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The $23.7 Trillion Backstop Heist
The full SIGTARP report is below. It took Steve Liesman 5 minutes to read the 262 pages and refute it. Read between the lines and find out just how you, dear taxpayer, are being robbed by the Too Big To Fails and the Reserve Banking System. Much more info contained in this report, which attempts to grasp just how pervasive the involuntary taxpayer support of Wall Street is, including a great overview of the Federal Reserve Banking System. Neil, you are doing a tremendous job: please contact Zero Hedge at your convenience for some of our thoughts on the matter: sigtarp@zerohedge.com Neil's presentation (happening on his birthday) to the Congressional Oversight Committee which is going on live right now can be seen here... Much more relevant than the Federal Reserve propaganda spewing forth from General Electric subsidiaries.
And this section beginning on page 137.
TARP IN CONTEXT: OTHER GOVERNMENT PROGRAMS TO ASSIST THE FINANCIAL SECTOR
By
itself, the Troubled Asset Relief Program (“TARP”) is a huge program at
$700 billion. As discussed in SIGTARP’s April Quarterly Report, the
total financial exposure of TARP and TARP-related programs may reach
approximately $3 trillion. Although large in its own right, TARP is
only a part of the combined efforts of the Federal Government to
address the financial crisis. Approximately 50 initiatives or programs
have been created by various Federal agencies since 2007 to provide
potential support totaling more than $23.7 trillion.
The Federal
Reserve has been one of the lead agencies responding to the financial
crisis — increasing its balance sheet to more than $2 trillion to
implement a wide range of programs designed to stimulate liquidity in
financial markets, as well as several institution-specific
interventions.321 The Federal Reserve’s $2 trillion balance sheet
(which grew from approximately $900 billion prior to the financial
crisis to a peak of nearly $2.3 trillion in December 2008),322 however,
does not reflect the true potential amount of support the Federal
Reserve has provided to those programs, which is estimated to be at
least $6.8 trillion. This is because many of the programs involve
guarantees that, although not listed on the balance sheet, expose the
Federal Reserve to significant losses if the assets they are backing
deteriorate in value.
Other players in the Government’s efforts
include the Federal Deposit Insurance Corporation (“FDIC”), which has
contributed more than $2 trillion in new gross potential support. The
newly created Federal Housing Finance Agency (“FHFA”) — under whose
auspices fall the Government-Sponsored Enterprises (“GSEs”) such as
Fannie Mae, Freddie Mac, and Federal Home Loan Banks (“FHLBs”) — has
effectively provided more than $6 trillion in gross potential support.
Meanwhile, Treasury itself has programs outside of those authorized
under the Emergency Economic Stabilization Act (“EESA”), and has
supplied potential support beyond TARP of approximately $4.4 trillion.
An overview of the Government’s new potential support relating to the
financial crisis is listed by Federal agency in Table 3.4.
Of
this $23.7 trillion in assistance to financial institutions,
participants in non-TARP programs are not subject to TARP’s
restrictions and conditions, such as executive compensation, nor do
they necessarily require specific Congressional approval. Although
SIGTARP’s oversight responsibility is for the operations of TARP and
directly related programs (such as TALF and the Public-Private
Investment Program (“PPIP”)), it is necessary to understand the larger
context in which TARP operates, the linkages between TARP and the
trillions of dollars of other Government initiatives. As noted earlier,
SIGTARP has no authority over any of the non-TARP activities of the
agencies discussed below.
Other Federal Responses: Beyond TARP
The Federal Government has undertaken dozens of initiatives, some of
them involving specific programs with specific spending limits and
others without any specific, quantifiable measurement appearing in the
books of the responsible agency. Examples of the latter include the
increase in deposit insurance instituted by FDIC, or the action by the
Federal Reserve to pay interest on reserves held by banks at the
Reserve Banks.323 To the extent possible, SIGTARP has quantified the
total exposure of these programs using publicly available information
from the Federal agencies responsible for the programs or initiatives.
Following each table are brief descriptions of key programs implemented
by the agencies. The descriptions reflect the agencies’ own
descriptions of their programs. Note that the TARP related programs,
such as TALF and PPIP, are not included as they are addressed in other
sections of this report.
Federal Reserve System
As
the central bank of the United States, the Federal Reserve has
exceptional responsibilities and powers to deal with systemic financial
crises. See the previous discussion “TARP Tutorial: The Federal Reserve
System” in this report. The Federal Reserve has created 18 financial
support programs outside of its TARP-relatedprograms, as listed in Table 3.5.
