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Another Conspiracy Theory Becomes Fact: The Fed's "Stealth Bailout" Of Foreign Banks Goes Mainstream
Back in June 2011, Zero Hedge first posted:
which we followed up on various occasions, most notably with
- "How The Fed's Latest QE Is Just Another European Bailout" and
- "The Fed's Bailout Of Europe Continues With Record $237 Billion Injected Into Foreign Banks In Past Month."
With the following key chart:
Of course, the conformist counter-contrarian punditry, for example the FT's Alphaville, promptly said this was a non-issue and was purely due to some completely irrelevant microarbing of a few basis points in FDIC penalty surcharges, which as we explained extensively over the past 3 years, has nothing at all to do with the actual motive of hoarding Fed reserves by offshore (or onshore) banks, and which has everything to do with accumulating billions in "dry powder" reserves to use for risk-purchasing purposes (alas understanding that would require grasping that reserves are perfectly valid collateral to use as margin against purchase of such market moving products as e-mini futures, which in turn explains why traders usually don't end up as journos).
Fast, or rather slow, forward to today when none other than the WSJ's Jon Hilsenrath debunks yet another "conspiracy theory" and reveals it as "unconspiracy fact" with "Fed Rate Policies Aid Foreign Banks: Lenders Pocket a Spread by Borrowing Cheaply, Parking Funds at Central Bank"
Wait... the Wall Street Journal said that? Yup.
Banks based outside the U.S. have been unlikely beneficiaries of the Federal Reserve's interest-rate policies, and they are likely to keep profiting as the Fed changes the way it controls borrowing costs.
Foreign firms have received nearly half of the $9.8 billion in interest the Fed has paid banks since the beginning of last year for the money, called reserves, they deposit at the U.S. central bankaccording to an analysis of Fed data by The Wall Street Journal. Those lenders control only about 17% of all bank assets in the U.S.
Moreover, the Fed's plans for raising interest rates make it likely banks will see those payments grow in coming years.
Hmm, we almost feel like we should bring up the dreaded "P" word considering the bolded sentence is a recap of what we said in February of 2013 in "How The Fed Is Handing Over Billions In "Profits" To Foreign Banks Each Year." That's ok, though: imitation, flattery and all that...
So here is Hilsy "figuring out" what we have been explaining for over 3 years!
Though small in relation to their overall revenues, interest payments from the Fed have been a source of virtually risk-free returns for foreign banks. Large holders of Fed reserves include Deutsche Bank, UBS AG, Bank of China and Bank of Tokyo-Mitsubishi UFJ, according to bank regulatory filings. U.S. banks including J.P. Morgan Chase, Wells Fargo and Bank of America Corp. are also big recipients of Fed interest payments, according to the filings.
"It is a small transfer from U.S. taxpayers to foreign taxpayers," said Joseph Gagnon, a former Fed economist at the Peterson Institute for International Economics. The transfer, he added, was a side effect of Fed policy, not a goal.
Actually it is a goal, but that would lead to a whole lot of embarrassing congressional hearings which the Fed would rather avoid, plus nobody really "gets" it. The reason why? Apparently things are so "complex" that anyone who figured it out years ago was clearly a conspiracy theorist:
Behind the payments is a complex interplay between new government regulatory policies and new methods the Fed has developed to control short-term interest rates.
The Fed has pumped nearly $3 trillion into the banking system since the 2008 financial crisis, increasing banks' reserves, in efforts to stabilize markets and boost economic growth.
Since 2008, it has paid banks interest of 0.25% on those reserves. The Fed affirmed this month that the rate it pays on reserves will be the primary tool it uses to raise short-term borrowing costs from near zero when the time comes, likely next year.
In part because regulatory requirements discourage domestic banks from holding more cash reserves than they need, many of the reserves created by the Fed are held by foreign banks.
In other words, the Fed-funded risk-free carry trade finally goes mainstream. Of course, all those who read ZH in 2011 will know all of this by now:
The interest payments totaled $4.7 billion so far this year and $5.1 billion last year, and will increase over time as the Fed raises rates. The Fed remits most of its profits to the U.S. Treasury, and the rising cost of the interest payments could put downward pressure on the amount the central bank sends to taxpayers each year, the Fed has said.
Some observers say this could become a political challenge for the Fed, especially the payments it makes to foreign banks.
"The fact is that the Fed is going to be paying very large amounts of interest to banks," said William Poole, a senior fellow at the Cato Institute and former president of the Federal Reserve Bank of St. Louis. "It's highly likely that some politicians will notice that and given the proclivity of some politicians anyway to demagogue issues, the Fed is going to have some political explaining to do."
Some Fed officials also have expressed concern about how these payments will look. "I think the optics are very difficult to defend and might get us into trouble," James Bullard, president of the Federal Reserve Bank of St. Louis, said in an August interview with MarketWatch.
Since 2009, foreign banks have earned roughly $5 billion by borrowing dollars cheaply, often at less than 0.10%, in short-term funding markets and depositing those funds at the Fed for 0.25%, according to the Journal analysis. That estimate doesn't take into account the costs of raising money through other means, overhead and taxes, which affect net income.
