On a cold wintry weekend, one of my personal pleasures is to muse on how the interesting times we live in compare to history. My fad interest at the moment is government bailouts. With TARP, TALF and several other equally bizarre acronyms, I'm spoilt for choice.
Imagine my joy when I came across this fascinating chart comparing past government "bailout" programmes against the chimera created by the Bernanke/Paulson tandem (aka the gruesome twosome). Thanks to Paul Kredosky for this one.
Even if you quibble some of the math (for example adjusting for inflation), the sheer size of government intervention in 2008 has been amazing. And the best part kids? It's far from over , since many of these bailouts (e.g. Citi, AIG) have huge additional writedowns on the way.
Of course, at some point the government will be unable to fund further bailouts - the trigger will probably be a sharp snap back of Treasuries to a saner level. Unfortunately in these bizarre times, the sheer amount of investor fear may keep those yields down for a few months yet.
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