»
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And they grilled Neil Barofsky on CNBC as if he made it up!
Too tragic for words!
What is tragic is Barofsky has to defend himself against a bunch of GE puppets.
Just once i wish some guest would say to Liesman, "you really don't have a deep skill set (aside from speed reading)".
In never ceases to shock me how much 300 S&P points cost the U.S taxpayer.
I find it quite remarkable the lack of ink devoted to GE's Q2 fiasco. Top line on a company like GE off 17% and it simply disappears.
As much as I want things to improve for people, I also think a market crash and a dose of reality and truth is a lesson that is needed.
We had a market crash. Nothing learned, nothing changed.
Bernanke getting desperate to keep his job "unemployment to peak by end of 2009" (of course he said a year ago it was supposed to peak at end of 2008 @ 4.8%).
Stock market up so economy is getting better? tail wagging the dog?
It is "Wag the Dog" if you ever saw the movie but in Finance. Check out this Greenspan quote: "In my experience, such episodes [rising or falling stock prices] are often not mere forecasts of future business activity, but major causes of it." He is saying this is why he blew bubbles, and sets the stage for the manipulation of the markets - to lead us out of the economic deflationary depression in their view.
Come one, we are flying on the cushion of liquidity, injected
once again by brainless central bankers. If you look at timelags
when it gets to money supply, we now witness the reaction in
the markets. Nothing more. So it is the typical climb the wall
of worry markets, as long as liquidity is provided by central banks.
The incredible bearishness among investors provides the additional
fuel, to get the S&P500 above 1000. of course there will be another
leg down, but don't fight the tape right now.
Structural change is needed. We won't get structural change unless/until millions of armed starving citizens hit the streets. Our political system is captured by the financial elite.
It's all about credit default swaps that GE wrote
http://seekingalpha.com/article/106445-general-electric-genuine-risk-of-...
I don't even think we know yet how much 300 S&P points cost us. We will be paying the true price years from now. How much money was printed to prop up the market? What happens when all that money sloshing around lands on more unproductive uses? Another bubb;e that bursts even worse? Stagflation?
History will not look back on this era kindly.
Barofsky's Freudian slip, he started to call the PPIP the Public purchase program. haha to funny
It doesn't matter anymore. We are going to hell in a hand basket.
I hope Mr. Barofsky takes ZH up on its offer. Nice job, Mr. Barofsky, please keep pressing.
Nice line on Liesman, TD....very funny.
Parenthetically, nice article on HuffPo this a.m. about Congress being upset with Geithner in re the warrants. A Congressional Representative has introduced legislation requiring warrants to be auctioned. Whatever the end result is, it's nice to see some more light go on the TARP warrants so we can avoid yet another backroom deal.
Has anyone noticed the volatility in the Yen based crosses... amazing.
Check out 10 yr Treasuries.
Can someone much smarter than myself, please explain WTF is going on in Treasuries today?
I would highly recommend this guy John Jansen < http://acrossthecurve.com/ > for insights as to what the Treasury market is doing. Read some of his past posts to get a sense of the expertiese he offers and his market views. But for me his daily roundup is required reading (I've been missing ZH's credit market roundups of late).
What he has to say about today: "The market is very thin and the combination of central bank buying and Fed buying has shorts on the run."
The Yen is getting a lot of action. GBP/JPY is down a full percentage point.
Though other Yen crosses are moving in seemingly opposite directions like CHF/JPY.
How is it popssible that Ben is buying? Didn't he say today that the FED WILL NOT engage in QE?
By the way, what is it called when the FED sets up a 300 billion dollar fund to buy bonds to keep rates low? NO QE here, no sir.
In other news, Kindle ERASES copies of 1984 from readers as they were not obtained 'properly' I kid you not.
Ben bought $7 billion today
Bernanke says short rates will stay near zero for the forseeable future ....cost to carry inventory looks cheap.
Primary dealers lightened up on shorts.
EUR/JPY going down....
This obsession that you and Denninger have with CNBC is not healthy. I mean, it's not like they're the only media outlet that lies. I used to hate them too. Now I just don't care. Steve Liesman, the stock hooter girls and all the other bozos are a sideshow. You have a great website. It would be better if you could get past your obsession with CNBC. Who cares?
Agree.
