Recent Items

Guest Post: Fed Data Shows Foreign Banks Huge Beneficiaries of Emergency Lending Programs, Hedge Funds, McDonald’s, Harley-Davidson and Others Also Received Help

Posted on by

Washington’s Blog

Under orders from Congress pursuant to the Dodd-Frank financial legislation, the Fed has finally released details of its emergency lending starting in 2007.

As Bloomberg notes:

Bank of America Corp. and Wells Fargo & Co. were among the top borrowers from the Term Auction Facility [TAF]…

Bank of America had three loans for $15 billion each outstanding from the facility as of Jan. 15, 2009, while Wells Fargo had three loans for $15 billion each on Feb. 26 …

Citigroup Inc. and JPMorgan Chase & Co. also availed themselves of the TAF. Citigroup’s Citibank NA subsidiary had three loans under the facility totaling $20 billion on Jan. 15, 2009. JPMorgan’s JPMorgan Chase Bank NA had two loans totaling $25 billion on Feb. 26, 2009.

Bloomberg notes that foreign banks borrowed heavily from TAF as well:

Banks with headquarters outside the U.S. were among the first to begin using the facility in December 2007 and were also among its heaviest borrowers. These included the U.S. affiliates of banks such as Manama, Bahrain-based Arab Banking Corp., Madrid-based Banco Santander SA, and Paris-based Societe Generale SA. Beginning on June 18, 2009, Barclays Bank Plc had two loans totaling $23.45 billion outstanding.

In a second article, Bloomberg points out that despite Goldman’s statements that it would have survived even without help from the Fed, Goldman was a big borrower as well:

Goldman Sachs Goup Inc., which rebounded from the financial crisis to post record profit last year, was a regular borrower from two emergency Federal Reserve programs in 2008 and early 2009, new data show.

The firm borrowed from the Fed’s Term Securities Lending Facility most weeks from March 2008 through April 2009, data released by the Fed today show. Two units of the New York-based firm borrowed as much as $24.2 billion from the Fed’s Primary Dealer Credit Facility in the weeks after Lehman Brothers Holdings Inc.’s bankruptcy in September 2008, the data show.

Chief Executive Officer Lloyd Blankfein, 56, was quoted by Vanity Fair last year as saying the company might have survived the credit crisis without government help. The firm’s president,Gary Cohn, was more definitive, according to the magazine: “I think we would not have failed,” he was quoted as saying. “We had cash.”

Business Insider quotes the Fed to show that many banks tried to avoid the stigma attached to discount window borrowing by using the TAF program:

Many banks were reluctant to borrow at the discount window out of fear that their borrowing would become known and would be erroneously taken as a sign of financial weakness.

***

The PDCF functioned as an overnight loan facility for primary dealers, similar to the way the Federal Reserve’s discount window provides a backup source of funding to depository institutions. By providing a source of liquidity to primary dealers when funding was not available elsewhere in the market,

Business Insider also notes that, “Morgan Stanley, Citi, and Merrill were the biggest users of the PDCF [the Primary Dealer Credit Facility].”

CNBC points out that foreign banks used the PDCF as well:

In addition to Barclays, BNP Paribas Securities , Daiwa Securities America, Deutsche Bank Securities, Mizuho Securities USA, Dresdner Kleinwort Securities and UBS Securities all received support from the PDCF.

In a third article, Bloomberg reports that foreign banks were also among the biggest users of the Fed’s emergency commercial paper facility:

The U.S. subsidiaries of European financial institutions, led by Zurich-based UBS AG and Brussels- based Dexia SA were among the largest users of a government program to provide emergency short-term funding to U.S. companies and banks during the credit crisis.

Six European banks were among the top 11 companies that sold the most debt overall to the the Commercial Paper Funding Facility. They sold a combined $274.1 billion, according to data made public today by the U.S. central bank. UBS sold $74.5 billion, the most among all borrowers. The largest U.S.-based user was insurer American International Group, selling $60.2 billion.

