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How Lehman, With The Fed's Complicity, Created Another Illegal Precedent In Abusing The Primary Dealer Credit Facility

Tyler Durden's picture




 

Five months ago, Zero Hedge observed the nuances of the Federal Reserve's Primary Dealer Credit Facility (PDCF) and concluded that this artificial liquidity boosting construct was nothing more than yet another scam to allow banks to extract ever more money from taxpayers, with the complicit blessing of the Federal Reserve Board Of New York (as the original piece also provided an in-depth discussion of the triparty repo market which is now a parallel to the buzzword of the day in the form of Lehman's "Repo 105" off balance sheet contraption, it should serve as a useful refresher course to anyone who wishes to understand why while Repo 105 with its $50 billion in liability contingency may have been an issue, the true Repo market, with over $3 trillion of likely just as toxic assets, is where the real pain in the future will come from). The PDCF would allow assets of declining and even inexistent value to be pledged as collateral, thus making sure that taxpayer cash was funneled into sham institutions holding predominantly toxic assets, and whose viability was and is limited, yet still is backed by the Fed, which to this day continues to pour our money into them. Today, with a tip from the NYT's Eric Dash, we demonstrate just how grossly negligent the Federal Reserve was when it came to Lehman's abuse of the PDCF, and how the trail of slime of Lehman's increasingly obvious manipulation of its books goes to the very top of the Federal Reserve Bank of New York, and its then governor - a very much complicit Tim Geithner.

1. The Liquidity Conundrum And the PDCF

In our original piece, we posited the following observation on the Fed's constant involvement in liquidity provisioning, particularly in the context of the repo market:

Here is the liquidity crunch in its full flow-chart glory:

  1. If can not obtain short-term (overnight or term) funding in repo market, go to Eurodollar market
  2. If can not obtain short-term funding in Eurodollar market (LIBOR), go to asset sales
  3. If
    asset sales are impossible due to lack bids, illiquid markets, and
    collateral consists of toxic MBS and CCC-rated junk bonds, yet margin
    calls are streaming and repo counterparties are demanding their cash
    back, go to bankruptcy
  4. File for bankruptcy

This
would be natural chain of events in a normal capitalist country.
However, America in times of stress is anything but - which is why
enter 3.5 (after 3 and before 4): the Federal Reserve. What the Fed did
was to basically extend credit, first to Bear Stearns (through JP
Morgan which ended up acquiring Bear's toxic asset mess, now better
known as Maiden Lane as it continues to reside on the Fed's balance
sheet), and second to Lehman Brothers (here JPMorgan was not the
ultimate beneficiary of the "good bank," and instead it was merely the
clearing agent of the triparty repo which had a very nervous Fed on one
side, stuck with nearly $70 billion in worthless securities consisting
of anything from defaulted CRE whole loans, to stock in hundreds of
bankrupt companies.

Keep in mind this is not the first time the
Fed has found itself in this situation: in 1998, when LTCM blew up, it
was a dress rehearsal to the dot, along with the same feedback-loop
driven evaporation of liquidity, as haircuts collapsed and nobody
wanted to be on contingent to anyone else making rash decision. Yet
there was one notable difference between 1998 and 2008: roughly $3.5
trillion (or 350% more) in outstanding repos: a number equal to about
30% of the US GDP, and a number sufficient to bring down the entire
financial ponzi house of cards. Enter the Federal Reserve and the
doctrine of encouraged moral hazard.

The Fed's response to point 3.5 - the emergence of the Primary Dealer Credit Facility.

The PDCF is mostly notable for the one fact that on the eve of Lehman's bankruptcy, the PPT officially came out to play. On September 14th the original, "stricter", terms of the PDCF were modified to expand the collateral package from investment grade securities to pretty much anything that was not nailed down, including equities. In this way the Fed was basically acting as the Plunge Protection Team once removed: it would lend money to banks so they could buy equities. If anybody was confused about the existence of the PPT, it became completely evident on September 14th. This was also previously discussed on Zero Hedge:

All through the spring and summer of 2008, the Fed was confident it had
managed to glue the pieces together, and retain some semblance of
stability. Then came that fateful weekend of September 13th about which
so much has been written. In advance of the Lehman collapse, and what
the Fed knew would quickly become a lock-up of not just money markets
(which nearly occurred), but of the entire repo system, bringing
practically all leveraged institutions to a halt and prompt
liquidation, the Federal Reserve announced
this little discussed amendment to the Primary Dealer Credit Facility:

The collateral elligible to be pledged at the
Primary Dealer Credit Facility (PDCF) has been broadened to closely
match the types of collateral that can be pledged in the tri-party repo
systems of the two major clearing banks. Previously, PDCF collateral
had been limited to investment-grade debt securities.

The bolded text is all you need to know to find the smoking gun for any
and all allegations of "plunge protection" or however one wishes to
frame the invisible market bid. On September 14th, 2008 the gloves
cames off, when the Fed, stated in a press release no less, that it
would provide virtually free taxpayer capital to banks so that they
could go to the market and purchase equities!

And while the gloves really came off after Lehman's failure, there was a sense that in the period between the PDCF's inception in March and the September crisis amendment, the Fed was acting with at least a borderline fiduciary obligation to taxpaying Americans, by at least being true to its words of accepting only "investment grade rated securities."

On March 16, 2008, finding itself in a quandary as to how to unclog
frozen repo markets, the Federal Reserve Board announced the
Primary Dealer Credit Facility.
Most notably from the press release is the disclosure on collateral:
"Credit extended to primary dealers under this facility may be
collateralized by a broad range of investment-grade debt securities."
Note: not junk bonds, equities or any other toxic trash. At least at
this point the Fed, while acting to preserve liquidity, still retained
some semblance of fiduciary responsibility to the U.S. taxpayer.

We have now discovered that this was absolutely not the case.

When analyzing the Lehman failure, the Lehman Examiner spends a substantial amount of time on the PDCF, and the interplay between it, and Lehman's "assets":

On March 16, 2008, “at the height of the Bear Stearns crisis” the Board of Governors of the Federal Reserve granted the FRBNY the authority to establish the Primary Dealer Credit Facility (“PDCF”)...Under the PDCF, the FRBNY would make collateralized loans to broker-dealers, such as LBI, and in effect, act as a repo counterparty. Unlike a typical counterparty, though, with the creation of the PDCF, the FRBNY was generally understood by market participants to be the “lender of last resort to the broker-dealers.” Reflecting the fact that broker-dealer liquidity had become increasingly dependent on overnight repos to obtain short-term secured financing, the PDCF was structured as an overnight facility.

As to the acceptable collateral qualifier, Valukas notes:

Pursuant to the Federal Reserve Act’s requirement that a Federal Reserve Bank lend only on a secured basis, and according to the convention in repo lending, the FRBNY advanced funds against a schedule of collateral. Collateral accepted by the PDCF initially consisted of: Treasuries, government agency securities, mortgage-backed securities issued or guaranteed by  government agencies, and investment grade corporate, municipal, mortgage- and asset-backed securities priced by clearing banks.

Wall Street immediately greeted the arrival of the PDCF as the panacea that would bail out the world.

Citigroup’s Global Markets Equity Research division upgraded Lehman to “buy” on the back of the expansion of the PDCF. Referring to the PDCF, the Citigroup analysis states: “In our view, it’s tough to have a liquidity-driven meltdown when you’re being backed by government entities that have the ability to print money.” The Citigroup analysis elaborated on that point: “With $34b in liquidity at the parent company, [and] the ability to get access to over $200b in liquidity from the Fed’s primary dealer credit facility, . . . access to liquidity is a non-issue.”

To Lehman itself, the PDCF seemed like a Bernanke Ex Machina. To wit:

A day after the PDCF became operational, Lehman personnel commented: “I think the new ‘Primary Dealer Credit Facility’ is a LOT bigger deal than it is being played to be . . . .” They mused that if Lehman could use the PDCF “as a warehouse for all types of collateral, we should have plenty of flexibility to structure and rethink CLO/CDO structures . . . .” Additionally, by viewing the PDCF as “available to serve as a ‘warehouse’ for short term securities [b]acked by corporate loans,”5345 the facility “MAY BE THE ‘EXIT STRATEGY’ FUNDING SOURCE WE NEED TO GET NEW COMPETITION IN THE CORPORATE LOAN MARKET.

Amusingly, even Lehman realized the obvious: that the Fed was locked in its "enabler" mode and would now have to serve Ponzi heroin virtually in perpetuity, as it would have no ability to withdraw the extra liquidity:

Feldkamp hypothesized that banks would be able to take advantage of the PDCF’s warehousing potential over the long term, believing the FRBNY could not discontinue the temporary program in the near term, and that the program would eventually become entrenched:

Bernanke and co may have ‘saved the day’, and JPM has a great public affairs approach to make the Bear deal look extremely positive for everyone, by emphasizing how it will be looking forward to applying this new [CDO packaging]  technology to [the] resolution of this crisis. Once applied successfully, the Fed will not be able to end the facility. They’ll have to conti[n]ue it and manage it as a standard monetary policy tool.

Forget lender of last resort: everyone now saw the Fed as the "enabler of infinite resort."

The 'hope' reached to the very top, when Dick Fuld said on March 17:“The Federal Reserve’s decision to create a lending facility for primary dealers and permit a broad range of investment-grade securities to serve as collateral improves the liquidity picture and, from my perspective, takes the liquidity issue for the entire industry off the table.” [amusingly, this is taken from a quote by the now infamous Zachery Kouwe, Lehman Is Not Ready To Fuld — Chairman Bullish Despite 19% Drop, N.Y. Post, Mar. 18, 2008, at p. 37 - we wonder how many sources were trampled in the creation of this reference...]

