Federal Reserve's secret $3.3 trillion bailout revealed:

[Galileo]

Federal Reserve's secret $3.3 trillion bailout revealed:

LOWLIGHTS

Deutsche Bank (German); $290 billion

Credit Suisse (Swiss); $287 billion

Morgan Stanley; $205 billion

Citigroup; $185 billion

Merrill Lynch/Bank of America; $174 billion

Goldman Sachs; $159 billion

JPMorgan Chase; $153 billion

Barclays (British); $123 billion

UBS (Swiss); $94 billion

BNP Paribas (French); $67 billion

This adds up to $1.7 trillion. There is still another $1.6 trillion.

http://www.huffingtonpost.com/2010/12/01/fed-opens-books-revealing_n_790529.html

[boutons_deux]

So we bailed out the Swiss banks that hide US wealthy people's obscene incomes from IRS?

Clinically insane, but par for the course.

Will the Repugs and tea baggers inflame this issue? I bet not a peep.

[Wild Cobra]

They are rich friends of the liberals in DC. Just that simple.

[CosmicCowboy]

So we bailed out the Swiss banks that hide US wealthy people's obscene incomes from IRS?

Clinically insane, but par for the course.

Will the Repugs and tea baggers inflame this issue? I bet not a peep.

What a fucking dumbass

It's sure as hell not the Democrats that have been calling for an audit of the Fed...

[Parker2112]

What a fucking dumbass

It's sure as hell not the Democrats that have been calling for an audit of the Fed...

funny enough...boutons isnt the slght bit interested either

[BlairForceDejuan]

It's all a game none of us will ever be players in. Why even care.

[Winehole23]

The Fed, ferociously backed by the Obama administration, fought lawmakers' desire for full disclosure throughout the financial reform debate.This leapt out at me. Are progressives shifting against Obama? Consider the source.

[ElNono]

They are rich friends of the liberals in DC. Just that simple.

That's why the bailout was proposed, carried out and signed off by a Republican administration?

BTW, Obama signed that financial reform into law.
You might not like things that he has done, but you should commend him on actually getting this approved and the data out there. Weren't some of you bitching about the lack of transparency?

[Galileo]

THE FRAUDULENT RESERVE: Ron Paul Says Fed Policy 'Is Out of Control' - Bloomberg Interview (Dec. 1) [VIDEO]

This is pretty brilliant. Try to set aside a few minutes.

WATCH VIDEO:

http://dailybail.com/home/the-fraudulent-reserve-ron-paul-says-fed-policy-is-out-of-co.html


Ron Paul on Debt and War (VIDEO)

WATCH VIDEO:

http://www.lewrockwell.com/blog/lewrw/archives/71950.html


FED Was Liquefying The World (VIDEO)

The Federal Reserve on Wednesday revealed the details of some $3.3 trillion in emergency loans it made to financial institutions during the credit crisis as mandated by a revamp of US regulations. CNBC's Steve Liesman has the details.

http://www.youtube.com/watch?v=4xu8uqedkto&feature=player_embedded#!


Drs. Ron and Rand Paul on Fox 12-02-10 (VIDEO)

WATCH VIDEO HERE:

http://www.dailypaul.com/node/151019

[Winehole23]

[/URL]
Fed officials have claimed they did not know of the need for large-scale intervention in the financial markets until autumn 2008. Ben Bernanke, Fed chair, also testified that “The only way we could have saved Lehman would have been by breaking the law.” Yet [URL="http://www.federalreserve.gov/newsevents/reform_transaction.htm"]the Fed’s new spreadsheets (http://www.ft.com/cms/s/0/6ea84d76-fe54-11df-abac-00144feab49a.html#ixzz174xkrLkQ) belie these claims. The data show the Fed was lending prolifically abroad in 2007, and then domestically, to investment banks – including Lehman – in early 200http://www.ft.com/cms/s/0/6ea84d76-fe54-11df-abac-00144feab49a.html#axzz170sKzg00

[boutons_deux]

Give me a signal when the tea baggers and Repugs start ragging on the financial sector, THE REAL CULPRITS, as much as they hate the government (that simply follows the dictates of the Too-Powerful-To-Oppose financial sector).

