Federal Reserve

10 things you need to know today: December 19, 2014

An airstrike hits an ISIS position. 

An airstrike hits an ISIS position. (AP Photo/Vadim Ghirda)

The Week

1. Stocks surge for a second day after soothing words from the Fed
The Dow Jones Industrial Average jumped by 421 points on Thursday — its biggest one-day increase in more than three years. The gains capped Wall Street’s biggest two-day advance since late 2011. The surge were triggered by reassuring comments by the Federal Reserve, which said in a statement following its latest policy meeting that although the economy was improving, policymakers would be “patient” in raising interest rates. Investors interpreted that as a signal that the central bank would not raise interest rates until next summer or later. [CNN]

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2. Airstrikes kill three ISIS leaders in Iraq
Three top Islamic State leaders were killed by airstrikes in Iraq between mid-November and early December, a senior Defense Department official said Thursday. The deaths of the ISIS leaders, who included the Islamist group’s Iraq military emir and ISIS chief Abu Bakr al Baghdadi’s administrative deputy, has damaged the organization’s ability to control its strongholds in Iraq and Syria, the U.S. official said. U.S.-led airstrikes also helped Kurdish fighters on Thursday retake a large swath of Iraqi territory from ISIS. [Voice of America, The New York Times]

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3. Movie studio pulls another film critical of North Korea from theaters
Paramount Pictures halted screenings of its 2004 film Team America: World Police on Thursday, a day after Sony Pictures canceled the Christmas Day release of the new film The Interview. Both movies are comedies mocking the reclusive communist leaders of North Korea. Sony’s decision came after an anonymous group of hackers threatened violence against moviegoers in theaters that showed The Interview, in which James Franco and Seth Rogen play TV journalists recruited by the CIA to assassinate North Korean leader Kim Jong Un. [Los Angeles Times]

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4. Top Sierra Leone doctor dies of Ebola
Sierra Leone’s leading Ebola doctor, Victor Willoughby, died of the virus on Thursday. He was the 11th physician to die out of 12 who have contracted the virus in the West African nation, which accounts for more than half of the 18,603 confirmed Ebola cases. Willoughby, a virologist frequently called on to help colleagues, died hours after doses of an experimental drug that could have been administered to him arrived in the country. [Reuters]

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5. Insurgents kidnap 200 in deadly raid on Nigerian village
Suspected Boko Haram militants killed at least 33 people and kidnapped 200 in a raid on the village of Gumsuri in northeastern Nigeria, witnesses said Thursday. “After killing our youths, the insurgents have taken away our wives and daughters,” a Gumsuri resident said. The attack took place on Sunday but news only spread after survivors reached a nearby city. Meanwhile, the army in neighboring Cameroon said it killed 116 Nigerian militants who attacked one of its bases. [BBC News]

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6. Putin tells Russians to brace for $40-per-barrel oil
Russian President Vladimir Putin warned in an overnight address that his constituents should brace for the price of oil — a pillar of Russia’s economy — to tumble to $40 per barrel. Russia is falling into a recession already after crude oil declined by 40 percent this year to around $60 per barrel, triggering the worse financial crisis since Putin came to power in 2000. Still, Putin insisted the country could handle the shock. “The economy will structure itself accordingly,” he said, “however much is necessary.” [Sydney Morning Herald]

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7. Eight children found dead in Australia home
Eight children were found dead in a Cairns, Australia, home on Friday in what Prime Minister Tony Abbott called an “unspeakable crime.” The children’s ages ranged from 18 months to 15 years. “They’re only babies,” a relative said. The mother of seven of the children was being treated for stab wounds. Abbott noted that the tragedy struck as the nation was still shaken by a siege in a Sydney cafe that left two hostages and a gunman dead this week. “These are trying days for our country,” Abbott said. [NBC News]

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8. Neighboring states sue Colorado over its law legalizing pot sale
Nebraska and Oklahoma on Thursday filed the first major court challenge against Colorado’s lawlegalizing marijuana sales. The attorneys general of the two neighboring states said that Colorado’s shops selling state-regulated recreational marijuana were aiding in the trafficking of drugs into states where the drug remains illegal. “Marijuana flows from this gap into neighboring states,” the suit says, “draining their treasuries, and placing stress on their criminal justice systems.” [The New York Times]

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9. Tsarnaev returns to court weeks before his trial’s scheduled start
Boston Marathon bombing suspect Dzhokhar Tsarnaev appeared in court on Thursday for the first time since he was formally charged in July 2013, three months after the deadly attack. Outside the packed Boston courthouse a survivor argued with a small group of protesters holding up signs saying Tsarnaev was innocent. In what was to be Tsarnaev’s final pre-trial conference, one of his lawyers said he planned to file a request to delay the trial, now scheduled to start with jury selection on Jan. 5. [ABC News]