But don't blame the banks - they are merely doing what the Fed is encouraging them to do. And after all who wouldn't collect billions in risk free cash?
A spokeswoman for one bank engaged in the trade, Bank of Tokyo Mitsubishi, said that the growth of excess reserves parked at the central banks is a natural consequence of the Fed's policy. "The share of excess reserve balances held by BTMU has been in alignment with its business footprint in the U.S.," she said.
Deutsche Bank, which had one of the largest reserve balances at the Fed as of June 30, declined to comment. UBS didn't respond to requests for comment. A Chinese official close to Bank of China said it has been parking funds at the Fed in order to help it comply with liquidity requirements in its home market.
The foreign banks' activity is "entirely legitimate because they are providing a financial service and they are taking a spread," said Lou Crandall, chief economist at research firm Wrightson ICAP.
Sadly, the WSJ ends just before it gets good. So without further ado, here is what happens if and when one extrapolates a rising rate environment in terms of Fed handouts to foreign banks, from what we said in February of 2013:
We show the surge in the foreign bank cash level, as well as the cumulative cash interest paid to these banks assuming a weekly cash interest payment. What the chart shows is that from December 2008 through the last week of January, the Fed has paid out some $6 billion in cash (red line) to European banks simply as interest on excess reserves.
But that's just the beginning. If we are correct in assuming that QE3 will be a replica of QE2 when all the new reserves created ended up as cash on foreign bank balance sheets, it means that we can quite accurately forecast what the total foreign bank cash position will be on December 31, 2013 (as the Fed will certainly not end its open ended monetization of the US deficit before then, or likely, ever). The result: just under $2 trillion in cash held be foreign banks operating in the US, which also means that in calendar 2013, the Fed will fund and subsidize foreign banks a blended interest payment of $3.5 billion! This is entirely separate from the $2 trillion liquidity subsidy that Bernanke will also have handed out to keep these banks afloat, and is $3.5 billion that will flow right through the P&L and end up in the pockets of offshore shareholders who otherwise would very likely be wiped out had it not been for the Fed's relentless efforts to bailout foreign banks.
And since it is improbable that excess reserves held by any banks will decline at all in the coming years, one can also assume that the annualized interest paid to foreign banks, which would amount to at least $5 billion pear year, every year, will continue indefinitely as a direct Fed subsidy to the bottom line of Foreign banks.
All of this, of course, ignores what happens should the Fed hike interest rates across the board, which will also mean rising the rates on IOER, once inflation finally strikes: simple math means a 1% IOER means some $20 billion in interest paid to foreign banks, 2% - $40 billion, 5% - $100 billion paid to foreign banks, and so on. Putting these numbers in perspective, let's recall that Italy's third largest bank just got a €3.9 billion bailout (its third), and has a market cap of some €2.9 billion.
We can only hope someone in Congress asks Ben Bernanke in two weeks just under which Fed charter it is that the Fed is more focused on generating profits (not just trillions in excess liquidity) for European banks, than on opening up consumer lending which has been stuck in "petrified" mode for the past 4 years, with the total amount of loans outstanding currently at all US banks - foreign and domestic - at levels last seen the week Lehman filed for bankruptcy.
Obviously, nobody asked Bernanke and nobody has asked Yellen this simple question, because until last night apparently nobody aside from the Zero Hedge community had any grasp of what is going on.
That said, we doubt that anyone in control will ask any related questions in the near of not so near future even with Hilsenrath's "How The Fed Is Bailing Out Foreign Banks For Dummies" primer, because let's not forget - the same banks that control the Fed are also the same banks that purchase politicians at every possible opportunity (see for example: With Cantor Down, Which Other Politicians Has Goldman Invested In?).
In fact, the only good news from Hilsenrath's report is that yet another conspiracy theory has been documented as unconspiracy fact. Then again, Zero Hedge readers knew all of this over three years ago, for free.
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LOLOLOLOLOLOLOLOLOLOLOLOL
That is just a security company to protect buildings.
What? You think they send police to congress to beat them up?
lololololololololololol
Please, the bank lobby is stronger than ever. Hilsenbarf printed this because those who pay attention already know this and the other 95% of the iSheeple are too stupid to care.
I really don't believe the general public can even begin to comprehend the major underlying issue here and that is that the Federal Reserve has gone rogue. Greenspan, Bernanke and others are have all but or are in the process of destroying our reserve currency status. The bailing out of foreign banks by the US tax payer is also treason pure and simple. Not one person voted on this. Not one. The devaluing of the dollar is also in my opinion damn close to treason and they have been doing that for decades. No one else really gives a damn save for a few people who understand where this all ends up.
House finance committee and senate banking commitee pre-approved anything Fed did and they still do
Whether they understand what they are pre-approving or not, it is a different story.
I am expecting now propaganda that Fed misled congress which will blame everything on the Fed.