The tea baggers and Repugs are doing exactly as the VRWC wants and pays for, whining about "the government is the problem" and must be starved adn destroyed, to hide the financial sector as the perps.

[boutons_deux]

The Fed Lied About Wall Street

Banks have lots of money in long-term assets, but can’t convert those long-term assets into short-term cash.

In retrospect, that view was clearly an error. The bank held hundreds of billions of dollars worth of subprime mortgage assets, which were not merely worthless in the panic-stricken view of the financial mob, but worthless, full stop. At the time many people argued that the financial system faced not a liquidity crisis, but a liquidity crisis and a solvency crisis. That is to say, even if the government had helped the banks deal with day-to-day problems, the banks were still fundamentally unable to pay their debts. They were not merely illiquid, but insolvent.


http://blogs.alternet.org/speakeasy/2010/12/02/the-fed-lied-about-wall-street/?utm_source=feedblitz&utm_medium=FeedBlitzRss&utm_campaign=alternet

=============

But you right-winger guys would rather swallow the lies of govt and FCM while assassinating truth-teller Assange.

I can't wait til he dumps his bank secrets.

[CosmicCowboy]

Lehmann was assassinated by Goldmans short squeeze on them with the full complicity of the Fed...

[Winehole23]

Lehmann was assassinated by Goldmans short squeeze on them with the full complicity of the Fed...Ok.

Lay it out for us, Profe. How did it go down?

[Winehole23]

Saying Goldman killed Lehman with the government's backing is somewhat vague. Can you fill in the history a little?

[Winehole23]

Some people might be new to the topic.

[Winehole23]

As previously discussed on ST: Goldman Sachs.


Mar 31, 2010: Matt Taibbi: Looting Main Street.
In 2002, during a conversation recorded in Nixonian fashion by JP Morgan itself, LeCroy bragged that he had agreed to funnel payoff money to a pair of local companies to secure the votes of two county commissioners. "Look," the commissioners told him, "if we support the synthetic refunding, you guys have to take care of our two firms." LeCroy didn't blink. "Whatever you want," he told them. "If that's what you need, that's what you get. Just tell us how much."

Just tell us how much. That sums up the approach that JP Morgan took a few months later, when Langford announced that his good buddy Bill Blount would henceforth be involved with every financing transaction for Jefferson County. From JP Morgan's point of view, the decision to pay off Blount was a no-brainer. But the bank had one small problem: Goldman Sachs had already crawled up Blount's trouser leg, and the broker was advising Langford to pick them as Jefferson County's investment bank.


The solution they came up with was an extraordinary one: JP Morgan cut a separate deal with Goldman, paying the bank $3 million to fuck off, with Blount taking a $300,000 cut of the side deal. Suddenly Goldman was out and JP Morgan was sitting in Langford's lap. In another conversation caught on tape, LeCroy joked that the deal was his "philanthropic work," since the payoff amounted to a "charitable donation to Goldman Sachs" in return for "taking no risk."http://www.rollingstone.com/politics/news/12697/64833

http://www.spurstalk.com/forums/showthread.php?t=150055&highlight=Goldman+Sachs


Jul 15, 2010. Goldman Settles SEC Fraud case for $550 million.
The settlement also requires Goldman to review how it sells complex financial mortgage investments. Goldman acknowledged in a court filing that its marketing materials for the deal at the center of the charges omitted key information for buyers.

But Goldman did not admit any legal wrongdoing.
(http://www.spurstalk.com/forums/showthread.php?t=159044&highlight=Goldman+Sachs)
The investments were crafted with input from a Goldman client who was betting on them to fail. The securities cost investors close to $1 billion while helping a Goldman client—hedge fund billionaire John Paulson—capitalize on the housing bust. http://www.spurstalk.com/forums/showthread.php?t=159044&highlight=Goldman+Sachs (http://www.spurstalk.com/forums/showthread.php?t=159044&highlight=Goldman+Sachs)


