Have You Heard About The 16 Trillion Dollar Bailout The Federal Reserve Handed To The Too Big To Fail Banks?

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What you are about to read should absolutely astound you. During the last financial crisis, the Federal Reserve secretly conducted the biggest bailout in the history of the world, and the Fed fought in court for several years to keep it a secret.

Do you remember the TARP bailout? The American people were absolutely outraged that the federal government spent 700 billion dollars bailing out the "too big to fail" banks. Well, that bailout was pocket change compared to what the Federal Reserve did. As you will see documented below, the Federal Reserve actually handed more than 16 trillion dollars in nearly interest-free money to the "too big to fail" banks between 2007 and 2010. So have you heard about this on the nightly news? Probably not. Lately Bloomberg has been reporting on some of this, but even they are not giving people the whole picture. The American people need to be told about this 16 trillion dollar bailout, because it is a perfect example of why the Federal Reserve needs to be shut down. The Federal Reserve has been actively picking "winners" and "losers" in the financial system, and it turns out that the "friends" of the Fed always get bailed out and always end up among the "winners". This is not how a free market system is supposed to work.

According to the limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, the grand total of all the secret bailouts conducted by the Federal Reserve during the last financial crisis comes to a whopping $16.1 trillion.

That is an astonishing amount of money.

Keep in mind that the GDP of the United States for the entire year of 2010 was only 14.58 trillion dollars.

The total U.S. national debt is only a bit above 15 trillion dollars right now.

So 16 trillion dollars is an almost inconceivable amount of money.

But some other dollar figures have been thrown around lately regarding these secret Federal Reserve bailouts. Let's take a look at them and see what they mean.

$1.2 Trillion

A recent Bloomberg article made the following statement....

The $1.2 trillion peak on Dec. 5, 2008 -- the combined outstanding balance under the seven programs tallied by Bloomberg -- was almost three times the size of the U.S. federal budget deficit that year and more than the total earnings of all federally insured banks in the U.S. for the decade through 2010, according to data compiled by Bloomberg.

The $1.2 trillion figure represents the peak outstanding balance on these loans, not the total amount of all the loans. On December 5, 2008 the "too big to fail" banks owed this much money to the Federal Reserve. Many of them could not pay these short-term loans back right away and had to keep rolling them over time after time. Each time a short-term loan got rolled over that represented a new loan.

$7.7 Trillion

Bloomberg is reporting that the Federal Reserve had made a total of $7.77 trillion in financial commitments to the big banks by the end of March 2009....

Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

But as mentioned above, a one-time limited GAO audit of the Federal Reserve that was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act covered an even broader time period and revealed even more bailout loans.

According to the GAO audit, $16.1 trillion in secret loans were made by the Federal Reserve between December 1, 2007 and July 21, 2010. The following list of firms and the amount of money that they received was taken directly from page 131 of the GAO audit report....

Citigroup - $2.513 trillion
Morgan Stanley - $2.041 trillion
Merrill Lynch - $1.949 trillion
Bank of America - $1.344 trillion
Barclays PLC - $868 billion
Bear Sterns - $853 billion
Goldman Sachs - $814 billion
Royal Bank of Scotland - $541 billion
JP Morgan Chase - $391 billion
Deutsche Bank - $354 billion
UBS - $287 billion
Credit Suisse - $262 billion
Lehman Brothers - $183 billion
Bank of Scotland - $181 billion
BNP Paribas - $175 billion
Wells Fargo - $159 billion
Dexia - $159 billion
Wachovia - $142 billion
Dresdner Bank - $135 billion
Societe Generale - $124 billion
"All Other Borrowers" - $2.639 trillion

This report was made available to all the members of Congress, but most of them have been totally silent about it. One of the only members of Congress that has said something has been U.S. Senator Bernie Sanders.

The following is an excerpt from a statement about this audit that was taken from the official website of Senator Sanders....

"As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world"

So where is everyone else?

Why aren't leading Republicans and leading Democrats crying bloody murder over this report?

This scandal should have been front page news for months when it was revealed.

But it wasn't.

And Guess what?

Not only did the Federal Reserve give 16.1 trillion dollars in nearly interest-free loans to the "too big to fail" banks, the Fed also paid them over 600 million dollars to help run the emergency lending program. According to the GAO, the Federal Reserve shelled out an astounding $659.4 million in "fees" to the very financial institutions which caused the financial crisis in the first place.

In addition, it turns out that trillions of dollars of this bailout money actually went overseas. According to the GAO audit, approximately $3.08 trillion went to foreign banks in Europe and in Asia.

So why were our dollars being used to bail out foreign banks while tens of millions of American families were deeply suffering?

That is a very good question.

Also, it is important to remember that many of these bailout loans were made at below market interest rates, and this enabled many of these financial institutions to rake in huge profits.

