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Not even in the lead headlines, I find tucked away in my RSS reader:

“US Bails Out Major Credit Unions”

Well, it is only $30 billion. Just to put that number in perspective, if you take some estimates seriously, it would seem to take only about $75 billion in total to largely eradicate malaria around the world (I do not take those estimates seriously for a variety of reasons). And for this $75 billion, “we” would therefore be able to cure more malaria deaths in a one shot deal, than are expected to be caused cumulatively over the next 90 years by the serious global warming scenarios in the most recent IPCC report.

Ahhh … but this $30 billion is an “investment” in the vitally important credit unions, and will surely be paid back you say. And saving the lives of a million people is not “an investment” worth pursuing?

The regulators tell us, “this won’t cost taxpayers anything” … and a few paragraphs later we see:

Losses on the mortgage-backed securities held by the five seized credit unions are expected by regulators to total about $15 billion. Wiping out the capital of the failed institutions will cover a chunk of those losses. But the remaining $7 billion to $9.2 billion eventually will be passed along to the nation’s 7,445 federally insured credit unions in the form of future assessments.

Well, customers aren’t taxpayers, and it’s only $7 to $9.2 billion. Read the rest of this thing – the regulators were watching these guys closely for years, and nodded their heads as “toxic mortgage securities” were allowed to be purchased under the rubric of “safe, liquid assets.” Whatever you think of the toxic assets, trying to pin the blame on those assets for this problem is like blaming cholesterol for the inability of people with heart problems to stop eating it. And hey, if there is such a thing as Lipitor, why not have that extra slice of pie?

3 Responses to “Incredible that This Has Become Dog Bites Man”

  1. Harry says:

    Thirty billion! It takes one’ s breath away.

    Meanwhile, we read in the financial press about subdued inflation, and concerns about deflation. The next article will be about how printing another $30 billion will not be inflationary. We banking sophisticates know that they really do not print all of that fiat money anyway, right?

    How many wheelbarrows would be needed to carry thirty billion Weimar Marks, and how many loaves of bread would that buy, assuming the transaction happened simultaneously, as opposed to a day later?

    Wintercow will immediately recognize this as a calculus word problem, and I am sure he would ask his teacher for a bit more information before attempting an answer.

    When $30 billion is an unremarkable figure, how come the consumer price index is a better indicator of inflation than Wintercow’s daily gold and silver graphs?

    Is Tim Geithner a Martian?

  2. Harry says:

    Speaking about man-bites-dog, I hope you caught the Swiss economics minister breaking up in laughter delivering his remarks about spiced sausage imports. The only German I could pick out was fleisch.

    Could this be a great moments in free trade event?

    A Great Moment in Economics Humor? The Dismal Scientists Gone Wild?

    This is worth at least another book, probably a novel, with the Swiss ambassador appearing in either the Prologue or the climax.

  3. Harry says:

    Oliver Stone’s next movie: Wall Street III: Free Trade and Love.

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