S&L Versus a (Possible) GSE Bailout

Not a Portfolio.com Insider?

In This Issue of Condé Nast Portfolio

Home > Views > Blogs > Odd Numbers > S&L Versus a (Possible) GSE Bailout

Your Name

Your Email Address *
Send a copy to me

Recipient's Email Address *

Separate multiple email addresses (max 20) with commas.

Subject *

Message

0/1500

Email Confirmation

Odd Numbers

by Zubin Jelveh

Main

The Life Cycle of Filmmakers Private Cries: The Case for Cutting ...

Jul 14 2008 3:44PM EDT

The worst case scenario for how much taxpayers will have to dish out in the case that a bailout of Fannie Mae and Freddie Mac is needed has been put at about $300 billion. How does that compare to the S&L bailout which cost $125 billion? This from Merrill Lynch:

Back in 1989, the US government formed the Resolution Trust Corporation (RTC) to purchase nonperforming loans from failed savings and loans. Ultimately the RTC purchased $125 billion in loans from the defunct banks and issued government-backed debt against them, according to an FDIC study done in 2000. The $125 billion in 1989 amounted to 2.2% of the prevailing GDP of just over $5 trillion. Against the current $14 trillion size of the US economy, $300 billion is quite comparable at 2.1%.

The actual size of a GSE bailout is expected to much smaller, however, at between $10 to $30 billion.

See more in

Add Your Comment

Already a Portfolio.com Insider? Sign In

Comments*

Thank you for registering as a Portfolio.com Insider. Your comment has been added.

Create Your Public Profile

Recent Blog Posts

The Year in Research
Dec 31 2008 9:13AM EST
Mind Your Value Judgements
Dec 19 2008 7:52PM EST
S.E.C. Short-Sale Ban: Pretty Much Useless
Dec 19 2008 3:45PM EST
Advice from Japan: Don't Forget TARP 1
Dec 19 2008 2:31PM EST
Chart of the Day: Money Market Stress Easing
Dec 18 2008 8:57PM EST
House Price Bubble Deflated?
Dec 18 2008 5:57PM EST
Where Were the Whistleblowers?
Dec 16 2008 11:03PM EST
It's Just a Recession
Dec 13 2008 10:20PM EST
Comparing American and European Unemployment Insurance
Dec 12 2008 7:46PM EST
Back to Normal?
Dec 11 2008 4:33PM EST
Chart of the Day: Japan Under Quantitative Easing
Dec 10 2008 4:11PM EST
Don't Cry for Capitalism
Dec 9 2008 4:13PM EST
Can We Remember the Pain of Bubbles Past?
Dec 8 2008 4:58PM EST
The Pain to Come
Dec 5 2008 6:04PM EST
The Lending Standards Red Herring
Dec 4 2008 3:34PM EST

Links

Also in Portfolio.com

Visit our partner sites

Subscribe to a magazine:

Visit our sister sites:

Quotes delayed 15 minutes for NASDAQ. 20 minutes for NYSE and AMEX. Market Data provided by Interactive Data. Terms & Conditions. Powered and implemented by Interactive Data Managed Solutions. Company fundamental data provided by Hemscott. Economic data provided by Econoday. News provided by Comtex. Sec Filings data provided by Edgars. The Wall Street Horizon National Consumer Interest Rate Survey. ©2009 Wall Street Horizon. PMMS Mortgage Data ©2009 Freddie Mac. Mortgage averages are for conforming mortgages with 20% down.