According to a recent Bloomberg article, the big banks brought in an estimated $13 billion by taking advantage of the Fed’s below-market rates....

While the Fed’s last-resort lending programs generally charge above-market interest rates to deter routine borrowing, that practice sometimes flipped during the crisis. On Oct. 20, 2008, for example, the central bank agreed to make $113.3 billion of 28-day loans through its Term Auction Facility at a rate of 1.1 percent, according to a press release at the time.

The rate was less than a third of the 3.8 percent that banks were charging each other to make one-month loans on that day. Bank of America and Wachovia Corp. each got $15 billion of the 1.1 percent TAF loans, followed by Royal Bank of Scotland’s RBS Citizens NA unit with $10 billion, Fed data show.

So once the financial crisis was over, were adjustments made to the financial system to make sure that this type of thing would never happen again?

Of course not.

Today, the "too big to fail" banks are larger than ever. The total assets of the six largest U.S. banks increased by 39 percent between September 30, 2006 and September 30, 2011.

So now they are more "too big to fail" than ever.

But this is what happens when we allow unelected central bank bureaucrats to run our financial system.

Most Americans do not realize this, but the truth is that the Federal Reserve is not part of the government. In fact, it is about as "federal" as Federal Express is. The Federal Reserve has admitted that they are a privately owned institution in court many times, and you can see video of a Federal Reserve employee admitting that the Federal Reserve is privately owned right here.

The Federal Reserve is an out of control monster that is throwing around trillions of dollars whenever it wants to. Nobody should be allowed to do this. Nobody should be allowed to give bailouts to banks and corporations without the express permission of the U.S. Congress and the president of the United States.

This is a point that I made in my article yesterday. The Federal Reserve decided this week that it is going to provide "liquidity support" to Europe. If the American people do not like this move, that is just too bad. We do not get a say in the matter.

Are you starting to understand why I keep pushing the idea that it is time to shut down the Federal Reserve?

Please share this information about the secret 16 trillion dollar Federal Reserve bailout with your family and your friends.

If we can get enough people to wake up, perhaps there is still time to change the direction that this country is headed.

From the Economic Collapse Blog

Video: The Fed Grants $7.77 Trillion in Secret Bank Loan - Now Do You Understand Occupy Wall Street?

Kucinich bill seeks to end the Federal Reserve:

Kucinich bill seeks to end the Federal Reserve!
http://www.godlikeproductions.com/forum1/message1718844/pg1
Kucinich bill seeks to end the Federal Reserve
http://www.rawstory.com/rs/2011/12/01/kucinich-bill-seeks-to-end-the-federal-reserve/

Related:

WHAT THE HELL? The U.S. Secretly loaned 7.7 TRILLION To Banks Without Interest. Then Borrowed Back WITH Interest
http://www.godlikeproductions.com/forum1/message1718942/pg1

America's Next TARP Model
http://www.thedailyshow.com/watch/thu-december-1-2011/america-s-next-tarp-model

A Bloomberg report reveals that the U.S. government loaned banks $7.7 trillion in secret bailout funds at no interest and then borrowed the money back at interest.
Bloomberg reports 7.7 trillion in loans to big banks and Wall Street
http://reading-sage.blogspot.com/2011/11/bloomberg-reports-77-trillion-in-loans.html?m=1pg1

h/t to Jean Stoner

Stop Spending Our Future... STOP!!!

Quote: "We are committing Generational Theft!", John McCain

Talking about YouTube - Stop Spending Our Future - STOP

Renters Left Hanging in the Middle in Foreclosure Proceedings

With the current wave of foreclosures, that we hope will diminish after the recently announced bailouts, many renters are finding themselves in the middle between lenders and their landlord; who is now the foreclosed on owner. They are finding themselves homeless, like the Smiths, after their cash-strapped landlord stopped making mortgage payments and their houses, condos, townhouses or apartment buildings were foreclosed upon, even though they have been making their monthly rent payments.

The California Apartment Association, the state's largest organization of rental property owners, reported that nearly a quarter of all foreclosed single-family residences are renter occupied. And the number of renters trapped in the foreclosure debacle in duplexes and other multi-unit buildings is considerably higher.  Total California foreclosures of single-family homes statewide rose more than 400 percent to a record 31,676 in the fourth quarter of 2007 from a year earlier and has been rising ever since. 

The Smiths received notice last month, when a Trustee Sales Notice was posted on the front door of their townhouse, after their landlord had missed 6-months of mortgage payments and the property was foreclosed upon.  And this seems to be the way most tenants are getting their notifications; inciting a sense of panic and feelings of insult, betrayal and lack of control.

For many people, this can mean even steeper rents on the horizon because the wave of foreclosures has created greater demand in the rental housing market -- a blessing to landlords who are not having foreclosure problems, but also leaves the door open for some gauging. And invariably, these situations mean a total loss of deposits paid by renters, so it is generally suggested that renters stop paying rent as soon as they are made aware of foreclosure proceedings and notice definitely of an impending sale.

