'Save Us!' Says Merrill Lynch

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The United States Government is capitalizing on a comprehensional failure of the human mind – the inability to fully grasp the magnitude of large numbers. Upon hearing numbers beyond a few thousand our brains interpret it as, “Wow, that’s a big number!” with no tangible image to relay exactly how big. So, let’s start with a One Dollar Bill. We can understand $1.00, right?
According to the United States treasury, a One Dollar Bill has a thickness of 0.0043 inches. One thousand One Dollar Bills would be one thousand times thicker -- 4.3 inches.
One million is one thousand thousands, so the thickness of $1,000,000 is 4300 inches. Converting to feet and this becomes 358.3 feet, an American football field.
One billion -- $1,000,000,000 is one thousand times thicker still or 358,333.3 feet. This is 67.866 miles, the driving distance from New York City to Milford CT.
One Trillion is one thousand billions – one trillion One Dollar Bills stacked one on top of another is 67,866 miles. This would circumnavigate the globe 2.73 times.
The proposed 700 Billion Dollar bailout alone would be a stack of One Dollar Bills stretching 47,506.2 miles, or 1.90 times around the globe.
A stack of One Dollar Bills totaling the current national debt cap of 10.6 trillion dollars would go around the equator 28.93 times. The proposed cap of 11.3 trillion dollars would go around 30.85 times.
Is creating a debt that is the equivalent of a stack of One Dollar Bills rounding planet 31 times a responsible act?

JP of GA 11:29PM September 21, 2008

Exactly....in terms of me not providing a reference to my "statistics"! WHY is it that Gerri Willis of CNN and/or any other reporter who is reporting on the mortgage crisis only seems to cover the surface and NEVER give the full picture or truely do an investigation to get to the details. Sure there are people getting foreclosed upon and there is an increase. Coming from an accounting background, where executives showed me a thing or two about how to "report numbers", you can make any number look good or bad just in the presentation. If there was only 1 foreclosure in all the US and 2 the next year...the news would jump all over that as a 100% increase in the foreclosure rates. My question becomes, with the increase in total number of mortgages over the past few years...what is the ratio of foreclosures to performing mortgages now as compared to the same ratio in 2006, 2005, 2004 etc...... My point being the big banks are not suffering because of mortgage foreclosures, they are suffering because of the press perpetuating the negative creating a psycological freeze of the credit markets. Someone, correct me here! Someone provide us some true statistics! Resolution to market crisis....easy... stop all the bad press and get some decent reporting.

Teresa Anaya of TX 9:45PM April 15, 2008

I was reading comments from the Jim Sinclair web site (www.jsmineset.com) on this subject and found the most interesting thing to be that when a top economist from a top firm is calling for the monetizing of even more illiquid paper than the Fed is already doing, that it probably will be done and also that this indicates just how super serious this problem is. I believe its enormous and the long term implications for massive inflation are for me disastrous. Here is an excerpt from Jim's site.
"...
Monty Guild's Commentary
Today Merrill Lynch’s North American economist came out and predicted that government backed fiscal action is required to ‘alleviate credit market paralysis.” This means according to Merrill “the outright purchase of illiquid mortgage backed securities.” As you know this is something we have been predicting for many months now that the bandwagon is getting more crowded. We look for the government to take such action.
Once establishment organizations like Merrill and others begin such a call for action it will probably be coming.
This action will not stop a big US and European economic slowdown and substantial recession in the US, nor will it stop gold from moving much higher. It will allow the current ongoing credit de-leveraging to proceed with less cataclysmic effects upon the US and world economy in our opinion.
Respectfully yours,
Monty guild
Dear Monty,
1. These items, also known as SIVs, are items with no intrinsic or market value, nor will there be any in the future. I have discussed this many times.
2. The Fed has been buying defunct mortgage derivatives every day. Merrill wants it bigger and faster than the Fed has been buying. This gives you a window by which you can view the continuing size of this crisis.
3. To everything economic there are economic consequences, just like the side effects of miracle drugs.
4. The consequences to the monetization of bankrupt special performance contracts (called mortgage SIVs) is the making of US citizens the immediate last resort buyer of the Titanic amount of valueless crap!
5. This is exactly the flow of events that created the Weimar Experience.
6. You are right, but in the above context.
..."

Guy Duff of CA 7:29PM March 28, 2008

"I keep reading that it is less than 2% of all mortgages that are failing...ie...going into foreclosure. "
Read where?
"People are saying....?"

DB of NY 8:56AM March 28, 2008

I keep reading that it is less than 2% of all mortgages that are failing...ie...going into foreclosure. If this is true and you compared that to a business with just 2% of accounts receivable not paying, then how can banks continue to scream they are hurting. (aside from a frozen market due to continued press creating negative hysteria which is a completely different thread)
Most businesses, even small ones can handle a default of 2% of its receivables.
Think about it....and these big bank guys are the ones who went to Harvard Business school right? They are smarter than the average bear....crooked as hell but smarter. Thanks for hood winking buyers, employees and stockholders and enjoy your $200 million bonus as you sip the froo froo drink in "ship the money to an off shore account" hideaway destination unknown.
Stop the whining, modify the loans, give up your bonus to save a few good honest homeowners that were hoodwinked and work hard for 30k a year for the next few years to get yourself out of the mess you and your Harvard degree got yourself into!
I don't have any more tax dollars to rescue you...it's all going my gas tank!

Teresa Anaya of TX 5:39PM March 27, 2008