Secret Fed Loans gave banks 13 billion

MaggieD said:

You're right, actually. Wipe out taxpayers' home equity. But save the big banks. Trouble is, once the first happened, the second would have been a true death blow. Where I think our government went wrong was in not putting a lot more strings on their bailouts...one of the most important being multi-million-dollar bonuses. Don't know how they could've done that...but in hindsight, Main Street would have reacted better.

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It would have been easy. Let's put aside the fact that it should not have been done this way, but let's argue for a moment we had to.

Government: You suck and are an absolute failure but despite that we are going to save you. The only problem, all your old contracts are null and void and you'll work under our conditions. You are free to refuse but then we will not step in. Sink or swim on your own.

j-mac said:

Well, I am not a lawyer, nor am I in government. I am just a citizen that pays taxes that watches MY money go for this crap, and thinks there should be something in place to prevent this kind of stuff. Unless you think it is perfectly fine for our government to just do what ever they wish to do with your money without accountability.


j-mac

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Another good point. Absolutely nothing has been done to stop this from happening again. Look at what Corzine did. Odds that he is ever charged with anything? No, they did not get bailed out this time (that we know about). But stuff like this continues to make people have absolutely no faith in our markets.

Corzine was able to bet other people's money all without their knowledge. You want to put your money into this sort of markets?

My big question is...where's Anonymous now? Here's a nice, fresh new target for you....go get em.

1Perry said:

Another good point. Absolutely nothing has been done to stop this from happening again. Look at what Corzine did. Odds that he is ever charged with anything? No, they did not get bailed out this time (that we know about). But stuff like this continues to make people have absolutely no faith in our markets.

Corzine was able to bet other people's money all without their knowledge. You want to put your money into this sort of markets?

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Corzine is a scumbag and a criminal. Chances are much higher now that he will see day in court after they put ex-FBI Director Louis Freeh on the case.

MF Global’s Bankruptcy Trustee Set to Be Ex-FBI Director Freeh - Businessweek

I still fail to see the connection you draw between blatant securities fraud and the existence of a central bank. People seem to blur the lines between bailouts from the federal budget and "bailouts" from the Fed's printing presses. The former comes directly from taxpayer's pocket and the latter steals from the value of the dollar itself. They also fail to differentiate between expansion of the Fed's balance sheet with loans from the Term Auction Facility. The former is an expansion in the money supply itself while the latter contracts itself when the loans are repaid.

action taking provides virtually free money to large US banks.

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I should clarify that when I said free money I was referring to injections of capital (primarily through asset purchases). While you can definitely consider ZIR loans "free money" they should be differentiated from asset purchases.

So the Fed gave them money for nothing and then paid them interest on it

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You have any source for this? I googled around briefly and couldn't find any credible source showing the Fed dropped interest rates below zero.

Rhapsody1447 said:

I still fail to see the connection you draw between blatant securities fraud and the existence of a central bank. People seem to blur the lines between bailouts from the federal budget and "bailouts" from the Fed's printing presses. The former comes directly from taxpayer's pocket and the latter steals from the value of the dollar itself.

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It really is both ever since we started printing the money to buy our own debt like Weimar.

j-mac

j-mac said:

It really is both ever since we started printing the money to buy our own debt like Weimar.

j-mac

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Deficit spending is hardly securities fraud. We've been doing it since the start of the 20th century. The problem is the size and sustainability of our deficits.

"The mainstream economics position is that deficit spending is desirable and necessary as part of countercyclical fiscal policy, but that there should not be a structural deficit: in an economic slump, government should run deficits, to compensate for the shortfall in aggregate demand, but should run corresponding surpluses in boom times so that there is no net deficit over an economic cycle – a cyclical deficit only. "

Rhapsody1447 said:

Corzine is a scumbag and a criminal. Chances are much higher now that he will see day in court after they put ex-FBI Director Louis Freeh on the case.

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I hope you are right.

I still fail to see the connection you draw between blatant securities fraud and the existence of a central bank. People seem to blur the lines between bailouts from the federal budget and "bailouts" from the Fed's printing presses. The former comes directly from taxpayer's pocket and the latter steals from the value of the dollar itself. They also fail to differentiate between expansion of the Fed's balance sheet with loans from the Term Auction Facility. The former is an expansion in the money supply itself while the latter contracts itself when the loans are repaid.

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It's confusing with so many opinions but I'm not argueing that what the Fed is doing is the exactly the same as securities fraud. I believe the Fed is indeed stealing as much as one would in a securities fraud case but in the Feds case, it's legal and even highly encouraged.

You have any source for this? I googled around briefly and couldn't find any credible source showing the Fed dropped interest rates below zero.

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No, they gave the banks the money for nothing, had them keep the money in a federal account (while it wasn't being used) and paid interest on that account.