Two illustrations of why our government is in trouble

They seem to have trouble counting. (But ya gotta understand: the numbers are just so very, very big, anybody would have trouble. Not!)

How “massively” was Goldman short the mortgage market?

The [Senate] report unequivocally states that in 2007, Goldman: “reported net revenues of $11.6 billion, of which $3.7 billion was generated by the structured products group in the mortgage department, primarily as a result of its subprime investment activities.”

The sentence was meant to show that Goldman’s shorting of the housing market had provided a large percentage of the firm’s revenue that year. The sentence in the report even included a handy citation for the information.

But in 2007, Goldman Sachs reported: net revenue of $45.98 billion, not $11.6 billion. That’s a big difference.

And exactly how much is that: California high speed rail going to cost?

“For example, based on the state’s agreement with FRA, the cost of the initial construction segment between Fresno and Bakersfield alone is now estimated to be $4.5 billion, which is 57 percent greater than was assumed in the original plan. … If the cost of building the entire Phase 1 system were to grow as much as the revised HSRA estimate for the 100—mile segment discussed above, construction would cost about $67 billion.”

$43 billion, $67 billion–what difference does a little small change make among friends?

Cross-posted from Newmark’s Door.

Craig Newmark

Associate Professor of Economics, North Carolina State Univ.

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