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Racketeering 101: Bailed Out Banks Threaten Systemic Collapse If Fed Discloses Information
And so the guns come out blazing. The Clearing House Association, another name for all the banks that were bailed out over the past year with the generous contributions from all of you, dear taxpayers, are now threatening with another instance of complete systemic collapse if Bloomberg's lawsuit is allowed to proceed unchallenged, let alone if any of the "Audit The Fed" measures are actually implemented.
As a reminder, The Clearing House Association consists of ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo.
In a declaration filed in the Bloomberg Case (08-CV-9595, Southern District of New York), the banks demonstrate no shame in attempting to perpetuate the status quo with regard to the Federal Reserve and demand that the wool over the eyes of the general population remain firmly planted in perpetuity.
The Clearing House submits this declaration because the Court's Order threatens to impair the ability of our members to access emergency funds through the New York Fed's Discount Window without suffering the severe competitive harm that public disclosure of their identity will cause.
Our members have accessed the New York Fed's Discount Window with the understanding that the Fed will not publicly disclose information about their borrowing, especially their identity. Industry experience, including very recent and searing experience, has shown that negative rumors about a bank's financial condition - even completely unfounded rumors - have caused competitive harm, including bank runs and failures.
Surely transparency would facilitate rumor-mongering to an unprecedented degree. After all rumors spread much easier when everyone knows the true financial condition of banks.
And here, in plain written Times New Roman, you see what racketeering by a major bank consortium looks like:
If the names of our member banks who borrow emergency funds are publicly disclosed, the likelihood that a borrowing bank's customers, counterparties and other market participants will draw a negative inference is great. Public speculation that a financial institution is experiencing liquidity shortfalls - which would be a natural inference from having tapped emergency funds - has caused bank customers to withdraw deposits, counterparties to make collateral calls and lenders to accelerate loan repayment or refuse to make new loans. When an institution's customers flee and its credit dries up the institution may suffer severe capital and liquidity strains leaving it in a weakened competitive position.
Pardon me if I am a broken record here, but would rumors not spread much less if there was more transparency, if investors and other financial intermediaries were fully aware of the conditions of their counterparties, if banks did not have to cover their billions in reserve losses by pretending they are viable and essentially being constant wards of the state?
The Banks' racketeering has gone on for far too long.
And yet, it does not stop: the conclusion from the banks' letter:
In sum, our experience differs from the factual conclusions the Court appears to have reached about the nature of competition in the banking industry:
- The competitive harm to institutions that are publicized as needing emergency funding is not "speculative," but demonstrated by the recent multiple failures of financial institutions whenever information about their funding difficulty has been disclosed.
- The disclosure does not involve mere "embarassing publicity" but information that could result in the immediate demise of an institution.
- The disclosure would not merely "stigmatize [ ]"the institution or make it "look [ ] weak," but goes to its very viability.
- The disclosure of accessing emergency funding is not an "inherent risk" of market participation, but an extraordinary risk in extraordinary circumstances.
- Competitors can use the disclosure to advertise or publicize that they are financial stronger because they don't need emergency funding.
In a nutshell - the banks want their complete opacity cake and eat it too, or else, the racket goes, the transparency that will somehow promote massive rumor mongering will again destroy capitalism. In the meantime, the Ken Lewises of the world can continue touting how stable their businesses are based on optimistic future projections, while implicitly, they continue to survive merely thanks to the cash granted them by you, taxpayers.
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It's lie, not lye. Your threats don't work here, so stop wasting our time.
You PUSSY!
It's simple: just give them a choice.
The can opt for transparency or they can endure a 99% marginal tax rate on any bonuses, employment income, capital gains or any other form of income, realized or deferred on any amount greater than forty grand.
Sound fair?
The government will do nothing, they are captured, only you can do something now, take all you money out of these monsters and bank with local credit unions or smaller community banks.
remember this line?
"change does not come the top down, it comes from the bottom up"
never a truer sentence ever spoken by the Man.
In terms of legal rights, where do my rights as a shareholder stand in regards to Regulation FD (Full disclosure).
I am an idiot - one would think that tapping the discount window should be a DISCLOSEABE event. As a shareholder I should know whether my firm is in such dire trouble that its only source of funds is at the penalty rate from the FED.
Hmmmmmm
I am still patiently waiting for 8-k's from last fall. They will be filed won't they. The disclosure rules apply to banks right?
Quixoticly waiting for Godot.
Screw these banks. Fire management (many qualified to take those jobs). Disclose the information like the judge said!! NOW AH
I feel for Judge, I bet you is getting paid his/her salary in one of those banks. This is not FED lobbying, is self preservation!
This should be Exhibit A for the stupidity of deregulation. If these banks were 100% depositary institutions they may have a point, perhaps 20 years ago. But this is now.
They were allowed to gamble big time. They lost, we lost. Time to expose their misdeeds. Depositors have a right to be informed and flee if they want to.
These guys think that telling the world that our system will collapse if a lawsuit is pursued is somehow reassuring for people? Isn't that simply a declaration that indeed everything is already completely phucked, but that they are the only ones who know that for sure? This nation has had it with crisis creation; give it a rest. None of us care if you fail and die. Go away. We need banks in our society, but they don't have to be your banks.
aye men brother/sister...
HERE IS THE CHART PUBLISHED BY THE FED IN 1976; a chart of OWNERS of Federal Reserve Bank; read it and spread it around. http://www.land.netonecom.net/tlp/ref/federal_reserve.shtml
On a side (but related) note, I'd advise to do the same with this list of companies:
http://www.cfr.org/about/corporate/roster.html
A fine list of traitors to our country there.
You're consistent...
Those charts were NEVER published by the Fed and are simply ficticious works by mullins or griffin.
Try again. This time with something verifiable... you'll get the idea soon.
Until then, tell us about the Kennedy EO - and how it STRENGTHENED the hand of the Fed or how the FRA was voted on an approved by a signifigant majority.