State and local officials say many evictions could be avoided or at least made less painful if people knew the legal protections available to them. However, few owners, lenders and property managers make such information available during the eviction process.

This entire experience can be terrifying!! "It's something a number of jurisdictions have been discussing because it's a growing problem.", says Michaelyn Jones, general counsel to the Santa Monica Rent Control Agency, which oversees some of California's toughest rent-control rules.

Many foreclosed properties were purchased by real-estate speculators or novice investors taking advantage of dirt-cheap loans and rising property values, who subsequently rented them to tenants before falling behind on mortgage payments.  Plus now there is a newly reported scam whereby some owners, knowing they are on the road to pending foreclosure are renting their properties anyway or again, right before the Trustee Sale, and then vanishing with what can be a tidy sum, including as much as first and last month’s rent, a security deposit and sometimes additional cleaning or pet deposits; leaving renters holding the proverbial bag and having to move again.

Some tenants don’t find out that they have to move until they receive a letter from the bank or lender, that has taken the property back, or from the new owner after the Trustee Sale, either in letter form or by a representative showing up at their door, which sometimes includes the offer of an "assistance check" varying in amount from $1000 to $2500, to vacate quickly. In many cases it is to the renters’ benefit to accept this assistance check, which usually includes a warning like: "Please keep in mind that the eviction process has started". 

Offering financial inducements is a common practice when renters are being pressed to vacate a foreclosed-upon property, but there are several factors to weigh. It's called "cash for keys" and can involve payments of up to $2,500, ostensibly to help a tenant resettle but also to get him or her to waive any claims to the rental property.  However in the wake rising foreclosures and rising rents, you now have 60-days from the day you receive official notification to vacate before having to be out or before eviction procedures can begin, giving you 2+ months of rent free living.  So you need to weigh the value of two free months of rent against the amount of the assistance check being offered.  And if you have an active lease in place, that lease could have to be honored.  Be sure to check with Renters Rights and give your options some thought before the representative appears on your doorstep.  Also, if your property has been purchased by a new owner, be sure to ask if you can stay on as a renter.

The Smiths were told that if they didn't agree to the assistance money deal right away, their resettlement money would be slashed in half from the original offer within a week and then to third a week after that. Then it would drop to nothing, and they'd still have to move out.  Sometimes that is enforced and sometimes, if they really want you out, they will work with you and could still get the original offer, but it is a gamble.

Also be wary of your previous landlord trying to collect rent, present or past, (before or after the trustee sale) or asking for a share in the moving assistance money.  Once they have lost title to the property, they have no claim or rights to anything involving their former property.

State officials have said that under California law, existing rental agreements are essentially wiped out when a property is foreclosed upon, but changes and amendments have and are being made daily, so keep checking. A few months ago renters only had 30 days' notice before being evicted; now they have 60.  And those officials also said state law can be trumped by local rent-control statutes, which often provide tenants with more far-reaching protections.  These "just cause" provisions of many municipal rent-control laws limit the ability of landlords to evict tenants, even those on month-to-month leases. They also include cases in situations when ownership of a property changes hands, such as a foreclosure.

However, not all "just cause" provisions are created equal. Some require that a tenant occupy a property for at least two years before an eviction notice is served. Others allow an eviction to proceed if the landlord plans to remove the property from the rental market or have a relative move in.  And, not all rental properties may fall under a city's rent-control protections, allowing state law to apply.

But anyone receiving a notice from a bank or property manager, which is often an assigned realtor, saying their rented home has been foreclosed on should contact City Hall and ask about rent-control rules that may exist in your area and whether your particular property is protected as well as checking with Renters Rights.  Then ask the bank or property manager to specify the legal grounds for the eviction. If nothing else, this could result in a more generous offer of payout to get you moving.

And remember, do your homeworkd and always get everything in writing!!!

By: Marion Algier/Ask Marion

Related Articles:

Michael Reagan:  Wall Street Bailout "Robbery"

The Rest of the Meltdown Story

The Rest of the Meltdown Story

What in the world is going on here?

You’ve seen the headlines, and you heard of the failures and buyouts. Lehman Brothers, Bear Stearns, Merrill Lynch, AIG; all big names and all in big trouble. Then those mysterious quasi-government agencies with names like Freddie and Fannie become wards of the state and you learn that you and your fellow taxpayers are potentially on the hook for tens of billions of dollars. At the end of the week Washington Mutual is looking for a buyer, and you start to wonder about the security of your own bank and your own savings account. Let’s change that ad copy to WaMu -- boo hoo.

