Submitted by Elaine Magliaro, Guest Blogger
Fed Lifts Veil of Secrecy (December 1, 2010)
“Almost two years ago I asked Chairman Bernanke to tell the American people which financial institutions and 
corporations received trillions of dollars as part of the Wall Street bailout. He refused. Today, as a result of an audit-the-Fed provision I put into the financial reform bill, we finally learn the truth – and it is astounding.”
— Sen. Bernie Sanders (I-Vt.), author of Fed disclosure provision
Lifting the Veil of Fed Secrecy
Who Got Secret Fed Bailouts?
The Big Winners
• Goldman Sachs received nearly $600 billion
• Morgan Stanley received nearly $2 trillion
• Citigroup received $1.8 trillion
• Bear Stearns received nearly $1 trillion
• Merrill Lynch received some $1.5 trillion
• Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities
• Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds
Also receiving secret Fed bailouts
• General Electric
• McDonald’s
• Caterpillar
• Harley Davidson
• Toyota
• Verizon
Release: Sanders Statement on New Federal Reserve Lending Disclosures (March 31, 2011)
WASHINGTON, March 31 – Under court order, the Federal Reserve today identified more banks that took loans during the financial crisis using a once-secret system that Sen. Bernie Sanders (I-Vt.) called “welfare for the rich and powerful.”
A Sanders provision in the Wall Street reform law already had forced the Fed last Dec. 1 to name banks that took trillions of dollars in emergency loans during the crisis.
“The Federal Reserve bailout was welfare for the rich and powerful and you-are-on-your-own rugged individualism for everyone else,” Sanders said. “The information released by the Fed today should never have been kept secret. This money does not belong to the Federal Reserve; it belongs to the American people. I applaud Bloomberg News, Fox News and others for their success in lifting another veil of secrecy at the Fed.”
Sanders said the latest disclosure raises questions about conflicts of interest. While Jamie Dimon, the CEO of JPMorgan Chase, served on the board of directors of the New York Fed, in one month alone, April of 2008, JPMorgan Chase received a combined $313 billion in Fed loans directly benefitting JP Morgan Chase and other financial institutions.
“This is an obvious conflict of interest on its face that must be investigated as part of the independent audit that my amendment requires to be completed this summer. When JPMorgan Chase was telling the world about their great financial success, it seems like they were using the Fed’s discount window as a giant piggy bank.”
Sanders’ provision in the Wall Street reform bill required the central bank to disclose which financial institutions, corporations, and foreign central banks took more than $3 trillion in what were secret loans.
His amendment also directed the Government Accountability Office to conduct the first top-to-bottom audit of the Federal Reserve. The findings of that investigation by the non-partisan research arm of Congress are due to be made public this July.
Usage of Federal Reserve Credit and Liquidity Facilities
MSNBC w/ Cenk: Matt Taibbi – Magic Money Printing Machine at The Fed
Need I say more?????
I’ll just add this: Because April is National Poetry Month, I thought I’d write a song parody to go with this post. I dedicate it to Senator Bernie Sanders of Vermont.
Guess Where Our Money Goes?: A Song Parody by Elaine Magliaro
(To be sung to the tune of That’s Where My Money Goes…to Buy My Baby Clothes)
Guess where our money goes? Not where you might suppose!
It goes to millionaires with big yachts and grand chateaux.
They’re worth their weight in gold. The rest of us keep getting rolled.
Hey, hey! That’s where our money goes!
Bernanke is in the tank for Goldman Sachs and Citibank,
GE and Verizon, too. They got bailout funds—it’s true!
The Fed gave them lots of dough—tried to keep it a secret though.
Hey, hey! That’s where our money goes!
The rich keep getting more and more! It’s something that we should deplore.
Citizens should know about the money that Ben’s passing out.
Bernanke, it just ain’t fair. Main Street oughta get a share.
Hey, hey! That’s where our money goes!
SOURCES & FURTHER READING
Sanders Op-Ed: Sunshine Week
Source: The Caledonian-Record (March 16, 2011)
Articles & Blog Posts by Matt Taibbi
The Great American Bubble Machine
From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they’re about to do it again
(This article appeared in the July 9, 2009 issue of Rolling Stone.)
Wall Street’s Big Win
Finance reform won’t stop the high-risk gambling that wrecked the economy — and Republicans aren’t the only ones to blame
(This article appeared in the August 19, 2010 issue of Rolling Stone.)