So far, you've posted 3 fictions about the Fed - do you do any honest research or you just fall for anything you read on the net??
Judge -
You are wasting your time trying to correct CB or anyone else on this site. You might as well try to sell "Darwin was Right" T-shirts at the Creationist Museum.
Look around you!
LOL; yes; i see they thought you well in " Introduction to PR and how to blur the facts with ad hominem attacks " class you took when you joined FEDs PR team. Nice try man; but no go.
LOL. Is he failing to En"lie"ten you?
I like your facilitator helper judge. He's so polite. You ever get the feeling you walked into a chess game with old strategies?
Lol.. You have a point.
it is obvious to see that the truth isn't big among some, they just want to rant and hurl insults.
But some on here do care and are able to engage in a reasoned discussion. Those I respect and enjoy.
Nice chart, wonder why I haven't seen it before...
CB when dealing with Judge, remember especially important is the warning to avoid conversations with the demon. We may ask what is relevant but anything beyond that is dangerous. He is a liar. The demon is a liar. He will lie to confuse us. But he will also mix lies with the truth to attack us. The attack is psychological, CB, and powerful. So don't listen to him. Remember that - do not listen.
Regards,
Sure, one shouldn't listen to the facts, but should believe in poorly researched fiction and myths. One should never have their 'beliefs' challenged either.
It's simple really.
You are entitled to your own opinion, but not your own set of facts. You can refuse to believe them, but they are still the facts.
The US differentiated itself from the rest of the financial world because of its much touted "informational efficiency". It was believed that the financial statements of firms in the US were more realistic than those of other nations. Because investors could trust the information they were receiving, they were more apt to invest in the US.
Now, with this competitive advantage gone(or going), how can the US compete for capital?
no one obfuscates information more "efficiently" than uncle sham & co.
"And so the guns come out blazing." I very much like the metaphor, I just want it applied in a literal way in a slightly different context.
I had a pet rabbit once.
It musta' been cute. Nothin' cuter than bunnies.
We need banks in our society but not your banks. Well said Anonymous. We need a financial system not specific banks.
the fed, and upper tier banks - aka jp morgan - are unnecessary middle-men; particularly in our digital age.
Seems to me the Declaration does more to harm big banks than to help them. What better way to fuel fears than to say the truth might cause depositors to pull their money? The truth shall set them free.
Here is the sand, there is the line....
Members of Congress, state your name and your loyalty and await judgement.
Side with them, or side with the public.
This will not end well.
The lawyer is just doing his job and trying to justify his paycheck.
His argument, however, rests on the old paradigm that a single troubled bank should not be separated from the otherwise healthy herd by being "outed" for asking for Fed help.
The new paradigm of "too big to fail" and ALL large banks are "troubled" (and should ride the FED gravy train) obviates this argument, and I suspect the judge will ignore this filing.
Shining a light on cockroaches has a predictable outcome and deters future activity.
As another reader suggested, we should all move our accounts to a smaller bank /Credit union for a start.
Well, why the right amount and kind of PR the banks that access the discountwindow will certainly be able to spin this the right way. After all, they are not insolvent they claim, so customers, business partners, investors etc. will understand, after all they are business savyy, aren't they. All they offer is more conjecture. Where is the proof? Has this acutally happened often that people knowing that the bank had accessed the DW made a run on it? Isn't the discount window a pretty standard tool that is actually reassuring for investors, customers, etc as banks who have access to that are better of and safer than those who have not? I mean GS has certainly access and no on ran for it.
So there really is no problem with disclosures unless the insolvency would be the right inference to draw.
I think a big issue is disclosure of the collateral the FED has accepted.
Exactly. My bet is that it's a heaping pile of worthless crap.
Bankers love to indebt. They are MAKING the toxic loans. Then ENFORCING the repayment of them. The banks get defaulted on and PRETEND to forgive the loans while making these huge shams to collect.
We know it is ; )
FDIC now insolvent.
Banks insolvent.
Most corporations will be unable to service debt, hence
bondholders will be severely impaired.
All cash flow derived from debt instruments will eventually fail and principal deeply discounted.
Dollar will be debauched further eroding any interest income
Demand for social services and increased stimulus will cause much greater QE/printing.
THE USA IS BANKRUPT; ITS ONLY RECOURSE IS DESTRUCTION OF THE CURRENCY; IT IS NO LONGER A VIABLE PRODUCER OF ANYTHING BUT FINANCIAL SERVICES AND WAR
Sovereign, state, municipality, corporate,private cascading defaults can only be ameliorated by the "extend and pretend", but the AUDIT and FOIC disclosure from the Fed will be a coffin nail.
Everyone knows it is govern by fiat now and in the future. The only ambush not universally expected is a bank holiday and immediate and deep step devaluation of the currency.
Unless this is anticipated and agreed among the world's nations, it could precipitate war or at least the end of global trade as we know it.
The USA is only transfer payments, subsidy, QE, social services, and covert debt default now.
Real economy will die except for those segments held within the scope of the above.
Brace,brace,brace. Global "send in the keys" is assured.
www.RevokeTheFed.com
it depends on what the definition of "emergency funding" is.
Just in time for the grand centennial of establishment of the Federal Reserve will be the orchestrated collapse of the greatest republic in the history of man.
Never allow a private entity to conduct a nation's monetary policy and issuance of its currency without transparency and checks and balances.
You end up with kleptocracy, general impoverishment, revolution, and global war.
This is the third time in 100 years, we really never learn the destructiveness of USURY.
"...the Ken Lewises of the world can continue touting how stable their businesses are based on optimistic future projections, while implicitly, they continue to survive merely thanks to the cash granted them by your, taxpayers. "
While collecting 10's of millions in taxpayer paid bonuses to boot!