May 11, 2010. Goldman records a perfect first quarter.
In a disclosure destined to focus more unwanted attention on Wall Street, Goldman Sachs reported Monday that its traders made money on all 63 trading days of the first quarter of 2010 — the first perfect quarter in Goldman's history.http://theweek.com/article/index/202836/goldmans-suspiciously-perfect-63day-trading-run http://www.spurstalk.com/forums/showthread.php?t=154207&highlight=Goldman+Sachs


April 9, 2010. Banks use accounting tricks to disguise risk.
According to the data, the banks' outstanding net repo borrowings at the end of each of the past five quarters were on average 42% below their peak in net borrowings in the same quarters.http://online.wsj.com/article/SB10001424052702304830104575172280848939898.html?m od=e2fb

http://www.spurstalk.com/forums/showthread.php?t=150623&highlight=Goldman+Sachs


Feb 17, 2010. Matt Taibbi in Rolling Stone: Wall Street's Bailout Shuffle.http://www.spurstalk.com/forums/showthread.php?t=146999&highlight=Goldman+Sachs


Feb, 2010. Analyst: Goldman is TBTF.
“We’re in the business of doing credit analysis, and we’ve come to the conclusion that essentially Goldman Sachs is backstopped,” Egan says. http://www.spurstalk.com/forums/showthread.php?t=146058&highlight=Goldman+Sachs (http://www.spurstalk.com/forums/showthread.php?t=146058&highlight=Goldman+Sachs)


Feb 10 2010. Congressional Hearings including Lloyd Blankfein.
Some of your firms received payouts on credit-default swap contracts with American International Group. Most of those guarantees resulted from hedging supposedly safe investments (they had AAA ratings, after all) with A.I.G. or other insurers. This hedging allowed traders to book “profits” that had not yet been earned — profits that would be counted in calculating their bonuses.

However, this insurance was likely to fail, as your risk managers surely knew. It involved so-called wrong-way risk: the guarantor (A.I.G.) was certain to be damaged by the same event (the housing market collapse) that would lead you to seek payment on the insurance. The insurance was effective only because the government stepped in, theoretically on the taxpayers’ behalf, and made payments for A.I.G., an otherwise bankrupt firm. Since employees’ bonuses, and ultimately yours, were based on these fraudulent profits, my questions are these:

1. How much profit did your firm record for bonus purposes on these trades that ultimately delivered huge losses? How much of those bogus profits were paid out in bonuses?

2. Have you made any effort to recover the bonuses? If not, why not?

— YVES SMITH, the head of Aurora Advisors, a management consulting firm, and the author of the blog Naked Capitalism and the forthcoming book “Econned: How Unenlightened Self-Interest Undermined Democracy and Corrupted Capitalism”

Without the Troubled Asset Relief Program, Wall Street banks would not have survived the shock to the financial system that occurred in September 2008. Nor would they have subsequently accrued large profits and bonus pools in 2009. Shouldn’t a substantial share of those bonus pools be sequestered on bank balance sheets for several years to increase the banks’ capital levels and shield taxpayers against another bailout? All deposits insured by the Federal Deposit Insurance Corporation that were held by Wall Street financial conglomerates should have been insulated in separate bank subsidiaries that were prohibited from trading, holding derivative securities and investing in risky assets like equities or bonds with less than a AAA rating. Wouldn’t such safeguards have reduced excess banker risk-taking, thereby reducing the need for taxpayer bailouts?
3. Wall Street turbocharged the subprime mortgage boom from 2002 to 2006 by providing billions in cheap warehouse loans to non-bank lenders that otherwise had virtually no capital or financing. Had the Federal Reserve kept short-term interest rates at a more normal 4 percent to 5 percent, rather than pushing them down to 1 percent, would this not have greatly curtailed the reckless growth of subprime loans?