I am expecting media to go furious on the Fed now with coordinated attacks,
We both know that the Federal Reserve does not outline anything to Congress anywhere close to the reality that is going on. ie We are going to bailout foreign banks with tax payer money.
Correct.
But congress never forgets that.
When the shit hits the fan, congress then says:
They misled us. It's their fault.
But, regardless, Fed must get approval from congress for anything they do.
Do they lie to congress to get to do with they do? Yes.
Mind you, Geithner was the actual chairman giving orders, not Bernanke
Paulson and Geithner. Imho nothing will ever change their course until one these Fed Reserve people is jailed. We are a long way from that my friend and never mind the other course you predict.
What I observe is different.
I see bankers losing power every day, that is my interpretation of what i see
I suspect there is going to be a large turnover of sitting congress folks after november just sayin'
Remember when you create the money it is like taking it from the left pants pocket and putting it into the right pants pocket when your hand that is doing it is things like special interest groups, lobbists, etc.
Election time. CONgress will lie to protect their own hyde.
Who is the sacrifice...
Lookin like the FED.
everybody, congress never kicks over rocks it knows will blow up the facts of a nation ruled by a few elites who are not even citizens in many cases..foreign born in many agency jobs in DC for one. this is the age of the illusion of .gov being for this nation..but many on zh know this, yet none has any idea how to act on it..except maybe some guy in PA using stazi troopers for target practice..seems to have escaped the LAW so far ...
Have you seen some of the people we elect to Congress? Most of these will still not get it as the system crashes on their heads.
What will the over under on the exchange rate between FRNs and a US Treasury dollar when the Fed is collapsed as the fall guy for ushering in the SDR?
SDRs are impossible. Humans cannot get along that well to the point of accepting a world government.
SDR = world government
Never gonna happen. We'll have wars, incessant wars
Does that mean in your mind that the next monetary system will be chaos due to the banker and MIC totans fighting it out for that global control top spot?
After watching the Underworld movies, I can't but help to draw these comparisons:
Vampires:=bankers
Werewolves:=military
it is currently undeway
Here, let me start the rout.
THE FED, ALWAYS WRONG, BUT NEVER IN DOUBT. There that should stir up some trouble.
No it doesn't mean that at all.
It means that the Fed is reminding Deutsch Bank, Societe Generale, UBS and a handfull of European banks that when they are moving away from the Dollar they are eliminating a PROFIT to them rather than a liability.
The US Fed was NEVER ABOUT THE US. It was always about a European Banking Hegemony in which the like of JP Morgan and the Rockefellers could expand their international holdings and influence.
Heads are going to roll, huh.
Ratfuck scumbags.
if we only knew who withdrew .5 trillion in Money M funds in oct of 08- or why Chris Cocks head of sec did nothing to stop naked shorting of equity..put that in with why bldg 7 came imploding down, conspiracy is in a bull market..a nations wealth stolen and FBI and DOJ look the other way..free corzine.
Bush told the SEC to leave Wall Street alone.
Ebola in Dallas?
"A patient in a Dallas hospital is showing signs of the Ebola virus and is being kept in strict isolation with test results pending, hospital officials said Monday.
Texas Health Presbyterian Hospital in Dallas said in a statement Monday that the patient's symptoms and recent travel indicated a case of Ebola,"
http://abcnews.go.com/Technology/wireStory/dallas-hospital-monitoring-pa...
Well....we've done everything we could to bring it here.
Fly Air Ebola.
Seven years before the founding of the Fed, some of its architects publicly admitted why they wanted a central bank to exist: power. Bankers LOVE power and used to crow about it in public committees.
If a "conspiracy theory" can be spun about banks and bankers, it's probably true.
"In 1906, The New York Chamber of Commerce charged a special committee to report on how a central bank might work. The committee was composed of bankers, naturally. John Claflin, chairman, was a member of the Jekyll Island Club. Jekyll Island was where the conspiracy against the American people, The Federal Reserve, was hatched in 1908. The vice-chairman of this special committee was Frank Vanderlip, one of the architects of the Federal Reserve.
In the section titled “Advantages of a Central Bank”, we find a rather stunning admission about what bankers of all ages desire:
“By the control of its rate of interest and of its issues of notes it would be able to exert great influence upon the money market and upon public opinion. Such power is not now possessed by any institution in the United States. “
The Currency Report By The Special Committee Of The Chamber Of Commerce Of The State Of New York
October 4, 1906
Judging by google’s results, no one in the past 100 years has paid any attention to the above quote."
http://unicornpoo.wordpress.com/2012/06/25/what-bankers-want/
It goes a lot furthur than 1906. It has it's roots in the 1870's and free silver movement. The panic of 1893 is where the choo choo train tycoons came on board with the plan also. They had to squash the free silver movement aka people's money first politically before they could set up central banks which came next once you were officially off a bimetal standard and only on gold. You can easily hoard and control gold reserves because of the scarcity while issuing not so scare paper notes backed by them. Silver there was too much available to hoard it all away in vaults to squash the free silver market and keep using it as money.
