• Sprott Money
    05/06/2016 - 06:03
    The US, in its own decline, is showing this same self-destructive tendency. The worse things get, the greater the inclination of the citizenry to say, “Carry on, everything’s fine.”

New York Fed Discloses CDO Holdings Of Maiden Lane Portfolios

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Wed, 03/31/2010 - 17:15 | 282265 john_connor
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This is just a political stunt so they don't have to comply with a full audit.

Wed, 03/31/2010 - 17:33 | 282300 monmick
monmick's picture

"The Federal Reserve recognizes the importance of transparency to its financial stability efforts and will continue to review disclosure practices with the goal of making additional information publicly available when possible."

Wed, 03/31/2010 - 18:19 | 282389 carbonmutant
carbonmutant's picture

I wonder how much Ron Paul had to do with that recognition...

Wed, 03/31/2010 - 18:27 | 282396 TheGoodDoctor
TheGoodDoctor's picture

I agree it is to appease Ron Paul. So, are these just holding companies then? LLC. No shit.

Wed, 03/31/2010 - 17:24 | 282277 wgpitts
wgpitts's picture

I knew the Fed was directly buying individual stocks to prop the market up. This was undisclosed to investors and is a violation of Securities law. This is a felony. All those like myself who purchased Puts or short positions when this information and the information that the Bank of England was also secretly funneling... money to prop up the banks was defrauded. Also, all those within the banks that were privy to this info are guilty of insider trading. Ben Bernanke, Paulson and Geithner and the rest of the tribe should all be in jail by morning….

Bank of England tells of secret £62bn loan to save RBS and HBOS

Bank of England advisers not told about secret £62bn loan to HBOS

Bank gave RBS and HBOS 'secret' £62bn loan

Fed Refuses to Disclose Recipients of $2 Trillion

Fed Fights Request To Disclose Who Got $2 Trillion In Bailouts


Wed, 03/31/2010 - 17:59 | 282353 zenon
zenon's picture

Good luck with that! (BTW I'll join in if you get something going)

Wed, 03/31/2010 - 18:53 | 282438 percolator
percolator's picture

I second what zenon said.

Wed, 03/31/2010 - 20:44 | 282521 deadparrot
deadparrot's picture

There are lots of lawyers looking for work right now. Find one willing to start a class action lawsuit.

Wed, 03/31/2010 - 22:31 | 282541 velobabe
velobabe's picture

class action lawsuits are curious beasts.

hey, O/T i am worried about deadhead. haven't seen him since that open sunday forum about where the hell everybody is in this here, today's economy. he exposed himself and haven't seen him since. he cares a lot about the old timer's on this blog.


also where is, I need more cowbell.

these are significant and important avatars, star atars, hotars, bitars.

Wed, 03/31/2010 - 17:20 | 282280 Ludic Fallacy
Ludic Fallacy's picture

Agreed.  Throw the wolves some meat so they don't go after the herd.

Wed, 03/31/2010 - 18:55 | 282440 Rainman
Rainman's picture

Interesting timing. On the last day of the quarter and the last day of Fed MBS purchases ( for now ). No conclusion, just suspicion about why they are tipping over these trash cans today.

Wed, 03/31/2010 - 20:17 | 282507 Harbourcity
Harbourcity's picture

On your point, begs the question as to how long can they can use this event to delay providing either new information or an update.


Wed, 03/31/2010 - 21:07 | 282536 bc0203
bc0203's picture

Keep your eye on the other hand. The magician is up to something...

Wed, 03/31/2010 - 21:59 | 282581 Fritz
Fritz's picture


The other hand is picking the taxpayers pocket in some insidious fashion. 

Wed, 03/31/2010 - 17:22 | 282283 wgpitts
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Traitors who stole $24 Trillion from the American citizens and sponsored spies who infiltrated the Pentagon and sold Secrets to all of the US nuclear weapons to China http://www.facebook.com/album.php?aid=54655&id=1054329942&ref=mf
Wed, 03/31/2010 - 17:31 | 282293 InstantWinner
InstantWinner's picture

Explains the recent articles questioning why Goldman has so much cash under management.

