Bottom Line - Fed lent banks nearly $8 trillion during crisis, report shows Secret Fed Loans Helped Banks Net $13B - Bloomberg While the nation's largest banks were publicly reassuring nervous investors of their stability during the height of the financial crisis, they were also quietly approaching the Federal Reserve, hat in hand. The total price tag: $7.77 trillion, many times the amount of the better-known TARP bailout. The magnitude of the government's assistance to struggling banks allowed them to grow even bigger and continue paying executives billions in compensation, a report in Bloomberg Markets January issue said Monday. A win in court against a group representing the banks and a FOIA request filed by Bloomberg LP revealed the extent of the central bank's largesse - as well as the $13 billion in profits banks earned from those bailouts. The so called "big six" - JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs and Morgan Stanley - accounted for $4.8 billion of that total - nearly a quarter of their net income during that time. Those borrowed trillions were a deeply-buried secret. It appears that even high-ranking Fed officials didn't know about the scale of the handouts. According to Bloomberg, then-president of the Federal Reserve Bank of Minneapolis Gary H. Stern “wasn't aware of the magnitude,†and unnamed sources say that even top aides to Treasury Department head Henry Paulson were kept in the dark. The six biggest banks in the country received a total $160 billion in TARP funds, but as much as $460 billion from the Fed, raising the question as to how and why this nearly $8 trillion in loans, guarantees and limits remained under wraps for so long. According to the Fed, the massive scale of banks' borrowing - and the red ink that prompted it - had to be kept secret to avoid spooking investors and prompting a panic or bank runs that would have had even more devastating consequences on the shaken economy. WOW
wait the fed got all their money back so why is this an issue? other than the need of an audit, and how the bankers used the money, what is the issue? unless the money was printed just for that and we secretly all got robbed by the inflation from the bailouts...
The people that operate the Fed are well invested in these corporations receiving next to 0 percent interest loans. So they made money through the banks that received the loans and they even make money on what little interest there is paid back to the Fed, you're talking in trillions remember. Not even considering whether it was necessary or not for these Banks to have been given such a huge lifeline in the first place, the implications are as follows. The problem is that now you have all this extra money trickling into our "main street" economy, and it's making what money you have now worth even less, driving prices up further. The big guys didn't go bankrupt, and now the tradeoff is the cost of goods is going up and people's incomes are not able to keep pace because of the interference in the amount of the money supply. The people that get the loans get to spend the money first, and as it trickles down from transaction to transaction, it brings everyone's buying power down. Consider it like a fraction, 1 dollar out of x amount of money in circulation. 1/100,000,000,000 > 1/10,000,000,000,000 Inflation is one of, if not the single most misunderstood taxes on the people.
well said, thorough explanation. That makes a lot of sense. it won't let me rep you :/ what the fuck dude, why do we even need a fed?? just make a vault full of money from taxes, take it when it's needed. no need for all that bullshittery. I feel like I'm being robbed, and my savings account transferred to the wealthy. Ron Paul 2012 ....
http://forum.grasscity.com/politics/928056-fed-audit.html The Fed Audit - Newsroom: Bernie Sanders - U.S. Senator for Vermont
well put and to top it off they have used US citizens money to bail out foreign entities and they never even left us a sloppy seconds tip.