By then it was clear that $700 billion was a sum insufficient to grapple with the troubled assets acquired over the previous few years by Wall Street bond traders. That’s when the U.S. Federal Reserve took the shocking and unprecedented step of buying bad subprime mortgage bonds directly from the banks. By early 2009 the risks and losses associated with more than a trillion dollars’ worth of bad investments were transferred from big Wall Street firms to the U.S. taxpayer.