— DAVID STOCKMAN, a director of the Office of Management and Budget under President Ronald Reagan
http://www.nytimes.com/2010/01/13/opinion/13intro.ready.html

http://www.spurstalk.com/forums/showthread.php?t=144202&highlight=Goldman+Sachs


Oct. 27, 2009 Maiden Lane III revealed. The New York Fed redeemed at least $13B in AIG CDOs at par. http://www.spurstalk.com/forums/showthread.php?t=137668&highlight=Goldman+Sachs


Oct 26, 2009. Cities and counties hit by underwriting costs related to exotic swaps. http://www.spurstalk.com/forums/showthread.php?t=137665&highlight=Goldman+Sachs


Oct. 27, 2009. Goldman swaps roil NJ.http://www.spurstalk.com/forums/showthread.php?t=137664&highlight=Goldman+Sachs


Oct. 23, 2009. Goldman profits swell bonus pool.http://www.spurstalk.com/forums/showthread.php?t=136759&highlight=Goldman+Sachs



Oct. 18, 2009.
The question is why did we give the banks billions of our money so they could then buy assets by the trillions with our money and they keep the profits?


The answer is Henry Paulson, former Goldman Sachs CEO who ran the US Treasury, and Tim Geithner, current Treasury Secretary who at the time ran the New York Federal Reserve, willingly delivered Goldman Sachs the $70 Billion -- with no strings attached.
http://www.businessinsider.com/dylan-ratigan-how-goldman-sachs-made-3-billion-a-year-after-we-bailed-their-lucky-asses-out-2009-10



Oct. 15, 2009.
The Wall Street bank Goldman Sachs is gearing up to pay huge year-end bonuses to its 31,000 employees after raking in quarterly profits of $3.19bn (£1.96bn), boosted by astute trading, resurgent stocks and a return to relative normality on the financial markets.

(http://www.spurstalk.com/forums/showthread.php?t=136874&highlight=Goldman+Sachs)Goldman's profits of $35m a day for the three months to September were more than three times as much as the bank made during the same period in 2008. Under its policy of setting aside almost half of its revenue to pay its staff, the firm has built up a compensation fund of $16.7bn for the year to date – including $5.35bn set aside in the last quarter.http://www.spurstalk.com/forums/showthread.php?t=136874&highlight=Goldman+Sachs


Sept. 29, 2008. Matt Taibbi: How Goldman Lobbies the Senate. http://www.spurstalk.com/forums/showthread.php?t=135835&highlight=Goldman+Sachs

[/QUOTE]

[Winehole23]

Sept.24, 2008. Berkshire Hathaway takes a $5B stake in Goldman.
http://www.spurstalk.com/forums/showthread.php?t=105503&highlight=Goldman+Sachs

[boutons_deux]

Paulson got AIG saved and then about $12B of those US tax $ to AIG flowed directly to Goldman.

By how many $Bs was Goldman exposed to at competitor Lehman?

Did AIG compete with Goldman? Did Lehman?

Guess who got killed, and who got saved?

[Winehole23]

That's more or less where we started. Thanks for filling us in a little.




(Pretty short story, though.)

[Winehole23]

Lehmann was assassinated by Goldmans short squeeze on them with the full complicity of the Fed...http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a7T5HaOgYHpE

There's a few blanks to be filled in, but you get the idea. Don't you have a fuller version of the story, CC?

[Winehole23]

The short squeeze needs to be defined and described, and the roles of the participants fleshed out for starters. You only offered a rough schematic of the situation. An actual theory might include a few more details.

[ElNono]

Sadly, the Fed gestapo unit prevailed, and history will probably be rewritten by some of these people that made millions through this scam, through a series of NYT Best Sellers depicting themselves as heroes of the day.

[Winehole23]

If you have any links to related narrative, I'd be grateful to have them.

[ElNono]

If you have any links to related narrative, I'd be grateful to have them.

I don't at this time. I was merely commenting on the stories provided by your links (thanks, BTW)

[Winehole23]

Instead of waiting around for CC to tell a story, I took my own tip to him, and briefly checked what was searchable here.



(mini-roundup)

[boutons_deux]

We'll see if the Repugs really audit the Fed as aggressively as they are going to subpoena/witchhunt the White House.

Auditing the Fed is Repug campaign bullshit.

The Repugs won't touch the Fed because Wall St, who runs/rigs the Fed and Treasury, owns the Repugs.

