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Thread: Secret Fed Loans gave banks 13 billion

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    Secret Fed Loans gave banks 13 billion

    Secret Fed Loans Gave Banks $13 Billion - Bloomberg

    Bloomberg news. The bailout was bigger than TARP
    “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” John Maynard Keynes

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    Re: Secret Fed Loans gave banks 13 billion

    Quote Originally Posted by iliveonramen View Post
    Secret Fed Loans Gave Banks $13 Billion - Bloomberg

    Bloomberg news. The bailout was bigger than TARP

    Yep, and it was Bernanke, and Geithner. How's that make you feel about the Obama brain trust?

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    Re: Secret Fed Loans gave banks 13 billion

    Quote Originally Posted by iliveonramen View Post
    Secret Fed Loans Gave Banks $13 Billion - Bloomberg

    Bloomberg news. The bailout was bigger than TARP
    hey, the poor banks were victims of government here. they all wanted to do the honorable thing and go bankrupt, but evil government forced them to remain solvent.

    the good news is that all we have to do is remove a bunch more regulation to fix the problem permanently.

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    Re: Secret Fed Loans gave banks 13 billion

    details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

    This is the part those who try and defend this **** by saying it's been paid back refuse to see. There are so many negative aspects here it would take paragraphs to even begin covering it all.

    If it's paid back, it's paid back on the backs of the taxpayers and as of yet, nobody has been held accountable for much of anything.

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    Re: Secret Fed Loans gave banks 13 billion

    Quote Originally Posted by iliveonramen View Post
    Secret Fed Loans Gave Banks $13 Billion - Bloomberg

    Bloomberg news. The bailout was bigger than TARP
    This title is misleading. The Fed didn't just fork over $13 billion, Bloomberg estimates that they were able to add $13 billion (across 190 banks) to their bottom lines as a result of the access to cheap credit. I posted this in another thread in relation to the "$16 trillion" myth.

    I would like to see how they calculated the $13 billion number. I am almost finished with the entire article and haven't seen any mention of it.

    Some quotes form the article:

    The Fed has been lending money to banks through its so- called discount window since just after its founding in 1913. Starting in August 2007, when confidence in banks began to wane, it created a variety of ways to bolster the financial system with cash or easily traded securities. By the end of 2008, the central bank had established or expanded 11 lending facilities catering to banks, securities firms and corporations that couldn’t get short-term loans from their usual sources.

    The Fed has said that all loans were backed by appropriate collateral. That the central bank didn’t lose money should “lead to praise of the Fed, that they took this extraordinary step and they got it right,” says Phillip Swagel, a former assistant Treasury secretary under Henry M. Paulson and now a professor of international economic policy at the University of Maryland.

    A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger
    The article is critical of the program as it shows that all the recipients combined added $13 billion to their bottom lines as a result of the cheap credit available from the Fed's Term Auction Facility. Note the quote from the professor of international economic policy about how the program generated record profits for the Fed (all of which are returned to the taxpayer). don't attempt to paint the entire concept of the Federal Reserve providing liquidity to the financial system as some sort of free money via secret bailouts for the entire world. The TARP program was truly a (successful) bailout because it injected capital in major banks by purchasing preferred equity. The Fed's Term Auction Facility made loans at lower interest rates to banks all over the world, in addition to employing currency swaps with the ECB; part of it's core purpose and something it has done since it was established in 1913. The sheer size of the program in 2008 is due to the extreme global credit crisis completely unprecedented in modern financial history. If anything you can say the program (like TARP minus Freddie/Fannie/AIG) resulted in a net profit to the US taxpayer, ignoring inflationary pressures of course (which are currently subdued but remain a threat in the future).
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    Re: Secret Fed Loans gave banks 13 billion

    Quote Originally Posted by Helix View Post
    hey, the poor banks were victims of government here. they all wanted to do the honorable thing and go bankrupt, but evil government forced them to remain solvent.

    the good news is that all we have to do is remove a bunch more regulation to fix the problem permanently.
    We have regulations that would at least curb some of the outrage by main street if the government would enforce it. Sarbanes/Oxley. That the government refuses to shows where this was and is a problem of incestous proportions.

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    Re: Secret Fed Loans gave banks 13 billion

    Quote Originally Posted by 1Perry View Post
    If it's paid back, it's paid back on the backs of the taxpayers and as of yet, nobody has been held accountable for much of anything.
    Every single dollar the Fed pays to anyone/thing is paid on the backs of taxpayers. Not as if Washington has a Money Tree Forest...well, except I guess import taxes. Punish a corporation with fines? Backs of taxpayers. Tax the coal industry? Backs of taxpayers. We pay for all of it.

    As to your last thought above, Congress should be ashamed.
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    Re: Secret Fed Loans gave banks 13 billion

    Quote Originally Posted by 1Perry View Post
    If it's paid back, it's paid back on the backs of the taxpayers and as of yet, nobody has been held accountable for much of anything.
    We don't refuse to see this, we just like to respond with facts when people think that the US taxpayer footed a $700 billion loss. Obviously, accountability, moral hazard, and bad precedence are all intangible costs of the rescue of the financial system but it doesn't mean we should ignore the benefits either. Keep reading and you will get to the "Core Function" paragraph:

    “Supporting financial-market stability in times of extreme market stress is a core function of central banks,” says William B. English, director of the Fed’s Division of Monetary Affairs. “Our lending programs served to prevent a collapse of the financial system and to keep credit flowing to American families and businesses.”

    The Fed has said that all loans were backed by appropriate collateral. That the central bank didn’t lose money should “lead to praise of the Fed, that they took this extraordinary step and they got it right,” says Phillip Swagel, a former assistant Treasury secretary under Henry M. Paulson and now a professor of international economic policy at the University of Maryland.

    The Fed initially released lending data in aggregate form only. Information on which banks borrowed, when, how much and at what interest rate was kept from public view. The secrecy extended even to members of President George W. Bush’s administration who managed TARP. Top aides to Paulson weren’t privy to Fed lending details during the creation of the program that provided crisis funding to more than 700 banks, say two former senior Treasury officials who requested anonymity because they weren’t authorized to speak
    "There is an excellent correlation between giving society what it wants and making money, and almost no correlation between the desire to make money and how much money one makes." ~Dalio

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    Re: Secret Fed Loans gave banks 13 billion

    What are the 99%ers protesting again? /sarcasm
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    Re: Secret Fed Loans gave banks 13 billion

    Quote Originally Posted by MaggieD View Post
    Every single dollar the Fed pays to anyone/thing is paid on the backs of taxpayers. Not as if Washington has a Money Tree Forest...well, except I guess import taxes. Punish a corporation with fines? Backs of taxpayers. Tax the coal industry? Backs of taxpayers. We pay for all of it.

    As to your last thought above, Congress should be ashamed.
    I understand your point but we are speaking ungodly numbers here to try and keep the previous bogus numbers afloat. This is why I understand the pissed off people of OWS.

    The markets were grossly inflated. Rather than allow them to find a natural sustainable figure the Fed's only concern was in getting them back up to the previous highs so all their cronies were made whole again.

    Nothing was done to make those struggling on main street whole other than some crumbs. The Fed believes that Wall Street = economy. I disagree. Very strongly. Wall Street is now just pushing papers trying to create the next bubble.

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