Oh Dick, if only you knew then how wrong you are.

2. Lehman PDCF Land-Grab

The second PDCF was announced, it became Lehman's saving grace. The firm immediately took to packaging whatever questionable assets it could find, including completely worthless unsecured loans from Mozillo's defunct Countrywide Financial, securitizing them with a few rating agency kickbacks, getting a single A rating for these, and peddling them over to the taxpayers in exchange for cash, with the Fed's criminally negligent complicity:

Lehman did indeed create securitizations for the PDCF with a view toward treating the new facility as a “warehouse” for its illiquid leveraged loans. In March 2008, Lehman packaged 66 corporate loans to create the “Freedom CLO.” The transaction consisted of two tranches: a $2.26 billion senior note, priced at par, rated single A, and designed to be PDCF eligible, and an unrated $570 million equity tranche. he loans that Freedom “repackaged” included high-yield leveraged loans, which Lehman had difficulty moving off its books, and included unsecured loans to Countrywide Financial Corp.

The rub here is that unlike any traditional "asset", there was no roadshow, no market, no way to determine the price for the CLO - it was all just Lehman's word. Yet the kicker is that the only reason the CLO was created was to abuse the PDCF's generosity.

Lehman did not intend to market its Freedom CLO, or other similar securitizations, to investors. Rather, Lehman created the CLOs exclusively to pledge to the PDCF. An internal presentation documenting the securitization process for Freedom and similar CLOs named “Spruce” and “Thalia,” noted that the “[r]epackage[d] portfolio of HY [high yield leveraged loans]” constituting the securitizations, “are not meant to be marketed.” Handwriting from an unknown source underlines this sentence and notes at the margin: “No intention to market.

Where it gets much worse, and where alarm bells comparable to those in the AIG case should now start to go off, is that Lehman had every intention of manipulating its books to hide its intention of using the CLO exclusively for Fed collateral purposes. This has all the makings of another SEC-sponsored disclosure crisis, in which both the regulator and the Fed were criminally negligent and/or complicit in hiding the true state of Lehman's affairs from the broader public. And while Fuld can claim he was unaware of Repo 105, there is at least a written trail that exposes his order to make Lehman's PDCF participation hidden from the public's eye: this alone is grounds for a criminal and civil investigation.

Lehman may have also managed its disclosures to ensure that the public did not become aware that the CLOs were not created to be sold on the open market, but rather were intended solely to be pledged to the PDCF. An April 4, 2008 e-mail containing edits to talking points concerning the Freedom CLO to be delivered by Fuld stated:


"Given that the press has not focused (yet) on the Fed window in relation to the [Freedom] CLO, I’d suggest deleting the reference in the summary below. Press will be in attendance at the shareholder meeting and my concern is that volunteering this information would result in a story."

It is unclear, based solely on the e-mail, why a reference linking the FRBNY’s liquidity facility to the Freedom CLO was deleted. One explanation could be that Lehman did not want the public to learn that it had securitized illiquid loans exclusively to be  pledged to the PDCF. Another reason may have been to hide the fact that Lehman needed to access the PDCF in the first  place, given that accessing the securities dealers’ lender of last resort could have negative signaling implications.

While it is immediately unknown if the SEC was aware, and thus at fault as well for the this public disclosure manipulation, what is clear is that the FRBNY was well too aware of the deal:

The FRBNY was aware that Lehman viewed the PDCF not only as a liquidity backstop for financing quality assets, but also as a means to finance its illiquid assets. Describing a March 20, 2008 meeting between the FRBNY and Lehman’s senior management, FRBNY examiner Jan Voigts wrote that Lehman “intended to use the PDCF as both a backstop, and business opportunity.” With respect to the Freedom securitization in particular, Voigts wrote that Lehman saw the PDCF

"as an opportunity to move illiquid assets into a securitization that would be PDCF eligible. They [Lehman] also noted they intended to create 2 or 3 additional PDCF eligible securitizations. We avoided comment on the securitization but noted the firm’s intention to use the PDCF as an opportunity to finance assets they could not finance elsewhere."

Thus, the FRBNY was aware that Lehman viewed the PDCF as an opportunity to finance its repackaged illiquid corporate loans. The Examiner’s investigation has not determined whether the FRBNY also understood that these Freedom-style securitizations were never intended for sale on the broader market. In response to a question from FRBNY analyst Patricia Mosser on whether Voigts knew “if they [Lehman] intend to pledge to triparty or PDCF,” Voigts replied that the Freedom CLO was “created with the PDCF in mind.”

Recall that Jan Voigts, who was an Examining Officer in the FRBNY's bank supervision department, was woefully unaware of Lehman's Repo 105, as in the words of the Examiner, he had "no knowledge of Lehman removing assets from its balance sheet at or near quarter-end via a repo trade." Voigts disclosure that Lehman intended to use the PDCF as both a backstop and business opportunity" comes from a letter to none other than Tim Geithner from April 9. What is hilarious is that while the FRBNY itself acknowledges that merely the first part of the use of the PDCF, namely the use of the facility as a liquidity backstop, "could encourage risky behavior", thereby introducing "moral hazard" issues, the second part, i.e., the use of the PDCF as a "business opportunity" screams of gross FRBNY negligence when it comes to eliminating any risk on part of the borrower, explicitly guaranteed by taxpayer funds. And Tim Geithner was all too aware of not just this, but of Lehman's lack of public disclosure of this very critical component to its ongoing business model.

Yet after milking the PDCF for all it was worth, suddenly Lehman got cold feet, as it realized that there is a stigma effect associated with being seen as needing this very last recourse in the lender of last resort's toolkit.

Lehman complained internally, and to the FRBNY, about the stigma attached to PDCF borrowing. In an internal e-mail, Lehman personnel appeared to view the PDCF as a net negative, writing that Lehman could not use it due to its “stigma,”  owing to the fact that “should the Fed disclose the [PDCF] borrowers, it would likely further damage confidence in the institutions that tapped the facilities.” Yet, at the same time, Lehman personnel suggested that the mere existence of FRBNY facilities forced Lehman to “quell rumors and bad press,” presumably regarding whether Lehman was suffering liquidity problems or was forced to access the PDCF. Tonucci also complained of the stigma, elevating his concerns to the FRBNY. Tonucci relayed the rumor to the FRBNY, which he attributed to Standard & Poor’s, that “usage of the PDCF would cause [the rating agency] to change [Lehman’s] outlook from stable to negative.”

Here we uncover yet another stunner: in order to validate whether or not the last statement above was true, the FRBNYs Brian Peters notified the FRBNY's infamous Steven Manzari, notorious for his involvement in AIG disclosuregate, which already got Tim Geithner in hot water before Congress, that he had spoken to S&P's Diane Hinton, who had told him that the rumor was "not at all" true. This brings a whole slew of questions: how often does the Fed discuss rating criteria and policy with the rating agencies? Does the Fed exert pressure when S&P or Moody's determines a given rating? Is the Fed instrumental in "nudging" a rating agency to raise or lower a rating, as then-Tim Geithner/Ben Bernanke and now Bill Dudley/Ben Bernanke so desire? Obviously, with the fate of Greece tied to Moody's one notch downgrade, this question could not have come at a more opportun time.

Yet despite posturing about worries of being stigmatized, Lehman had really no qualms about pleding Freedom CLO as collateral to the FRBNY, and to US taxpayers. And not only that, but it once again materially misrepresented its liquidity needs and actual internal operations, the Examiner finds. Hey SEC: how much more blatant does it get?

Lehman drew on the PDCF facility sparingly prior to its bankruptcy. Lehman accessed the PDCF seven times in the liquidity stress period that followed the Fed-brokered sale of Bear Stearns to JPMorgan. Both internally, and to third parties, Lehman characterized these draws as “tests,” although witnesses from the FRBNY have stated that these were not strictly “tests,” but instances in which Lehman drew upon the facility for liquidity purposes.

After demonstrating a valiant effort in going after "psychics" and enforcing
regulations when the amount of money involved is a few hundred
thousands dollars (or less), The Scam Enrichment Cabal becomes very
quiet when the perpetrator is someone who over the past several decades
made over half a billion dollars based on repeated and gross
misrepresentation and lies to the public. No, in this case the SEC is
very much silent. One wonders just how complicit the SEC's Chris Cox
and Mary Schapiro have been in all of this?

The above, in a nutshell, describes Lehman's repeated criminal misrepresentation to both investors, and the Fed's misrepresentation to taxpayers, about both Lehman's involvement in government backstopped programs, its intent in doing so, and the collateral the Fed would accept. We would certainly be more lenient on the Fed if it had indeed done some homework and realized the true value of Lehman collateral, which as is about to be shown, was in fact worthless.

3. The Fed's Criminal Negligence In Performing Any Collateral Diligence

Going back to the beginning, this whole debate would have been a moot point had the Fed done at least a little diligence to determine if the Lehman collateral in question was in compliance with the original PDCF terms of accepting only "investment grade" assets; if instead of blindly following the massively corrupt rating agency doctrine, the Fed's hundreds of overpaid analysts had done at least one hour worth of work; if the Fed had felt even a modest sense of fiduciary oblgiation to US taxpayers, to whom, much more so than Wall Street, it is supposed to be responsible.

This is not what happened.

In fact, what did happen, is that when Lehman attempted to use the Freedom CLO as collateral with Citi a few months down the line, it was classified as "bottom of the barrel" and "junk."

