The $700 billion bailout plan, also known as the Troubled Asset Relief Program (TARP), is one of the main tools to address the financial crisis.

The Treasury Department had set aside $250 billion of the program to buy senior preferred shares and warrants in banks, thrifts and other financial institutions.

American International Group’s $40 billion bailout was the biggest TARP investment, and would not come from the $250 billion bank capital program.

The TARP has so far committed the following funding:

AIG - $40 billion

JPMorgan - $25 billion

Citigroup - $25 billion

Wells Fargo - $25 billion

Bank of America - $15 billion

Merrill Lynch - $10 billion

Goldman Sachs - $10 billion

Morgan Stanley - $10 billion

PNC Financial Services - $7.7 billion

Bank of New York Mellon - $3 billion

State Street Corp - $2 billion

Capital One Financial - $3.55 billion

Fifth Third Bancorp - $3.45 billion

Regions Financial - $3.5 billion

SunTrust Banks - $3.5 billion

BB&T Corp - $3.1 billion

KeyCorp - $2.5 billion

Comerica - $2.25 billion

Marshall & Ilsley Corp - $1.7 billion

Northern Trust Corp - $1.5 billion

Huntington Bancshares - $1.4 billion

Zions Bancorp - $1.4 billion

First Horizon National - $866 million

City National Corp - $395 million

Valley National Bancorp - $330 million

UCBH Holdings Inc - $298 million

Umpqua Holdings Corp - $214 million

Washington Federal - $200 million

First Niagara Financial - $186 million

HF Financial Corp - $25 million

Bank of Commerce - $17 million

TOTAL: $203.08 billion

In addition to the $40 billion capital injection into AIG, the Federal Reserve is providing the additional $112.5 billion in separate loans and funds for asset purchases. Aid to the huge insurance company came after counterparties and rating downgrades forced AIG to post large amounts of collateral for its credit derivatives positions.

The remaining $350 billion in TARP funding can be accessed only after the White House formally notifies Congress. U.S. House Financial Services Chairman Barney Frank has said that if the initial banks participating in the program do not use the money for lending, Congress could block authorization of the final funding.

“Oh, I don’t blame Congress. If I had $600 billion at my disposal, I’d be irresponsible, too” - Lichty and Wagner

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Barack Obama defeat John McCain was elected the 44th president of the United States, becoming the country’s first African-American president. The Illinois senator capped his 21-month quest with a sweeping electoral victory that marked the end of an era of Republican dominance in Washington.

Obama crossed the requisite threshold of 270 electoral votes to defeat Republican rival John McCain last night when television networks projected him winning the state of California. He had at least 338 electoral votes to McCain’s 145, according to the Associated Press and television network projections. Six states remained undecided.

His victory, along with his party’s gains in congressional contests, puts Democrats in firm control of the federal government for the first time since the early 1990s. That gives Obama an opportunity to turn his victory into a pivotal moment in the country’s political history.

Obama promise a change in Washington, inspiring millions of new voters and volunteers along the way. He persuaded the electorate that he could best handle the economic crisis facing the country. He raised more money than any presidential candidate in history, overwhelming McCain.

The racial symbolism of Obama’s campaign was never far from the surface. He formally declared his candidacy in February 2007 in Springfield, Illinois, evoking the spirit of Abraham Lincoln and his call for the nation to overcome the divisions of slavery. Obama ended his campaign Monday night with a rally in Manassas, Virginia, the site of two Confederate Civil War victories.

“I have been thinking that I would make a proposition to my Republican friends… that if they will stop telling lies about the Democrats, we will stop telling the truth about them” - Adlai E. Stevenson Jr., Speech during 1952 Presidential Campaign, US diplomat & Democratic politician (1900 - 1965)

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The United States is moving towards an inevitable economic recession and possibly worse than the previous, two common questions will pop up. What are causes of economic recession? How long will it last?

The definition of a recession is a decline in a country’s gross domestic product (GDP), or negative real economic growth, for two or more successive quarters of a year.

The gross domestic product (GDP) in the United States is tracked by the Commerce Department’s Bureau of Economic Analysis. A recession may involve declines at the same time in the measures of overall economic activity such as employment, investment, and corporate profits. Recessions may also be a combined with deflation , or alternatively, sharply rising prices or inflation. An economic depression is a severe or long recession.

The Recession History

1929 to late 1930s, Great Depression, stock market crash, banking collapse in the United States sparks a global downturn. Durations: 43 months

1937, second downturn of the Great Depression. Durations: 13 months

1945, Duration: 8 months

1948 - 1949, Duration: 11 months

1953 - 1954, Post-Korean War Recession - The Recession of 1953 was a demand-driven recession due to poor government policies and high interest rates. Duration: 10 months

1957 - 1958, Duration: 8 months

1960 - 1961, Duration: 10 months

1969 - 1970, Duration: 11 months

1973 - 1975, Oil crisis, a quadrupling of oil prices by OPEC coupled with high government spending due to the Vietnam War leads to stagflation in the United States. Duration: 16 months

1979 - 1980, 1979 energy crisis, the Iranian Revolution sharply increases the price of oil.

1981 - 1982, Duration: 16 months

1982 and 1983, Early 1980s recession, caused by tight monetary policy in the U.S. to control inflation and sharp correction to overproduction of the previous decade which had been masked by inflation.

1980 to 2000, Great Commodities Depression - general recession in commodity prices.

1990 to 1992, Early 1990s recession - collapse of junk bonds and a credit crunch in the United States leads to one quarter of US GDP decline, and therefore not an official recession.

1990 to 2003, Japanese recession -collapse of a real estate bubble and more fundamental problems halts Japan’s once astronomical growth

1997, Asian financial crisis - a collapse of the Thai currency inflicts damage on many of the economies of Asia.

2001 to 2003, Early 2000s recession - the collapse of the Dot Com Bubble, September 11th attacks and accounting scandals contribute to a relatively mild contraction in the North American economy. Since the US GDP never actually declined in this period it is not considered an official recession.

“The government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it” - Ronald Reagan, 40th president of US (1911 - 2004)

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