Cost of the Credit Crisis...

Great slide from my friends over at Peter J Solomon on the current cost of the credit crisis.  There are 3 major updates to this as far as I can tell…

• TARP Part II Approved: Passed with less fanfare than its predecessor, the next $350Bn of the TARP was released, although a large chunk has already been dedicated to US homeowners, Bank of America and US automakers. Speculation lingers as to what the balance could be used for and further direct investments into financial institutions could be forthcoming but a portion could be used to set up the government bank.
• Stimulus Package Firming Up: If there is one thing we can be sure of, it is that the package will change between the proposed $825Bn plan and what is finally enacted into legislation. At a high-level, the the two-year package calls for $550Bn in new spending and $275Bn in tax relief. The plan’s final structure will depend not only on much politicking among lawmakers in the House and Senate, but also on the continued pressure from lobbyists.  While no-one denies that this massive fiscal stimulus will help offset the economic headwinds, it will clearly take time to have an impact.
• Further Federal hand-holding: The government continues to demonstrate its willingness to chaperone the financial system, whether it be its role in ensuring the Bank of America/Merrill Lynch transaction closes or the additional injection of funds (some even reading nationalization) into Citi.