Is This Where the $700 Billion Is Going?

There was a lot of noise last week about how the banks who’ve been drawing down the government’s Troubled Asset Relief Program fund can’t account for how the money is being spent. It’s not like $700 billion can just disappear, right?

Well, a reader named Gannon Hubbard wrote in with a hunch as to where the money is being spent.

No, not on commercial loans or mortgage relief or even a new highway fund. Try … a rabbit hutch.

Yes, a third-party seller on Amazon.com was offering a “Marshall Peters Hinged Mat Woven Grass for Rabbits and Small Animal” for the low, low price of $766.5 billion:

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As Gannon writes: “It looks like third-party selling on Amazon isn’t exactly foolproof.”

The good news is that a serious discount was invoked since this screen shot was taken, with the hutch now selling for just $13.59. The seller is called Sleepy Pets, and as of this writing, its most recent customer feedback was a five-star review that said: “Arrived well ahead of schedule.”

For $766 billion, I should certainly hope so.


Jim

reminds me of an old Dennis the Menace cartoon where he and Joey are at the Lemonade stand and Dennis has priced a glass of lemonade at $10.

Joey is looking depressed because there are no customers while Dennis is saying:
"But all we have to do is sell ONE GLASS!"

catherine the great

seriously a much better way to spend that money than on a bailout!

whoanellie

Obviously the third party seller is requesting to be paid in ZIm dollars...

Senia

Cute. :)

Have you seen the U.S. bailout hedge fund site? It's quite a happening site. StrategeryCapital.com
The job postings is the single best part of the site.

Scott Supak

Let's take a look at where our money is really going, shall we?

The Wall St. Journal reports:

Merrill Lynch's Peter Kraus Collects $25 Million, Then Resigns

http://blogs.wsj.com/deals/2008/12/22/merrill-lynchs-peter-kraus-collects-25-million-then-resigns/

Then Kraus's wife (right) purchases a new apartment...

http://ny.therealdeal.com/articles/alliancebernstein-ceo-pays-37m-for-pad-at-720-park-avenue

"The buyer was identified as Jill Kraus, wife of Peter Kraus, a former executive vice president at Merrill Lynch who reportedly received a $25 million bonus after working at the firm for three months this year. However, only her name was listed on the property report. He was hired as chairman and CEO of AllianceBernstein on December 19. A Merrill Lynch spokeswoman would not comment on his pay package."

That's a $36 million dollar apartment purchased with tax payer money.

GoingLikeSixty

Some banks don't even like it when a newspaper calls it "Bailout" money.

http://bgdailynews.com/articles/2008/12/30/news/news9.txt

"A headline on Page 1A Saturday incorrectly referred to money Citizens First Bank received from the federal government as “bailout” money. The U.S. Treasury's $8.8 million investment in Citizens First came from the Capital Purchase Program. While that program is a part of the $700 billion Troubled Assets Relief Program, its emphasis is on providing capital to healthy financial institutions to meet the lending needs of their customers and the communities they serve. Prior to the Treasury purchasing preferred stock in Citizens First, the bank was considered well-capitalized by all regulatory standards. The additional capital injection from the CPP will further improve the bank's safety and soundness position."

DaveyNC

catherine @ 2 beat me to it. That is a better way of using the bail out money by giving it to a going concern like Sleepy Pets than to a soon-to-fail enterprise like GM or Chrysler.

Eric M. Jones

I posted earlier that $700 billion would build everything in Massachusetts from the ground up, or pave all 10,550 square miles of the Bay State in concrete 12" thick (rebar included). How huge $700 billion really is seems to elude people.

Here's another, perhaps more practical purchase--

The approximate cost of constructing a twin track 10,000 km maglev system including 300 kph trains, tunnels, bridges and stations, between major US cities is about $700 billion.

Average construction cost would be about $US 50 million per kilometre. About 1200 maglev cars would be needed. The rolling stock would cost only US$20 billion.

Actually, it would not be able to pay its own way, but at least you'd see where your money went....and how fast.

Christian Billman

Not all houses have lost value. Some are WAY up.

Derick

Think of all the people he could employ with all the spending he would do with that money?

I know, let's just blow up all of civilization! Think of the potential economic growth!

John

I like the combination offer at the bottom: Buy all three for only $2.3 trillion! Also, the heading is "Frequently Bought Together." Really?

Sean K

An acquaintance works for a flooring business in Manhattan. Supposedly AIG is getting new floors at their offices, thanks to taxpayer money. Any reporters out there?

Alex

Guys, I think everyone is missing the point about this whole bailout. If the goal is to inject cash into the financial system, who cares what the entry point is? #12 stated that AIG is getting new floors: awesome! a contractor just got a job and payment that he wouldn't have otherwise received, so he can pay his employees more (or hire more of them). The employees can then, in turn, go and spend those taxpayer dollars, turning around the recent trend in consumer spending.

Sure the investment itself may be a little silly initially, but remember that money keeps moving after it's spent.

ukdan

not sure if its still there, but someone put iceland up for sale on ebay!

Derekj

Hey ALEX (#13)

If you are so confident in our bureaucrats to "not care where the 'entry point' is"; why don't you just direct your own paychecks to someone else - say, ME? Or really, anyone besides yourself. Then those people will spend money that will abstractly benefit your community, and by extension, abstractly benefit you.

A "little silly" investment indeed..... the only new floor that AIG executives should be getting is the cold concrete one in a federal prison cell.

hazbeen

Please, please do a column on why the bailout is going to THEM instead of us. What would be the economic value of giving each adult 1000 dollars that had to be spent?

Martyn Strong

Cap markets are unstable. In the past there was no way to make them stable. But today we have computer power that can be used to make them stable. By using the greater computer power of today we can have a much higher turn over of cap in the cap market. This higher turnover will make the market harder to game or control and the market will no longer have the unstable run ups or declines. Who can change or control the market when say 20% of the capital is trading each day. So now that we have the compute power to provide for all these transactions that will smooth out the market how to we force people to turn over at a rate of 20% a day? Easy, put a cap gains tax of 0% (zero) on all gains of 7 days or less and put a cap gains tax of 90% of all gains of more than 7 days. The likes of Yahoo Micosoft and/or Sun Micro Systems will give us the systems that will provide automated software agents to support turning over one's investments every 7 days (based on the specs you give the agent). A system like this will make the financial markets work as smoothly as the local fruit market.

Read more...

Derick

What 13 and 15 are saying just shows the whole stupidity of any sort of injection. The government is just taking that money from other people via inflation, tax, and gov. debt (future tax) in the first place, so it's not stimulus so much as putting money into bad parts of the economy and taking it from good parts of the economy. The market would have done otherwise, and otherwise should be happening.

Olivia

#16 raises a good point. However, if all taxpayers or adults (I've heard it both ways - and obviously these are two very different routes to take) were given a $1,000 check, a good percentage of those tax payers or adults would put it toward debt payments. Though paying off some debt (mortgages, credit cards) is clearly a smart choice, it kind of spoils the whole American idea of jump starting the economy through spending if that $700 billion is mostly contributed toward paying off purchases we've already made years ago. Others, particularly lower income Americans, would most likely be paying rent or making their routine purchases with this money.

There would also be quite the debacle over whether to graduate the checks based on income bracket - in the same way that people are actually taxed in the first place.

A lovely idea that's been circulating the past few months, but altogether messy and unrealistic, unfortunately enough. Then again, isn't a $700 billion bailout pretty far out too?

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Ali

Pity it isn't that much anymore.

http://www.amazon.com/Marshall-Peters-Hinged-Rabbits-Animal/dp/B000YIT8BK/ref=cm_cr_pr_product_top