Margin Call
Deborah J. Lucas is the MIT Sloan distinguished professor of finance and director of the MIT Golub Center for Finance and Policy. She analyzed the impact of the bailout from the Sub-Prime fiasco in 2008.
Popular accounts of bailout costs tend to severely overstate or understate their economically relevant value, Lucas writes in a paper to be published in the Annual Review of Financial Economics
Lucas draws selectively from existing cost estimates, such as those from the U.S. Congressional Budget Office, which uses that method, and she augments those numbers with calculations based on various data sources from that period.
By those calculations, the total direct cost of crisis-related bailouts on a fair value basis was about $498 billion, which amounted to 3.5 percent of the gross domestic product in 2009.
As for who directly benefitted, Lucas found that the main winners were the large, unsecured creditors of large financial institutions. While their exact identities have not been made public, most are likely to have been large institutional investors such as banks, pension, and mutual funds, insurance companies, and sovereigns.
3 comments:
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As you know a billion here a billion there eventually you’re talking about real money
Mr. Custer,
Biden had two craniotomies. In addition to age's wear and tear. Do many citizens know that?
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