Disagree, these fools need to go down.
Are you trying to singlehandedly kill the supply of one liners around here?
the messenger needs to be shot
sorry
CNBC needs to be held accountable. Call them out until they are a universal object of ridicule.
Well, at least we know how much it costs to produce a few green shoots -- 1.68X your total annual economic output.
But hey, everythings fine now -- the plan worked -- we're enjoying our second half recovery -- back to the malls, America.
Where is the outrage?
When will the general public wake up and see they are being robbed blind to pay for the banksters cushy jobs?
How long did it take them to realize that Iraq had no part in the 9/11 attacks? And what did they do about it?
wigga, the correct word is "Bankstas"
http://www.youtube.com/watch?v=rL9ihXiFAko
Thank you Milton...much better than Bankster. And, Ben is "bugsy".
Come on, what is 24 trillion amongst friends?
For what it's worth - I just looked up the bios for all the 2009 FOMC members. William C Dudley = squid tentacle
Neil says tips from the public (who work for banks) are helping--sigtarp.com & they have a hotline as well...
Ya gotta love the fine print in Table 3.5:
">" reflects programs that do not specify upper limit.
Let's just call it a googolplex.
B.S. Bernanke...
I think the word "Power" should go before "responsibility", but I am pretty sure they would like to make it seem as if they are just trying to deal with the mess that all of those other financial houligans created.
Who has ever seen and approved an organization chart that just goes in a circle?
Around 1:25 into the video, Dylan Ratigan calls the Bank Execs Thiefs.
http://www.msnbc.msn.com/id/21134540/vp/32027203#32027203
wow
my favorite quote so far from the hearings "we had paulson in here for 5 hours last week, and trying to get information out of him was like trying to unscramble rotten eggs"
You'd have to be a dope to even try. Tried and true blood from a stone fish would have held her in better stead
On two occasions Benny has referenced the stock market's recent increases: first as a catalyst for consumer confidence; and second as a reflection of the health of the economy. On the screen I was watching a small cloud appeared above his head with the word "manipulation".
No question in my mind the Fed was involved in propping up the stock market. Gotta calm the herd, you know.
...that is another thing that might help the people understand how our capital markets really work.
B.S. Bernanke
Why does Congress continue to ask the opinion of persons who perpetuate this fraud? Do you expect the truth? Do they steer you towards the truth?
maybe if passing a high school level economics course was made a requirement to sit in congress - these hearings would go better?
As things stand - these are blunt instruments - all gums and no teeth.
I have to agree. Who elected these people? I have now realized how stupid they really are. They do not even know what they are talking about.
I think it takes a little more than high school economics, though some streets smarts on how to comabat 3 Card Monte might help.
But really no one votes for smartness. They vote for hearing things that sound nice to them. They vote for looking good and quick comebacks and great one-liners.
Mr. Heinlein, one of my favorite authors had a great idea, "make it a requirement to solve a algerbraic equation to vote"
Like the requirement to Post here!! ;-)
TD, do you actually watch CNBC or have someone watch for you? i guess you need to watch to "know thy enemy". I feel for you. I can't even stand turning it on at the gym at night anymore (where I can't get a real business channel). I would rather watch 1980s Superstars re-runs on ESPN Classic. CNBC is just horrible.
liesman is a fool. apologies to any fools that were offended by being compared to liesman.
But you've got to love the Dickensian name.
Absolutely! This whole financial debacle seems written by Dickens.....Lloyd Blankfien....Lord Bankfiend.....Neil Kashkari......Neil Cash'n'Carry....it is surreal....seems like we are in The Matrix
Madoff...with the money.
ever think you are a character in your own TRUMAN show?
The names of these thieves...its almost like the boardmasters are playing a joke on us.
However, come judgment day, they will meet their maker.
Neil Barofsky says they are currently involved in an audit of the decision of AIG to pay counterparties at 100 cents on the dollar (ie, who made that decision and why). Expects to have results in Sept '09. Go Neil !
...it makes my head hurt to even think it took this long for the question to officially be pursued...better late than never. When Enron was going down, things were quiet for a number of months before news came out about legal action, so maybe this whole mess is no different---that gives me a little hope for justice.
You concede everything when you use the Federal Government's choice of terms: "financial" and "crisis." When you do that, you take your eyes entirely off the ball. Too bad. You've been brainwashed.