The feds argument could also be interpreted by the judge as a constitutional failure to equal rights to everybody. Why should some banks/fed be above the law when it comes to disclosure especially when it comes to damaging them. How are the honest banks being protected here? Isn't the Freedom of Information also about equal protection to all? Why make an exception for some banks?
The failures of Bear and Lehman was not because they were perceived as weak, they failed because they made bad bets and their balance sheets went negative long before they actually imploded.
Maybe the judge should throw the stress test results back in their face as well as the fact that many of their p/e's are back to near all time highs and ask them what kind of game they're playing with the american people. I say, "Fuck 'em all and let the chips fall where they may."
Well, if you want the FED audited, Ron Paul is your man....
Go here: http://www.ronpaul.com/on-the-issues/audit-the-federal-reserve-hr-1207/
Type in your zip code and then point-and-click your way to notifying your representatives...
Complaining here is nice and all, but making it actually happen would be so much sweeter..
I don't want it audited. I want it shut down. Don't let them lie and weasel their way out, arrest them and lock the doors.
Yet another crack-addled gambling chip taking off....
Is the fix in? Are these guys just going all in, in a last ditch effort to keep the reins?
http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2002/20021121/default.htm
I wouldn't be suprised if all the records get destroyed similar to Enron.
Some nice stuff in there like:
This sounds like giving the bankers a carte blanche. Whatever happens they will get unlimited Fed monetizing.
Nothing worse than a professor trying to prove that the theories he connocted are working in practice. Might as well (help to) bring about the crisis after all you have the solution already.
Headlines of troubled bank list topping 400 and oh guess what, the banking sector is one of the main ones in the green and the market turns back up again
What a complete farce of a market this is!
The comment about burning ATM's gave me a thought. Destroying their property might feel good, but I don't know if it would really accomplish anything.
However, what if there were a movement to pull deposits out of these monster banks and move the cash into others? Some folks here report to be doing just that. Could the masses be inspired to do the same, at least in numbers great enough to cause them serious pain or death? In other words, could bank runs be created on these big guys not out of panic but out of anger or otherwise?
Do what you think is best, and encourage you friends and relatives to do what they think is best.
I thought it best not to do business with companies that are destroying my country.
anon +1 about how violence will only accomplish radicalizing & criminalizing a burgeoning movement and trivialize it in over 90% of the target audience that must be reached.
take this from someone who has been a fly on the wall for similar ill-fated attempts.
you must understand that the genius of the 2nd amendment already does for you what you seek to do through violence.
plus, remember that corporations are legal 'persons', energetically they are multi-headed rhizomatic hydras. e.g. look what happened at AIG...Greenberg gets taken out and the situation only gets worse.
corporations are also parasitical. parasites derive their power from willing but ignorant hosts. if the host(s) decide willingly to remove the parasite from their body (in this case, remove the fruits of their labor from the reach of the parasite), then the parasite has less energy.
of course, one host doing this has little affect. however, as the number of hosts who cleanse themselves of the parasite get larger, it has a multiplying effect due to the nature of fractional reserve banking.
as for how to cleanse, ghostface has all the simple tools one needs to purge oneself of parasites without completely withdrawing into self-imposed isolation.
there is a middle way...at it ain't got nothin to do with 'compromise' & bipartisanship.
2 copper pennies for ya
To the Clearing House Association:
cry me a river
(Go on and just)
Cry me a river-er
(Go on and just)
Cry me a river
(Baby go on and just)
Cry me a river-er, yea yea
It took almost a year just to get here, why does anybody think we are going to get any info before it is totally irrelevant?
Surrealistic!
maybe maybe not
but it sure would be fun
and ain't that the point?
I tried posting the link to this page on numerous Yahoo Finance Message Boards and it worked 3 times and now will not allow me to post anymore. Any ideas to help spread the word?
Try laundering the link through a number of URL shorteners (http://www.google.com/search?q=related%3Abit.ly), providing you with a number of unique URLs which should serve to bypass Yahoo's spam filters.
You are a Gentleman and a Scholar. Thank You!
This is exactly why the Founding Fathers, in the Constitution, said that CONGRESS shall coin the money.
This stopped being a 'market' a long time ago. This is more akin to casino poker and triple card monte than a market place.
Mike Whitney sums it up:
"will someone please explain how free markets can exist when speculators are subsidized by the state, or when the risk is removed from risky investing? That's what it means when the Fed opens its auction facilities to the investment banks and brokerage houses. It makes no sense at all. Government "safety nets" are anathema to free market capitalism. "You pays yer money and you takes yer chances". That's finance capitalism; deal with it.
What we are seeing is a hybridized version of capitalism; "Paulson's Scatterbrain Capitalism"; a hodge-podge of taxpayer bailouts, government intervention and free market mumbo jumbo. It's a toxic mix on off-balance sheets operations, over-the-counter "unregulated" derivatives, dark pool trading, opaque hedge funds, dodgy Enron-style accounting, and complex, hard-to-pronounce debt-instruments wrapped up into one, cheesy, unsustainable shell game, managed by Harvard-educated flim flam men and backed by a 100% government guarantee. That's the system we're supporting with our tax dollars and that's the system that is dragging us headlong to ruin.
It ain't capitalism, my friend. It's a crooked system run by corporate carpetbaggers and banking scalawags who've shot the Golden Goose in hopes of keeping the larder at the cottage on the New Jersey coast chock-full of Dom Perignon and halibut fillets. They created this nightmare and they've doomed us all.
As long as we prop up the existing system, the economy will continue to flounder, unemployment will continue to rise, foreclosures will continue to soar, banks will continue to be shuddered, and the wobbly old greenback will continue its inexorable march towards Pesoville."
Tremendous summation by Whitney. As Nikki Alexander said: "If it doesn’t govern, it isn’t a government. What is masquerading as government is a crime syndicate with a flag."
"Scatterbrain Capitalism, Paulson Style."
