Who isn't getting bailout money these days?
Posted
Nov 04 2008, 01:39 PM
by
Kim Peterson
Rating:
The Treasury Department is thinking about bailing out other companies besides banks and insurers. The $700 billion rescue fund could help a finance unit of General Electric, for example. GE shares are up 8% today on the news.
That's a far cry from the original intent of the bailout, which was to buy toxic mortgages and other securities from banks. And the handout line keeps getting bigger, with everyone from transit agencies to car makers asking to be included in the rescue.
It's becoming obvious that the Treasury asked for too much money.
"So, now it’s banks, insurance firms, bond insurers, and miscellaneous finance firms," writes investor/analyst Paul Kedrosky on his blog. "With auto companies almost certain to get bailed out eventually, remind me again who’s not on the list."
It's worthwhile to revisit how the Treasury even picked the $700 billion figure to start with. This is probably my favorite quote of the year:
"It's not based on any
particular data point," a Treasury spokeswoman told Forbes.com in September.
"We just wanted to choose a really large number."
Nice. So of the original amount, $250 billion has been set aside for equity investments, the Journal says. About $160 billion has gone to a range of banks.
The remaining $450 billion? The new president will probably have a big say in what happens to it.
Related reading:
A government bailout won't save GM
Bond insurers beg for piece of bailout action
Banks forced to make bad loans
The bailout gets too big