In early August, Lehman offered Citi the Kingfisher, Freedom, Spruce and Verano CLOs – recently rated tranches of asset-backed securities that were backed by corporate loans and structured by Lehman – as collateral in connection with the pledge agreement. Cornejo was concerned about Citi’s reaction to Lehman proposing these assets as collateral  and, according to Mauerstein, Lehman was not surprised when Citi ultimately rejected the CLOs as collateral. Citi personnel characterized the CLOs offered by Lehman in connection with the pledge negotiations as “bottom of the barrel” and “junk.”

There is far more but this is more than sufficient.

4. Total And Criminal Abdication Of Responsibility From Everyone

In conclusion what else can be said that the Fed was grossly irresponsible in its fiduciary obligation to US taxpayers, whose money it used to fund collateral which another bank (which itself would shortly need to be bailed out by taxpayers as well), made it all too clear that the Fed was playing Russian roulette with worthless assets, and admitting these to the PDCF, which at least on paper, was limited to quality collateral. The Fed basically lied to everyone, while behind the scenes allowing not just worthless collateral to be pledged, but worked in complicity with Lehman's management to misrepresent the true state of the firm's financial affairs. The Fed also conspired with rating agencies, and possibly was even instrumental in forcing the rating agencies to produce a credible threat of a major downgrade to Lehman, in order to accelerate the firm's death. Dick Fuld, in the meantime, was also willfully aware of financial misrepresentations, and that he was in violation of SEC reporting requirements, yet that did not stop him from repeatedly perverting the true nature of his PDCF involvements. And lastly, one may ask, where the fuck was the SEC in all of this? Aside from surely lamenting the fact that its only has a $1 billion budget a year, and engrossed in transvestite porn, did the agency do any work to figure out just how the common US investors was getting raped from all sides pretty much throughout 2008, and very likely, continuing to date?

 

 

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Sat, 03/13/2010 - 15:53 | 264444 Mongo
Mongo's picture

We need a timemachine to get some peasants with pitchforks from 18th century France!

Sat, 03/13/2010 - 18:09 | 264565 Crab Cake
Crab Cake's picture

What's wrong with your arms?  Can you not hoist your own pitchfork? 

Need you really call on the ghosts of Frenchmen for strength? 

Stand up and fight in any way you can.

Sat, 03/13/2010 - 20:51 | 264649 Reflexivity
Reflexivity's picture

From another time and place with different political strife, but same (timeless) instructions:

http://www.youtube.com/watch?v=JLYOOezs3DA

Sun, 03/14/2010 - 11:36 | 265018 BobPaulson
BobPaulson's picture

Another time and place but shows what happens when people rise up in the US. You need to be ready to use that pitch fork because they won't be nice about your protest.

 

www.youtube.com/watch?v=WyUagbsg-HI

Sat, 03/13/2010 - 19:39 | 264620 MarketTruth
MarketTruth's picture

Why a time machine, the time is coming soon. grab your pitchforks and.....

 

**********************

NATIONAL STRIKE
April 15 to April 18TH
Tell Everyone You Know
POST THIS ON EVERY DISCUSSION BOARD
www.taxfree15.com

+++ Also ++++

Join The Civil Revolution
Watch and FWD THIS LINK
www.REVOLTstartsNOW.com

**********************

Sat, 03/13/2010 - 20:13 | 264658 Anonymous
Anonymous's picture

Why do such good ideas get framed up in Geocities style websites (I'm looking at you taxfree15)? Seriously are all web design professionals protesting the protest?

Sun, 03/14/2010 - 03:40 | 264885 jeff montanye
jeff montanye's picture

not to mention a spell check on the first page of the second website.  gross misspellings always (to me) make efforts seem not serious.  audit the fed.

Sun, 03/14/2010 - 13:51 | 265063 Anonymous
Anonymous's picture

The pussies are serious, they just cant spell. audit the fed. Fucking psych. Dont scratch that scab brother. Trust me you dont want that coloured pill. Your mother living like mad max, eating dog foo from a can. I like it with me on top...Please dont flip my world.

Massatwoshitz

Sat, 03/13/2010 - 23:09 | 264740 Veritas
Veritas's picture

Mongo---spot on---Think of the scene in Les Miserables---can you hear the people roar---we need to mobilize the college students,and explain how f**ked their future is,then we can get some action

Sat, 03/13/2010 - 23:34 | 264757 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You tell them Lady Gaga is playing at the courthouse, that should do it!

Sun, 03/14/2010 - 14:20 | 265082 Mr Creosote
Mr Creosote's picture

Better yet, announce at the last minute that Gaga canceled. That will get them fired up.

Sat, 03/13/2010 - 15:54 | 264445 Madcow
Madcow's picture

Where is NYPD???

 

Better yet - where is the US Army ????

Sat, 03/13/2010 - 16:39 | 264492 Miles Kendig
Miles Kendig's picture

Still arguing if the government is in fact operating outside of the constitution as it relates to the concept of what exactly is a lawful order and lawful authority under the UCMJ.  Since you asked.

Sat, 03/13/2010 - 19:06 | 264599 swamp
swamp's picture

The Federal Reserve is not the government.

Sat, 03/13/2010 - 23:35 | 264760 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Man, the government ain't the government.

Sun, 03/14/2010 - 02:05 | 264859 Miles Kendig
Miles Kendig's picture

The exact point of discussion.

Sun, 03/14/2010 - 10:34 | 264990 doublethink
doublethink's picture

 

It Sure Ain't Us

 

Corporate entity becomes ‘candidate’, kicks off bid for Congress

 

http://rawstory.com/2010/03/corporate-candidate-kicks-bid-congress/

Sun, 03/14/2010 - 14:08 | 265074 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

True DT; a good friend of mine has published a story some years ago that predicted this corporate sponsored elect front.  He joked about a different corp electing a 'made man'.  It amazes me that artists can understand the future without understanding it.  The corporate rise has taken hold.  Pres Wallmart and VP Nike; the thought makes me jump!  They have come to the table, and blessed the meal; now they will sink their teeth in. 

we ask for a third party; we must be careful on our journey, as the snakes lie in waiting.

Sun, 03/14/2010 - 14:33 | 265094 Anonymous
Anonymous's picture

Oddly enough that is a good thing. Better represented on the scene than behind the scene

Sun, 03/14/2010 - 15:11 | 265114 Anonymous
Anonymous's picture

F**k that s**t. I will run for President, for the people.

I am not connected to anyboby so you know you can trust me.

I'll vote NO on every single issue. Another doctor "NO"

When every single law that is debated has only to do with corruptions, and nothing to do with the people, ITs time to burn the place down!

Patric the Painter

Sun, 03/14/2010 - 15:06 | 265110 Anonymous
Anonymous's picture

They should change there name to "Bankers Reserve"

Inspector Asset

Sun, 03/14/2010 - 01:16 | 264825 Anonymous
Anonymous's picture

Funny joke! What Constitution!?

The judicial branch folded this year, executive and legislative branches fell long ago (if they ever stood beyond 1776).

Where is justice? It's with the money and it sure isnt in the USA!

Sun, 03/14/2010 - 15:01 | 265106 Anonymous
Anonymous's picture

For some comic relief go to www.WallStOnion.blogspot.com

Inspector Asset

Sat, 03/13/2010 - 17:40 | 264548 Anonymous
Anonymous's picture

where is the us army? they are fighting wars that never end chasing ghost that never existed. but soon, they will be here, to deal with angry gun owners.

Sat, 03/13/2010 - 23:36 | 264763 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

***Guarding opium fields/pipelines.***

Sat, 03/13/2010 - 18:17 | 264567 Crab Cake
Crab Cake's picture

Yet another person pleading for help from others.  The person posting just above you cries for the ghosts of French revolutionaries, and you call for the cops and the army.

There is nobody coming to help you or us.  Nobody. 

Asking government minions for help, that's just pathetic.  I'm a cop, and I'm here to help.  I'm the US army, and I'm here to help.  Those are too of the scariest statements I've ever heard.

Stand up and fight in any way you can, together we are unstoppable. 

Sat, 03/13/2010 - 18:39 | 264580 Miles Kendig
Miles Kendig's picture

We are all 1%ers

Sat, 03/13/2010 - 19:10 | 264604 swamp
swamp's picture

It looks to me like the person to whom you are referring is not asking for help from the army, but instead states the army may be called to fight the patriots -- the gun owners who will take up arms against these bankers. The author insinuates the army is now on another hollow mission unrelated to our Constitutional agenda.

Sun, 03/14/2010 - 15:13 | 265117 Anonymous
Anonymous's picture

Buddhist vegan militia members and evangelical anarchist squatters

http://www.time.com/time/specials/packages/article/0,28804,1971133_19711...

Sun, 03/14/2010 - 10:09 | 264977 doublethink
Sun, 03/14/2010 - 15:04 | 265108 Anonymous
Anonymous's picture

Maybe we can copnvince some generals to defect and surround the White House with a group of tanks? Just thinking outloud.

Mon, 03/15/2010 - 00:49 | 265536 Budd Fox
Budd Fox's picture

just think from who they draw paychecks...sad day man..sad day..

Sat, 03/13/2010 - 16:04 | 264456 tip e. canoe
tip e. canoe's picture

"First of all, I've never been a regulator...I'm not a regulator."

tiny timmy G, 3/09, under oath before Congress

Sat, 03/13/2010 - 16:13 | 264464 merehuman
merehuman's picture

It makes no sense at all anymore. My gal and i got into a rare disagreement on account i told her i am marching on washington. By the end of next week, sunday the 21st of march i should have my truck ready, last job done.Tahts my date with rebellion. I may be the only one, but i dont care about that. My principles bid me stand and so i shall, knowing if i do not, i submit to falsehood and poverty. Poverty is not unfamiliar to me but lies i WILL NOT live with or condone.

as i explained to my gal , its not for the country so much as for myself. Who the hell am i if i wont stand for myself or whats right?!