This is the same bullshit as the Repugs voting against TARP, after a Repug WH and a Repug Treasury initiated (Paulson's 3-page extortionist) TARP. The Repugs were ready to let BoA, AIG, WF, Citi, etc declare bankruptcy? Their vote against TARP was pure campaigning, and profoundly dishonest. Had McLiar and animal snuff queen won, the Reugs TARP would have been carried out.

[greyforest]

It's all a game none of us will ever be players in. Why even care.

http://forum.blu-ray.com/images/smilies/imported/shh.gif we are the pawns

[Winehole23]

http://seekingalpha.com/article/71860-smelling-a-short-squeeze-in-lehman

[Winehole23]

http://blogs.wsj.com/deals/2008/09/18/short-squeeze-fewer-i-banks-fewer-places-for-hedgies-to-borrow-stock/

[Winehole23]

Nearly two years after the collapse of Lehman Brothers (http://topics.nytimes.com/top/news/business/companies/lehman_brothers_holdings_inc/index.html?inline=nyt-org), some on Wall Street still wonder whether a handful of the nation’s most powerful hedge funds conspired to push the 158-year-old financial giant into bankruptcy while making big profits for themselves.



Now, in search of a smoking gun, a law firm hired by the estate (http://topics.nytimes.com/your-money/planning/estate-planning/index.html?inline=nyt-classifier) of Lehman Brothers Holdings has demanded trading records, e-mail and other correspondence for all of 2008 from a collection of prominent hedge funds and the venerable Goldman Sachs (http://topics.nytimes.com/top/news/business/companies/goldman_sachs_group_inc/index.html?inline=nyt-org).



The firms named in the inquiry make up a Who’s Who of the hedge fund world, and include SAC Capital Advisors, run by Steven A. Cohen; Greenlight Capital, managed by David Einhorn; the Citadel Investment Group (http://topics.nytimes.com/top/news/business/companies/citadel_investment_group/index.html?inline=nyt-org), led by Kenneth C. Griffin; and Och-Ziff Capital Management (http://topics.nytimes.com/top/news/business/companies/och-ziff-capital-management-group/index.html?inline=nyt-org), whose chief executive is Daniel Och.


http://www.nytimes.com/2010/09/01/business/01lehman.html

[CosmicCowboy]

Sorry Winehole...I actually do have a life outside of ST....:)

Heres a pretty good summary...

http://www.rollingstone.com/politics/news/12697/64824

[Winehole23]

Then, on March 11th — around the same time that mystery Nostradamus was betting $1.7 million that Bear was about to collapse — a curious thing happened that attracted virtually no notice on Wall Street. On that day, a meeting was held at the Federal Reserve Bank of New York that was brokered by Fed chief Ben Bernanke and then-New York Fed president Timothy Geithner. The luncheon included virtually everyone who was anyone on Wall Street — except for Bear Stearns.


Bear, in fact, was the only major investment bank not represented at the meeting, whose list of participants reads like a Barzini-Tattaglia meeting of the Five Families. In attendance were Jamie Dimon from JPMorgan Chase, Lloyd Blankfein from Goldman Sachs, James Gorman from Morgan Stanley, Richard Fuld from Lehman Brothers and John Thain, the big-spending office redecorator still heading the not-yet-fully-destroyed Merrill Lynch. Also present were old Clinton hand Robert Rubin, who represented Citigroup; Stephen Schwarzman of the Blackstone Group; and several hedge-fund chiefs, including Kenneth Griffin of Citadel Investment Group.


