Hey Fed, can I borrow $1 billion?

If you are paying attention to that cleanly shaven, “be-moussed” talking head on TV (a newscaster in case you did not get it), you must have known already that AIG, the world’s largest insurance company, was bailed out by Federal Reserve (Fed) to the tune of US$85 billion. It gives the embattled company a new lease on life and prevents a potential catastrophic turmoil in the financial industry. Thanks Fed!

By the way, did you know how much Fed has shelled out so far to save ailing financial institutions in the United States? According to Straits Times, it’s a whopping US$905 billion!!! Here’s the breakdown:

• US$85 billion: loan for AIG
• US$87 billion: financing to Lehman Brothers, via JPMorgan Chase
• US$200 billion: for Fannie Mae and Freddie Mac
• US$29 billion: to finance JPMorgan Chase’s buyout of Bear Stearns
• US$200 billion (at least): outstanding loans to banks
• US$300 billion: for the Federal Housing Administration
• US$4 billion: grants to local communities

To give you an idea how big an amount that is, Philippines GDP in 2007 is US$299 billion. For my layman brothers, GDP (gross domestic product) is computed by adding up what everyone (your income, Gloria’s income, Sharon Cuneta’s income) earned in a given year. So, Fed shelled out 3 times what the entire Philippine economy made in a year. The magnitude alone is enough to make your jaw drop.

So Fed, I can see you are now in a giving binge, can I borrow a billion there? Come on, it’s just 0.1% of what you’ve lent so far.