UBS’s figure of $74.5 billion represents the company’s total sales over the life of the program. The bank’s CPFF borrowings peaked at $37.2 billion, an amount the firm rolled over, or re-sold at maturity, once. Other companies rolled over debt in the program as well.

Zero Hedge writes:

One may be forgiven to believe that … the Fed only bailed out foreign Central Banks, which in turn took the money and funded their own banks. It turns out that is only half the story: we now know the Fed also acted in a secondary bail out capacity, providing over $350 billion in short term funding exclusively to 35 foreign banks, of which the biggest beneficiaries were UBS, Dexia and BNP. Since the funding provided was in the form of ultra-short maturity commercial paper it was essentially equivalent to cash funding. In other words, between October 27, 2008 and August 6, 2009, the Fed spent $350 billion in taxpayer funds to save 35 foreign banks….

(click for larger image)

Zero Hedge also reports that California pension giant Calpers was the largest user of the TALF program, and provides details on the big foreign central bank users of the Fed’s emergency swap lines:

  • Looking at the TALF data, we see that the biggest borrower by subscription is Calpers, with a total of about $5.4 billion
  • More curiously, now disgraced and embroiled in an insider trading scandal hedge fund FrontPoint seems to have been a very active borrower on the TALF facility, having received $4.136 billion on subscription, the bulk of it going to a FrontPoint Michigan Strategic Partnership Investment entity, which has borrowed $2.6 billion
  • Foreign central bank borrowings
    • ECB [European Central Bank] – 271 borrowings for gross rolling total of just over $8 trillion.
    • SNB [Swiss National Bank] – 114 borrowings, for a gross rolling total of $465 billion
    • BOE [Bank of England] – 81 borrowings for a gross rolling total of $918 billion

Huffington Post is providing an excellent live-blogging round up as new discoveries are made from the Fed’s data release. Here are some of the more interesting insights:

Mutual funds, hedge funds and bond funds borrowed more than $71 billion from the Fed’s Term Asset-Backed Securities Loan Facility, the WSJ reported. This includes $7.1 billion borrowed by the massive bond fund PIMCO, run by veteran investor Bill Gross. Gross’s involvement in the details of the bailout, which included a campaign for public-private partnerships to unwind toxic assets, raised more than few eyebrows from critics.

***

Two European Megabanks Got A Windfall From The Fed … Two European megabanks — Deutsche Bank and Credit Suisse — were the largest beneficiaries of the Fed’s purchase of mortgage-backed securities. The Fed’s dollars also flowed to major American companies that are not financial players, including McDonald’s and Harley-Davidson, through unsecured short-term loans.

***

Wall Street firms teetering on the verge of collapse pledged more than $1.3 trillion in junk-rated securities to the Federal Reserve for cheap overnight loans….

The fact that Wall Street was able to pledge junk to the Fed in exchange for cheap financing is likely to enrage lawmakers who view the Bush and Obama-era crisis programs as largely benefiting Wall Street while “Main Street” has been left behind.

Adding insult to the perceived slight, banks have ramped up their requirements for new loans to borrowers, making it ever more difficult for cash-strapped households and businesses to take out new commitments.

Huffington Post also reports that many of these banks borrowed at ridiculously low interest rates.

Karl Denninger argues that the fact that the Fed took stock in two of AIG’s largest foreign insurance subsidiaries violates Section 14 of the Federal Reserve Act, which prohibits the Fed from taking an equity interest in a company irrespective of the means or terms.

While Bank of America and Wells Fargo were the biggest TAF recipients, AP reports that – when total government loans and aid are added up – other American banks borrowed much more:

New documents show that the most loan and other aid for U.S. institutions over time went to Citigroup ($2.2 trillion), followed by Merrill Lynch ($2.1 trillion), Morgan Stanley ($2 trillion), Bear Stearns ($960 billion), Bank of America ($887 billion), Goldman Sachs ($615 billion), JPMorgan Chase ($178 billion) and Wells Fargo ($154 billion).