The election of 1896 was the first step in the plan to bring the politicians onboard. Federal Reserve system was phase II.
Most people don't realize it but the Wizard of Oz was an allegory about the free silver movement and farmers plight. The movie changed a lot of the key symbollism from the book like the fact Dorthy wore silver slippers not ruby red slippers.
It is an interesting historical read (read it strictly for historical perspective not ideology) on the things leading up to since almost nothing ever just happens without precursor events that build up to it.
https://en.wikipedia.org/wiki/Free_silver
https://en.wikipedia.org/wiki/Panic_of_1893
Another important piece for a historical and modern perspective in all this is the New York Clearing House.
https://en.wikipedia.org/wiki/New_York_Clearing_House
The New York Clearing House Association, the nation’s first and largest bank clearing house, was created in 1853, and has played a variety of important roles in supporting the development of the banking system in America’s financial capital. Initially, it was created to simplify the chaotic settlement process among the banks of New York City. It later served to stabilize currency fluctuations and bolster the monetary system through recurring times of panic.
...
Between 1853 and 1913, the nation experienced rapid economic expansion as well as ten financial panics. One of the Clearing House’s first challenges was the panic of 1857. When the panic began, leaders of the member banks met and devised a plan that would shorten the duration of the panic–and more importantly, maintain public confidence in the banking system. When specie payments were suspended, the Clearing House issued loan certificates that could be used to settle accounts. Known as Clearing House Loan Certificates, they were, in effect, quasi-currency, backed not by gold but by discounted county and state bank notes held by member banks. Bearing the words “Payable Through the Clearing House,” a Clearing House Loan Certificate was the joint liability of all the member banks, and thus, in lieu of specie, a most secure form of payment.
The certificates appeared in smaller denominations during the panic of 1873, and continued to be used as a substitute currency among the member banks for settlement purposes during panics in subsequent decades, including the Panic of 1893. Although they represented a potential violation of federal law against privately issued currencies, these certificates, as a contemporary observer noted, “performed so valuable a service…in moving the crops and keeping business machinery in motion, that the government…wisely forbore to prosecute.”
In 1913, Congress passed the Federal Reserve Act, thus creating an independent, federal clearing system modeled on the many private clearing houses that had sprung up across America. The new monetary system, with its stringent audits and minimum reserve standards, assumed the role that clearing houses had played in offsetting the nation’s fears of future panics.
...
The clearing process todaySince the inception of the Federal Reserve System, the New York Clearing House has concentrated on facilitating the smooth completion of financial transactions by clearing the payments involved. The clearing process, while highly structured, is in theory, quite simple. Member banks exchange checks, coupons and other certificates of value among themselves, after which the Clearing House records the resulting charges to their accounts. Entries are posted on the books of the Federal Reserve Bank of New York to settle any differences. Settlement is prepared each business day at 10:00 a.m. after approximately three million pieces of paper have been presented for payment. The Clearing House also facilitates exchanges among non-member banks. Through the City Collection Department, non-member institutions can gather their checks and other items, which are presented to the Clearing House by member banks and the Federal Reserve Bank of New York, and pay for the items received.
In recent decades computers have been performing the payment clearing that once required paper processing. The Clearing House Interbank Payments System, or CHIPS, began operation in 1970. The New York Automated Clearing House, or NYACH, followed in 1975 and became the Electronics Payment Network in 2000. The Clearing House Electronic Check Clearing System, or CHECCS, was added in 1992.
...
and power it did provide, look at what the USA achieved in the last 100 years, how much power it gained as a nation.
it wasn't just for the banks who profited, it lifted a regional power to the status of world super-power within a century.
it provided power to the US govt to reach stardom, and profits to the banks who provided that funding, everybody wins - until the model reaches its limits.
No mention in my local paper or on NPR radio about this news or the Goldman scandals.
It is obvious the powers to be are trying to bury any story related to the FED and the banksters as quickly as possible.
But what seems different this time especially with the Goldman tapes is that the public is finally getting a look firsthand at what goes on behind the scenes at the FED.
Before it was only conspiracy, but now it might be finally dawning on the populice that the FED and the too big to fails banks are one in the same. Lawless crooks.
The Fed EXISTS to fund banks, and was created SPECIFICALLY to bailout foreign governments. What did you think all that elbow-rubbing between Ben Strong and the Bank of England was all about?
The Fed FUNDED WWI for its owner banks - including JP Morgan as well as a number of foreign banks.
It has funded all the Wars of the 20th and 21st Centuries.
The Fed is not, never has been, and was never intended to benefit the people of the United States. Its creation was an intrigue intended to extend the life of a dying empire - the British Empire - and consolidate power in Europe.
It was NEVER for small town mom-and-pop USA.
New York Fed, helping banks and their prior employers, nahhh....
On other news, NY FED concludes reverse repo (yes, at 8:30AM on quarter-end, because this is a "liquidity" temporary transaction, not a criminal scheme to aid in fraudulent accounting and provide collateral to be repo'ed multiple times and used to short bonds of our own country, gasp) with over $400 billion in bids submitted, now subject to a cap of $300 billion, with more than 100 bidders.
