Bloomberg FOIA suit reveals Massive Secret Fed Loans

You have to click on this jaw-dropping article to see the interactive graphic that shows which bank got how much, and to read how the Fed and our favorite Money Men gave banks billions without Congress having a clue.

Secret Fed Loans Gave Banks Undisclosed $13B

The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret.

A fresh narrative of the financial crisis of 2007 to 2009 emerges from 29,000 pages of Fed documents obtained under the Freedom of Information Act and central bank records of more than 21,000 transactions. While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” 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.

Lawmakers knew none of this.
They had no clue that one bank, 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.
Mark Lake, a spokesman for Morgan Stanley, declined to comment, as did spokesmen for Citigroup and Goldman Sachs.
Had lawmakers known, it “could have changed the whole approach to reform legislation,” says Ted Kaufman, a former Democratic Senator from Delaware who, with Brown, introduced the bill to limit bank size.

I guess this guy is proven right once again:

I think there are people in the Fed and the Treasury who should go to jail for this. Ben Bernanke, Hank Paulson, Tim Geithner — some of the most successful white-collar criminals of all time.

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28 Responses to Bloomberg FOIA suit reveals Massive Secret Fed Loans

  1. myiq2xu says:

    The Golden Rule – “The ones with the gold make the rules”

  2. votermom says:

    It seems quite a bit of a coinky-dink that Barney Frank is announcing he won’t run the day after this story is published.

    I know he’s supposed to be a reformer, but I am always skeptical of whether reforms are for real or for show- to forestall real reform.

    The Fed supported curbing too-big-to-fail banks, including giving regulators the power to close large financial firms and implementing tougher supervision for big banks, says Fed General Counsel Scott G. Alvarez. The Fed didn’t take a position on whether large banks should be dismantled before they get into trouble.
    Dodd-Frank does provide a mechanism for regulators to break up the biggest banks. It established the Financial Stability Oversight Council that could order teetering banks to shut down in an orderly way. The council is headed by Geithner.
    “Dodd-Frank does not solve the problem of too big to fail,” says Shelby, the Alabama Republican. “Moral hazard and taxpayer exposure still very much exist.”

    • crawdad says:

      Foxes guarding the henhouse

      • votermom says:

        Geithner being in charge of the oversight council is the very definition of that.

        • Lulu says:

          Is there a grand jury somewhere on this? Why and how is this coming out now? Something is going on but what?

        • votermom says:

          I bet it is all technically legal. The best white collar crimes are.

          Makes me think the people who say the Fed should be abolished may be right.

          Here we have the Fed literally acting like a rogue agency, usurping Congress’ role of budgeting by funneling money where they want it to go, without the full knowledge or approval of said Congress.
          It’s positively piratical.

  3. myiq2xu says:

    What’s up with the black hole where Corrente used to be?

    Did Lambert try to divide by zero or something?

  4. DeniseVB says:

    I had no faith in Geithner when he used the “it’s Turbo Tax’s” fault I didn’t pay my taxes. Then again, most of Obama’s team were approved by the Dem held Congress at the time. It’s how we got J-Nap and her turkey fryer warnings and Holder with his fast and furious.

    Throw them all out. The Republicans are just as responsible for not screaming from the rooftops …. which begat the Tea Party.

    We are the 81% 😀 😀

  5. DeniseVB says:

    I shortened your title so I could add extra hashtags 😀

  6. gxm17 says:

    UFB. Well, actually it’s SOP and UFB all rolled into one delicious shit sandwich for the American people.

  7. Karma says:

    O/T

    Someone has to warn Uppity. I tried to look away but spotted Christmas Peeps on the bottom shelves at Rite Aid yesterday.

  8. catarina says:

    More OT:

    The Bidens held up air traffic on Nantucket last night for a couple of hours while they boarded AF2 for a return trip to DC.

    They’d been on the island since Tuesday, as this is their “Thanksgiving ritual.”

    6 days off for Joey B. Guess he doesn’t have a whole lot to do.

    • DandyTiger says:

      And that’s who they’ll be sending to PA, OH, and FL to win over the working class voters. LOL. These jokes write themselves.

      • catarina says:

        The Bidens’ little vacay was kept under the radar by the media.

        There was very little reporting and not a lot of restricted airspace or extra security like when the Obummers are on the islands.

        The “working class voters” I know sure as hell don’t get a week off over Thanksgiving.

  9. HELENK says:

    along with the insider trading for congress, check out the land deals they make a bunch of money on and it is legal

    http://hotair.com/archives/2011/11/28/congressional-land-grabs-for-fun-and-profit/

  10. foxyladi14 says:

    I think there are people in the Fed and the Treasury who should go to jail for this

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