Federal Reserve's secret $3.3 trillion bailout revealed:

[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 bull .

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

This is the same bull 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.

we are the pawns

[Winehole23]

http://seekingalpha.com/article/7186...eeze-in-lehman

[Winehole23]

http://blogs.wsj.com/deals/2008/09/1...-borrow-stock/

[Winehole23]

Nearly two years after the collapse of Lehman Brothers, 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 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.



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, led by Kenneth C. Griffin; and Och-Ziff Capital Management, whose chief executive is Daniel Och.

http://www.nytimes.com/2010/09/01/bu.../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 bull 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 quan ies (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 su ious 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"

[Winehole23]

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

Heres a pretty good summary...

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

Thx.

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...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 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 " " 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 " ."


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 ins utions" provided there are "unusual and exigent cir stances."

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...tml?view=print

======

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