The meeting was never announced publicly. In fact, it was discovered only by accident, when a reporter from Bloomberg filed a request under the Freedom of Information Act and came across a mention of it in Bernanke's schedule. Rolling Stone has since contacted every major attendee, and all declined to comment on what was discussed at the meeting. "The ground rules of the lunch were of confidentiality," says a spokesman for Morgan Stanley. “Blackstone has no comment," says a spokesman for Schwarzman. Rubin declined a request for an interview, Fuld's people didn't return calls, and Goldman refused to talk about the closed-door session. The New York Fed said the meeting, which had been scheduled weeks earlier, was simply business as usual: "Such informal, small group sessions can provide a valuable means to learn about market functioning from people with firsthand knowledge."
So what did happen at that meeting? There's no evidence that Bernanke and Geithner called the confidential session to discuss Bear's troubles, let alone how to carve up the bank's spoils. It's possible that one of them made an impolitic comment about Bear during a meeting held for other reasons, inadvertently fueling a run on the bank. What's impossible to believe is the bullshit version that Geithner and Bernanke later told Congress. The month after Bear's collapse, both men testified before the Senate that they only learned how dire the firm's liquidity problems were on Thursday, March 13th — despite the fact that rumors of Bear's troubles had begun as early as that Monday and both men had met in person with every key player on Wall Street that Tuesday. This is a little like saying you spent the afternoon of September 12th, 2001, in the Oval Office, but didn't hear about the Twin Towers falling until September 14th.


Given the Fed's cloak of confidentiality, we simply don't know what happened at the meeting. But what we do know is that from the moment it ended, the run on Bear was on, and every major player on Wall Street with ties to Bear started pulling IV tubes out of the patient's arm. Banks, brokers and hedge funds that held cash in Bear's accounts yanked it out in mass quantities (making it harder for the firm to meet its credit payments) and took out credit-default swaps against Bear (making public bets that the firm was going to tank). At the same time, Bear was blindsided by an avalanche of "novation requests" — efforts by worried creditors to sell off the debts that Bear owed them to other Wall Street firms, who would then be responsible for collecting the money. By the afternoon of March 11th, two rival investment firms — Credit Suisse and Goldman Sachs — were so swamped by novation requests for Bear's debt that they temporarily stopped accepting them, signaling the market that they had grave doubts about Bear.


All of these tactics were elements that had often been seen in a kind of scam known as a "bear raid" that small-scale stock manipulators had been using against smaller companies for years. But the most damning thing the attack on Bear had in common with these earlier manipulations was the employment of a type of counterfeiting scheme called naked short-selling. From the moment the confidential meeting at the Fed ended on March 11th, Bear became the target of this ostensibly illegal practice — and the companies widely rumored to be behind the assault were in that room. Given that the SEC has failed to identify who was behind the raid, Wall Street insiders were left with nothing to trade but gossip. According to the former head of Bear’s mortgage business, Tom Marano, the rumors within Bear itself that week centered around Citadel and Goldman. Both firms were later subpoenaed by the SEC as part of its investigation into market manipulation — and the CEOs of Both Bear and Lehman were so suspicious that they reportedly contacted Blankfein to ask whether his firm was involved in the scam. (A Goldman spokesperson denied any wrongdoing, telling reporters it was “rigorous about conducting business as usual.”pp.2-3, "Wall Street's Naked Swindle" (http://www.rollingstone.com/politics/news/12697/64824?RS_show_page=1)

[Winehole23]

Sorry Winehole...I actually do have a life outside of ST....:)

Heres a pretty good summary...

http://www.rollingstone.com/politics/news/12697/64824Thx.

In an ordinary concidence, I happen to be reading it right now. Check the timestamps.

[Winehole23]

At the same time that naked short-sellers were counterfeiting Bear's stock, the firm was being hit by another classic tactic of bear raids: negative rumors in the media. Tipped off by a source, CNBC reporter David Faber reported on March 12th that Goldman Sachs had held up a trade with Bear because it was worried about the firm’s creditworthiness. Faber noted that the hold was temporary — the deal had gone through that morning. But the damage was done; inside Bear, Faber’s report was blamed for much of the subsequent panic.http://www.rollingstone.com/politics/news/12697/64824?RS_show_page=3

[Winehole23]

At first, the full-blown speculative attack on Bear seemed to be working. Thanks to the media-fueled rumors and the mounting anxiety over the company’s ability to make its payments, Bear's share price plummeted seven percent on March 13th, to $57. It still had a ways to go for the mysterious short-seller to make a profit on his bet against the firm, but it was headed in the right direction. But then, early on the morning of Friday, March 14th, Bear's CEO, Alan Schwartz, struck a deal with the Fed and JPMorgan to provide an emergency loan to keep the company's doors open. When the news hit the street that morning, Bear's stock rallied, gaining more than nine percent and climbing back to $62.

