Perjury is the act of lying or making verifiably false statements on a material matter under oath or affirmation in a court of law or in any of various sworn statements in writing. Perjury is a crime because the witness has sworn to tell the truth and, for the credibility of the court, witness testimony must be relied on as being truthful. Perjury is considered a serious offense as it can be used to usurp the power of the courts, resulting in miscarriages of justice. In the United States, for example, the general perjury statute under Federal law provides for a prison sentence of up to five years, and is found at 18 U.S.C. § 1621. See also 28 U.S.C. § 1746.

The rules for perjury also apply to witnesses who have affirmed they are telling the truth. Affirmation is used by a witness who is unable to swear to tell the truth. For example, in the United Kingdom a witness may swear on the Bible or other holy book. If a witness has no religious beliefs, or does not wish to swear on a holy book, the witness may make an affirmation he or she is telling the truth instead.

Regarding Geithner’s response:

“I would not have been comfortable lending to Bear at that time,” he said. “We only lend to sound institutions. Lending freely to Bear would not have been a prudent act.”

That’s funny because I thought Ben Bernanke and Chris Cox (at SEC) both stated on the record that Bear Stearns was “adequately capitalized”. If that was the case, then Bear Stearns was a “sound” institution, which diametrically contradicts what Geithner just said.

Sounds like total BS, and presumably nobody in Congress called him on it. They just swallowed it whole.

…that goes back to Bear not being well-capitalized before or after and so they all agreed to the last second extortion deal of a forced illegal acquisition, which like magic made Bear whole.

The real question related to the capitalization of JPM and how sound it was — without the payoff/loan from The Fed! Which also related to a lack of DD or review for antitrust violations. That deal should be voided!

See also: (as a term of jurisprudence) is a possible legal defense, one of four of the most important justification defenses[1], by which defendants argue that they should not be held liable because the actions that broke the law were only performed out of an immediate fear of injury. Black’s Law Dictionary (6th ed.) defines duress as “any unlawful threat or coercion used… to induce another to act [or not act] in a manner [they] otherwise would not [or would].” The notion of duress must be distinguished both from undue influence in the civil law and from necessity which might be described as a form of duress by force of circumstances

What happened to our free trade policy ! Maybe the free traders were right about government intervention to protect a particular industry.

It would seem that a summary of the governments response and action plan is equally applicable to the US prison population.

“Hey, if you drop the soap, just leave it.”

“I would not have been comfortable lending to Bear at that time,” he said. “We only lend to sound institutions. Lending freely to Bear would not have been a prudent act.”

Does that even make sense? I thought the discount window was indeed setup for banks that needed it, and that banks ended up _not_ using it because of the stigma attached to its use? Wasn’t that the whole reason that the auction facility was setup in the first place?

Remarks by Governor Laurence H. Meyer
Before the Spring 1998 Banking and Finance Lecture, Widener University, Chester, Pennsylvania
April 16, 1998

http://www.federalreserve.gov/Boarddocs/Speeches/1998/199804162.htm

… Nevertheless, deregulation has been a major force for change in the banking and financial services industries. Two decades ago we still had Regulation Q, the Glass-Steagall Act was widely viewed as requiring a virtual prohibition of combinations of commercial and investment banking, and interstate banking and branching were barely fantasies even at the state level, let alone applications for combinations of insurance and banking. Just a few days ago, the House of Representatives almost voted on a massive re-write of the laws on permissible bank holding company activities and is now scheduled to consider the issue early next month. It is difficult to predict the outcome of that bill, and I will not. But I will note that the pressures of market developments for changes in the rules set up during the Great Depression are immense. If Congress does not act, loopholes and regulatory changes will continue to be exploited — with or without bank participation. The forces of technology and globalization will deregulate in one way or another. I and my colleagues would prefer that the Congress would guide those changes in the public interest, but legislative deadlock will not do the job because the status quo will not hold.

However, in some cases we still observe potential competitive problems with a proposed bank merger. Fortunately, the antitrust laws, as written into the banking statutes, give us the means to maintain competition in such situations. These laws require that the Board approve only those mergers that are not expected to substantially harm competition. When implementing this policy, the Board may require changes to a merger proposal, and may even deny an application, if the merger or acquisition would result in a highly concentrated market, or an excessively large increase in concentration. As I indicated a few minutes ago, the focus of our analysis is normally on local retail markets for banking products and services.

Effective January 9, 2003, the discount window will be restructured into a so-called Lombard facility, from which well-capitalized banks will be able to borrow freely above the federal funds rate.

Thus, what about the issue of Bear being well-capitalized? I guess the way they got around that reality was to call this an acquisition….. however, the FTC did not sign off on this and the way in which this was rushed through should void this collusive corruption due to a lack of DD!

