December 12th, 2008

By preventing consideration of the auto bailout, Senate Republicans seem to have driven world equity markets down by about 3%, with the futures markets suggesting U.S. averages will follow. I don’t have current figures, but an estimate from 2001 puts the total value of equities worldwide at $37 trillion, of which about 40% was in the U.S.

So to save U.S. taxpayers a maximum of $14 billion, the GOP cost holders of U.S. equities something like $300 billion, and equity-holders worldwide something closer to $1 trillion.

Impressive!

Footnote Maybe the big share-price declines suffered by Toyota and Nissan (as a result of the dollar’s fall to under 90 yen) will lead the management of those firms to rethink their strategy of encouraging Congress to let their Detroit rivals go belly-up.

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