First Audit of the fed

Charlottesweb · 03/09/12 - 17:14

http://www.sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

Highlight is this

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

The two houses are arguing over about 1.5 trillion in spending for the budget, meanwhile the fed has unilaterally lent out 16 trillion to banks and businesses , and not just in the US.

When you are getting secret, 0% interest 'loans' , its probably very easy to post profits to justify bonuses and pay increases for the board.

The sham is outed, I wonder how many will grasp how much the average tax payer has been taken for a ride.

tysonstorm · 04/09/12 - 10:44

$16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.

The list of institutions that received the most money from the Federal Reserve can be found on page 131of the GAO Audit and are as follows..

Citigroup: $2.5 trillion ($2,500,000,000,000)

Morgan Stanley: $2.04 trillion ($2,040,000,000,000)

Merrill Lynch: $1.949 trillion ($1,949,000,000,000)

Bank of America: $1.344 trillion ($1,344,000,000,000)

Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)

Bear Sterns: $853 billion ($853,000,000,000)

Goldman Sachs: $814 billion ($814,000,000,000)

Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)

JP Morgan Chase: $391 billion ($391,000,000,000)

Deutsche Bank (Germany): $354 billion ($354,000,000,000)

UBS (Switzerland): $287 billion ($287,000,000,000)

Credit Suisse (Switzerland): $262 billion ($262,000,000,000)

Lehman Brothers: $183 billion ($183,000,000,000)

Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)

BNP Paribas (France): $175 billion ($175,000,000,000)
and many many more including banks in Belgium of all places

http://beforeitsnews.com/economy/2012/09/first-audit-in-the-federal-reserves-nearly-100-year-history-were-posted-today-the-results-are-startling-2449770.html

The Fed's $16 Trillion Bailouts Under-reported

The audit of the Fed’s emergency lending programs was scarcely reported by mainstream media – albeit the results are undoubtedly newsworthy. It is the first audit of the Fed in United States history since its beginnings in 1913. The findings verify that over $16 trillion was allocated to corporations and banks internationally, purportedly for “financial assistance” during and after the 2008 fiscal crisis.

Still no mass media coverage about this

[Deleted User] · 04/09/12 - 10:50

I remember linking to the amounts handed out by the FED to British banks some time ago in a blog. It was when it was discovered Barclays had large loans that were previously secret. So this is all on top of QE money, isn't anyone asking where it's all gone?

It will be interesting when/if they get to do the comprehensive audit of Fort Knox!

tysonstorm · 04/09/12 - 11:45

WindWalker wrote: »

I remember linking to the amounts handed out by the FED to British banks some time ago in a blog. It was when it was discovered Barclays had large loans that were previously secret. So this is all on top of QE money, isn't anyone asking where it's all gone?

It will be interesting when/if they get to do the comprehensive audit of Fort Knox!

The thing is would we even get a straight answer?

Sniffle774 · 04/09/12 - 11:53

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs

Tum di tum di tum..... Plenty of room at the trough....

Will be interesting to see the parties responses to this one.

[Deleted User] · 04/09/12 - 13:18

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Hold on. The US government passed laws in the 90s obliging American banks to give a proportion of their mortgages and loans to uncreditworthy borrowers.

More broadly The National Homeownership Strategy encompassed parallel regulatory and legislative reforms during 1994 and 1995. Examples include:
The Community Reinvestment Act (CRA) was revised to force lenders to make loans to uncreditworthy borrowers as a cost of doing business

The Riegle-Neal Act was passed making compliance with The Community Reinvestment Act a prerequisite for banks to expand, make acquisitions or operate in more than one state

These initiatives transformed the purpose of bank regulators. Since The Great Depression the goal of bank regulation had been to ensure the solvency of lending institutions. After 1994 regulators were tasked also with implementing and enforcing the NHS’ social agenda. Extending loan access to the uncreditworthy was in direct opposition to bank solvency.

Under the NHS the considerable resources of the Federal Government were brought to bear on expanding homeownership. In 1994 HUD directed Fannie Mae and Freddie Mac to proliferate subprime lending. These combined Government Sponsored Entities (GSEs) act as a functional monopoly within the mortgage market. As such, they enjoyed substantial influence over lending standards, credit availability and the private-sector mortgage industry which was directly dependent upon the GSE’s for profitability. By 1996, HUD was directing Freddie and Fannie to provide at least 42% of their mortgage financing to low-income borrowers and 12% of their portfolios to “special affordable” loans.

http://theaffordablemortgagedepression.com/2010/03/11/origin-of-the-housing-bubble-the-national-homeownership-strategy.aspx

Thus the seeds of the subprime mortgage crisis were sown.

It now seems only proper that the US government / Federal Reserve should pick up the tab for any banks that were brought low as a result of their meddlesome policies.

redhatmatt · 04/09/12 - 14:12

Santa needs a bailout
http://www.youtube.com/watch?v=6jLdyzuljqo

MartinP · 04/09/12 - 14:25

The method used to calculate this was flawed:

$16 trillion -- The “total transaction amounts” for Fed lending included in a July 21, 2011, study by the Government Accountability Office, a non-partisan investigative agency that reports to Congress. The Fed’s Dec. 6 memo said it was inaccurate to describe that amount as the total of its lending and guarantees, as some websites did.

The method the GAO used to produce that total differed from Bloomberg’s approach. Bloomberg built spreadsheets to show each borrower’s daily amounts outstanding, and then found the day on which those amounts peaked. The GAO tallied all cumulative loans to arrive at $16 trillion. Its report noted that the total didn’t reflect how loans’ terms varied under different Fed programs.

If a bank borrowed $1 billion overnight for 100 nights, Bloomberg’s analysis would show that the bank had a $1 billion balance at the Fed for 100 days; the GAO method that produced the $16 trillion total would sum up those transactions to $100 billion, even though the bank never owed more than 1 percent of that total.

http://www.bloomberg.com/news/2011-12-23/fed-s-once-secret-data-compiled-by-bloomberg-released-to-public.html

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