The head of the IMF, Christine Legarde dropped a big bill on Tim Geithner's desk after the market closed on Friday.
From the WSJ article
The IMF could offer short-term lines valued at roughly $50 billion combined to Italy and Spain.
The credit lines for those two countries could double to roughly $100 billion combined once their IMF contributions increase next year.
It's clear that Lagarde is after the ever-elusive leverage factor. In this case "creative"
"We have really tried to be creative about our facilities and instruments."
The lines could be offered to a group of countries, which could "Install a firewall around the core of the system to prevent or mitigate the propagation of virulent shocks."
The new credit lines could be used cooperatively with regional financing programs such as the European bailout program.Really?
The IMF is going to be doing some leveraged lending? Bailout money? For Spain and Italy?
The USA share of any IMF bailout is 25%.
So Christine thinks she can get Geithner to step up for 25 large.
And that would be just for Italy and Spain. Forget all the other troubled EU countries that would be able to borrow under this facility. The USA share of the IMF bailouts could easily exceed $100 billion.
I never thought Obama's "Jobs Plan" had much of a chance of passing. After reviewing the report by the CBO on S. 1549, The American Jobs Act of 2011,
I'm convinced this legislation will never see the light of day.
This legislation is being sold as a jobs creator. It's being sold as an economic stimulus. When you look at it, it's obvious that this is an attempt to swing an election. It has nothing to do with good economic or fiscal policy.
The folks at the CBO look at things on a fiscal year basis.