However, it may be  too early to call the horse race in terms of totals and rankings for emergency loans and aid to the banks.  Because of the way that the Fed presented the data, there is a possibility of double-counting across different program categories, or failing to take into account that loans were repaid and then new loans taken out.  So it may take a couple of days for a definitive analysis.

Print Friendly
Twitter14DiggReddit0StumbleUpon0Facebook54LinkedIn0Google+0bufferEmail

60 comments

  1. Wojo

    Wall Street firms teetering on the verge of collapse pledged more than $1.3 trillion in junk-rated securities to the Federal Reserve for cheap overnight loans….

    Un-fu_cking-believable !!

    1. Winslow R.

      All the more reason to open the Fed window to all American citizens with collateral, tsy bonds, home mortgages, etc.

    2. Aqua Buddha

      I am now going to send my elected clown demands every day that they bring these Bankster soul sucking Fraud monger craps to justice or by God these corrupt FED, Treasury and bankers will all be brought down in the most sudden and abrupt way possible!

      Government must demand a pound of flesh from all the big banks and this mean Nationalization and wiping out all the bond holders or there will be Hell to pay!

      1. Aqua Buddha

        The FED valued these Bank Assets at 10% of book what does that tell you about the state of American Banks?

        What bank would loan a dime to your business on the same terms? You only get the loan if you are a Friend of the FED.

        Time to Flush the system out all the way or there will be revolt the gandhi way as Americans all sit down and give the debt default finger to everybody!

        1. jacke

          Worse yet, the banks could call commercial construction loans at any point, even when a project was nearly complete, slow or stop funding altogether at any point, with the courts saying that they had the right to do so, even if they acted in bad faith and without cause. Officials and attorneys at those banks simply made loans with false promises, then failed to fund them and bankrupted businesses and destroyed jobs. They and their buddies then bought up the notes for a fraction of their value after forcing projects into foreclosure. Corruption, greed, conspiracy,and fraud permeate the bank lending processes, but don’t hold your breath waiting for the feds to act.

  2. F. Beard

    What does “overnight” mean? A 12 hour loan? A 24 hour loan? A loan that can be rolled over indefinitely?

    Thanks in advance.

      1. F. Beard

        Thanks. I see it is a component of the fractional reserve juggling game. But wouldn’t an overnight loan just be for liquidity? I don’t see how it helps with insolvency.

          1. Shawn H

            So a senator tells Amazon to shutdown a wikileaks with no court order, ** AND THEY DO IT**.

            Amazon, how are you going to feel when another senator asked for your site to be shutdown?

            The solution? BOYCOTT AMAZON. Just never buy from them again.

        1. stan getz 692

          The so far, indefinite suspension of accounting rules 4 asset valuations is what continues to hide insolvency. I.2

          1. F. Beard

            The so far, indefinite suspension of accounting rules 4 asset valuations is what continues to hide insolvency. stan getz 692

            I guess an ordinary business would just go under due to lack of cash-flow?

          2. financial matters

            Or be forced to sell its assets thus helping to establish a true market price. And then would come insolvency.. Creative destruction..

    1. alex

      “Were the loans interest-free?”

      Close enough as makes no difference. Gee, why can’t I get loans like that from the Fed. Open it up to everyone!

      1. George Washington Post author

        From HuffPost (http://www.huffingtonpost.com/2010/12/01/wall-street-borrowed-from_n_790709.html):

        Money For Nothing: Wall Street Borrowed From Fed At 0.0077 Percent Interest Rate

        ***

        Nine firms — five of them foreign — were able to borrow $5 billion in U.S. government securities, which effectively act like cash on Wall Street, for four weeks at the minuscule interest rate of 0.0077 percent.

        That is not a typo.