If we all waited for the other guy to stand , we may sit a long time. Meanwhile the banksters and minions will get us into another war (x3) and more of us will die for their profit.

Am on the west coast, gonna take a while to get there , and its gonna cost all my savings to do this. I will probably end up in jail. I dont care.

I have a son and grandson whos future is more important to me than my own.

I feel truly i have no choice but to protest!

Believe me , my head is telling me to stay, watch tv. Hey i got it good right now and am giving it all up. I must be nuts! And  leaving the shotgun at home. eewh

 I had to explain to my gal why i was going and she found 20 reasons not to go.

I only had one good retort. I said "what if we all just stay in our chairs and take no action?

Sun, 03/14/2010 - 01:02 | 264818 Anonymous
Anonymous's picture

He's done that before.I think he's telling a story from the 40's. "My gal", I fuckin love it.

Sun, 03/14/2010 - 10:16 | 264980 Orly
Orly's picture

Best of luck to you, human.

Fear not, we are all right behind you.  We may, in fact, rebel one at a time but there will come a point of critical mass and there will be a flood of us from seemingly out of the woodwork.  Before they know it, they will be overwhelmed.

Consider yourself of the first trickle through the dyke, my friend.  Pack a lot of beef jerky and bottled water.  Keep us updated on your progress, please.

:D

Sun, 03/14/2010 - 14:15 | 265080 Anonymous
Anonymous's picture

"Fear not, we are all right behind you" imho this statement certainly rivals the funniest things ever said, many thanx. Yes, please keep us updated on your progress..from the klink..or the krypt?

Sat, 03/13/2010 - 16:20 | 264471 merehuman
merehuman's picture

Or we can do what the jews did in germany.

Nothing! 

 Look how many died cause no one stood up!

If i am outa line, if you think i am full of it, fine educate me. I 'll be back

Sat, 03/13/2010 - 16:40 | 264493 nope-1004
nope-1004's picture

Just take all your cash out of these failed institutions and put it in the Bahamas, Caymans, or Canada.  You'll do more damage to the banksters by simply removing their fuel than any demonstration ever will.

 

Timmy needs to go to jail.

I will not stop posting that on every blog I can find until he does.

Sat, 03/13/2010 - 17:41 | 264549 Al Gorerhythm
Al Gorerhythm's picture

In your rush to sever the head of the beast, don't forget that it is Hydra you are dealing with. Cut the throat on both heads! Head #1,  Close bank accounts completely  (as they are vehicles that give them the capital base to create more loans). Head #2, Withhold taxes. It is non-violent (until they make it so) and at the same time you get to support the true meaning of the constitution. ie, you can't tax a citizen's labor. It doesn't have to be a "Stark" option where you pay the ultimate price. Put it on them. I take action tomorrow, Monday. Time to screw them. I'll escalate if necessary.

Sun, 03/14/2010 - 14:04 | 265072 Anonymous
Anonymous's picture

Ok take it easy man. You dont need to "escalate" anything. Do you really want to start shit with someone who spends 450 BILLION every Year on weapons. You go boom and the world gives two squirts and packs another bowl.The jig is up.Extend and pretend. Keep yer head down dummy.

I voted for Gore

Cuz i liked the name

Sun, 03/14/2010 - 17:34 | 265202 Al Gorerhythm
Al Gorerhythm's picture

I don't mean urban warfare. There are other forms of protest.

Sat, 03/13/2010 - 19:13 | 264607 swamp
swamp's picture

Timmy needs to go to prison, not jail.

Sat, 03/13/2010 - 20:41 | 264678 Careless Whisper
Careless Whisper's picture

Timmy needs to go to hell, not prison.

http://www.youtube.com/watch?v=GQ95z6ywcBY#

 

Sun, 03/14/2010 - 00:51 | 264812 defender
defender's picture

wait....was that meant to be a video of hell or prison?

Sun, 03/14/2010 - 00:56 | 264815 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Hell for Tim Geithner....until the singing.  He LOVES Lady Gaga.

Sun, 03/14/2010 - 11:45 | 265016 Careless Whisper
Careless Whisper's picture

This is what Ozzy sez about Gaga (@3:00)

http://www.youtube.com/watch?v=FyTKmz9df_s

Christopher Walken does a cover of Poker Face;

http://www.youtube.com/watch?v=xy5JwYOlgvY

 

Sun, 03/14/2010 - 14:25 | 265086 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Talented?  Yes.  Corrupted by the monies of the music industry, which is TOTALLY controlled by the Master Masons?  Yes.   If we could wrangle music away from the industry, there would be NO NEED for us to say gold bitches.  Sorry fellow bugz, but this is the truth.  Music is the soul of humanity, and as Tupac said, "You got to find a way to survive, cuz they win when your soul dies."  Lady Gaga sold out.  Her new music is as worthless as a dolla bill.

Lady Gaga "D'yer Maker" Led Zeppelin Cover live:

http://www.youtube.com/watch?v=4lbRAyo96z0

Sat, 03/13/2010 - 19:37 | 264630 Anonymous
Anonymous's picture

Don't be naive.

Every large economic crash is due to massive fraud, abuse of controls, secretive accounting techniques and the behaviour of the usual suspects.

This time we had Madoffs, Dick Fulds, Lloyd Blankfeins while the Genslers and Schapiros and the Emanuels (with cohort Holder) look the other way.

History repeating.

http://en.wikipedia.org/wiki/Stavisky_Affair

http://www.time.com/time/magazine/article/0,9171,772819,00.html

http://en.wikipedia.org/wiki/Maxim_Litvinov

Sun, 03/14/2010 - 05:27 | 264915 Anonymous
Anonymous's picture

Thanks for those great reminders. :-)

This was also most valueable observation to read from the far off history.

"The Stavisky Affair left France internally weakened. France remained deeply divided for the rest of the decade, but the political weaknesses it exposed and exacerbated were not confined to France. The Stavisky Affair was emblematic of a broader erosion of democratic values and institutions in post–World War I Europe."

Sat, 03/13/2010 - 16:24 | 264474 Anonymous
Anonymous's picture

Take your money out of the US and the currency.

Team Obama will continue all it can to try further cover-ups and nail again some 3rd party culprit, instead of changing anything relevant in the ongoing SCAM.

US = fraud, scam, ponzi

Nothing more to know or consider in this regard.

This is CRIME, not just negligence or incompetence.

It's state sponsored crime from the top down !

Sat, 03/13/2010 - 17:28 | 264540 Anonymous
Anonymous's picture

An age-old prescription for reducing the Fed's Money supply.

Repo 101 from the 1935 edition of "How to manage a global economic depression"

http://www.time.com/time/magazine/article/0,9171,748608,00.html

Sat, 03/13/2010 - 16:25 | 264475 casino capitalism
casino capitalism's picture

It should be obvious to everyone that the reason Bernanke doesn't want the Fed audited is a) all the crap on the Fed's balance sheet would be disclosed and b) it would become obvious that the Fed is more insolvent than any other bank.

Sat, 03/13/2010 - 18:41 | 264582 Anonymous
Anonymous's picture

No, the reason why certain people don't want the Fed audited is because in doing so, it will simply expose all the CRIMES that have been committed during all these years, and that all those people would go to PRISON.

Including Bernanke, himself.

Sun, 03/14/2010 - 09:11 | 264953 Anonymous
Anonymous's picture

all the crimes committed .....the russian Holocaust....WW1,
WW2.....are only few of the main ones

Sun, 03/14/2010 - 01:18 | 264827 Anonymous
Anonymous's picture

Maybe the Fed can't be audited. Maybe they don't even keep a set of books. Plausible deniability anyone?

Sun, 03/14/2010 - 01:22 | 264831 Anonymous
Anonymous's picture

Congrats CC, you are the sucker.

The reason that your precious Fed can't be audited is because it would reveal that it has zero to do with the US and everything to do with Europe.

You didn't honestly think US citizens owned the money did you!?

These are european bankers dude, and don't forget the number one secret state - Israel.

Sat, 03/13/2010 - 16:28 | 264478 Anonymous
Anonymous's picture

As Chris Crocker would say...

LEAVE LEHMAN ALONE!!!

http://www.youtube.com/watch?v=kHmvkRoEowc

Sat, 03/13/2010 - 16:30 | 264481 deadhead
deadhead's picture

Question to all the phuckheads in the US Senate as well as to the economically clueless President of the United States who supported Ben Bernanke for Fed Chair:

 

When is it going to dawn on you phucking morons that Bernanke, the Fed, and the banks (including hedge funds with BHC status) are robbing this country blind?  When is it going to dawn on you phucks that zero interest rates and walls of liquidity do nothing but create risk asset bubbles that inevitably pop and do not contribute to economic productivity and growth?

multiple choice question:

A. are you simply just owned by the banks?

B. are you simply just phucking stupid?

C. A and B

 

 

 

Sat, 03/13/2010 - 16:33 | 264485 ZerOhead
ZerOhead's picture

Most of these sociopaths have IQ's over 140... some over 160... and they know the business... and the business is making money.

Answer? A.

Sat, 03/13/2010 - 16:37 | 264490 deadhead
deadhead's picture

thx zero.

 

actually, all three answers are correct lol!

Sat, 03/13/2010 - 16:58 | 264518 ZerOhead
ZerOhead's picture

Damn... misread!