Because no one needs collateral, and yields go up (gasp again) as a result of this bizarro world of NY FED shenanigans.
Bidders submitted bids of -0.20 bps, they are so desperate for collateral that they would pay the NY FED. Yet somehow the NY FED sees it right to pay these "players" for the right to use this collateral, instead of having a bidding process show if demand warrants payment or a fee.
If I had to list the biggest threats to my kids future, certainly the NY FED would be among the leaders. The destroyer of our economic future, to the benefit of their friends and past employers.
Empires suck wealth out of colonies...until get to point there is nothing left to suck and there won't be colonies anymore-can turn potentional enemies as South America turn. Only option left is give back what was sucked and keep colonies above water. If they, puppets, are smart they can start extort empire to be paid for doing oral job; Polish minister said they do it, until now, for free- $tupids
YOUTUBE - "ALAN GRAYSON AND THE FED"
Congressman Alan Grayson basically calls out the FED in 2010 for foreign lending and Ben Bernanke lies and dances around the questions. Its amusing and scary at the same time.
I always thought only congress desided where US tax payers money was spent? Next thing you know the banks will levey taxes on US citizens...
I always thought only congress desided where US tax payers money was spent?
Yeah.....in 1776. Not so much anymore.
You really need to do some studying.
The only reason we have an IRS and income taxes is to pay the federal reserve for the priveledge of using frn's.
"Next thing you know the banks will levey taxes on US citizens..." LOL Got that right off.....
These days CONgress passes the "Presidents Budget". They may change it a little but that's how it works. We the People are paying ($174,000 yoy) for these retards to rubber stamp anything the Executive promotes, money, policiy, wars, whathaveyou.Then the "agencies" use those funds to screw We the People in every imaginable way. Then if it appears necessary the Supine Court claims all is constitutional. Joy.
The tyranny emmanating from these obnoxious rogue government scoundrels can be heard everywhere in the world but America where the deaf and dumb line up every day for the shearing. Soon the slaughter begins. Already their para military units jokingly called police are practicing shooting citizens for not "obeying", and they are now militarizing the colleges and 'public' school system to complete the takeover.
And all this funded by your friendly independent and innocent money printers in the Federal Reserve Bank. Grandma Yellen is about to show us who our daddy is.
What total incompetence allowed, allegedly, one man to take down one third of the air traffic in the United States until October 13th? Where is the investigative reporting on this? Where are the pictures of the guy? Yesterday a family member, after 4 days waiting, flew back to Chicago from a Western state. Around St Louis the pilot told them to enjoy the view as the plane had to fly to O'Hara at 14,000 feet to avoid problems. How can this happen? Where was the security? Where was the redundancy of systems to keep air traffic flowing? If this can happen, maybe only 2-3 people can take down the electcal grid. The incompetency at government level is astounding. From the Obama Care website debacle, to the Va mismanagement, to the IRS mess to the President denying knowledge of the ISIS strength, Bengazi, and Fast and Furious...it's appaulling.
That's why we pay these guys (safty patrol). They're really good at what they do (picking pockets and noses). I hope the other guy's still out there (jason bourne on vodka martini's).
The "goal" of the Fed is to fund war. All sides, foreign and domestic.
Banks -> Fed -> War
The raison d'etre of The Mulotto, too.
When TBTF SWAP deals are called "bailing out" the foreign banks we are now outconspiratoring Guy Fawkes.
Hey, from where I stand, its clear to me that the Pax Americana "globalization" age, as played out by Reaganomics WS pumping/ Yen Plaza according, cum subsequent NWO Bushism/Clintonianism/GWB-WTO-Chindia favoured statusism, meant we are all in the SAME Oligarchy bath tub-Titanic, since Dear Henry's ping pong strategy and Oil patch shuttling created the international "extended trilateral"; aka including Chindia, and post-Berlin wall collapse, newly docile Russia.
The golden age of FED hegemony under Greenspan had begun !
And further, AS the GREENBACK is the RESERVE of this ship heading for financialized/derivative scammed-- "on all continents"-- iceberg country, the FED has a responsibility towards all those TBTF banks who have been invited to the "global" party since those early trilateral days, under "our money your problem" petrodollar umbrella.
Until shit hit the fans in Lehman collapse and all the dominoes now become unstable !
What part of that construct do the Tylers not understand?This has been the game plan all along !
The only problem is when the SHIT hit the fans of hubris and greed, the thieves start falling out, heading for the life boats... and it BECOMES "devil take the hindmost" logic!
And then History repeats : the American Charles V's neo-universal empire starts looking wobbly and the neo-Spanish Inquisition--NSA peeping Tom style-- starts raising peasant revolts worldwide; and the neo-Spanish Main Eldorado country invites the Buccaneers of all flags! --Ali Baba etc. and cyber wars galore!
The FED, in this global context, is NOT the bank of nation-state USA, its the bank of Oligarchy globalization--right from DAY 1.