        On 31 separate transactions, the lucky nine were able to borrow billions for 28 days as part of a crisis-era Fed program that lent the securities, known as Treasuries, for 28-day chunks to ensure that firms had cash on hand to lend, invest with and trade. The market was seizing up; effectively free money, courtesy of Uncle Same, helped it thaw.

        The European firms — Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (U.K.), Barclays (U.K.), and BNP Paribas (France) — borrowed $5 billion worth of Treasuries 19 different times, each paying just $383,561.64 in interest for the privilege. Deutsche led the way with seven such deals/

        That’s equal to 0.0077 percent interest for the 28-day loan. The annual interest rate equals 0.10 percent.

        1. Doug Terpstra

          Thank you, GW, for an important post. This puts Richard Alford’s post here two days ago in better perspective. He takes it as a given that the “Fed” is basically a acting in good faith in the public interest, when in fact the creature from Jekyll Island is a secretive self-serving criminal cartel acting against public interest, in violation of its own charter and the US constitution. This information needs to go viral.

          Incidentally, I notice in your charts that UBS was by far the largest foreign beneficiary of involuntary taxpayer largesse. How curious that is. Phil Gramm served as principal advisor/lobbyist for UBS—yes, the very same ignorant jerk who insisted the financial crisis was merely a “mental recession” and that Americans were “a nation of whiners”, and later that deadbeat borrowers were to blame.

          In a just world, such a disgraceful, arrogant cad would be clapped in wooden stocks, subjected to a very painful public caning, and stripped of all his personal assets as ammends.

          1. financial matters

            Phil Gramm, the former Republican Senator from Texas who co-wrote the act that undid Glass-Steagall, said, “I’ve never seen any evidence to substantiate any claim that this current financial crisis had anything to do with Gramm-Leach-Bliley.”

            “In fact, you couldn’t have had the assisted takeovers you had,” Gramm, now a vice chairman at the investment bank division of UBS AG, Switzerland’s biggest bank by assets, said in a Nov. 10 telephone interview. “More institutions would have failed.”

            http://www.bloomberg.com/apps/news?pid=20601087&sid=az7AcisnxsCA

        2. a

          “The European firms — Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (U.K.), Barclays (U.K.), and BNP Paribas (France) — ”

          I don’t know the details, but I think you are talking about a facility to Primary Dealers. These banks are primary dealers. Primary dealers are banks and other financial institutions which trade directly with the Federal Reserve and sell Treasuries to the public. The US needs primary dealers because it runs a huge budget deficit – no primary dealers, no ability to borrow money. There are foreign banks among the dealers to facilitate the sale of the debt to foreigners. If too many of these foreign banks had run into problems at the same time, the US government would have run into problems financing its deficit; at the least the cost of the financing would have gone up.

  3. Federal Windows

    If one were to read more mainstream pipe(ie CNN) the lie continues that everything was payed back just fine n’ dandy. (Go back to sleep, continue shopping and paying your mortgage)

      1. Debt Warrior

        If you give trillions of dollars worth of loans and loan guarantees at below market rates, sure the Gov’mint would get paid back, but the taxpayer? The Whores are reaping mega bonuses, the serfs are losing their homes. Are you that stupid?

      2. Anonymous Jones

        If you have a transaction in which one party is receiving terms that are well below established market value, the difference between market and those terms is a gift to that party.

        In this case, the gift was never paid back, as is common; most gifts are not returned. Saying that the transaction (ex the gift) was on market terms (i.e., paid in full) is a little disingenuous, n’est-ce pas?

        1. Eagle

          :shrug: That is the proper function of a central bank in a liquidity crisis. The healthiest, most moral bank in the world cannot survive a run, by definition.

  4. Sacramento Guy

    CalPERS borrowed from the TALF? How’s that for federalism?

    It’s interesting, because CalPERS is generally very transparent. All of their investment transactions are disclosed on their website, but entering “TALF” into the search box turns up nothing. Hmm.

  5. wes

    “likely to enrage lawmakers” PLLLLLease!!!!