No senators with IQ's approaching that turf... yup all 3 correct!

Sun, 03/14/2010 - 01:45 | 264852 Howard_Beale
Howard_Beale's picture

Zero--been waiting for you to show up just in case you haven't seen www.catsforgold.com .

Mon, 03/15/2010 - 16:08 | 266181 ZerOhead
ZerOhead's picture

Seen it? That's my site!

I was hitting the bong a little late one night and was pondering how to solve the dual problems of my lack of gold and my cat-friends lack of housing due to foreclosures... the result? Catsforgold.com

Sat, 03/13/2010 - 18:22 | 264568 Crab Cake
Crab Cake's picture

It is time to realize that our government is in bed with the criminals, and thus are criminals themselves as well. 

It is time for the People to come together and effect justice.

Sun, 03/14/2010 - 01:27 | 264834 Anonymous
Anonymous's picture

You can't afford justice, nor can anyone else except those that already stole your democracy.

Wake up serf, and quit living in denial.

JUSTICE IS FOR SALE, why else do you think the Supreme Court made the decision with "W"s stacked deck.

...and the people sleep.

Sat, 03/13/2010 - 19:16 | 264610 swamp
swamp's picture

Stupid? No

Cowardly and treasonous? Yes.

Sat, 03/13/2010 - 21:40 | 264701 Anonymous
Anonymous's picture

Speaking as a Senator, I am not owned so much as "regulatory captured" by the banks. Owned, corrupted, captured... Potato potah-toe... Tomato toe-mah-to....

Who is stupid, you or I ? I am filthy fucking rich, all my friends and family make money from my influence.. I eat the finest caviar and college intern pussy.. You eat mcDonalds.. Laws don't apply to me or any else I know ... You stop at red lights... You play the market hoping to get it right.. Gollem Sachs sends me my winnings and I didn't even know I owned stocks...

Sooo ... As a representative of the government sworn to uphold the Constitution I say Fuck you serf..

Nikki.. In decaying Detroit..

Sun, 03/14/2010 - 01:18 | 264828 Anonymous
Anonymous's picture

Muchas grassyass.

Sun, 03/14/2010 - 03:52 | 264888 jeff montanye
jeff montanye's picture

so well said and so true.

Sun, 03/14/2010 - 05:59 | 264918 perchprism
perchprism's picture

 

Nikki is the name of my Siamese kitty.  She's 6 mo's old and wickedly climbs the country curtains and pulls out the bows.

Sun, 03/14/2010 - 02:56 | 264867 Howard_Beale
Howard_Beale's picture

Great multiple choice, DH!

I have just sent the link of these findings and a letter to Elizabeth Warren. Hopefully a few of her staff are ZH readers but just in case, this one could seriously allow her to open fire on Geithner--again, but with much more evidence. While she is the head of the Tarp Oversight Committee, she also has to piece together a great deal to get to how it happened in the first place. And since Lehman and TARP are fuck buddies--lets see if her recent media blitz to explain her frustration with everyone at every level in the system lights a fire. One can only hope.

Sun, 03/14/2010 - 14:11 | 265076 deadhead
deadhead's picture

good that you sent this to Warren.  I would be shocked if some of her people or she did not read ZH. I have got to say she really impresses me, particularly with her persistent.  she is like that dog on your pant leg that just won't let go.  I really hope she continues with her mission.

I sent the story to my congress critter who sits on the House Financial Circus committee.  for the umpteenth time i explained to him what bernanke and geithner and the crew are doing. Once again offered to explain it to him cuz it was likely that he didn't understand.  it won't do any good i imagine, however, i continue to pound him with this stuff.  

 

Sun, 03/14/2010 - 15:03 | 265107 Howard_Beale
Howard_Beale's picture

"she is like that dog on your pant leg that just won't let go"

LMAO!

She will continue with her mission--she has promised that. She's tough, smart, and being the most hated woman on Wall Street is a good thing.

Sun, 03/14/2010 - 18:03 | 265221 Miles Kendig
Miles Kendig's picture

Hell of a way to have to operate... Far better to be respected than hated, but that's not in the cards with those who refuse to enforce the law of the street upon themselves.

Sat, 03/13/2010 - 16:30 | 264482 Anonymous
Anonymous's picture

"OFF WITH THEIR HEADS" The Red Queen/Alice in Wonderland.
Actually, I feel sick to my stomach every time I read this stuff...!
The kleptocratic stench...!

Sat, 03/13/2010 - 16:32 | 264483 Caviar Emptor
Caviar Emptor's picture

Unfortunately for our country, there will be little action beyond the symbolic despite the rhetoric. This is the other side of the same coin that permitted criminally negligent and complicit oversight of rogue Wall Street enterprises. It's called criminal indolence (to coin a term). Congress, the Justice Dept, supervising agencies, state law enforcement, private oversight organizations and even the mainstream media are all complicit in perhaps the most dangerous game of all: criminal indolence. That is to say that we are now in a moral shadowland where everyone looks the other way when they see injustice and signs of advanced rot in the legal foundations governing the conduct of business. All to advance one very important goal: to do absolutely nothing. Not rock the boat, not move, not breathe, not do anything that could jeopardize the status quo. Depraved indifference is the harbinger of terminal illness in a free society because you can always put off confronting those who violate the rules, deprive others of rights and their fair share and who ultimately can dictate terms to everyone else once they grab enough power.

Sat, 03/13/2010 - 19:38 | 264631 Al Gorerhythm
Al Gorerhythm's picture

Criminal Indolence? In no way was this criminal laziness. They were very industrious in their pursuits. In no way was this regulatory laziness! This was and is complicitity and criminal intent. This was and is criminal fraud, married to deceit and greed. This was and is an unconcionable attack (planned strategy by bankers and bureaucrats, CFO's and Rating Agencies) on the well-being of those who placed their trust in them.

Don't give them excuses. 

Sun, 03/14/2010 - 03:06 | 264879 Caviar Emptor
Caviar Emptor's picture

The criminals are industrious. The criminal justice system at the Federal and State level is criminally indolent, as is our society in general (ZH customers excluded) as evidenced by the lack of clear action and outrage against the massive fraud.

Sun, 03/14/2010 - 05:12 | 264909 Al Gorerhythm
Al Gorerhythm's picture

I hear you Cav. but like I said.... they are bought and paid for lapdogs. Fed and State.

To me, offering "Criminal Indolence" as an excuse for these (---------) [fill in the blank], is a defense akin to Tricky Dicky Fuld claiming he should not be held responsible for his complicity in the planning of a crime, the rationale of his defense being; "I did it all for the good of the company". 

That does not exonerate him from his Fiduciary and legal responsibilities as an Officer of The Company.

In the same vein, it does not exonerate judges from their role as upholders of the law (both constitutional and criminal), nor the regulators and bureaucrats in upholding their responsibilities in applying regulations entrusted with them. 

No mercy.

Sat, 03/13/2010 - 16:36 | 264489 deadhead
deadhead's picture

More importantly than my rant is my thanks and appreciation to TD and ZH for this excellent piece and the continuing coverage of LEH, FED, Tim "the phucknut" Geithner and the whole host of despicable phuckheads that comprise our financial and political leadership of the United Banana Republic States of America.

And while I am on the subject of coverage, a big "fuck you" to cnbc, b'berg and the rest of the financial media (with exceptions to a small handful of reporters that understand that journalism is not the same profession as sell side analysis) for enabling the aforementioned phucking pigs.

 

Sat, 03/13/2010 - 16:58 | 264517 Screwball
Screwball's picture

+1

Don't candy coat it Deadhead!  Tim "the phucknut" Geithner - classic. LOL

Sun, 03/14/2010 - 06:54 | 264928 Miles Kendig
Miles Kendig's picture

the phucknut

One more fine contribution to the lexicon of our age.

Sun, 03/14/2010 - 14:12 | 265079 deadhead
deadhead's picture

thank you miles.

i'm thinking of how to work that word in on my tombstone lol!

Sun, 03/14/2010 - 18:54 | 265238 Miles Kendig
Miles Kendig's picture

Historic Marker - It was here where the term "The Phucknut" was introduced to society by the blogger known as Dead Head.  "The Phucknut" became the go to term in reference to those who are generally referred to as the weakest links in an era of weaklings in financial, business, legal, union & public service that led to the implosion and reconstitution of American society.  First used during the period immediately after the report that chronicled the demise of the Wall Street firm, Lehman Brothers was released to the general public and with it the realization that the poster child for the whole of a failed age became "The Phucknut", Timmay Geithner, former President of the Federal Reserve Bank of New York and Treasury Secretary.

Sun, 03/14/2010 - 10:27 | 264984 Orly
Orly's picture

Hear here, dead!

I say we use that term as a complete replacement for anything relating to the "good Secretary."  We will even have Brian Williams saying it eventually:

"Phucknut was called to Capitol Hill today to testify before the Seante..."

Phucknut it is!  Long live Phucknut!  Death to the Fed!

Sat, 03/13/2010 - 16:42 | 264498 nope-1004
nope-1004's picture

phucking A, dh.

Sat, 03/13/2010 - 16:44 | 264502 Anonymous
Anonymous's picture

We are the Federal Reserve... we must regulate the largest banks... we must regulate them to conduct monetary policy... they are the smoke and mirrors of the ponzi monetary system...

Great blog post... string the bank puppet Geithner up!

Sat, 03/13/2010 - 18:24 | 264569 Crab Cake
Crab Cake's picture

If I might add....

....and burn the Federal Reserve, and it's branches across the country, to the ground.