Wed, 03/31/2010 - 17:31 | 282295 SayTabserb
SayTabserb's picture

Wow, the Fed is even owed money by Hilton Hawaiian Village.  What would Cricket Blake have to say about that?

Wed, 03/31/2010 - 17:33 | 282302 knukles
knukles's picture

Book 'em, Dan-O.

Wed, 03/31/2010 - 17:31 | 282296 monmick
monmick's picture

I wonder how they price the swaps, in paticular the CDSs and the interest rate swaps?

Wed, 03/31/2010 - 17:35 | 282308 SayTabserb
SayTabserb's picture

A dart board in the Yale Club.

Wed, 03/31/2010 - 18:34 | 282408 MarketTruth
MarketTruth's picture

Same way they did in South Park. Watch the episode Margaritaville.


Wed, 03/31/2010 - 18:43 | 282421 Argos
Argos's picture

Best episode ever. Well worth the watch

Wed, 03/31/2010 - 21:13 | 282540 perchprism
perchprism's picture

Naw, Scott Tenoman Must Die was the best episode.

Wed, 03/31/2010 - 20:14 | 282505 Cursive
Cursive's picture

The Maiden Lane vehicles were unconstitutional in the first place, but my first reaction to reading this was,  "Why would a central bank that sets interest rate policy ever enter into or purchase interest rate swaps?"  Seems kinda like Superman runnin' a book on black market kryptonite.

Wed, 03/31/2010 - 22:42 | 282634 glenlloyd
glenlloyd's picture

I believe they justfified this under the heading of unusual and exigent circumstances, but I could be wrong.

Wed, 03/31/2010 - 17:34 | 282304 SayTabserb
SayTabserb's picture

Under what legal authority is the Fed allowed to acquire non-agency MBS? The 1913 Act might be stretched to cover GSE-backed mortgages on the theory they have (especially since Dec. 24, 2009) the full faith and credit of the Treasury behind them.  But how can they own ordinary mortgages Constitutionally?

Wed, 03/31/2010 - 17:36 | 282310 monmick
monmick's picture

"As part of extending support to specific institutions, under section 13 (3) of the Federal Reserve Act, the Board of Governors of the Federal Reserve System in 2008 authorized the New York Fed to facilitate lending to three limited liability companies—ML, ML II and ML III."

Wed, 03/31/2010 - 17:46 | 282325 faustian bargain
faustian bargain's picture

A frustrating wall of fictional words.

Wed, 03/31/2010 - 18:26 | 282395 SayTabserb
SayTabserb's picture

From the Fed's webpage:What securities are eligible for purchase under the program?

Only fixed-rate agency MBS securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae are eligible assets for the program. The program includes, but is not limited to, 30-year, 20-year and 15-year securities of these issuers. The program does not include CMOs, REMICs, Trust IOs/Trust POs and other mortgage derivatives or cash equivalents. Eligible assets may be purchased or sold in specified pools, in "to be announced" (TBA) transactions, and in the dollar roll market."

Maybe the Board of Governors decided unilaterally to go outside the Fed's 1913 Charter, but the question remains: is the legal authority there for holding non-Agency MBS?

Wed, 03/31/2010 - 20:48 | 282526 monmick
monmick's picture

What "program" are they referring to?

Section 13 (3) of the Federal Reserve Act, at least the way the Fed interprets it, is pretty broad and open ended. Sort of like the Martial Law of central banking....

Wed, 03/31/2010 - 17:42 | 282320 InstantWinner
InstantWinner's picture

Zero Hedge knew those maiden thingies were stuffed full of shit and boy where they right!  Congrats!

Wed, 03/31/2010 - 17:46 | 282326 RobotTrader
RobotTrader's picture

If the Fed were to take Maiden Lane public, no doubt, it would be 300% oversubcribed and could be the hottest IPO of 2010.

Right now, there is an unprecedented demand for junk, garbage, and/or anything else perceived to be at "rock bottom"...

Too late to buy the bombed out retail stocks, they have already had 300% - 500% runs.

So the speculators will be looking into other garbage bins for bargains.

Wed, 03/31/2010 - 18:11 | 282373 buzzsaw99
buzzsaw99's picture

leveraged speculators perhaps?