    They sure as hell weren’t enraged in Sept 2008 with a Pecora Commission to follow(right!)? They were too busy taking that WS/bankster payola disguised as campaign funds

  6. readerOfTeaLeaves

    Two European Megabanks Got A Windfall From The Fed … Two European megabanks — Deutsche Bank and Credit Suisse — were the largest beneficiaries of the Fed’s purchase of mortgage-backed securities. The Fed’s dollars also flowed to major American companies that are not financial players…
    ***
    Wall Street firms teetering on the verge of collapse pledged more than $1.3 trillion in junk-rated securities to the Federal Reserve for cheap overnight loans….

    Wall Street firms on the brink of collapse still paid out extravagant (to us ‘ordinary’ folk) bonuses the past couple of years.

    And as for the foreign banks: here’s to globalization. Wheeeeeeee!

  7. Belongs Here

    Had it not been for the bailout, most of the major center banks would have been wiped out. This would have destroyed the fortunes of their shareholders, many of their creditors, and their top executives. This would have been a massive redistribution to the rest of society — their loss is our gain.

  8. MichaelC

    Skimming the Parent/Sponsor list in the CCFP disclosure, one infamous name caught my eye : Hudson Castle.

    IIRC this was an entity that provided/and was provided funding to Lehman, was virtually worthless, yet was eligible for this program into 2010. Huh??

    http://www.federalreserve.gov/newsevents/files/cpff.cp.xls

    Perhaps I don’t recall correctly, but it is interesting that this paper would qualify for Fed funding over such an extended period, and at a pretty stable discount rate.

    1. StopFraudEsq

      I very much recall this name in Lehman’s SEC filings listed as an affiliate or some such thing.

      Use a good SEC filing search engine and check it out.

  9. StopFraudEsq

    Good news.

    It’s time for a talk about the birds and the bees with Americans. First, there is no such thing as a “foreign bank” just like there’s no such thing as a top 6 “American bank”.

    Hopefully, this will start the conversation I’ve wanted to have for 15 years.

    It’s not even that complicated, either. Americans NEED to learn: what is a BANK.

    99% have no clue what banking really is.

    1. readerOfTeaLeaves

      I agree.
      Until I’d read Nomi Prins’ excellent “Other People’s Money”, I myself had no idea.

      I’m interested in economics generally, but finance was never an interest of mine. For someone like myself, being asked to follow the details of ‘finance’ was about as appealing as being asked to concentrate on the complexities of my car engine; I simply was not interested.

      Now, however, I find it just mind-boggling to try and connect the dots.
      I also think that for like myself, Yves’ blog, masaccio at Firedoglake, Barry Ritholtz, and Dylan Ratigan have made the ‘stories’ absolutely must-read, jaw-drop ‘how does this all work?!’ intriguing.

      But I doubt that if I asked the next 100 people I encounter ‘what’s a bank’ that more than 3 could give me a good explanation.

      Your point is a very good one, and I hope some sharp minds around here follow up on it.

  10. F. Beard

    The solution? BOYCOTT AMAZON. Just never buy from them again. Shawn H

    Indeed! Who else should we use instead? Who’s their main competition?

  11. Doc Holiday

    Like someone said above… unfucking real how much corruption is involved in this disgusting farce…. every member of congress should be in a meeting in the morning to subpoena Bush, Paulson, Geithner, Bernanke and every stooge at Goldman and put a fucking end to this retarded extortion and send these fucking crooks to prison! This bullshit falls within the context of:

    The Logan Act

    § 953. Private correspondence with foreign governments.
    Any citizen of the United States, wherever he may be, who, without authority of the United States, directly or indirectly commences or carries on any correspondence or intercourse with any foreign government or any officer or agent thereof, with intent to influence the measures or conduct of any foreign government or of any officer or agent thereof, in relation to any disputes or controversies with the United States, or to defeat the measures of the United States, shall be fined under this title or imprisoned not more than three years, or both.
    This section shall not abridge the right of a citizen to apply himself, or his agent, to any foreign government, or the agents thereof, for redress of any injury which he may have sustained from such government or any of its agents or subjects.
    1 Stat. 613, January 30, 1799, codified at 18 U.S.C. § 953 (2004).

