On 2011-12-11, at 6:28 PM, c b wrote:
> $30 trillion! Do I hear $35t?
>
> These numbers are ridiculous. Just last week it was $7t.
>
> Funny to hear this coming from Levy. Aren't they of the school that
> thinks the Fed isn't doing enough?
>
> Doug
>
> ^^^^^^^^^^
>
> CB: Originally numbers like $1 or 2 trillion were put out. 7 is a lot
> more than that. Senator Bernie Sanders reports some government audit
> putting it at 16 Trillion when foreign banks are included.
There were so many facilities, and so many ways of counting, that I may have this all balled up. But so far as I can recall, Bernanke's 1.2 trillion was the peak credit outstanding on a single day. Fed critics like Sanders counted each revolving loan, even overnight ones, as a new loan. So if a bank rolled over a $1 million dollar loan every day for a week, it brought the cumulative loan total to $7 million. Hence, Bernie's $16 trillion. I think Bloomberg recently went with Bernanke's $1.2 trillion but also added the benefits accruing from the TARP to US and foreign banks - mainly the profits resulting from the spread on their below market borrowing costs and their investments in Treasury bonds and other securities, for a total $7 trillion. Don't know where the $30 trillion comes from, perhaps a cumulative total of the revolving loans and the net interest of the banks. There must be some research out there showing the methods which were used by the different parties.