Sat, 03/13/2010 - 21:10 | 264688 Bob
Bob's picture

I'm beginning to wonder how long it will be before the internet gets "unplugged." 

Sat, 03/13/2010 - 23:45 | 264772 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

1 year and 9 months.

Sun, 03/14/2010 - 13:16 | 265048 Anonymous
Anonymous's picture

You should be relieved to know that this is impossible.

Sun, 03/14/2010 - 17:24 | 265193 Anonymous
Anonymous's picture

Are you referring to his nostradumbass impression or rather or not this the series of tubes(internet)can be disconnected?..as in titanic CANT sink?

Sun, 03/14/2010 - 19:49 | 265308 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Haters so easy to spot.  They are the one's who get angry over anything that shakes their reality.  A closed mind must be a bitch. 

Solar flares, hater.

Sun, 03/14/2010 - 01:49 | 264855 Anonymous
Anonymous's picture

What on earth makes you think the entity you are trying to strike against is in this country??

How convenient. Better open your mind a little more (and Im not talking the new world)

Sun, 03/14/2010 - 04:12 | 264890 merehuman
merehuman's picture

let them have their side of the world

 Dont fuck with us! This is OUR country and we are taking it back.

 

Sun, 03/14/2010 - 07:00 | 264921 perchprism
perchprism's picture

 

You know, MH, driving cross-country to Washington is certainly one way to get yourself counted among the growing number of disaffected, but there may be better ways to register your dissatisfaction.  Buddhist monks douse themselves with gasoline and self-immolate, and surely you don't want to do that. 

No, there are better, more effective means to send notice of discontent.  Go Galt.  Get on Facebook and rail.  Write Letters to the Editor.  Don't use up your savings to drive to Washington and thence...what?  What do you plan to do once you get there?  You have a responsibility to your son and "Gal" to be the rock upon which they can either stand upon or hide behind when the SHTF.  Spend your savings instead on 6 months of rice and beans.  Buy a shotgun.  Get a water filter pump from Katadyn and a grainmill.  If you can't afford gold get some silver.  Prepare for the world that is coming rather than cling to what we pretend we have now.  The pretence is dissolving before our eyes.  Lots of folks will clap you on the back and say "way to go!!  Go getum!!" but really they're no better than the crowd below the leaper on the bridge, hollaring "Jump!!  Jump!!".   Don't jump.  Don't self-immolate.  Don't drive cross-country to Washington.  Be a rock for your family instead.

I will wish I had more neighbors like you in the coming months/years ahead.  Neighbors who can be counted on when crunch time comes.  Look at it like a chess game.  In the opening, each move must be carefully pondered to get the best position for the middle game.  You can't afford to throw away a move merely for psychological effect.  We're still in the Opening, the first 10 moves.  You're being goaded into a trip-to-Washington.  You leave your flank exposed.  You'll lose.  It's that simple.  Our resources are limited and must be used sparingly.  When you have the momentum and position, that's when you strike and destroy.  Yes I said destroy, because that's what they plan to do to us. 

 

Sun, 03/14/2010 - 11:05 | 265003 Orly
Orly's picture

Well, following your logic, a la Rothschilds, Warburgs and the Bank of England (the Windsor Bank...) owing this country, one would conclude that this is the bitter pill that von Mises predicted and one that they cannot swallow.

Their monetary base is the British Pound and from what I understand about the economic conditions in England and the broader scope of Europe, the situation is not looking very good for them.

Bernanke authorised a massive transfer of wealth blatantly and with no regard for the Constitution of the United States of America.  That was an FX swap, mainly with the Windsor/Warburg banks, to the tune of one-half trillion dollars.  Alan Grayson exposed this after the transfers were completed in March of 2009.  My basic belief is that those funds were a deposit on the losses the global cabal has sustained, a mere drop of spit in the ocean.

It behooves us to call these actions what they are: theft.  With that simple word, we have the power to bring criminal indictments and complete, true investigations into the sinister reaches of the most criminal conspiracy in the history of the world, dating back to Thyssen-Krupp in the Second World War.

The evil ones are trapped by the weight of their own debt and the complexity of their schemes.  One could argue that they wouldn't have been in this position had it not been for the incompetence of their subordinates.  Phucknut is the linch-pin and he is currently in the rifle scope five by five.

If we simply do not allow them to maintain their grip, we can expose each and every one of them and bring justice back to the world.  You know, the American Way.

Don't think it can't happen.  With articles like these and mere mortals such as ourselves- who a few short months ago would not even have known what a credit default swap was- educating ourselves as quickly as we can to the mechanics of the shenanigans, we can see their next move coming down the Avenue of the Americas.  My guess is that there will be more false flag, "terrorist" incidents manufactured to gin up support for yet another war to keep the focus off of the rape of America.  It would be an advantage today to speak Farsi in the US Army.

I have news to phucknut: you're screwed and you're sleight-of-hand machinations aren't going to work any more.  We're on to you and I know you feel us coming.  We won't strike in the middle of the night with stealth assassins, either.  We are going to walk right to your front door at noon, drag you out by your heels and have you standing tall before the man by dinner time.  You know it is coming.  You think you're ready, protected by your betters.  Don't be so certain.

As to your comments, anon..855, they control nothing any more.  Their schemes have caught up with them.  The inevitable has happened but you're not going to hear about it in the evening news.  You will, however, hear of the repercussions:

Kissinger was in hospital over the week-end for stomach problems; Brzezinski has got to be sweating bullets; King, Darling, et. al., are about to be tossed onto their keister; there are international legal questions involving Repo 105/108's with the banks of Scotland; the IMF will be exposed as a mechanism these criminals used to keep poor countries poor and make rich people richer; and the sun will come out tomorrow.

Don't be so smug and certain that we Americans will not emerge victorious.  We have the animal trapped and we can smell his fear.

Sun, 03/14/2010 - 01:32 | 264838 Anonymous
Anonymous's picture

Geithner is simply the target, his job is to be the front so that there is one degree of separation from the thieves and the serfs.

Use him to reveal the next fish up the chain. Rinse, repeat.

Do you actually think that Geithner is worth two shits to the mafia cartel that runs your money?!

If you want to fix anything one has to add personal accountability to dirty business, just like mafia.

Good luck with your spineless incompetent "regulation." HA!

Sun, 03/14/2010 - 12:21 | 265037 Heavy
Heavy's picture

So we can use water boarding for good instead of evil?

Sat, 03/13/2010 - 16:45 | 264503 Miles Kendig
Miles Kendig's picture

As time goes on the pathway to the core of the federal reserve system is looking more & more like I-95 approaching the GW from Jersey.  Given the operative conditions existent this must not only have been a primary expected outcome, but looks like it has been developed to hide more. Most likely in plain sight. After all, the folks at Lehman had no issues disclosing all of the 105isms and the court had no problem releasing what was.  Excellent effort folks.

Sat, 03/13/2010 - 17:21 | 264534 Caviar Emptor
Caviar Emptor's picture

Right! What is hiding in plain sight is first of all the transition from a Fed Implicit  guarantee to an Explicit one. IE: the transition from Reserve Bank of the Federal Government (National Bank serving the Public Interest) and to Plunge Control Central and de facto quasi Private bank (National Bank serving Private Interest).

This has far reaching and deep ramifications for the conduct of business in the US, the globe and represents in fact a re-writing of the Fed mandate and a re-definition of the Republic of the United States.

On the most superficial level the Fed's mandate has been re-written. Maintaining full employment is not a priority. This has actually been a gradual transition. Larry Kudlow (as a most public example) is one of many who openly state that this mandate is open to interpretation. Supply-siders wanted to define it as providing maximal stimulus to business for the secondary purpose of assuring full employment. We can safely assume that Bernanke as a groupie supported this notion. However the decisions taken during 2007-2010 indicate full abandonment of the full employment mandate.

On a deeper level, the Fed now fully and openly puts the priorities of private interests before those of the US Treasury and the public interest. This is a major shift and a very dangerous one. It means that there is a shadow government within the government that has the power of the purse behind it. It can happen. It has happened. It can be the death bed of free-market capitalism and liberal democracy.

Sun, 03/14/2010 - 02:48 | 264872 Howard_Beale
Howard_Beale's picture

It means that there is a shadow government within the government that has the power of the purse behind it.

I think you meant press...as in printing press.

Sun, 03/14/2010 - 03:10 | 264882 Caviar Emptor
Caviar Emptor's picture

Hehe yes, the printing press. But what I'm saying is that the Fed and a claque of influential banksters and their Washington shills have now reached a new level of undisputed power that endangers us economically and politically. The markets and politics are there solely to maintain the power of the shadow government. 

Sun, 03/14/2010 - 05:53 | 264893 Miles Kendig
Miles Kendig's picture

Yes indeed.  The very core of our national life has been, if not destroyed, then completely compromised.  The federal reserve and much of the work done by the nerve centers of government now operate under the freedom that the policy of judicial exclusion provides combined with the auspices of various National Security Executive Orders, many of them sealed from the congress & courts.  Forming at their juncture, in essence, is a form of super constitutional government that rules by coercion and royal decree.  Some have attempted to place an umbrella over the whole of this structure by labeling it the unitary executive, others some thing else entirely and what I believe you choose to call a shadow government.  The essence of this shadow governments actions demonstrate the lie that states the constitution can only be preserved, protected and defended by destroying the very precepts upon which it had been founded.  That the state of affairs has grown so ponderous that seemingly all pretense has now fallen away as the concept of the big lie gets the Lehman 105/"risk management" treatment.  In this there is still much to be learned through careful discernment of the time line of events across seemingly isolated areas of the global financial and governing systems.

