How Did $700 Billion Turn Into $7.7 Trillion?

November 24, 2008 · Posted in Corporate Finance, Government, Rants · Comment 

Normally, I have a lot of respect for Bloomberg.com, but their recent article on the US Government’s pledge of 7.7 trillion to ease frozen credit seems a little absurd all things considered.  Their numbers include some of the following expenses:

$3.18 trillion — Already been tapped by banks and other financial institutions

$2.4 trillion — Set aside to buy short-term notes, or commercial paper, that companies use to pay bills

$1.4 trillion — Used by the FDIC to guarantee bank to bank loans

$29 billion — To help with the Bear Stearns takeover by JP Morgan Chase and Co

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