WOW. I caught a half-hour of Barofsky's presentation to the Committee, and it was thrilling. The Committee is firmly backing Barofsky's investigations; the Chair threatened to summon Geithner to explain himself.... It seems like this will set up a real clash between Wall Street and top bankers vs. main street.
Meanwhile, this morning, bernake the terrible, is letting members of congress take turns smooching his A@# to show what a sacred figure he is...
23.7 Trillion doesn't go as far as it used too.
Damn it must feel good to be a Bankster.
the largest number for money supply, M3 (around 15 billion according to Shadowstats), states that total existing money / 24 trillion liability = .015/24=.000625, or 24/.015=1600, a 1600 times increase in money created...1600 times. Sure hope ole B.S. Bernanke has the strength to rein in that money supply when inflation scares the herd...
From the Bernanke Testimony(WSJ) Question to Bernanke Can the investment banks and broker-dealers (read: Goldman Sachs and Morgan Stanley) decided to become bank holding companies. Could these banks decide to return to being only broker-dealers? The answer: Yes. “They could do that and if they did, the Fed would no longer be their supervisor,” Bernanke But he notes that the financial regulation overhaul would prevent Tier 1 firms from escaping Fed supervision, regardless of their charter.
What silly ass is still dutifully paying their taxes?
I am Chumbawamba, and I am not a slave, bitch.
CNBC-US is very important. Most of their skilled reporters went to Harvard or NYU or Colombia Schools of journalistics. They do good reportin'. Some worked on the wall street and goldman- so they know how to commit crimes. and they all luuuuv jack welch. None a one can even speak a second language! Propping an industry that has 50 trillion in accumulated losses in the last 10 years!
Neill barofsky is perhaps the most disgusting, vile appointee. His (new york!!!!!!!) law firm represents Hank Greenberg(AIG mastermind!!!). Was there no attorney from kansas available?
Sheila Bair had a prior engagement. :)
Boies' firm? Everyone deserves a fair trial.
I didn't see Barofsky on the lawyer roster : http://www.bsfllp.com/lawyers/search_out?sa_LastName=B
What do you hate so much about this firm?
I checked the Federal Reserve Act of 1913 (FRA) and couldn't find authorization of the Fed to do all these programs unless you assume that the Fed has been delegated unlimited power in the FRA. So the Fed's actions are either illegal, or the establishment of the Fed itself was illegal, as Congress delegated more power away than it was authorized iteself to delegate.
http://zeropointfield.wordpress.com/2009/07/17/the-legality-of-the-feder...
Yeah, well Paulson created new tax law for Wells to
buy Wachovia...oh well.
I am sorry to say, but the captchas suck big time. three-quarters of the time they don't accept the right answer.
If you want to get rid of commenters that's a way to do it.
We are simply trying to prevent unmotivated posting on ZH. Most readers value the highly intelligent commentary here and we are trying to minimize uncontributing comments as much as we can.
i don't have a problem with that.
but if the answer is -13 it should accept the input of -13 and not tell you that the answer can only be two places long because it doesn't somehow accept the minus.
that's just annoying.
I think Barofsky went a little overboad on the $27 trillion figure in trying to make his point, as there is no way in hell the Fed/Treasury/FDIC three headed monster will fully tap the available balance. It seemed a little too headline grabbing and over the top.
On the other hand, it's a little troubling that only $700b-$800b of that total required Congressional approval. The remainder of these "make good" guarantees and the like to our financial system total more than a full year of U.S. GDP-- and there is little or no accountability behind that. It just the potential that American taxpayers are left with if things go really really bad.
It's pretty digusting, isn't it?
Too bad we the little peopel can't get any say in any of this. Let's include all the other costs such as Iraq, Iran, Afghanistan, North Korea, Heath care,
good finance articles
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by Anonymouson Mon, 07/20/2009 - 22:05
#10864 Are they going to assume the roll of the bankrupt Fannie Mae and Freddie Mac? Is the 'Shadow System' taking a bank holiday? WTF! A complete sham. Caterpillar's revenue is down 66% (40-some% last year!) and they have laid off 20% of their employees. BAC upgrades from neutral to buy. thus the stock is up 15% over the past 5 days. GTFO! Caterpillar is completely dependent on the US government's ability to extract $$$ from the tax-payers and foreigner investors and funnel it into projects such as bridges to nowhere. Watching the market over the past week has been excrutiatingly painful. The absolute ridiculousness of it
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