Love it - great phrase.
we should keep in mind that there are 2 economies out there, one of them is real, and the other is not. The phony one has done its parasitic best to enmesh itself with real one, such that the surgical removal of the phony one will damage its unwitting host. However, like all medical decisions, this is one driven by the clock, with the certainty that the failure to treat will lead to further entanglement, and ultimately death to the host. There is no better time than "immediately" when faced with one of these decisions, especailly when there still remains some shred of borrowing capacity upon which the survivors can rely to fund the Real Recovery from this nightmare.
Judge - you seem a reasonable man. Do you get it? This is what we are dealing with. We hear you about the problems and dislocation peeling off the bandages and lancing the abcess will cause, and it will be a pathetic sight for sure, but the patient still has a chance to survive. How long do you want to wait?
The "Judge" is not a reasonable man. She is not even a man. She is a paid lobbyist from the Federal Reserve.
But I would like to thank her for stirring up the hornet's nest, it will help educate the people on the ways of the Fed.
HSBC was notably not bailed out by anyone.
Didn't they get a wad of cash out aig's back door?
You mean their butt?
[insert Geitner/Beavis Huh,huh,huh,huh. Huh,huh,huh,huh.]
i think the dude who stole ben's identity is actually running the show
district court decision will be appealed right? so then to the 2nd circuit which will hopefully refer this to the supreme court before bothering to further delay by confirming the decision and then having the defendants apply for cert (another few months delay at least).
the banks are barking up the wrong tree here. instead of inviting more public attention and scrutiny, it behooves them to simply cover up the truth of the fed. there is a very easy way to do this. say that 90% of the money was given to goldman, let goldman take the fall for everyone and then the rest of the banks survive when they shouldn't, the public feels vitiated because goldman is the the satan of satan's and obama gets a pass.
of course, the goldman execs will have to be compensated. but this way, you throw one man off the boat so that it still floats. otherwise, you risk more attention on this. the payoff is that you win the next court decision or that you hope obama calls up the judges on the supreme court to change their minds. but that's unlikely at this point. well, i hope it is.
yo ho ho and a bottle of rum.
$ taking a nose dive../es to the moon...tear rolls down cheek
It seems to me that the disclosure has global implications rather than local. After all, when it comes to banking, the US put the "con" in confidence. For the Feds, confidence is all they got.
The TIC has basically crashed, a trend that must not be exacerbated by revealing the stark nakedness of the fact that Dollars are units of unpayable and barely serviceable debt. I can't say that I disagree with our Finance Sector Overlords, under the circumstances.
Jesus Christ! Off with their friggin' heads I say.
The day these wretched fucks are exposed for their greed driven illegal practices and skullfucking the american public our whole fantasy economy will come crashing down. And I will dance on their graves
per CNN: " Why deficits will mean higher taxes"
Fuck you CNN . I ain't payin. Your 'news' is just bank propaganda. Why the fuck should I pay higher taxes for trillions upon trillions that was stolen?
Well when you get into this much debt, our grand-children are the ones who pay for it...we just get to RIDE DA WAVE and live on credit till we die!!!!
It's sad really.
I just completely hate unfounded truths. In the words of George W, "Bring it on."
Perhaps when people find out how they are being royally screwed by their representatives and their banking buddies, some bankers and politicians will end up tarred and feathered, just like in the old days.
Yes, unfounded truths do suck. any physicist knows that.
I removed my money from BofA last month. Denninger's rant back in June or July about starving the bastards really moved me. My husband's family were northern Italian immigrants who would have recognized BofA's founder on the streets of North Beach and probably tipped their hats. What a sad sack of excuses these banks have become. Bring them to heel! These mofos work for us... The last straw for me was being charged $9.00 for "too many" electronic transfers between two high balance checking/savings accounts, done in the privacy of my own home unassisted by any teller and well after peak hours. WTF?? I now bank at a pokey little local credit union a few blocks from my home. I can ride my bike right up to the windows, leave it unlocked outside and bank in minutes with 2 or 3 individuals who recognize me on sight. When I need ATM services I can use any credit union machine in our co-op, which appears to be all of them doing business in my county. Haven't travelled far with this yet, but I'm sure I can make it work when I do. The big banks have sold us a pack of lies about "ease" and "access" and "community." Time to show them how its really done. BofA is welcome to become a small regional lender pulling itself up by its bootstraps all over again. Might do it a world of good. I don't recognize this bloated goldmanesque squid who sends me jaunty bulkmail come-ons under the pseudonym "Banc" of America and then charges me $9.00 for self-pleasuring myself with my own goddamned money.
Sorry to be so windy here... I'm perimenopausal bitches so look out below!
Elsie
The ATM issue is interesting. It is a big deal for lots of people, including myself. But I did some research and many credit unions and small banks belong to networks that give you access across the country to ATMs with no fee. Moneypass is one example, many small banks belong to this network. There are others. Also, some banks waive charges from other banks, my Schwab account does this.
http://www.moneypass.com/moneypasslocator/search.jsp
wow...just checked this...c(sh)itibank is a member of moneypass.
which means that if you can find a small bank that's also a member, you can access citi's ATM network for free, yes?
if so, that's a huge find, thanks.
No moneypass banks near me. Does anyone know of other similar networks? TIA.
Let me see:
Obama re-nominated Bernanke in return for Bernanke's promise to keep doing you know what?
Congress can get Bernanke's promise to submit to full audit in return for the confirmation.
We, the voters, can threaten the Congress if Fed is not submitted to full audit while Bernanke got the confirmation, will all vote the third party and dismiss all Demon and Gop.
We, the depositors, can threaten all the banks if they are not coming to support full audit of the Fed, we will assume they have something to hide and stop doing business with them.
Let me see. Yeah, Banks threaten to cause systemic collapse. Oh, big deal. Last time I checked we are still covered under the FDIC. Threat this time via CNBC (can not be certified) will not work. This is the new normal.