Why Isn’t Wall Street in Jail?
Financial crooks brought down the world’s economy — but the feds are doing more to protect them than to prosecute them
(This article appeared in the March 3, 2011 issue of Rolling Stone.)
Looting Main Street
How the nation’s biggest banks are ripping off American cities with the same predatory deals that brought down Greece
(This article appeared in the April 15, 2010 issue of Rolling Stone.)
Jefferson County, Alabama: Screwed By Wall Street, Still Paying
(TAIBBLOG—April 7, 2011)
Why is the Fed Bailing Out Qaddafi?
(TAIBBLOG—April 1, 2011)
Edited to add:
The S.E.C.’s Revolving Door: From Wall Street Lawyers to Wall Street Watchdogs (TAIBBLOG—March 30, 2011)
Steve,
Here is one just for you.
Once I had a secret loan, (Chorus)
I thought I’d toss you a bone,
Since you are alone.
I’ll be your bone,
when your all alone.
You all blew up,
when we have your balls up,
with our bailout,
You see the one with the most green.
wins the men.
Once I had a secret loan (Chorus)
And you complain,
and show us disdain,
Oh how can that be,
it just between you and me,
Our spread sheets are pearly white,
not a dribble in site.
we wipe them clean, we use mean
Once I had a secret loan (Chorus)
Great post, Elaine, and excellent parody! How about writing a parody of another old song…
Once… I had a secret loan, …
From Bloomberg
On the subject of the Federal Reserve secretly loaning billions to a bank owned by Libya–as well as to other foreign banks:
High court rules that the Federal Reserve must disclose records from bailouts
Examiner/PNN
March 22, 2011
http://www.patriotnewsnetwork.org/2011/03/high-court-rules-that-federal-reserve.html
The high court today ruled that the Federal Reserve will be required to disclose their records of bank bailouts that took place during the 2008 credit crisis. In a determination by the Supreme Court on March 21st, the high court chose to let stand a lower court ruling which rejected the banks case that disclosure of bank intervention and lending in 2008 would lead to dire consequences for the economy, and for the banks themselves.
The original lawsuit that was filed by Bloomberg News under the Freedom of Information Act was high contested by both the banks, and the Federal Reserve. In the lawsuit, Bloomberg News sought information on load amounts, dates, and entities who borrowed money from the Fed during the banking and credit crisis. Fox News Network had also joined in on the lawsuit, seeking the same, or similar information on the bailouts.
In December of last year, the Federal Reserve acknowledged that the Supreme Court would probably rule in favor of the lower court, and issued a list of some of the recipients who received money during the time of the bailouts. Beyond domestic banks, the list included foreign banks, and even corporations such as McDonalds, and the California State Teachers Retirement Association.
Both American citizens, and Congressional Representatives have been highly critical of the Federal Reserve’s failures in disclosing the list of bailout recipients in a timely manner. Congressman Ron Paul repeatedly asked the Federal Reserve and Ben Bernanke during Congressional hearings to disclose where the taxpayers money went, and who received it, only to be stonewalled at every turn. Former Congressman Alan Grayson was also a strong advocate of the Fed revealing who and where the money was distributed to while he was still in office before the 2010 elections.
While the high court’s determination that the lower court’s ruling was correct, and that the Federal Reserve should have been required to disclose all documents on which banks and companies received money during the bank bailout and credit crisis, the fact that the information was finally revealed two years after the fact made the disclosure almost irrelevant as Americans and legislators have sinced moved on to deal with other monetary crisis’ such as the current state and federal budget issues.
Swartmore mom,
Regarding Alan Greenspan: He definitely helped to create the mess!
You should read the chapter about Greenspan in Matt Taibbi’s book “Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America.” You’ll love the title of the chapter on Greenspan–“The Biggest Asshole in the Universe.”
From Senator Bernie Sanders (March 31, 2011)
Release: Why Did the Fed Bail Out the Bank of Libya?
How do Gadhafi’s Bankers Avoid U.S. Sanctions?
http://sanders.senate.gov/newsroom/news/?id=ece720e4-d5d6-4eff-937c-dcada784c3f9
Excerpt:
WASHINGTON, March 31 – Sen. Bernie Sanders (I-Vt.) today questioned why the Federal Reserve provided more than $26 billion in credit to an Arab intermediary for the Central Bank of Libya.