The sudden and unexpected rally prompted celebrations inside Bear’s offices. "We're alive!" someone on the company's trading floor reportedly shouted, and employees greeted the news by high-fiving each other. Many gleefully believed that the short-sellers targeting the firm would get “squeezed" — in other words, if the share price kept going up, the bets against Bear would blow up in the attackers' faces.


The rally proved short-lived — Bear ended the day at $30 — but it suggested that all was not lost. Then a strange thing happened. As Bear understood it, the emergency credit line that the Fed had arranged was originally supposed to last for 28 days. But that Friday, despite the rally, Geithner and then-Treasury secretary Hank Paulson — the former head of Goldman Sachs, one of the firms rumored to be shorting Bear —had a sudden change of heart. When the market closed for the weekend, Paulson called Schwartz and told him that the rescue timeline had to be accelerated. Paulson wouldn't stay up another night worrying about Bear Stearns, he reportedly told Schwartz. Bear had until Sunday night to find a buyer or it could go fuck itself.


Bear was out of options. Over the course of that weekend, the firm opened its books to JPMorgan, the only realistic potential buyer. But upon seeing all the "shit" on Bear's books, as one source privy to the negotiations put it — including great gobs of toxic investments in the sub-prime markets — JPMorgan hedged. It wouldn't do the deal, it announced, unless it got two things: a huge bargain on the sale price, and a lot of public money to wipe out the "shit."


So the Fed — on whose New York board sits JPMorgan chief Jamie Dimon— immediately agreed to accommodate the new buyers, forking over $29billion in public funds to buy up the yucky parts of Bear. Paulson, meanwhile, took care of the bargain issue, putting the government's gun to Schwartz’s head and telling him he had to sell low. Really low.


On Saturday night, March 15th, Schwartz and Dimon had discussed a deal for JPMorgan to buy Bear at $8 to $12 a share. By Sunday afternoon, however, Geithner reported that the price had plunged even further. "Shareholders are going to get between $3 and $5 a share," he told Paulson.


But Paulson pissed on even that price from a great height. "I can't see why they're getting anything," he told Dimon that afternoon from Washington, via speakerphone. "I could see something nominal, like $1 or $2 per share."


Just like that, with a slight nod of Paulson's big shiny head, Bear was vaporized. This, remember, all took place while Bear's stock was still selling at $30. By knocking the share price down 28 bucks, Paulson ensured that the manipulators who were illegally counterfeiting Bear's shares would make an awesome fortune.

[boutons_deux]

Federal Reserve's $3.3 Trillion Insider Loans Follow a History of Corrupt Practices

That should not mean that the Federal Reserve is authorized make loans to any individuals, partnerships and corporations with the approval of as few as two unelected bureaucrats. It should not mean that these few unelected officials face no required checks or balances. It should not mean that Federal Reserve officials need no detailed source records, nor, if they do exist, should they destroy them, a policy they began in 1995. There should be full individual accountability for each of the Fed's unelected officials who have immense power over the economy.

Only two unelected bureaucrats at the Federal Reserve can decide who can receive trillions of dollars of loans without even consulting Congress. The Board of Governors of the Federal Reserve (not the Fed's other policy committee, the Federal Open Market Committee) has the immense power to bypass the congressional appropriation process to make loans to individuals, partnerships and corporations that are "unable to secure adequate credit accommodations from other banking institutions" provided there are "unusual and exigent circumstances."

Before 2002, at least five of the seven Fed governors had to authorize the action. (Section 13-3 of the Federal Reserve Act). In 2001 the law was amended after the 9/11 terrorist attacks so that if there are less than five governors in office these loan powers could be authorized by a "unanimous vote of all available members then in office -- if at least 2 members are available." [11/26/01 (115 Stat. 333)]


http://www.huffingtonpost.com/robert-auerbach/the-federal-reserves-33-t_b_794155.html?view=print

======

So the Repugs and bankers exploited 9/11 to stuff themselves with Fed funds with no oversight, no paper trail, etc, etc.