Thursday, December 02, 2010

They got theirs. Did you get yours?

I bet you got jack out of it. Because you got no pull with big Ben.

This link, Fed names names, this excerpt:

At Goldman Sachs Group Inc., Wall Street’s most profitable securities firm, borrowing from the Primary Dealer Credit Facility peaked at $24 billion in October 2008. “Without question, direct government support was critical in stabilizing the financial system, and we benefitted from it,” Chief Executive Officer Lloyd Blankfein said in January 2010.

Michael DuVally, a Goldman Sachs spokesman in New York, said today that the Fed’s actions “were very successful.”

Dollar Squeeze

The presence of foreign banks in the program underscores the squeeze in dollar liquidity after the collapse of Lehman Brothers Holdings Inc. on Sept. 15, 2008. UBS, Switzerland’s largest bank, was the biggest borrower from the Commercial Paper Funding Facility, tapping the program 11 times for $74.5 billion.

The emergency programs included the Term Asset-Backed Securities Loan Facility, which has supported billions of dollars in credit to small businesses, credit card borrowers, and students, and the Term Auction Facility, which helped banks get cheaper funding.

Bernanke pushed the boundaries of the Fed’s powers, using section 13(3) of the Federal Reserve Act, which allowed the central bank to aid non-banks under “unusual and exigent circumstances.” In some facilities, the Fed engaged in non- recourse lending, meaning it loaned against collateral alone and took a greater risk of loss.

‘Risk Exposures’

“By moving into the world of non-recourse loans, they started to accept risk exposures that the private sector was no longer capable of maintaining,” said Lou Crandall, chief economist at Wrightson ICAP LLC in Jersey City, New Jersey. “That effectively turned the Fed into an asset warehouse.”

Congress excluded one Fed lending program from disclosure, the discount window, which is the subject of a 2008 lawsuit filed by Bloomberg LP, parent of Bloomberg News, against the central bank. A group of banks is appealing to the Supreme Court over lower-court decisions ordering the Fed to identify loan recipients. The program peaked at $110.7 billion in October 2008.

“We see this not as the end of a process but really a significant step forward in opening the veil of secrecy that exists in one of the most powerful agencies in government,” Senator Bernard Sanders, the Vermont Independent who wrote the provision on Fed disclosure, said to reporters Nov. 17.

No, you did not get a share, because you were busy being distracted at Tea Party rallies. I feel for you. I bleed with you.

But Sanders, saying "one of the most powerful agencies in government," if so, why is it run exclusively by bankers, for the benefit of banks, with the government only looking over shoulders, sometimes?

Don't expect me to answer that. Ask Ron Paul. Or ask Michele Bachmann if you want the horsed up misunderstood version of what Ron Paul might say.

Or ask Mary Kiffmeyer. She at one time briefly headed that experimental banking thing in Otsego, on its way into a takeover by a sounder, secular, banking business.

______________UPDATE_____________
An interesting footnote to things, Reuters Dec. 1 headline, "Citi tapped Fed window 278 times during crisis," this link.

Neighbors to the north got theirs; according to the Globe and Mail, this link. So why didn't you and I get ours?