By the way, Bernanke really dislikes CNBC (can not be confirmed). Bernanke is willing to do anything to get rid of CNBC. Congress, take your shot.
one might add, all completely legal, all completely non-violent, all within the rights & responsibilities of being an informed citizen-consumer.
hell of a shot you got there SS
The Banksters put a gun to THEIR heads, and warn us that if they pull the trigger, we'll REALLY find out how bad things can get.
I say let's call their bluff, stop the extortion, and let the chips fall. Audit the Fed, and no more BAILOUTS!
Then we can bury the Oligarchs, stop trying to re-inflate a self-destructive bubble, and get on with constructive innovation of products and services that actually provide value.
Otherwise, we are Pompeii; if we ignore the warnings long enough, we expedite our doom.
Am I reading this right? The banks have submitted a brief to the court stating that they will only be able to remain in business if they are permitted to hide their financial condition?
Seems a strange way to run a financial system
It doesn't really matter whether the FED gets audited, or how, or when, or not. Everyone commenting here already knows that the banks are insolvent and that the CONfidence game of the DOW and the stress test sham and the FASB accounting rule changes are designed to hide that, and whether or not a FED audit may shed some light on that reality or not is immaterial at this point.
Either way, the central banks are planning to crush the dollar, and by extension US sovereignty, and if the FED gets audited, the veiled threat from Benny B and the CHA comes true and "they tried to warn us", but if the ruling gets stayed they delay the inevitable a little longer, but the dollar still gets tanked.
It's been decided that the US will be dismantled and the Sovereign Nation State replaced by "a more integrated and sophisticated global civil governance" which will be headed by a centralized economic power and as power corrupts, and absolute power corrupts absolutely, this form of new age globalism will emerge as global Fascism.
On a long enough timeline, this is the most likely scenario.
The "end of the recession" and the FDIC list of potential bank failures explodes from 300 to 400 plus in 90 days?
I thought banks are the "canary in the coal mine" that shows the health of the financial system, of which consumers rely on?
In 90 more days it will go from 400 to 500. Then 500 to.........
End of the recession? Bernanke said that-----and he gets reappointed? Good job Bernanke for patting yourself on the back, you bum.
The "recession" is ending because GDP will rise on the back of government spending. Of course GDP does not count the debt required to pay for that spending.
In the real world, we are still losing more jobs than we create. Banks who do not have government backing are still failing. Delinquencies and foreclosures are still rising.
This bullshit has got to stop before the entire county goes 'postal'. As for me, I'm taking bids to dig a moat around my humble cave.
August 27th, 2009
Via: Bloomberg:
The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot.
The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identities of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.
“The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.”
The Fed’s “ability to effectively manage the current, and any future, financial crisis” would be impaired, according to the motion. It said “significant harms” could befall the U.S. economy as well.
The central bank didn’t say when it would file its appeal.
Fed lawyer Kit Wheatley told Preska in a conference call today that she did not know how long it would take for the Fed board to search the New York Fed for records.
“We really don’t know what’s in New York,” Wheatley said. “We don’t control the system of record-keeping in New York.”
The Standard
The Fed’s lawyer went on to say that she did not know what records would fall under a “delegated function,” which would be a task assigned to the New York Fed.
Preska interrupted Wheatley, saying that “Ms. Wheatley, I held that’s not the standard. You didn’t search under the regulation. You’re supposed to search under the regulation.”
Preska scheduled another conference call for 2:30 p.m. today to discuss the schedule for a search of the New York Fed.
“Nobody is going to deny you your right to an appeal,” Preska said on the call, “We’re going to do it expeditiously, not in a piecemeal fashion and hand it all off to the Second Circuit.”
The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under the emergency programs, saying disclosure might set off a run by depositors and unsettle shareholders.
Either Zero Hedge is slow or is going thru a Denial of Service attack...
They systematic raping of the US taxpayer continues. The entirety of the US financial market is based on keeping the US taxpayer ignorant of the truth. The US taxpayer should have the right to know the truth and make an INFORMED DECISION on what to do with THEIR MONEY. If the only reason an institution exists is based on the ignorance of their "customers", they don't DESERVE those customers - the customers are acting in GOOD FAITH where as the institution isn't.
We need a strong leader to lead us into a revolution to take our country back from entities like The Clearing House Association!!
I think should keep in mind that the banks were just "Testing" the discount window to remove the "stigma". How do I know this? They told us.
I can't let these guys get away with this any longer. I think we need raise significants of money to question the solvency of the banks . We need to run ads in major news outlet that will accept the content.
The full page text would read something like this...
To the following CEO's ....
We at xyz organization have assumed that your instutution is insolvent and are unwilling to do any business with you until you accurately disclose the true market value of your assets on and off balance sheet and all the sources of your funding including the emergency fed window....
Does anyone including ZH want to cooridinate this effort and accept my measly $1000 donation....
I know it is popular to hate on the banks, but they do make a point.
The question policy-makers should answer is what it is they're trying to accomplish?
Are they trying to maintain a mediocre, status quo banking system where some are allowed to live off life support?
Or are they trying to create a strong banking system backed by strong assets, but with some short-term volatility?
The weak banks (i.e. the ones on the government dole) could get trampled to extinction. Assets could shift from weak banks to strong banks.
If the only reason that they exist is due to deceipt, can you argue they deserve to exist?
No offense, but I'd like to know the effective point you think that the banks are making-- because most of us are wondering which planet have you been living on the past year.
This not just a status quo, mediocre banking system we are talking about here. We are talking about a banking system so abusive and so poorly run that most of the giant TBTF banks would be insolvent-- if not for using pretend accounting principles and getting enough capital to maintain the zombie state.
Right now, the policy has been for the abusers to take capital injections, raise equity in a manipulated market, and get free funding from the Fed. Meanwhile, the Fed is using Barry the Wonder Magician to back door monitizing debt the keep the Treasury market alive-- and buying toxic agency MBS and making massive loans while taking crappy collateral.