Thats what Reaganomics/NWO was all about. And Maggie knew that, as she was the other spear carrier, with City and offshored Caymans cum Shetlands/Jersey etc.
Ha ha Tylers, you have discovered the logic of Guy Fawkes's attack on parliament.
Guy Fawkes today is Assange, Snowden, and now Putin !
May the fireworks begin !
Why do you use the same ideas as Tyler then claim they don't understand? I think you got caught up on a particular phrase then used it to construct a narrative to promote a division of understanding that exists only in your mind.
no, I am only saying that the "theory is not a theory", its a reality since 1973...and you are right ZH has demonstrated that argument time and again here.
But, ZH has an incoherent editorial style. Each Tyler seems to have his own pet thread and time line.
In the past, ZH has consistently said what I have said. In fact ZH confirmed my prior beliefs by giving me a financial back drop that I have come to better understand.
As I had no prior savvy about WS shenanigans, which were explained to me here on a day to day basis since late 2010.
I am sure I am not alone in experiencing this.
Oh there good for it. Just look at it as an investment in the past.
So when are the protests going to happen?
Gotta support the team. Everybody loves money even if it's in somebody elses pocket (makes the world seem real I guess).
When the shelves have no more cheetos or the xbox live network goes offline. Otherwise good luck.
And here I was, thinking Benny pumping US based eurobanks full of FRNs was just good old American hospitality, and that LTRO repayments were hit with ease due to sound fiscal policy and fantastic management...
EKM1: "Congress owns the Fed."
Uuuhhhhh, No.
https://www.youtube.com/watch?v=LGy-gTksnII
Listen closely boys and girls. 17 seconds in.
It's astonishing that Greedspin would admit that in an interview, although he did look very uncomfortable.
Listen closely boys and girls. 17 seconds in.
Mr. Magoo sez the Fed is an independent agency......how cute is that?
So is the Mafia
Actually they answer to the BIS, but since the BIS has full immunity for it's members' actions, Greenspin is correct. They answer to no one but their own kind. There is not a single entity on the planet with jurisdiction over them.
"No evidence that the admn or congress or anybody else is requesting that we do things other than what we think is the appropriate thing"
Maybe you should listen again. This does not mean they are not complicit, but they DO have the power to stop it, if they so choose.
Tylers: Well done for getting right, again. We know you're the tops and way ahead of the curve. Why do you think ZH has such a huge following?? Nobody nowadays expects to read the facts or truth from MSM.
When you're one step ahead crowd you're a genius When you're two steps ahead you're a crackpot.
OMG: I sometimes think I'm THREE steps ahead.
I dare not ask what that makes me ;-)
I vote Naked Capitalism is also a good, more profound, a less "instant knee-jerk reactive" blog site than ZH.
But that's just me...I like being a heretic amongst ultra heretics!
Naked Capitalism is hopelessly socialist and statist. Stopped reading them years ago.
This is exactly why Bernanke should be hanged for Treason. Said it then. Say it now. Will Say it again in the near future.
Might as well include all of princton, I did.
So all of these bail out countries are going to step up and help us fight ISIS right?
They're pretty dumb but not that dumb.
They would except for one thing. Their cronies all tell their citizens that the USA is to blame for all their fuck ups. So they think we are the problem, not their glorious tyrants. TV edumacated idjits, same as here.
"Domestic economy" that is funny! Globalists....think they see "domestic" at ALL? Fuck no.
Join the FSA and subvert from within. Tune in, turn on and drop out! Decentralization scares the shit out of fascists.
Since American banks and financial institutions almost bankrupted these foreigns bank by selling them toxic MBS and CDS, restitution was in order thank you very much.
You fail to mention, as a cohort to these mean-old-meanies, good old Uncle Sam who pushed the entire housing toxicity. Regulators are in these institutions constantly. They were ecstatic with the way things were going - until things crashed. And economies worldwide participated whole-hog, too.
What regulation? The sector was deregulated. That was the root of the problem. Because Clinton wanted to give every piece of trailer trash and ghetto gang banger a home. Alan Greenspan wholeheartedly went along.
The lending standards were low by design, these institutions are among the most heavily regulated in our economy. This was by design.
Nobody put a gun to their head. They saw an opportunity to make more money and took the risk. And the taxpayer had to bail them out in the end.
Wrong, declining someone in many situations would be "racist" or discriminatory. In effect that is the gun to their head since the government is the enforcer.
http://www.consumer.ftc.gov/articles/0188-mortgage-discrimination
It is the industry that is the real victim here, I see. Turning someone down because there is a high risk that that person can not ever pay off the loan is a legitimate reason and can be argued in court. This whole mess was due to political reasons to provide people who were not eligitable with a loan or mortgage and the industry seeing an opporunity to make big bucks. They willingly supplied the loans and mortgages, repackaged them and sold them on, bought them back and repackaged and sold them on again, etc.
The Fed, the Congress, the bureaucrats. They told them to jump and the lenders said how high. All built on Keynesian idiocy.....all by design.
All ready to collapse like the back of the one dollar bill they are.