Sun, 03/14/2010 - 10:26 | 264983 Caviar Emptor
Caviar Emptor's picture

I agree! The crisis has revealed the weakness of some of our government's institutions, like Congress's utter failure to confront serious breaches of of law and of its own authority and the complete impotence of financial services oversight agencies (aka the cops). But there have been massive Increases in power which have been under appreciated for the most part (except here at ZH) and which if not checked will imperil freedom. There's a new paradigm emerging: "The Imperial Fed". The Fed's effective power over us all including the executive and legislative branches of government has exploded as a result of the Federal debt which hangs like a sword of Damocles over the economy and the American people. The debt has morphed into the instrument of power because of its potentially devastating impact over the national and global economy. It's the New Bomb. The people have learned to tremble at the thought of it. The paradigm applies globally: we live in a world of "mutually assured financial destruction": the balance of power in a world where we are in huge debt, are fully import dependent and have outsourced manufacturing hangs on the threat of mutually assured global financial devastation. China won't call our debt or destabilize us because if we stop importing and devalue our currency their economy would collapse and their newly found prosperity would be pulled from the jaws of victory, just when the sun was about to shine. Their political system might not be able to survive the shock. The same applies around the world: under the current system people in essence "have it too good" and don't want it to end. Many poor, small nations (as we've seen with Greece) have been living an economic fantasy based on a national credit card with no max. Sound familiar? It should because that's our predicament with the debt, as it is with most of the developed world. Thanks to this system of "Charge it to the Fed", the people get their flat screens and smart phones and 36% of those who file don't pay a stick of tax! (http://www.taxfoundation.org/news/show/25965.html). That's a deal! And it explains the indolence of average citizens and Congress and regulatory agencies. The Fed has also consolidated power through a claque I call the shadow government which consists mainly of powerful Wall Street types and financiers who pull the strings behind the scenes and get President's elected and beholden to them. 

 

Sun, 03/14/2010 - 06:06 | 264898 Miles Kendig
Miles Kendig's picture

Well, when the government first checked its balls along with the power of the press to the bankers those items could fit easily within the shadow of the purse.  Now, the bankers purse is just starting to fall and seemingly spill out over the floor.  I suspect that we may well be exposed to an era of minimization through repetition and pace of disclosure in an effort to further desensitize and overwhelm the morts.

Me, I opt for the power of the pursue.

Sat, 03/13/2010 - 16:51 | 264509 doublethink
doublethink's picture

 

Where are the cops? Who cares? We have global investors who, understanding more fully now the all-pervasive fraud underlying US markets, will simply sell their holdings. The PPT does not have enough ammunition to simultaneously defend equities, bonds and the currency. The jig's up.

 

Sat, 03/13/2010 - 17:27 | 264539 merehuman
merehuman's picture

doublethink. How much longer? Will it blow before april 1st. Its gone on much longer than many of us thought it could.

It would save me a long drive.

Sat, 03/13/2010 - 17:29 | 264543 SteveNYC
SteveNYC's picture

Merehuman, there are some tax strikes coming up on April 15th. Your intentions are true my friend, and your courage great, but pick your spots. Use your energy where it can gain synergies and become contagious.

Perhaps there are better ways, perhaps not. You know, but stay sharp friend.

Sat, 03/13/2010 - 18:58 | 264595 velobabe
velobabe's picture

mere i said before i like your way, the (right) way, tao.

be careful. i marched three times on D.C. in the 60's, my parents let me. i believe it made a difference. thousands peaceful (sorta) protectors. the large masses were security for me. i don't have the guts anymore because i know it's adverse outcome. i watched the protects at copenhagen via Democracy Now! that really was rigged and unfair. your dealing with a much more dangerous combatant now a days. we aren't free anymore. that's the message that needs to get out into public and you will have the masses show up at D.C.

give us back our FREEDOM

Sat, 03/13/2010 - 21:59 | 264705 Al Gorerhythm
Al Gorerhythm's picture

Couch potato revolutionary! Fear no Evil.

Sat, 03/13/2010 - 23:07 | 264738 merehuman
merehuman's picture

I will be passing out the messege in the fliers i will distribute along the way.

cant sit and wait while the grandkids future is dissolved along with our freedoms.

At 59, what i got to lose compared to our youngsters? Shall we all wait till we are in argentina?

Besides its my policy to face my fears head on. Its been a good policy so far.

Anyone wants to help, you can do so by learning to appreciate your neighbors. They get hungry too. 

Leaving here monday 22nd.

And thanks for your supportive comments! 

Sun, 03/14/2010 - 00:33 | 264801 merehuman
merehuman's picture

Velobabe, i too protested against the vietnam war.

66 in Oakland 67 in NY. In the army a year later.Divine justice?

Sun, 03/14/2010 - 01:43 | 264851 Anonymous
Anonymous's picture

I was laughing at your "my gal" comments earlier. I am a dumb ass. I didnt know you served. My father spoke fondly of some fun near pleiku dec.68.

Sun, 03/14/2010 - 04:29 | 264895 merehuman
merehuman's picture

None of it was fun. I was put in 519th in FT Meade , md. Always on Alert because of it.

The Army was a wonderful coming together of american culture at the time while concurrently we had racial protests and riots. And the peace and love movement with their loveins and drums.

During that time we were less afraid and less afraid of our government. How could we believe our government would take advantage of two airplanes hitting the towers, by choosing that moment to blow up 3 buildings? And many of us fail to think truh  what really happened that day and how fast the evidence was removed. Or why it took 2 months for the fire to go out? Or why it happened the day after 1 trillion was announced discovered missing? Yes , there are a lot more questions many of us dont want to ask.

Its time to quit beating around the bush.

If you can have a positive effect ..please.. do something

Sun, 03/14/2010 - 11:33 | 265015 Orly
Orly's picture

"Yes , there are a lot more questions many of us dont want to ask."

I have been asking these questions literally for years- even when people would look at me as if I were from outer space.  Now, they just look at me as if I just fell off the turnip truck.

We are making progress and the process is accelerating at an exponential rate.  Believe, it won't be long now before the can of snakes is revealed to all.  With these questions going back to Prescott Bush and Averill Harriman in the 1940's, there are a lot of questions and it will take much time to glean all the nuances of history.

But these are the days it stops and your actions, no matter how puny and irrelevant, are a catalyst and a rebuff to our current situation.

Who knows?  Outside of Des Moines, you may pass a flyer to someone who not only has the intellect and the passion, but the populist resources and charisma to start a chain of events that liberates us all from these madmen.

You may be a butterfly with small wings but the impact you may have could be devastating to these criminals.

Sat, 03/13/2010 - 19:17 | 264612 doublethink
doublethink's picture

 

When? The Elliott Wave guy Daneric believes that we are on the cusp of a major wave down--the "three of three"--which will be precipitated by a failed vote on health care reform this week.

 

http://danericselliottwaves.blogspot.com/

 

I believe that these Lehman revelations will so shock global investors (starting in Asia) that we may start cliffdiving on Monday (or Sunday night if you prefer futures). It really depends on how widely this news is reported; the facts speak for themselves.

 

Sun, 03/14/2010 - 01:40 | 264850 Anonymous
Anonymous's picture

Nope.

Fraud street is the REAL bailout.

...and here you thought main street mattered.

Freedom and justice is only available for paying customers No money, no nothing.

You can't name one example of the common good or a founding principle that hasn't been monetized and held hostage by the rich, also known as your masters (shhh and they aren't the US).

Sun, 03/14/2010 - 04:23 | 264894 jeff montanye
jeff montanye's picture

before we vote we're prospects.  after we vote we're customers.

Sun, 03/14/2010 - 10:22 | 264982 Anonymous
Anonymous's picture

I was thinking gap up to new all time highs as it becomes evident the fed will back stop everything and anything while the printing press stop button has broken off and like the jap accelerators they don't know how to stop it.
QE1 might be the "toe in the water" test run. QE2 could explode onto the scene with higher confidence, including out right dollar devaluation. Would a 20% devaluation create an instant 20% gap up in equities, gold and energy ?

Sun, 03/14/2010 - 13:01 | 265046 doublethink
doublethink's picture

 

Got FAZ?

 

“I almost threw up when I read the report,” a senior Wall Street executive said on Friday. “It makes me sick of this industry.”

 

http://www.ft.com/cms/s/0/f3cdb26e-2e09-11df-b85c-00144feabdc0.html?ncli...

Sun, 03/14/2010 - 14:31 | 265092 doublethink
doublethink's picture

 

The actions of early last year when FASB changed the rules are exactly backward.  By allowing this trash to remain on balance sheets with fantasy marks FASB and our government has set up a potential Lehman in every one of our large financial institutions.

 

http://market-ticker.denninger.net/


Sun, 03/14/2010 - 01:04 | 264820 defender
defender's picture

If anyone is reading this and can make such a thing happen, I suggest on April 1st.  It is about time that the joke was on the Fed, instead of all of us poor shmucks.

Sun, 03/14/2010 - 04:39 | 264897 merehuman
merehuman's picture

Agreed. I got tricks. Not just for kids.

Us contractors have more ways to screw up a house. If you hired one , you know!

Seriously, water, gas , power and phone can all easily be cut off. A potatoe in the vent pipe of plumbing on the roof will not allow proper flushes. Then you call the plumber and i will be right there. There are a lot of sneaky ways to defeat the enemy, its the only other way rather than have a mob facing government guns. I prefer quiet work.

After all i said, will there be a knock on my door?