The other issue is that Bear and JPM are not “banks” and thus that changed everything for this charade, thus here is some background on that:

Deal on Bank Bill Was Helped Along By Midnight Talks

http://query.nytimes.com/gst/ful…ul…8260&sec=& spon=

At 2 o’clock on Friday morning, a few scant hours after his pessimistic report to the President, Mr. Dodd and other exhausted Democratic lawmakers placed a telephone call to a weary Treasury Secretary Lawrence H. Summers to report that they had clinched a deal with Mr. Gramm to repeal the Glass-Steagall Act of 1933. After eluding its advocates for decades, the agreement to deregulate Wall Street, favored by many of the nation’s most powerful business interests, was struck.

The meeting in the middle of the night was the final chapter in a saga that began in 1934, when Senator Carter Glass himself tried to undo the law that put his name into the history books. The meeting capped a month of posturing, brinkmanship and dealmaking in Washington. And its outcome is expected to bring about one of the most important changes in decades in the laws governing the nation’s financial system.

I know this is too long here, but the following are several outtakes posted yesterday on calculatedrisk, but it offers some history tips and questions the terms of this “loan” and why The Fed is in the business of lending money and using The Treasury as a conduit for an un-authorized and unprecedented bailout!

>> As background, The Chrysler Corporation Loan Guarantee Act of 1979 was signed into law January 7, 1980, and established a loan guarantee board with the authority to issue up to $1.5 billion in government loan guarantees for the Chrysler Corp., a failing company, over the next three years.

A number of strings were attached to the bill. To receive the loan guarantees, Chrysler was required to:

“Win concessions from the companys workers, plus $500 million in new
credit from U.S. banks; $125 million in new loans from foreign banks and
other creditors; $250 million in aid from state and local governments;
$180 million in aid or credit from dealers and suppliers.
· Sell off $350 million of company assets or other equity ….etc…

>> Moving forward to Bear Hearing, but back to The Great Depression:

President Franklin Roosevelt signed a bill into law that added Section 13(b) to the Federal Reserve Act, which authorized the Federal Reserve to “make credit available for the purpose of supplying working capital to established industrial and commercial businesses,” according to the Federal Reserve Board’s 1934 annual report.

In the depths of the Depression, the country’s relatively nascent central bank, arguably still struggling to find its role in the U.S. economy, was being asked to get into the lending business, and much to the chagrin of one Rep. C.L. Beedy:

The Federal Reserve banks, 12 in number, which were never designed to do business with any individual or any person, but were banks of issue or rediscount to deal with other banks, ought never, in my opinion, to be put into the lending business. It is a perversion of the original purpose for which those banks were established.

Hence, The Fed is permitted to make IPC (individual, partnership, and corporation) loans directly to the private sector, but only under stringent criteria. This latter power has not been used since the Great Depression but could be invoked in an emergency.

Furthermore, Unlike some central banks, and barring changes to current law, the Fed is relatively restricted in its ability to buy private securities directly. However, the Fed does have broad powers to lend to the private sector indirectly via banks, through the discount window.

Therefore a second policy option, complementary to operating in the markets for Treasury and agency debt, would be for the Fed to offer fixed-term loans to banks at low or zero interest, with a wide range of private assets (including, among others, corporate bonds, commercial paper, bank loans, and mortgages) deemed eligible as collateral.

12. The Fed is allowed to buy certain short-term private instruments, such as bankers’ acceptances, that are not much used today. It is also permitted to make IPC (individual, partnership, and corporation) loans directly to the private sector, but only under stringent criteria. This latter power has not been used since the Great Depression but could be invoked in an emergency deemed sufficiently serious by the Board of Governors. Return to text

13. Effective January 9, 2003, the discount window will be restructured into a so-called Lombard facility, from which well-capitalized banks will be able to borrow freely above the federal funds rate.

14. By statute, the Fed has considerable leeway to determine what assets to accept as collateral.

However, in terms of the ability of taxpayers to be involved in this process:

The New York Fed presented a one-page description of the portfolio. The assets include investment-grade securities and residential and commercial mortgage loans, all of which were current on principal and interest as of March 14. The staff of some lawmakers will be able to review the full list on a confidential basis, the statement said.

Federal Open Market Committee Transcripts

http://www.federalreserve.gov/fo…mc/Transcripts/

In all the transcripts, a very small amount of information received on a confidential basis from, or about, foreign officials, businesses, and persons that are identified or identifiable was subject to deletion. All deleted passages, indicated by gaps in the text, are exempt from disclosure under applicable provisions of the Freedom of Information Act.

Why would any lender refuse to lend overnight against Treasuries? I can understand demanding a steeper haircut because asset values are less stable than they used to be, but I can’t understand not lending. Does anybody actually understand what happened here?