Orange County Register business columnist Jon Lansner writes that Forbes publisher Rich Karlgaard needs to check his facts before he goes off slamming business journalists for leading the economy into a recession.
Lansner wrote, “Sounds good. But wrong. $700 billion? Where did he get that? So you know the true history, which your blogger lived as a reporter, it goes like this from government docs (like THIS ONE) ….
• The government’s Resolution Trust Corp., between 1989 and 1995, liquidated 747 failed S&Ls that owned worth $400 billion in assets. (Most of the assets were worth more than a few pennies.)
• RTC losses on those S&Ls was estimated at $87 billion.
• Add in the cost of S&Ls that failed from 1986 to 1989 and the cost bumps up to $156 billion. (82% of that was taxpayer funded, by the way!)
• If one assumes those outlays were made equally, on average, from 1986-95, in today’s dollars the S&Ls added up to a $250 billion mess.
“Sadly, the subprime crisis is approaching the cost of the S&L crisis. And, perhaps worse, many of the bad S&L debts were to developer types — not to mom and pop home buyers who took out subprime loans. So, Rich, do your homework before sliming your own craft!”
Read more here.
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