As the Inkspots said long ago..I dont worry if the milkman comes

Sun, 03/14/2010 - 11:38 | 265020 Orly
Orly's picture

Please don't harm your neighbors.  That is no way to show your disdain for the US government.

Black helicopters have been flying over the Katy Freeway every Sunday since I can remember.  There will be no knock on your door.  They already know who you are.

No worries.

Sun, 03/14/2010 - 18:40 | 265258 Anonymous
Anonymous's picture

The old potato in the vent pipe is definitely not childs play.Seriously high tech .You'd be busy up and down the ladders in greenwich. I dont think they'd see you. 59 year old man stufffing potato's in shitter vents...Really? WTF is a talking inkspot? Lotflmao @ the gov working in unison with the 20 sand niggers to destroy WTC #6. Almost as funny as size 11.5, 500$ hand made Italian shoes drenched in OJ's blood werent his. George Carlin in his prime cant beat that shit but thanx.

Sat, 03/13/2010 - 17:05 | 264524 Anonymous
Anonymous's picture

Well, that was a lengthy read and, if I understand the implications of all this correctly, it's DOW 20,000 before mid-term elections!!! Honey, where's the credit card - let's have us a fancy dinner.

Sun, 03/14/2010 - 00:48 | 264808 Al Gorerhythm
Al Gorerhythm's picture

You positively know now who's doing the buying. Sell to them...... and buy gold.

Sat, 03/13/2010 - 17:07 | 264525 Anonymous
Anonymous's picture

What time does American Idol come on?

Sat, 03/13/2010 - 21:11 | 264690 loki
loki's picture

fairly soon... hang on... I'll get the Doritos and soda.

Sat, 03/13/2010 - 17:12 | 264528 Fritz
Fritz's picture

Tyler - that is a fantastic piece of journalism

Sat, 03/13/2010 - 17:21 | 264535 SteveNYC
SteveNYC's picture

This is a superb piece. I would actually send it to everybody I know, but 1/10 would understand it, 8/10 would stop a quarter or half of the way through because it would cut into their TV time, and the other 1/10 could give a shit.

This is irrefutable evidence that the Federal Reserve is the largest, most organized, most complicit criminal entity to potentially ever grace the planet Earth. Led by a "most humble, gentle Princeton Professor", this disgusting institution has robbed this nation blind since its inception. Even with the "change" everybody voted for, this "gentle bearded one" gets a pat on the back and is sent back in to rob the public over and over again, and the pathetic elf gets appointed to head the Treasury. Of course, each of these "men" took the place of a criminal larger than themselves, which I guess they are doing a wonderful job of emulating and trying their darndest to outdo.

The one solace I find in all of this is that the corpse is so rotten, so hollow, so corrupt and maggot infested, that is MUST collapse. It can not continue into perpetuity. THe sheep will get what they deserve for their ignorance and laziness, but we will go on regardless. Let's hope the intelligent, caring, responsible and strong of us survive to rebuild after this blows sky high.

 

Sat, 03/13/2010 - 20:36 | 264674 Reflexivity
Reflexivity's picture

This is a superb piece. I would actually send it to everybody I know, but 1/10 would understand it, 8/10 would stop a quarter or half of the way through because it would cut into their TV time, and the other 1/10 could give a shit.

First, I know exactly what you mean by this.  Frustrating to say the least.  If you handed out food to the starving or water to the thirsty, they would have no choice but to take it, ingest it, and thank you for it (their lizard brain couldn't turn it down).  But since 'finance' has evolved faster than the human brain can comprehend), the average joes and janes just can't understand it, make time for it, or give a sh-t.

Second, this statement of yours sums up the ENTIRE problem with our economy and government:  If 8/10 or 9/10 of the people you know had BOTH the time AND the smarts (it's really not that complex) to read and fully grasp these news articles, the entire nation would change their behavior in such a way as to NOT support these types of banks, businesses, and government officials.  It's really that simple.  The number of charlatans goes down as the number of informed citizens goes up.

 

Sun, 03/14/2010 - 04:46 | 264900 merehuman
merehuman's picture

You shore hard on ussn sheep. Dont classify us that way, besides, some of us are goats.

plUS HA HAH YOU ARE ONE OF US!!!

If the nukes go of you think the radiation will miss you cause you are smarter? LOL

Think your better? Hahaha. LOL Thats just to funny. We are all stuck hip deep in shit and this one guy is grinning. Whats he got, an erection?

Sat, 03/13/2010 - 17:28 | 264541 Optimystic
Optimystic's picture

Holy shit.........unbelievable!

(I sense a Pulitzer coming this way......for whatever that's worth nowadays.)

 

Sat, 03/13/2010 - 17:54 | 264557 bingaling
bingaling's picture

No you have to be writing about how great the recovery is to get one of those ,this will probably land him jail with no contact to the outside world .

Sat, 03/13/2010 - 17:37 | 264545 virgilcaine
virgilcaine's picture

Dicky Fuld is in the FT this weekend.. what a smug evil looking dude.

Sat, 03/13/2010 - 18:26 | 264571 Crab Cake
Crab Cake's picture

He lives in Greenwich, CT, and yes his house is flammable.

Sat, 03/13/2010 - 18:47 | 264588 Anonymous
Anonymous's picture

Bah, nobody has the balls.

Ooh, look... American Idol re-run!

Sat, 03/13/2010 - 21:13 | 264691 loki
loki's picture

Hang on,  BRB,  new bag of Doritos and a case of soda

Sat, 03/13/2010 - 23:52 | 264776 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Child SCREAMS from other room, "I WANT PIZZA!"

Sat, 03/13/2010 - 17:39 | 264547 Not For Reuse
Not For Reuse's picture

This sort of mindblowing bullshit is what compels otherwise rational people to dream up the concepts of "hell" and the eternal infliction of torture. Otherwise, it's unbearable to realize that in all likelihood the protagonists of this article will never be commensurately punished in their own lifetimes.

Sun, 03/14/2010 - 11:38 | 264998 andy55
andy55's picture

Hah, I have this thought often.  Otherwise, it's maddening to know these guys are enjoying their private jets to the Caribbean, continuous 5 star gourmet food, and living standards above and beyond the outermost imagination of any modest and decent person.

I'm not a religious person but I've always found it striking that all the artist renderings of hell/purgatory over the last thousand years typically are scenes of bankers twisted and tied up among hell's denizens, their money and coins still clutched in their hands. 

There really is an argument to be made that these top-level bankers are the closest form of sadistic and evil beings (devils?) the human race has to offer.  So if hell and eternal damnation do exist, there'll be two ferries to hell to cut down on total transportation costs, one originating from Manhattan and the other from Georgetown.

Sat, 03/13/2010 - 17:42 | 264550 bc0203
bc0203's picture

One question: How much of the toxic stuff pledged at the window actually permanently ended up on the Fed's balance sheet?  I'm confused because there were CLOs being offered to Citi later on that were previously offered to the Fed - they were obviously not on the Fed's balance sheet at that point.

I realize in advance that the Fed could have acquired these assets again and then got stuck with them at some point down the road, and we'll never know that until the Fed opens up it's books to a thorough audit (fat chance, that.)

 Thanks in advance for the clarification.

Sat, 03/13/2010 - 18:00 | 264561 Caviar Emptor
Caviar Emptor's picture

 "I'm confused because there were CLOs being offered to Citi later on that were previously offered to the Fed - they were obviously not on the Fed's balance sheet at that point."

Don't you see? Whether it was Citi, the Fed, AIG, Goldman, Merrill, Bear, JPM does'nt make any material difference anymore. It's all one big slush fund now. They've crossed the line. If one fails then the other parts will pick up the pieces like some sci fi movie creature that keeps growing bigger the more it eats. With infinite public backing there's no incentive to be diligent.

Sun, 03/14/2010 - 02:10 | 264860 bc0203
bc0203's picture

Actually, the impression I get reading the article (and others here on ZH), is there are some types of assets on a sick bank's balance sheet that the other publicly traded banks won't touch... and those are the ones the either end up being hidden on that bank's balance sheets or bought up by the Fed via some program.

Sun, 03/14/2010 - 02:49 | 264874 Anonymous
Anonymous's picture

As reported by ZH yesterday, the FDIC now Explicitly guarantees all toxic paper from failed banks so that still functioning banks will take it on their own balance sheets.
As stated by FDIC:
"the timely payment of principal and interest due on the notes are guaranteed by the FDIC, and that guaranty is backed by the full faith and credit of the United States."
The Fed will undoubtedly move in a similar direction when it decides to offload toxic crap off its balance sheet into banks to give the appearance that the banking system is solvent. As I said, it's all one big slush fund now since the US Treasury (ie taxpayer) backstops the entire black hole to infinity.

Sun, 03/14/2010 - 03:01 | 264877 Caviar Emptor
Caviar Emptor's picture

As reported by ZH yesterday, the FDIC now Explicitly backs all paper from failed banks in order to place the paper on the balance sheet of functioning banks.

The Fed will undoubtedly take the same approach when it decides to offload the toxic crap on its balance sheet so as to keep up the appearance that the banking system is solvent.

It's all backed by the same slush fund, ultimately the US Treasury (ie Taxpayer) with no limit other than Vic Pandit's imagination.

Sun, 03/14/2010 - 11:50 | 265024 Orly
Orly's picture

The overall sense I get is that the Fed is collecting the garbage and is currently dumping the poison into Fannie and Freddie.  All the toxic assets into the rat-hole and then, Ka-Boom!

Fannie and Freddie go bankrupt and the US taxpayer is hit with a bill the likes of which the world has never seen...

When they do go under because of this mess, there will be riots in the streets of the United States of America.

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