  12. doc holiday

    Text of the Logan Act

    § 953. Private correspondence with foreign governments.
    Any citizen of the United States, wherever he may be, who, without authority of the United States, directly or indirectly commences or carries on any correspondence or intercourse with any foreign government or any officer or agent thereof, with intent to influence the measures or conduct of any foreign government or of any officer or agent thereof, in relation to any disputes or controversies with the United States, or to defeat the measures of the United States, shall be fined under this title or imprisoned not more than three years, or both.
    This section shall not abridge the right of a citizen to apply himself, or his agent, to any foreign government, or the agents thereof, for redress of any injury which he may have sustained from such government or any of its agents or subjects.
    1 Stat. 613, January 30, 1799, codified at 18 U.S.C. § 953 (2004).

  13. Debt Warrior

    McDonalds. At least Cheeseburgers haven’t seen a bubble yet, it’s a good thing borrowers will have their cheap meat after foreclosure. The homeless are going to swell, and not one goddamn news outlet covers it. The Homeless have been invisible for many years now, once your there, no one cares.

  14. razzz

    Remember that dear US Treasury Secretary Henry Paulson had Congress exempt him from criminal prosecution for whatever he does while holding all that power with bailout monies, at the time. In exchange Congress critters received massive funding for pet project which just added to the taxpayers’ bill.

    From
    http://www.answers.com/topic/henry-paulson

    [The support given by Federal Reserve Board, Under Ben Bernanke and Treasury, with Paulson at helm, in acquiring of Bear Stearns by J.P Morgan and $200bn facility made available to Fannie Mae and Freddie Mac. There was a great deal of criticism of this decision in congress by both Republicans and Democrats.[23] When Barclays required support for acquiring Lehman Brothers, both Geithner and Paulson were reluctant. Instead, they pressured Lehman’s into chapter 11 bankruptcy, believing the effect wasn’t systemic.[24]

    “Well, as you know, we’re working through a difficult period in our financial markets right now as we work off some of the past excesses. But the American people can remain confident in the soundness and the resilience of our financial system.” [25]
    This proved to be a colossal miscalculation, as the money markets began to free-fall between September 15, 2008 and September 19, 2008.]

    Hatred for Bear Stearns and ensuing payback in the form of becoming non-existence was really uncalled for. There was a bidder for BS.

    Guarantees of money markets and bank deposits would have calmed markets and prevented any bank runs and panics. Instead we get, “You never want a serious crisis to go to waste..”

    Wait till Wiki releases bank documents in January, it won’t paint a very pretty picture making today’s news a head’em off at the pass event.

  15. skippy

    Societal cancer is hard to watch. Firstly the shocking news that a loved one, seemingly strong and vigorous, was corrupted deep inside all awhile. All the economic interns, residents and attending financial physicians have tried all the classic treatments ie localized radiation, chemotherapy, increasing anti-body’s with in the blood stream and a few non classic ie holistic remedies hoppum, group therapy (mental projection) and any other mystic tool they can find.

    But alas the the body rots, it putrefies as we speak, I can smell it…can you. Every where I go, every thing I see, all that I talk too, point to only one conclusion… economic / financial contraction. The anathema to financial organs, yet their solution is dilution ha ha ha…in increasing volume, hoping the water molecule has memory. Tis hard to medicate for pain management and still fight the side effects of it…cough respiratory depression and hypo tension…eh.

    Skippy…Ha the great buildings and industry’s are the Moi of crony capitalism, what wretched will be found lingering whilst chiefs relocated to Dubai et al.

