The Secret $7.77 Trillion Bailout

[blueduck37.livejournal.com]

Apologies if this story was posted here already; I couldn't find a post on it.

Now we've all heard the lie statement that the Tea Party began as a cultural backlash to a new President, who to conservatives was the face of a changing America that scared them protest and backlash to the 2008 TARP program even though no conservative protests occurred until early 2009.

So I assume they will join Occupy Wall St in demanding major changes to Wall St and our banking system after Bloomberg News' big story about a shadow bailout that was occurring, via the Federal Reserve. They gained this info through the invaluable Freedom of Information Act. As the article notes, "It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year."

The article discusses how this "secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger."

To me, the most anger-inducing facts are the lies and deception that surrounded this, from the Wall St. end. We learn that Wall St firms lied to investors (pretending to be healthy, while this was going on), as well as to Congress, who passed a weak reform bill with bad information.

For instance, we learn that-

Bankers didn’t disclose the extent of their borrowing. On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.
....

JPMorgan Chase & Co. CEO Jamie Dimon told shareholders in a March 26, 2010, letter that his bank used the Fed’s Term Auction Facility “at the request of the Federal Reserve to help motivate others to use the system.” He didn’t say that the New York-based bank’s total TAF borrowings were almost twice its cash holdings or that its peak borrowing of $48 billion on Feb. 26, 2009, came more than a year after the program’s creation.

And that-

New York-based Morgan Stanley (MS), took $107 billion in Fed loans in September 2008, enough to pay off one-tenth of the country’s delinquent mortgages. The firm’s peak borrowing occurred the same day Congress rejected the proposed TARP bill, triggering the biggest point drop ever in the Dow Jones Industrial Average. (INDU) The bill later passed, and Morgan Stanley got $10 billion of TARP funds, though Paulson said only “healthy institutions” were eligible.

Free market!

Multiple Senators are quoted as saying “We didn’t know the specifics," which is great for a democracy. It notes that having all of the information of what was really going on would have likely resulted in a different (stronger?) Wall St reform bill. As it is, it doesn't really fix anything. Too big to fail still exists, etc.

If news about a secret bailout and its surrounding deception doesn't spur any action for real change, nothing will. This is why many in the OWS movement feel the system is hopeless. And that's not good for democracy either.

[PS- Bloomberg News also has another great story about how, as Bush's Treasury Secretary, Hank Paulson passed on insider info to his hedge fund friends.]

Comments

[badlydrawnjeff.livejournal.com]

Because you don't want it to be.

I'm sorry for being terse, but it's statements like that which lead me to make statements like this.

Because it's easier to make up what I say as opposed to simply reading what I say.

It has nothing to do with what I want. It is what it is.

Disciplining bratty, spoiled children = bad. Got it.

You don't have to be a bratty child to want a candy bar. How ridiculous.

And, again, you seem to want to blame the child for being a child as opposed to a parent for not being a parent.

Did you say word-for-word that they had no want of it? No.

I'm sorry for being terse, but, to be blunt, stop fucking saying otherwise. Basic courtesy and honesty goes a lot longer a ways than this.

I never said I was quoting you verboten, but rather summarizing your view as you chose to express it.

No (http://talk-politics.livejournal.com/1249717.html?thread=99598773#t99598773), you weren't (http://talk-politics.livejournal.com/1249717.html?thread=99606965#t99606965). As those do not reflect my views in any way shape or form...

Just stop doing it. This isn't politicartoons.

Well that kind of proves my initial point that the Tea Party opposition didn't have roots in the bailout in 2008 itself like they now claim, but only (coincidentally) materialized after a new President to their disliking took office.

How so? Are you now assuming my views, which are not associated with the Tea Party and are generally opposed to their methods and many of their positions, are the Tea Party's, or is this just another one of those things you're concocting for whatever reason?

Coincidentally, after it was too late to matter! Neato!

Better than not learning at all. More stimulus, am i rite?

And it's not too late, obviously - we're seeing more calls for bailouts and for not letting things fail. Hardly too late. Never too late.

[blueduck37.livejournal.com]

Because it's easier to make up what I say as opposed to simply reading what I say.

Wrong again.

Whether you intend to or not, you have gone out of your way in a discussion that is about Wall St primarily to talk about them as little as possible. You find it wrong for me to point these things out. You think it's mean or wrong of me to call you a corporate apologist. But, I am sorry, that is how you come off.

And, again, you seem to want to blame the child for being a child as opposed to a parent for not being a parent.

So Wall St = children. Okay, this we can agree on. Cool.

Basic courtesy and honesty goes a lot longer a ways than this.

And I believe that the need to be civil above being honest is partially what is wrong about politics today.

If that makes me a fucking asshole, well... it is what is.

Better than not learning at all. More stimulus, am i rite?

This is the wrong debate. It's not about more or less. It's about better. The stimulus was a bad bill. But not because of its size. Because it was aimed at tax relief and temporary projects.

[badlydrawnjeff.livejournal.com]

Whether you intend to or not, you have gone out of your way in a discussion that is about Wall St primarily to talk about them as little as possible.

In my mind, you've gone out of your way in a discussion that's primarily about bad Fed policy to talk about Wall Street. This is me disagreeing with your premise.

You find it wrong for me to point these things out. You think it's mean or wrong of me to call you a corporate apologist. But, I am sorry, that is how you come off.

It's not that it's mean, it's that it's incorrect. I assume you don't want to be wrong and incorrect all the time. So, I don't know, stop doing it.

So Wall St = children. Okay, this we can agree on. Cool.

In this analogy, absolutely. Just because someone asks for something doesn't mean you should just offer it.

And I believe that the need to be civil above being honest is partially what is wrong about politics today.

If that makes me a fucking asshole, well... it is what is

Except you're not being civil or honest. Be as much of an honest asshole as you want, no sweat off my back.

[blueduck37.livejournal.com]

See this from my perspective.

I have never seen you criticize a corporation, banking system, or Wall St., except in a vague hypothetical.

I have seen you criticize government actions in regards to those, but never them themselves. I am genuinely fascinated by your inability to do so, actually (which may lead me to be overenthusiastic in the volume of my response).

This leads me to believe you are an apologist for them.

If I am wrong, prove me wrong! And I will apologize in turn.

[badlydrawnjeff.livejournal.com]

This leads me to believe you are an apologist for them.

If I am wrong, prove me wrong! And I will apologize in turn.

That I've outright said that I'm perfectly willing to blame them when necessary should be more than enough. That you instead base your assumptions on what is essentially one topic we've discussed for two years is a significant problem, and when you're told you're wrong time and time again, you simply cling onto it in desperation, it becomes pathetic and sad. And it's fine to be pathetic and sad in a lot of places, but I'd prefer those places not be here.

[blueduck37.livejournal.com]

Fair enough. For the sake of not taking up more of either of our time, I will just move on to being sad in my real life, and leave the internet alone for now.