The biggest problem that I have is that the Fed, Treasury and the Administration feel the need obfuscate the truth from the American people. What we see instead-- and fail to understand-- is that the Fed taking a "whatever it takes" approach to savinga collection of institutions that don't deserve saving. And financing this crap (because deficits don't come from thin air) are borne upon the taxpayer.
Let's end this crap NOW! Find a method of putting these junk banks into the receivership; provide all the capital necessary to the FDIC; bury the bondolders and dilute the crap out of equity holders if necessary-- or sell the pieces to the thousands of banks that are more conservative, prudent, and sound.
While there will be lots of pain to endure-- its much better than the lying and deceiving the American people by kicking the can down the road and having them liable for throwing money into a perpetual black hole. Forcing the Fed to be transparent on what collateral they are taking, as well as knowing where the loans are going would be a start.
When Capitol One tripled our barely used, carefully guarded credit card rate I not only cancelled it but wrote a letter about their TARP haul, patriotism, and betrayal, ending in "May God preserve our Nation" and "please never contact us again for any reason". Hard copy went in the US Mail to the President, my Senator (singular, MN you know), Congressman, and the Senators and Congressional rep of theirs in Virginia, along with the Attorneys General of my state and theirs. I also posted the text at least three places on the Web.
The 'complaint' as they amusingly refer to it has been passed up the chain where it will no doubt rot as an object of amusement, pity and derision. I am well educated, well aware of the facts and simply wanted to voice my opinion in the appropriate fashion. Oh, and never ever transact business with these people again. That too.
Anyone else???
Oh here's me prescription (laughable, I know):
1. Put public agents behind bank lending desks and insure loans to regular businesses (the RFC solution from the 1930s after the Chicago and Detroit bank collapses, which we seem intent on failing to discover for exactly as long as it took back then–about three years from the crash).
2. Progressive bond haircuts. Let US citizens with incomes less than (pick a number) $500,000 apply for properly income-graduated tax refunds to make up some of the bond losses. Let the rich take the full writedowns.
3. Strengthen safety nets and spend on worthy infrastructure.
--Jim in MN
The very last connection I had to the TARP 19 was an Amex that I rarely use.
A couple weeks ago I got a notice in the mail that my rate was going up (although I never carried a balance) and my late fees were going up (although I have never been late on the card, shit, I barely use it).
I called them up to cancel and thanked them for reminding me that I still had the card so I could cancel it.
I also told them I canceled because no on accepts the fucking thing because they gouge their merchants.
Like they didn't cause the systemic collapse, like they can stop it now. They are just looking for someone to blame (other than their own fat fannies) when the shtf.
One thing that gets lost in all this noise is the fact that the Fed is owned by the banks.
One of its purposes is to ensure the survival of its member banks.
Is it evil for the Fed ( or any central bank) to support itself(its members)? I don't know.
If the Fed funds its members losses, then in effect the banks collectively fund their own mistakes. In the current situation the banks losses are so great that govt programs are required to supplement the Feds own emergency aid. But, the principle at stake in the current discount window borrowings FOIA relates only to the FED portion
In this particular case the Fed extended emergency funds (non gov't funds) to its members. That it needed to do so is a direct result of its ineptitude and it deserves to be disclosed, but (until this ruling) a right did not exist for taxpayers to demand the details of those discount window borrowings.
So it's rational for them to defend their secrecy, and to state the obvious and list the risks to their members as part of a secrecy defense.
I believe they're wrong not to disclose, but only because I believe shareholders have a right to know if their banks borrowed at the discount window, and currently since no one is forcing the individual banks to self disclose the Fed is the next best source. I'm not sure if I believe the Fed is obligated to disclose details of its emergency programs.
The banks should disclose this information themselves and that is something the SEC can require separately, and immediately, in tandem with this FOIA request. Self disclosure by the banks is a more critical issue in my mind, since it would be universal and would result in an end run around FED secrecy without the need for a prolinged court battle.
At the same time the banks should be required to disclose any support they've received from all gov't programs. Again, the SEC can require this immediately.
In addition to the SEC, other state banking and federal regulators can demand this information be disclosed immediately.
We can then cross check the disclosures to the gov't disclosures as we strive for full transparency.
This is a boring and tedious fight for information, and I suppose fuck the fed, and I hate the fed, and kill the Fed tantrums help relieve some anxiety, but they make for a pretty tedious debate.
What's tedious is responding to shills
"I believe they're wrong not to disclose, but only because I believe shareholders have a right to know if their banks borrowed at the discount window"
CHA is claiming that disclosing the information could lead "counterparties to make collateral calls and lenders to accelerate loan repayment or refuse to make new loans." If CHA is worried about that, it's because those counterparties already have the right to make those collateral calls or accelerate those loan repayments. I.e., under the terms of the EXISTING CONTRACTS that at least some CHA members have, the counterparties would have taken those steps if they had accurate information. IOW, at least some CHA members are deceiving the counterparties to their contracts in order to avoid complying with those contracts.
And, according to this brief, they want to continue that decpetion and to deceive FUTURE lenders who they claim will "refuse to make new loans" if they knew about that member's borrowing at the Fed window.
Now, presumably, the party who will be making the loan to a CHA member is sophisticated enough to include covenants and other protections in such loan that would include (directly or indirectly) the CHA member's need for Fed Funds. And CHA has said that if current counterparties knew about its members activities they would accelerate loan payments. But not only do they want to avoid that, they want to deceive new parties into making new loans that the CHA member does not intend to comply with. (Ditto for counterparties that have the right to make collateral calls.)
How is the source of the money relevant to the CHA member's not disclosing relevant information to their current and future lenders (and those who enter contracts that have collateral calls)? Are you saying that it's ok for CHA members to deceive counterparties to their current and future contracts?