  16. Rick Halsen

    Prediction:

    This cannot be paid back in time to counter the U.S.’s own internal and external deficit implosions. Therefore there must be some global plan in the works to consolidate the dollar as part of a new global reserve currency yet to be announced whereby the current debt structures are consequently also consolidated and reset. This extent of this debt cannot be repaid. The interest alone cannot be repaid. It was knowingly lent with that in mind.

    Therefore I see no other way in view of the present global-wide currency devaluations, the subsequent debasement of the dollar itself, the growing specter of inflationary forces upon essential commodities, the subsequent ongoing destabilization of global financial systems and their governments, that a new global currency based on new methods of valuations must be enacted quickly in order to avert complete and total collapse of modern society.

    There is no other way around this. I expect an announcement to this effect within the year at best. What your dollars will be worth is anyone’s guess but there is no doubt whatsoever that they will be worth less than they are today. Either way, we either for it now or we pay for it later. Unfortunately because of the foregoing it will have to be now or it won’t make any difference.

    RH

  17. Allen C

    As detestable as the Fed’s support was/is, it seems obvious that we were close to a sudden stop. The Fed’s real crime was letting it get anywhere near that point.

    One should reasonably conclude that an expert of depression can actually see one coming. Bernanke was unable to forecast any material trouble. How messed up is that?

      1. Sundog

        I’m not arguing that the Fed was perfect. But the data seem to show the system was close to collapse, and it didn’t. That’s a win for the Fed in my eyes.

        The big decisions on propping up failed institutions seem to have been made at Treasury (TARP, phoney stress tests, regulatory forebearance, extend and pretend, etc. etc.)

        If Fed fudging and flailing had been used to keep the zombies alive until the political system had dismembered them and shared out the pain to bondholders, it would have been a great victory. Our elected representatives failed more than the Fed.

  18. Allen C

    “why on earth did harley davidson and mcdonalds tap the Fed?”

    These guys committed a basic financing error – the maturity mismatch. When it blew up, they got their buddy to bail them out with your money. They remain employed collecting their bonuses.

  19. Allen C

    Mr. Bernanke:

    Please consider the many that gave their lives for the United States of America. I assure you that history will render you a reformed citizen if you pursue justice for the incredible wrongs. The citizens can heal knowing the that evil doers have suffered appropriately.

    You know what you need to do…

  20. Lynda Scott

    You’re kidding me, right ?! How is this possible that HARLEY DAVIDSON got some of my tax money ? I don’t remember signing any papers ! WHERE’S MY FREE MOTORCYCLE ? — you know, that HARLEY DAVIDSON that i’ve always wanted but could never afford !! ? ……. i’m out, this is the final straw ……. I spend no more money on anything from a large corporation & I’m purchasing the bare minimum of foodstuffs & the maximum silver & gold. I am withdrawing all my money out of the bank, too…….. it’s over / signing out of the system.

  21. Swedish Lex

    After which, banks all over the planet helped themselves to well deserved bonuses at stratospheric levels and went home to spend christmas, feeling good about themselves…….

  22. psychohistorian

    I am chuckling as I read all this in a sick sort of way.

    I focused on macro-econ, planning methodologies and modeling back in the early 70′s in college and after a brief stint fighting the bureaucrats as a state level CETA administrator went back to my computer skills to make money as I watched the world go by.

    I read Greider’s book: The Secrets of the Temple” about the Fed in 1989 when it came out.

    I have watched with rapt attention as economic crisis after crisis was averted, obfuscated, extended and pretended like it didn’t exist over the past 40 years. I was thinking I was going to pass on as a know ranter against American imperialism without most Americans knowing what the fading of an empire feels like.

    It now looks like the crash that I have been telling folks for years needed to happen, is underway. It would have been less painful if it had happened sooner and worse the longer it goes on in its demented fashion.

    Times ahead will be painful enough for many and that is assuming that adults will come to the fore, right the worlds ship of state , prosecute the perps and organize mankind towards more humanistic endeavors……yes, I have a card for what I am smoking…..what do we have if not our dreams for a less greedy and more sharing mankind?

