Seven hundred billion dollars.
Say that slowly. Now say that in a dramatic voice, with dramatic background music. Raise your pinkie to your lips if you like.
$700 billion is the amount of money that US Treasury Secretary, Henry Paulson, wants to give to Wall Street to bail it out of a mess that was created largely by Wall Street’s own greed.
Do you know how much money $700 billion is? It is seven times more than what Dr. Evil demanded to not destroy the world. In other words, it is seven times more than what a ridiculous villain in a ridiculous movie thought was too ridiculous for the world to afford to pay him to stop his ridiculous plan.
This whole sub-prime mortgage crisis that has been unravelling for the past two years is so (gosh, here’s that word again) ridiculous that it is unbelievable that no heads have rolled. Literally.
I admit that I don’t know all the minute details, but this is what I believe is generally accepted as what happened:
Banks and financial institutions lent too much money to too many people without getting enough collateral in return. Once these people couldn’t repay the loans, big matata.
Some of the biggest names in the banking industry, like Lehman Brothers and Merrill Lynch, who really ought to have known better, have become bankrupt, and millions of lives have been ruined.
The three most galling points of this mess:
1. When I was doing my MBA in the UK, I asked my Economics lecturer what would happen if there was a mass defaulting of loans by consumers. He said there wouldn’t be any trouble as the amount of consumer debt wasn’t that significant. Oh, really?!
2. The big shots at these banks and financial institutions who contributed mightily to this mess by their own greed still got their multi-billion dollar paychecks, and no one is going after them. (Daniel Mudd, ex-CEO of Fannie Mae, earned $13.4 million in 2007 while leading his company to a $2.1 billion loss.) The $700 billion bail-out, as proposed by Henry Paulson last week, is a free handout to these crooks. Stop the plan!
3. The western country least affected by the crisis? France, and its lousy economy. (I told you it was “Gaul-ing”. Count this as the latest “Pun of the Weak”.) Apparently in France, if one wants a loan, one has to put down a whacking great down payment first. And monthly instalments are limited by your monthly income, so you won’t be lent more than you can repay. Well, duh, no wonder they're not affected!
Say that slowly. Now say that in a dramatic voice, with dramatic background music. Raise your pinkie to your lips if you like.
$700 billion is the amount of money that US Treasury Secretary, Henry Paulson, wants to give to Wall Street to bail it out of a mess that was created largely by Wall Street’s own greed.
Do you know how much money $700 billion is? It is seven times more than what Dr. Evil demanded to not destroy the world. In other words, it is seven times more than what a ridiculous villain in a ridiculous movie thought was too ridiculous for the world to afford to pay him to stop his ridiculous plan.
This whole sub-prime mortgage crisis that has been unravelling for the past two years is so (gosh, here’s that word again) ridiculous that it is unbelievable that no heads have rolled. Literally.
I admit that I don’t know all the minute details, but this is what I believe is generally accepted as what happened:
Banks and financial institutions lent too much money to too many people without getting enough collateral in return. Once these people couldn’t repay the loans, big matata.
Some of the biggest names in the banking industry, like Lehman Brothers and Merrill Lynch, who really ought to have known better, have become bankrupt, and millions of lives have been ruined.
The three most galling points of this mess:
1. When I was doing my MBA in the UK, I asked my Economics lecturer what would happen if there was a mass defaulting of loans by consumers. He said there wouldn’t be any trouble as the amount of consumer debt wasn’t that significant. Oh, really?!
2. The big shots at these banks and financial institutions who contributed mightily to this mess by their own greed still got their multi-billion dollar paychecks, and no one is going after them. (Daniel Mudd, ex-CEO of Fannie Mae, earned $13.4 million in 2007 while leading his company to a $2.1 billion loss.) The $700 billion bail-out, as proposed by Henry Paulson last week, is a free handout to these crooks. Stop the plan!
3. The western country least affected by the crisis? France, and its lousy economy. (I told you it was “Gaul-ing”. Count this as the latest “Pun of the Weak”.) Apparently in France, if one wants a loan, one has to put down a whacking great down payment first. And monthly instalments are limited by your monthly income, so you won’t be lent more than you can repay. Well, duh, no wonder they're not affected!
4 Comments:
AMEN! I am so upset over this whole proposed "HOT MESS". AMEN. The bailout will not resolve anything. These huge companies need to assume responsibility for their poor business practices. All it is: It's a quick fix. So basically they would be throwing 700B into a black hole.
A coworker and I did a small calculation the other day. There are over 305 million people living in the US. Divide 700 Billion among us and that amounts to $2,295 per person.
Send me a check for $2,295! I'll stimulate the economy!
it really is crazy, what is this world coming too? It really makes me worry!
Jamie
It's not only corporate greed, but personal greed as well. The real question, is how to fix it?
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