The brief says "has caused" depositors, counterparties, etc to do those things.
It's the warning that if you make us disclose you'll be risking another Bear and Lehman.
The claim is complete BS of course, but it's what you'd expect the defense to argue.
I took a look at JPMs June 10Q and they do disclose that they are taking money from the Fed in various forms including discount window borrowing (See note 19 and p 59 if you're interested).
The banks institutional customers all know who got money through these programs. They are disclosed, to some degree,in their financials.
The issues here are - 1. The Fed doesn't want to disclose this information, since interested people can get the information from the banks themselves and they feel no need to make it easier for anyone to get the consolidated view, and 2 Banks PR is terrified that their less saavy customers will panic and disrupt the banks operations, (i.e withdraw deposits) or dump the stock.
The wild card here is if the Fed numbers don't agree with what the bank's have already disclosed, there will be unintended consequences.
I'd like to see the Fed disclose.
I know the declaration says "has caused". But that part of the declaration makes no sense unless CHA is essentially saying that the same thing will be likely to happen to at least some of its members. Otherwise, it is putting an irrelevant threat into its declaration. IOW, it's overtly BSing the judge and trying to get her to rule its way by misrepresenting the dangers involved. I think your reading (that CHA isn't saying it would probably happen to them, it's just talking about some speculative potential danger) would be worse than what I said they were doing. Any judge would be really pissed if that's what they are doing.
If they are only worried about their unsophisticated customers, why put their concerns about their CURRENT AND FUTURE creditors into the declaration?
And why worry about their current lenders and counterparties if they are not in violation of some provision in their contracts that would trigger a loan acceleration or collateral call? You can't do those things just because you are worried about some event. The events that allow those things are clearly specified in the relevant contracts. They have to have actually occurred. So, either they are worried about actually being in breach of current contracts or else the whole line in the declaration about disclosing the information might cause current counterparties to acclerate loans or make a collateral call is BS.
Good points
I don't think they expect to win the appeal I think
they're just going throught the motions. The judge can dismiss it out of hand, as you point out, with the BS
argument.
But
If they are in violation of some of the covenents they can't possibly be looking to the court to shelter them from their contractual obligations.
To the contrary, they would have to demonstrate to the
judge that they are not fraudulently witholding
information from their counterparties.
The judge would be complicit in the fraud if s(he)
upheld the appeal and allowed the information to
remain secret knowing its suppression was defrauding
the petitioners counterparties.
Thanks for the challenge. I'm not sure if my
assumptions are valid and while I think I'm reading it
right I'm ready to be called on this if I'm wrong.
Good points
I don't think they expect to win the appeal I think
they're just going throught the motions. The judge can dismiss it out of hand, as you point out, with the BS
argument.
But
If they are in violation of some of the covenents they can't possibly be looking to the court to shelter them from their contractual obligations.
To the contrary, they would have to demonstrate to the
judge that they are not fraudulently witholding
information from their counterparties.
The judge would be complicit in the fraud if s(he)
upheld the appeal and allowed the information to
remain secret knowing its suppression was defrauding
the petitioners counterparties.
Thanks for the challenge. I'm not sure if my
assumptions are valid and while I think I'm reading it
right I'm ready to be called on this if I'm wrong.
Translation: If any one of our banks are broke because they are stupid and made bad business decisions, John Q. Public should be completely in the dark and should be completely unaware of the solvency of the institution where his money is being held.
Does the Clearing House problem mean that our Auto Drafts for utilities each month will quit working?
Does this mean the Auto Drafts for our Utilites and billing each month quit working?
Just remember guys, Einhorn is ALWAYS Finkle.
Does anybody know the time line for the court coming to a decision on this?
How do the CEO's and CFOs attest their financial statements? Seems that accessing one or more of the prop programs is material information for the shareholders.
Mark to Model.
This means instead of pricing your assets to the market price (mark-market) you basically state your assets for what you think they are worth.
Example:
If you tried to sell an asset using mark to market you might get 20-30 cents on the dollar. Mark to model you state it at par because thats what you think it's worth.
I want you to realize when banks magically became profitable. One minute the banking system is going to collapse, the next minute they suddenly are turning record (blowout) profits.
This is what brought Enron down.
I understand mark to model and hold to maturity. The question is whether the finacial reports "present a true and fair view, in all material respects,..."
Think Enron barges.
This bullshit has got to stop! The root cause of all this is today's currupt politics. Democrats are no better than Republicans. Behind every politicians portfolio s is the unbelievably high ROI, curtosy of banks, insurance, oil, healthcare, and other special interest. All end up costing you and I. It is time to take back our county.
Both political parties have successfully distracted the populace from this issue by sending up the healthcare smokescreen. When the assholes raising hell about healthcare spend 0.01% as much time on finance and realize the banksters are sending us to hell in a handbasket, there should be pitchforks and torches at the steps of the capitol tomorrow morning.
The first step in moving this county back to the constitution is to audit the fed, prosecute the banksters and politicians, abolish the fed and return states rights.
As for me, I'm taking bids on building a moat around my humble cave.
we should organize a civil take over of the Fed, an act of civil disobedience. A planned and declared march on the Fed. Physically stop their transactions, just hold back their hands from the keyboards. It's the only way to be sure.
5 thousand people would be enough, the largest flash mob in history, it would be a symbol of the discontent. People in power would take notice.
Flash mob the fed!
"have fun storming the castle!"
http://www.youtube.com/watch?v=d6m7NR6iYjg&feature=related
Alright let's start the hangings... "NOW"
I have plenty of wood and rope to pitch in and help...
I've completely had it with these scumbag phucking thieves of the 21 st century...
I wouldn't feel guilty one bit executing these people to save our future United States of America...
If that's what it takes to grab the attention of our elected officials so be it...
I hope the people at the very top read this message loud and clear...
