Thursday, October 21, 2010

Remember when fixing Fannie and Freddie would cost $25 billion?

It was July 22, 2008, when I blogged about the absurdly low $25 billion price tag that the CBO had put on bailing out Fannie Mae and Freddie Mac, linking to this NYTimes piece.

I speculated that it would more likely be more than $100 billion.  To date, a net $135 billion has been pumped into the two agencies.  Now we learn that an additional $124 billion may be needed.

Yikes!  That's supposedly a "worst case scenario," and maybe as little as $6 billion more will be required.  However, based upon the track record of the estimators in 2008, it seems just as likely to me that we'll burn through $500 billion before we're done.

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