I have to agree with you that the institutions you mention had a role to play. You know, winning the hearts and minds (and their votes) of people by promising them cheap housing. But the lenders were all too eager to jump on this new market. So many new potential costumers blinded them for the dangers. It all went well as long as people were paying off their loans and mortgages.
No one owes foreign banks anything. They should know the risks on any trade they make or security they hold. Otherwise restitution turns into what we see today which is risk free trading.
These MBS and CDS got good rankings remember? So you think you buy something that is good because some ranking company that was in the scam gave it a good ranking. American banks and financial institutions off loaded their bad assets to the rest of the world. Trade is based on trust and that trust was violated.
Edit: - mind you though, I never understood why someone wants to buy somebody's debt.
Anyway, the US banks got a bailout. The 7 biggest got 125 billion with the expectation that they would lend it out. But they didn't. But why would the Fed bail out foreign banks while -as you said it- themselves took the risk. In order to keep the world's financial system intact or in order to prevent foreign banks from dumping their US assets? Some arm wrestling went on.
Administrators will burn, trust me.
Is that you Blythe? you have done a very good job scrubbing the web of yourself.
How can it be Blythe when she was the one who invented the CDS?
I do recall that CDS was $60 T in 2008. To undwind foreign counterparty positions the commission would be paid, it was 2% if I remember right. 2% x 60 T = $1.2 T . That is a lot of dough for innocent taxpayers to cough up for in regards to "restitution".
Giving loans to unqualified borrowers was the foundation of the problem, slicing it up into tranches and rating agencies overvaluing it was the jenga tower.
Uh, yeah, unwind that position by yourself and then come back and tell me their aint hell to pay.
Back in 2008 and 2009, I remember hearing the bailout of AIG was in large measure a bailout of smaller economies and that entire countries reinsured with AIG. (Third hand information and vague rememberances.)
Your right about 40 billion went to I think the french if I recall right. A.I.G was insuring foreign banks
I know more was sent but can't recall where I read that it was pre ZH.
oh, "some observers say this could become a political challenge for the Fed."
I say HANG THEM ALL (after indictment, arrest, trial and conviction for treason, of course).
Sure "political challenge", on first statement they are already using apologist language. In other news, that guy cut her head off, this could possibly affect his working situation moving forward.
Scumbag news outlets.
Lenin had the proletariats inspect the hands of people at check points during the great and glorious revolution.
If your hands looked like a workers hands should you were let go, all others were shot
works for me.
The most rediculous assumption in the financial universe is that the FED has a balance sheet. If its owners need to be paid for the crap it spews you know it has no credibility whatsoever. At some point the taxpayer will have to bail it out.
FUCKING WAY TO GO ZH.
KEEP UP THE GOOD WORK.
hahaha.
Let's explain this so that the masses can understand and get pissed off. Kim Kardashian spent all her daddy's money on Oreos and plastic surgery. Once the money ran out, Kim's ass began to balloon out into the 4th dimension. Realizing that people would lose one of their major distractions if Kim's ass continued its exponential expansion and her show got yanked, the federal reserve decided to pump money into Kim's bank account so she could get her ass liposuctioned and get more Oreos. Kim eats a lot of Oreos and requires frequent liposuction, so the fed sends a lot of cash her way. To avoid paying taxes on all of the interest she is making, Kim moves her money to a bank in the Cayman Islands. Kim is getting rich off of all of the money the fed is giving her so that she can keep buying Oreos and liposuction. Now you, with your poor, broke, drunk ass, you want some Oreos too, but they are hard to come by and really expensive because Kim keeps eating them all. You have to give up buying your ounce of weed this week in order to get some Oreos, but then you find they just aren't as good when you are not high. But that is neither here not there. The truth is you can't get no Oreos. Khloie can get all of the Oreos she wants because she is in the same tribe as Kim, and she is also getting money from the Fed for STD treatments. Khloie don't give a shit about you. You ain't getting shit except hungry. Sucker.
Publish this in Cosmo and the National Enquirer and Furguson will look like play time at the orphange.
I just saw the CNN Money article on ZH yesterday - congrats, Tylers!
I suspect others knew. They just chose not to report it. Thank goodness for sources like zh - there are not enough are not widely known.
Explains the obesence to the assasin in chief.
Is it fair to say that after the fuckery of 2007 - essentially one of the largest thefts of wealth from productive labor by the financial industry ever, nothing at all was changed, but this time, the Fed is printing in order to contain some of the fall out from the next housing bubble burst?
So they'll keep the army paid, the EBT cards charged, and payments to seniors going - and keep importing Indian tech workers, unskilled Latin Americans, and exporting jobs and capital?
Is that right?
So in essence, the same fucks will keep their ill-gotten gains while the value of everyone's savings/pensions/piggy bank will tank? More dependency on government, more debt owed to the same private central bank...
I feel like all of this has happened before.
At least twice. Maybe more.
THIS....is the sort of article I come to ZH to read. Pertinent facts and information not readily available elsewhere.
Definite "thumbs up".