< WE ARE WATCHING YOU >
with all due respect for your anger, i don't know if you realized this, but the last administration did an ironclad job at defusing & co-opting your mantra at the end.
plus, i also know if you've ever had the misfortune of hearing hundreds of screaming liberals shout 'the whole world is watching', but i have and let me say that the cadence created is pathetically cheesy.
take a few cues from 40 tylers & a marla and put some creativity into your righteous rage my friend!
if nothing else, one thing's for certain,
it will definitely lower your chelesterol levels.
ZH....thanks for keeping this article top all day... def. needs to get all the attention in can get..
outrage fatigue setting in...
hhaha best comment I've read!
1. The US Congress has the option to buy back the FED at $450 millions (per Congressional Records).
When the Congress does this, it will own back the billions of US Government Bonds held by the FED.
The US Government will actually PROFIT by buying back the FED! Also, the US government no longer has to pay interests to the FED owners on those bonds
http://whistleblowers.freehosting.net/federal_power.htm
Shouldn't we be focused on forcing Congress to buy back the Fed? Can someone explain the implications of this buyback and why we are not doing it. Thanks.
Any credible source for the claim that the US has the option to buy back the Fed for $450 million? Do you have a link to the part of the Congressional Record that says this?
(NB: even if you do, that would not mean that the US has that right. Lots of stuff gets put in the CR. At best, it's legislative history which may have some bearing on how a law is interpreted but is not binding. Often, it's not even that important or relevant. In any case, although I've seen the $450M rumor before, I've never seen a link to the part of the Congressional Record that says this and would be interested in reading it.)
Old Codger
use small community banks- the problem with credit unions is, while they're non profits and don't pay the taxes the banks do, they use the funds that would've gone to taxes- to support the US Dems- who is, as we all know, really the US fascists.
You've got it wrong. The DEMons are the commies. The ReTHUGs are the fascists. If you're going to participate in US politics, you need to use the correct nomenclature to demonize the other side and avoid dealing with the substance of any issue.
It's not that hard to find out which banks are on the list.
For example: from JPM 10Q June 09
p56 Borrowings from the Federal reserve- statement discloses that they are borrowing at the discount window. (it doesn't provide amount)
p156 Note 19 Other Borrowed funds details amounts borrowed from FHLB, under AMLF and TAF programs and direct from Fed. Total 73b at 6/30 ( this # may include discount window borrowings).
And so I guess....once the bank has loaned me (or my company) money....I should not have to tell them my current financial condition or else they might all of a sudden want me to repay them...which would not be a good thing. If they will go along with that then...we can both keep our secrets.
It's even better than that. Not only can you avoid any covenants in your current loan agreements that require you to notify your creditor of your problems, you shouldn't have to tell prospective lenders either. CHA says so.
Tyler,
Isn't this post one of the ones with most comments. It again shows that people [some] understand what the problem is and where the truth [together with garbage] are being hidden. At the Fed.
What is this any different from the criminals saying " You either do as I say or I am coming after your family"
Fear, fear, fear. Keep the pressure on and if this doesn't work, there are many fears or distractions, like H1N1, Korea, health care mob, right wing christians, Iran, code orange or blue or whatever, mexican mafia, food shortages, etc etc.
Please "Fear only fear itself"
Johny Q
Tyler,
Isn't this post one of the ones with most comments. It again shows that people [some] understand what the problem is and where the truth [together with garbage] are being hidden. At the Fed.
What is this any different from the criminals saying " You either do as I say or I am coming after your family"
Fear, fear, fear. Keep the pressure on and if this doesn't work, there are many fears or distractions, like H1N1, Korea, health care mob, right wing christians, Iran, code orange or blue or whatever, mexican mafia, food shortages, etc etc.
Please "Fear only fear itself"
Johny Q
come on you guys. can't you guys show some respect? Ted died yesterday. They are lugging his fat body all over the place now. Its been on the boob toob all day long. At least show some respect by laying off of the snide remarks about crooked business dealings for one day, for crying out loud. to show proper respect for the late lion of the senate by zero intelligence....:)
I'll show some respect when they fly him in the Thanksgiving Day parade.
there's a phrase in the technical world for this circumstance. It's called "FUD", as in "they're just spreading FUD about the competitions product".
_F_ear
_U_ncertainty
_D_oubt
That's what the we're getting from the fed, FUD.
Every state should begin the process of establishing a state bank a la North Dakota. Tax revenues and fees would belong to the people from whom they are taken. Existing cash deposits would then be reserved for a benevolent fractional reserve lending platform, the interest earned would be returned to the people in 'their' bank. Taxes then could be lowered as velocity increases, benefiting the people instead of the inglorious basterds.
Fractional reseve system is the ROOT of the problem. It can't be made benevolent. It needs debtors like a crack whore needs crack. It replaces wages and giving and recieving with loaning and enslaving.
Just use the credit unions you have now. They are non profit, at least in my state, and owned by the depositors.
You are right, the Fed is a white elephant.
GS is not on the list. Just tell the CHA to bring it on Mofos and then make GS the only bank in America. The govt will like that plan.
How do you "audit" an entity with a one-sided balance sheet. When you audit a corporation, it's hard to hide stuff because the money has to come from somewhere - they can't print money and make one-sided balance sheet adjustments. An audit would be very difficult in my opinion but I'm all for bringing this monkey out into the spotlight.
You audit it by following the money.
The same way you get the Swiss to Bernanke their customers.
Well let the rumors begin here and begin now:
ABN Amro, Bank Of America, The Bank Of New York, Deutsche Bank, HSBC, JP Morgan Chase, US Bank and Wells Fargo are trying to block transparency because they are all on the verge of collapse -- right now.
Right now, ladies and gentlemen these 8 banks are only weeks from collapse.
If they do not provide total transparency within the next week, then withdraw *all* of your funds immediately, because the collapse is imminent.
A refusal to provide transparency = an admission of imminent, impending collapse.