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10. Researchers say Dr. Oz’s medical advice is usually wrong
Syndicated talk-show host Mehmet Oz — known by some as “America’s doctor” — has been criticized recently by members of Congress who say his reports on “miracles” and medical breakthroughs have given millions of viewers false hopes. This week researchers published a study in the British Medical Journal saying that medical research either didn’t support or directly contradicted more than half of Dr. Oz’s recommendations. “The public should be skeptical about recommendations made on medical talk shows,” the article said. [The Washington Post]

The Federal Reserve’s ‘breathtaking’ $7.7 trillion bank bailout

Surprise, the government lied to us…

The Week – By The Numbers

A new report by Bloomberg Markets Magazine details trillions of dollars in secret federal loans made to the big banks during the 2008 financial crisis, a process that helped them rake in billions of dollars in undisclosed profits. Here, some key numbers that illuminate the Federal Reserve’s “breathtaking”$7.7 trillion bank bailout:

29,000
Pages of federal documents, courtesy of the Freedom of Information Act, and central bank records that Bloomberg combed through to reveal a “fresh narrative of the financial crisis”

More than 21,000 
Number of transactions detailed in those pages

$7.7 trillion
Amount in undisclosed loans the Federal Reserve made to struggling financial institutions, according to the new Bloomberg report. That “dwarf[s] the Treasury Department’s better-known $700 billion Troubled Asset Relief Program [TARP],” say Bob Ivry, Bradley Keoun and Phil Kuntz at Bloomberg

$13 billion
Estimated amount in previously undisclosed profits the six largest banks —  JP Morgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs Group, and Morgan Stanley — took in, thanks to those loans and the Fed’s below-market rates. Unlike the TARP funds, “the loans came with virtually no strings attached for the banks,” says Travis Waldron at Think Progress

$160 billion
Amount in TARP funds the big six received

As much as $460 billion
Amount the big six borrowed from the Fed, as calculated by Bloomberg and measured by peak daily debt

$1.2 trillion
Amount that banks referenced in the new report required on December 5, 2008, “their single neediest day.” The Federal Reserve didn’t reveal to anyone which banks were in such dire need, say Ivry, Keoun, and Kuntz, and “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.”

$86 billion
Amount that Bank of America Corp. owed the central bank when then-CEO Kenneth D. Lewis wrote shareholders saying that he was at the helm of  “one of the strangest and most stable banks in the world” on November 26, 2008

$107 billion
Amount in secret loans that Morgan Stanley took in a single month, in September 2008

1 out of 10
Share of the country’s delinquent mortgages that amount could have paid off

$6.8 trillion
Total assets held by the big six on September 30, 2006

$9.5 trillion
Total held on September 20, 2011. Rather than help curb the practice that caused the financial crisis, “the Fed and its secret financing helped America’s biggest financial firms get bigger and go on to pay employees as much as they did at the height of the housing bubble,” say Ivry, Keoun, and Kuntz

Sources: BloombergBusiness InsiderThink Progress

Ron Paul Bashes Paul Ryan’s Budget, Calls Big Government ‘King’

Huffington Post

Potential 2012 GOP presidential candidate Ron Paul (Texas) on Monday panned Rep. Paul Ryan’s (R-Wis.) budget proposal, telling a crowd in Iowa that the Ryan plan will not end big government, which he said is becoming like a monarchy.

Speaking at a forum organized by the Family Leader, a local Christian and socially conservative group, the Texas congressman referred to a passage in the Old Testament where the Israelite people asked the prophet Samuel for a king to rule over them. He used the story a parable to illustrate where he believes the once self-reliant American culture is headed.

“We don’t have a king today but unfortunately I think we’re drifting to a point that our big government is king, and the government tells us what we can do and be responsible for us,” Paul said. “And if we don’t have a house, they’ll give us a house. If we don’t have education, they’ll give us free education. If we’re hungry, we get food stamps. And deficits don’t matter. And if you need money, you print the money. And we have this moral obligation to police the world.”

“It goes on and on,” the congressman said. “The king will take care of us.”

Paul, who had a surprisingly strong showing in the 2008 Republican presidential primary but has not yet declared his intentions for the 2012 race, also talked about Ryan’s budget and the Federal Reserve with an audience of roughly 150 people in Sioux Center, in the state’s northwest corner.

He said the budgets proposed by Rep. Ryan and President Obama wouldn’t put Washington on a path to limited government.

“Neither of those budgets will solve our problems, or even come close,” Paul said.