The total includes at least $3.2 billion in loans that the Fed was forced to make public today in addition to earlier revelations under a Sanders provision in the Wall Street reform law.
Sanders also asked why the Libyan-owned bank and two of its branches in New York, N.Y., were exempted from sanctions that the United States this month slapped on other Libyan businesses to pressure Col. Moammar Gadhafi’s government.
“It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya,” Sanders said.
Rep. Paul wants to return to the gold standard. That is his solution. I blame Greenspan more than Bernanke. He created the mess.
Foreign Banks Tapped Fed’s Secret Lifeline Most at Crisis Peak
By Bradley Keoun and Craig Torres – Apr 1, 2011
Bloomberg
http://www.bloomberg.com/news/2011-04-01/foreign-banks-tapped-fed-s-lifeline-most-as-bernanke-kept-borrowers-secret.html
Excerpts:
U.S. Federal Reserve Chairman Ben S. Bernanke’s two-year fight to shield crisis-squeezed banks from the stigma of revealing their public loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.
Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion.
The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record. The disclosures may stoke a reexamination of the risks posed to U.S. taxpayers by the central bank’s role in global financial markets.
“The caricature of the Fed is that it was shoveling money to big New York banks and a bunch of foreigners, and that is not conducive to its long-run reputation,” said Vincent Reinhart, the Fed’s director of monetary affairs from 2001 to 2007.
**********
“The American people are going to be outraged when they understand what has been going on,” U.S. Representative Ron Paul, a Texas Republican who is chairman of the House subcommittee that oversees the Fed, said in a Bloomberg Television interview.
“What in the world are we doing thinking we can pass out tens of billions of dollars to banks that are overseas?” said Paul, who has advocated abolishing the Fed. “We have problems here at home with people not being able to pay their mortgages, and they’re losing their homes.”
When speaking of criminal indictments let us not forget Henry Paulson.
Every single American citizen, man, woman, and child, was financially raped by these guys and all with the help of the Bush Administration. They literally stole our future out from under us simply to cover their own ineptitude … and then, like the animals they are, they sniffed the air and, smelling no danger, continued the rape.
The crazy teabaggers are going to look like kittens when the rest of the American citizenry discover the totality of the crimes committed against them.
That isn’t wishful thinking; that’s fact … and they know it. I’m certain many of them have their travel plans in place.
I second that motion. The Fed loan audit was one of the best things passed through Congress in years!
Thanks for the heads up. I will certainly keep an eye out for that article, Elaine.
Buddha,
Taibbi has an article about the Fed loans coming out in the next issue of Rolling Stone.
Something like that, Elaine. I plan on selling guillotine holsters in addition to fire proof hand baskets. Hip holster models only though. I’m having difficulty making the shoulder holsters work out.
Buddha,
“That Marie Antoinette moment for American history will just come on that much faster.”
Have portable guillotine…will travel???
Elaine,
And that needs to change.
Quickly.
Because if it doesn’t?
That Marie Antoinette moment for American history will just come on that much faster.
In addition, I’d like to see Bernanke fully investigated and charged as well for his role in aiding and abetting this massive scale fraud committed against the government and the American tax payers.
Buddha,
What’s been happening to the “upper crust” crooks of this country is that they and/or their banks/firms get fined. Few ever go to jail.
Jamie Dimon needs to go to trial and then onward to a very long prison term. Stat. If the GAO audit due in July turns up the kind of fraud, conflict of interest and malfeasance I think they’ll likely turn up and the DOJ doesn’t pull a “let’s look forward, not backward” fascist evasion of their legal responsibilities (now known the Obama/Bush Maneuver)? I fully expect to see Dimon and others like GoldmanSacks (misspelling intentional) criminal CEO Lloyd Blankenfeld in either prison orange or fleeing the country to avoid prosecution.
Wormy venal bastards.
Elaine,
Great story! I wasn’t aware of the corporations getting secret loans. That is a travesty.
Considering all the creepy guys who get elected to office and how damned depressing their presence can be on the present and future of our nation, one forgets that politicians such as Sen. Bernie Sanders are also out there. Thank God.
I need more time to study this post and have to go to a birthday party right now.
Elaine … love your song parody