FED UP
By using lawful money as required by that old and much ridiculed relic of a constitution this thievery couldn't happen or at the least would be very difficult. Of course we in the 21st century are sooooo much smarter and wiser.
Conspiracy is NOT a theory; It's a felony.
It's tough with making Trillions to find the right places TBTF to give it to.
Tell me again who owns the fed? International bankers? Surprised that the US taxpayer is now underwriting the entire world banking system? LOLS. Odd that Chinese banks are participating to meet their internal liquidity demands while sitting on over a trillion $ in US treasuries. I'll bet that the Chinese now have a significant stake in the ownership of the Fed and that they are writing many Fed rules today. I'm sure if one apportions the liquidity afforded the individual banks we will have a picture of it's ownership. That's the bad news.
The good news is that upon return to some form of normalization in the banking sector the US taxpayer will be handsomely rewarded for underwriting this risk. LOLS again.
ps: I recall bernanke advising congress that he can't (won't) tell us who owns the fed. AKA: none of your fucking business who runs your country!
Another ibackdoor bailout for Jamie, Lloyd, and the rest of the crooked bastards that pumped the international banks full of shitty mortgage deals. They should be hanging by their balls on Broad and Wall, but instead we will have a revolution.....
ON Q99X2 these banksters and whatever it Yellen is would be marched straight to the 12 sacrificial pyramids and the world's q99x2 would watch from above as they (the banksters) were promptly sacrificed. .
Back on Earth. Fuck Congress it is time for military action by the military and time for another coup to recapture the United States of America back from the banksters; the banksters that used a financial terrorism coup to take over Washington D.C.
Jump Bankster Jump.
Think globally, steal domestically
And of course the Fed. has Citadel to roll those excess reserves into the equity markets every fucking day to cover those interest payments, and a little extra scratch for the coke and hookers.
Control must be maintained via wealth transfer from the savers in society who used to earn interest to the bankers who don't do shit. Remember when these "businessmen" used to make loans for productive economic activity? Yea, me too. Now they are nothing but crony capitalist parasites.
www.traderzoo.mobi
Can I write off my PM losses?
Gold ain't for wimps......where were you 10 years ago? You'd be holding a 4 bag.
Hold on to it....you're really gonna need it in the next 10 years.
I thought Bloomberg's lawsuit revealed about $16 Trillion in bailouts.
I think the best thing libertarians and reasonably intelligent, moderate, practical people can do is start loudly demanding the Fed be given more power and control.
Then, the Left and much of the press will begin demanding the opposite...
I'm not entirely joking. Can you imagine if a couple of the bigger "tea party" groups came out and said they wanted to give the Fed more power. HuffPo would be instructing its herd of cats about the evils of the FRA of 1913 the very next day...
We need to create a libertarian caliphate in the DC belt area.
The most affluent contiguous zip codes within the US ring our Imperial Capital. One doesn't need a economics PhD or even a degree to have some understanding of the implication (s). It falls on mostly on deaf ears. We could survive initially, and I do believe ultimately thrive if the BosWash Megalopolis disappeared.
i thought the side effect was the policy. pump up bank reserves, banks then invest those reserves in the stock market as a side effect
"Unanswered questions remain also, about the case on the basis of which, the "Federal" Reserve secretly supplied through the "back door" with more than $ 9 trillion, various financial institutions with questionable balance sheets during the financial crisis in the US. Nobody seems to deal with this issue today."
http://failedevolution.blogspot.gr/2013/10/new-deal-vs-obamacare-one-rea...
Punch a central banker in the face- buy gold. Kick a central banker in the nuts- buy silver. Give a central banker an ulcer- audit the fed.
I'm giving up on this honesty thing, tommorow I will be high frequency inverting bailed out mortgage backed ponzis. I'll figure out what it means as I'm doing it.
Sadly, the average person cares not about this stuff.
Facebook, Twitter and reality shows are MUCH more important.
What about Belgium?
I'm surprised Goldman and JPM let them get a cut of the vig.
They tend to steal it all.
Future history will consider the Federal Reserve one of the leading causes for the approaching collapse in value of the dollar and destruction of the american economy. Another will be the general populations ignorance and apathy concerning corruption and criminal activity in government and the financial industry.
Question: Aren't some foreign owned banks also a part of the FED membership?
Since the $ is the reserve currency, and interbank overnight borrowing/liquidity froze after Lehman, should we (now that ZH has provided some education) be surprised that the Uber Central Bank is providing a means for non US Banks (aren't they all a part of the same PetroDollar system?) to re-capitalize....never mind that derivatives are an even more important part of their income stream (Another Thanks to ZH) and an ever sharper blade upon our collective throats? Just sayin....
Willygroper :Maybe you should listen again. This does not mean they are not complicit, but they DO have the power to stop it, if they so choose.
Cite just one case where Congress went against the Fed.
Just one.
Congress can "request" all the bullshit they want. The Fed is independent and does NOT have to make their "requests" so, any more than you have to honor the request of your pet dawg to change from Gaines Burgers to Alpo.