Wed, 03/31/2010 - 18:55 | 282439 percolator
percolator's picture

great idea robo!

Wed, 03/31/2010 - 17:49 | 282333 faustian bargain
faustian bargain's picture

I wonder what they had on the books before they were released today? i.e. this is the positive spin; what is the reality? Somebody's arm must be tired from all the erasing.

Wed, 03/31/2010 - 17:49 | 282334 non-anon
non-anon's picture

shades of Enron

By law, the Fed isn't allowed to buy assets -- it can only lend, as lender of last resort. That was a problem for the Bear Stearns bailout, because JP Morgan said it would only buy Bear if someone else assumed responsibility for the crap. Fed came up with this idea to start a shadow company, called a special purpose vehicle (SPVs were how Enron operated, creating "Chewco" and the like named after Chewbacca - the New York Fed called their SPV "Maiden Lane LLC" for name of the street the NY Fed is located on in southern Manhattan). The deal then was JP Morgan put $1 billion into Maiden Lane, the Fed put $29 billion in cash into it. Maiden Lane paid Bear Stearns $30 billion, which went straight back to JP Morgan as this deal happened simultaneously to JP's purchase of Bear. So Morgan got $30 billion in cash ($29 billion net) and the Fed got stuck owning the crap, but was legally only making a loan to Maiden Lane, who was the legal owner (Maiden Lane was incorporated not in NYC, but in Delaware to avoid paying taxes). By the Fed's own accounting - which is very different from a real company's accounting - Maiden Lane has lost $5 billion between its creation and today.


Wed, 03/31/2010 - 18:00 | 282355 faustian bargain
faustian bargain's picture

But who owns Maiden Lane LLC? I don't see how the Fed could say they're not buying assets, even if it's through a subsidiary company. It's insane.

Wed, 03/31/2010 - 18:29 | 282399 SayTabserb
SayTabserb's picture


Wed, 03/31/2010 - 23:57 | 282698 Willzyx
Willzyx's picture

Or like how repo 105's are really "sales"

Wed, 03/31/2010 - 19:12 | 282450 Rainman
Rainman's picture

Emergency powers can be quite creative, yah ??

Wed, 03/31/2010 - 20:19 | 282509 Matto
Matto's picture


Wed, 03/31/2010 - 18:03 | 282363 GubmitWKR
GubmitWKR's picture

Im dissapointed that the fed didn't use more appropriate discriptors like EATSHT_07, URFKD_06, RIPOF_06

Wed, 03/31/2010 - 20:50 | 282530 monmick
monmick's picture


Wed, 03/31/2010 - 18:09 | 282370 Stanley Lord
Stanley Lord's picture

Hey ZH Thank you for letting me in the club.

I will be quiet now.

Wed, 03/31/2010 - 18:12 | 282378 buzzsaw99
buzzsaw99's picture

It's official, the usa is a criminal org.

Wed, 03/31/2010 - 18:29 | 282398 Catullus
Catullus's picture

Wait wait wait.  Do you hear that?  Turns out the world is not collapsing into a neverending pit of dispair and civil unrest.  So let us just audit the rest of the fed.  It's not going to change what's already been done.  An audit never does.  If it makes you feel any better, we'll wait 6 months before telling everyone what you've done.

Wed, 03/31/2010 - 18:33 | 282404 AnonymousMonetarist
AnonymousMonetarist's picture

Pay the man Shirley.

Wed, 03/31/2010 - 18:32 | 282403 vote_libertaria...
vote_libertarian_party's picture

Nice of them to leave off the key info.  Like these assets are worth 50% of a non-performing loan.

Wed, 03/31/2010 - 18:33 | 282405 hooligan2009
hooligan2009's picture

ok..so the Irish Government took out its problem banks mortgage portfolios at 53 cents in the Euro today..so on this basis the $156bn in ML is worth around 80 bn..hmmm..i guess if you are the Fed with rigged accounting its not a loss of 76 billion at all..GS market cap is 90 billion...just saying..whats the rate on an overnight tri-partite collateralised repo actually worth if the mark to market is like this?

Wed, 03/31/2010 - 18:34 | 282407 hooligan2009
hooligan2009's picture

GMTA vote libertarian...wait..who are you? :)


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