    So, are the world economies going to crash soon in spite of all the overt and covert manipulation? I no longer make predictions but it is sure is fascinating to watch the current goings on.

  23. Mindrayge

    One of the “enlightening” things about the TAF dump was the size and number of loans secured from whole loans sitting on the banks’ balance sheet (unrated) that were fetching less than 10 cents on the dollar – some were less than 2 cents on the dollar.

    Another thing was, banks like Wachovia were pledging up to 25% of their balance sheet loans for such small loans. Key Banks, it appears, literally pledged its entire unencumbered commercial loan/commercial real estate portfolio along with its entire marine/rv/aircraft portfolio for pennies on the dollar.

    What was of interest in the Maiden Lane info was that Maiden Lane I (Bear) finally made its first repayment on its loan after 9 quarters. Maiden Lane III (AIG CDOs etc to extinguish CDS) went from an initial 67% investment grade from its 1st quarter to 29% investment grade in the next one while as of last quarter 98.9% is now rated junk. Maiden Lane II (AIG Subprime, ALT-A, Option ARM) is 85.4% junk.

  24. Jerry

    This reminds me of how I felt when I read a book “Left to Tell” about a person who survived the genocide in Uganda the Evil killing was so hateful ugly, it made better understand and thankful for righteousness. Now this downward spiral of ethics and morality makes me think of a song “Some trust in chariots and horses (governments)….others trust in our God…His name Holy, His name is righteous..His name is above any other name..” He calls out to the weary so I guess I’m just weary of all the ugliness and am so thankful for the comfort and peace I find elsewhere…pardon my digressing..

  25. robert

    I see there are three Canadian banks on that 35 member list.

    The constant refrain from our financial punditry and politicians about our bank shit somehow not stinking is starting to ring a little hollow right now. I’m with Lynda Scott on the system bail. It’s the only way to force the change that is needed.

  26. Anon

    Consider:

    Walter Bagehot-Lend freely at a penalty rate against good collateral…

    vs.

    “Wall Street firms teetering on the verge of collapse pledged more than $1.3 trillion in junk-rated securities to the Federal Reserve for cheap overnight loans….”

    Through the looking glass we go.

  27. Frank

    According to an excerpt from the Washington Post:

    “The Fed launched emergency programs totaling $3.3 trillion in aid, a figure reached by adding up the peak amount of lending in each program.

    By the fall of 2008, credit had frozen across the financial system, including the commercial paper market. The Fed then purchased commercial paper issued by GE 12 times for a total of $16 billion. It bought paper from Harley-Davidson 33 times, for a total of $2.3 billion. It picked up debt issued by Verizon twice, totaling $1.5 billion.”

    GE owns MSNBC, NBC, and CNBC, yet the corporate shills at CNBC never mentioned anything about a GE bailout and seem to have had no problem cheerleading for Wall Street and “free market capitalism”, while simultaneously taking a free ride on the American taxpayer.

    In Nov 2008 a Bloomberg article stated “General Electric Co. said the U.S. government agreed to insure as much as $139 billion in debt for lending arm GE Capital Corp.”

    In other words General Electric took at least $139 billion in government-backed loan guarantees to keep GE Capital Corp from going belly-up and taking the company down with it.

    And after receiving all that bailout money, how do the corporate shills at CNBC repay the American public? The way they pay us back is by inviting billionaires like Pete Peterson and his hitman David Walker (formerly head of the Government Accounting Office) on CNBC, then giving them an open forum to promote their national debt fearmongering along with their proposed solution of austerity that would begin by slashing social security.

    All for our own benefit of course. Their solution requires austerity for the masses and the peasants, so the priviled few can continue living high on the government bailout hog.

    1. Jerry

      Do we still live in a democracy? I think not. Doesn’t our constitution say something about what our citizens can do when this is the case? Do we not have the right and obligation to over throw this government as we did as colonies when dominated by England? Where do we start?….our children deserve it!

Comments are closed.