Continuing With The Revelation of The Fed’s Stealth Bank Bailout (TARP 2.0), We Present Our Analysis Of The Use And Abuse Of The Primarily Dealer Credit Facility

Reggie Middleton's picture

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Wed, 12/22/2010 - 12:14 | 823934 sodbuster
sodbuster's picture

Thanks Reggie- keep up the good work- you do a stellar job!

Wed, 12/22/2010 - 12:02 | 823909 gwar5
gwar5's picture

Thanks Reggie.  Blarney, I guess we're all Irish now.

The recent FED revelations should really put and end to the tin foil hat bankster conspiracy theories. It's a conspiracy fact.

The real government is the unelected, unaccountable, shadow banking unilaterally controlling our foreign and domestic policy.

Things make sense now. The banksters are just running out the clock while the storm troopers are being assembled.

Happy St. Patty's day!





Wed, 12/22/2010 - 11:15 | 823766 Tic tock
Tic tock's picture

helping people do stupid things faster?

Wed, 12/22/2010 - 10:55 | 823712 cunningtrader
cunningtrader's picture

Tyler and gang have got to understand:the rothschilds can afford to print forever, because they are the only ones with a few lazy quadrillion hanging around under the porch in the backyard....

They are happy however, to keep trying to enslave the entire world to thie NWO crap... Uncle Sam might own your ass if you're in the military, but the Rothschild's own your ass through debt.......

Wed, 12/22/2010 - 10:50 | 823693 Tic tock
Tic tock's picture

Tyler, will it ever be time to field a Zerohedge political party?

Wed, 12/22/2010 - 11:14 | 823763 Star Warrior
Star Warrior's picture


Lets be original and call it the Coffee Party LMAO


Wed, 12/22/2010 - 10:45 | 823682 Star Warrior
Star Warrior's picture

Hey Reggie, how about making that subscription price more affordable for us nickle and Dime traders!!

Wed, 12/22/2010 - 10:42 | 823667 Star Warrior
Star Warrior's picture

As always Reggies, shit hot and credible info, you are an Analysist in a million, Billion, Trillion (LOL) got to keep up with the POMO.

Wed, 12/22/2010 - 10:41 | 823666 Pladizow
Pladizow's picture

Who would this data surprise?

Wed, 12/22/2010 - 11:19 | 823780 Mark Medinnus
Mark Medinnus's picture

Who cares: with an avatar like yours, just keep posting.

Wed, 12/22/2010 - 10:47 | 823665 Mercury
Mercury's picture

So, if the PDCF closed down in February does that mean that all the short term loans have been paid back by the banks and the crap collateral is back on the banks' books or has everything just been rolled over into some other money-for-crap scheme?

Timmy has tried to address some "common myths" about TARP but as you point out in the article on your site, TARP is but a drop in the bailout bucket.

Wed, 12/22/2010 - 10:15 | 823611 Tyler Durden
Tyler Durden's picture

As we reported on December 1:

One of the biggest stunners: Bank of America pledged as much as 77.2% of a loan from the PDCF with equity collateral!
So much for the Fed taking fiduciary precaution with what crap it lends
taxpayer money against. This is a topic we first (very disgusted) discussed first over a year ago.

Wed, 12/22/2010 - 11:44 | 823847 Kayman
Kayman's picture

But this is the proof that TBTF is TOO BIG TOO EXIST. When the entire nation is put at risk to save a few cancerous dinosaurs, then let them die.

Power is concentrated in too few hands, money is not allocated on a productive basis, and the (private sector) middle class gets the tab.

Crony Capitalism needs to be buried, and Competitive Capitalism needs resuscitation.

Where are the Trust Busters Tyler ??

Wed, 12/22/2010 - 10:14 | 823607 Tic tock
Tic tock's picture

moneymutt, if similar terms were available to everyone it wouldn't be capitalism, where normally one gets a loan interst rate on their credit rating. The Primary Dealers are banks who can, let's say, bankroll a small nation for a year, so they are pretty big and so they get a preferential interest rate.

As for the real value, of which a subset is the cost of the loans, phew! the value is made up of two things, the significance of the thing the bank needed the money for because that is where the money went. Two, the cost is the difference between rates now, with the credit infusion and what rates would been without the facility, multplied by market-sizes under such rates. -insofar as banks are effectively just accumulating profits under a captured Congress, I would tend to think that the 'value' to us is pretty detrimental.

Lastly, licensing money-creation to States and Credit unions in itself is a minor pallitive- there are some who think the price structure, the regulations and laws (so-called Structural reform) applicable commerce, savings, taxes are more relevant in the first instance.


Wed, 12/22/2010 - 09:34 | 823538 Tic tock
Tic tock's picture

Yes, the numbers are large, but so are the banks' total assets. Without knowing what the size of squeeze is from the banks there's no way to quantify this outlay in terms of 'moral hazard' or imprudence. Anyone can believe that the PDs borrowed the money to pump their profits- but we don't know if, for instance, this facility was used for that. Sure, $8trn is far too much, it does portray a systemic failure in the happening, I just don't think a contention is that the Central Banks should not have covered for the potentially serious risk to financial rates; the question is how far and above the Central banks went and doing so effected what is more than likely to be the greatest transfer of wealth out of the hands of the poor, the tired, the downtrodden as well as the now persecuted middle-class. Go Constitution!

Wed, 12/22/2010 - 09:28 | 823532 moneymutt
moneymutt's picture

wow, this is really good stuff (well, not good in that it was good thing, but good in that this in very informative)

Pardon my ignorance, but it begs some questions, if someone is willing to explain to me what this means in terms of results and special treatment.

What was the real value of these loans, as in, how much was it worth to the Primary Dealers and how much did it cost us?

Why do primary dealers get a special program?

If similar lending available to others, how much would it have saved those folks and how much would it have cost us. Like say, if a local credit union, state govt could borrow this way?

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