Federal Reserve

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.