Via Bloomberg News, we will continue to see the effects of the “extend and pretend” philosophy of propping up failing banks for a very long time. It’s a shame that the European Union isn’t learning from our mistakes, either:
The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates, Bloomberg Markets magazine reports in its January issue.
Saved by the bailout, bankers lobbied against government regulations, a job made easier by the Fed, which never disclosed the details of the rescue to lawmakers even as Congress doled out more money and debated new rules aimed at preventing the next collapse.
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.
When the Federal Reserve Bank was set up less than 100 years ago by Congress, it had three basic tasks. 1) Conduct the nations monetary policy. (That’s a violation of Article I, Section 8:5 of the Constitution.) 2) Oversee the banking and financial system. 3) Maintain employment, keep prices stable, and keep interest rates low. The FED is either in violation of the Constitution or has failed miserably in its assigned tasks.
Somewhat off topic, but in the same realm of fiscal chicanery:
Zero Hedge comments on the astounding increase in nominal values for all the derivatives (think “credit default swaps,” and other evil spawn) being held all over the world. Absolutely stunning numbers — and Tyler Durden thinks no good will come of this.
http://www.zerohedge.com/news/707568901000000-how-and-why-banks-increased-total-outstanding-derivatives-record-107-trillion-6
Read on to get an idea of notional versus gross market value. Then think about the concluding paragraphs:
Yet another reason to support the Occupy movement.
Couple interesting comments:
Tweet concerning Occupy movement and Black Friday (Beginning on T’Giving Day, of course):
Yup.
Via:
http://whynow.dumka.us/2011/11/24/early-morning-thoughts/
The brain reels.
The mind boggles.
The head explodes.
What is to be done, Mr. Bradstreet?