Somewhere in the back of your mind you understand that this is all tied somehow to bad mortgages. If you start reading a bit further to enhance your understanding you run into terms like Mortgage Backed Securities (MBS) and credit-default swaps, whatever in the world those are. Read further and you find out that a combination of falling home prices and mortgage defaults have put many investment banks and other financial institutions in deep puddin’. All this reading, all this watching the talking heads on TV, and you still don’t really know what in the world is going on here.

Fear not. I’m here to help. I know … I’m just another talk show host; but the fact is that when the stage was being set for the problems we’re seeing today I was making most of my money as a real estate lawyer .. closing loans for some of the very institutions that are the tank today. This rather unique combination – closing lawyer and radio talk show host – gave me a front row seat to the politicization of mortgage loans that led us to today’s headlines.

OK .. so we all know that a lot of really bad real estate loans were made. The political class would sure love for us to believe that the blame here rests squarely on “greedy” (try to define that word) mortgage brokers and lenders. The truth is that most of the blame rests on political meddling in the credit decisions of these mortgage lenders.

Twenty years ago the buzz-word in the media was “redlining.” Newspapers across the country were filled with hard-hitting investigative reports about evil and racist mortgage lenders refusing to make real estate loans to various minorities and to applicants who lived in lower-income neighborhoods. There I was closing these loans in the afternoons, and in the mornings offering a counter-argument on the radio to these absurd “redlining” claims. Frankly, the claims that evil mortgage lenders were systematically denying loans to blacks and other minorities were a lot sexier on the radio than my claims that when credit histories, job stability, loan-to-value ratios and income levels were considered there was no evident racial discrimination.

Political correctness won the day. Washington made it clear to banks and other lending institutions that if they did not do something .. and fast .. to bring more minorities and low-income Americans into the world of home ownership there would be a heavy price to pay. Congress set up processes (Research the Community Redevelopment Act) whereby community activist groups and organizers could effectively stop a bank’s efforts to grow if that bank didn’t make loans to unqualified borrowers. Enter, stage left, the “subprime” mortgage. These lenders knew that a very high percentage of these loans would turn to garbage – but it was a price that had to be paid if the bank was to expand and grow. We should note that among the community groups browbeating banks into making these bad loans was an outfit called ACORN. There is one certain presidential candidate that did a lot of community organizing for ACORN. I won’t mention his name so as to avoid politicizing this column.

These garbage loans to unqualified borrowers were then bundled up and sold. The expectation was that the loans would be eventually paid off when rising home values led some borrowers to access their equity through re-financing and others to sell and move on up the ladder. Oops.

Right now this crisis is being sold to the American public by the left as evidence the failure of the free market and capitalism. Not so. What we’re seeing is the inevitable result of political interference in free market economics. Acme bank didn’t want to loan money to Joe Homebuyer because Joe had a spotty job history, owed too much money on his credit cards, and wasn’t all that good at making payments on time. The politicians told Acme Bank to figure out a way to make that loan, because, after all, Joe is a bona-fide minority-American, or forget about opening that new branch office on the Southside. The loan was made under political pressure; the loan, with millions like it, failed – and now we are left to enjoy today’s headlines.

So … why aren’t you reading the whole story in the mainstream media? Come on, are you kidding me? Do you really expect the media to blame this mess on deadbeat borrowers and political interference in the free market when it is so easy to put the blame on greedy lenders and evil capitalists? Remember … there’s an election going on. One candidate is decidedly anti-capitalist. Do the math.

by Neal Boortz, talk show host and columnist for Townhall.com as well as co-author of The FairTax Book

For those of you that don't want to do the digging...

Inside Obama’s Acorn
By their fruits ye shall know them.
By Stanley Kurtz

What if Barack Obama’s most important radical connection has been hiding in plain sight all along? Obama has had an intimate and long-term association with the Association of Community Organizations for Reform Now (Acorn), the largest radical group in America. If I told you Obama had close ties with MoveOn.org or Code Pink, you’d know what I was talking about. Acorn is at least as radical as these better-known groups, arguably more so. Yet because Acorn works locally, in carefully selected urban areas, its national profile is lower. Acorn likes it that way. And so, I’d wager, does Barack Obama. 

This is a story we’ve largely missed. While Obama’s Acorn connection has not gone entirely unreported, its depth, extent, and significance have been poorly understood. Typically, media background pieces note that, on behalf of Acorn, Obama and a team of Chicago attorneys won a 1995 suit forcing the state of Illinois to implement the federal “motor-voter” bill. In fact, Obama’s Acorn connection is far more extensive. In the few stories where Obama’s role as an Acorn “leadership trainer” is noted, or his seats on the boards of foundations that may have supported Acorn are discussed, there is little follow-up. Even these more extensive reports miss many aspects of Obama’s ties to Acorn.

AN ANTI-CAPITALISM AGENDA

To understand the nature and extent of Acorn’s radicalism, an excellent place to begin is Sol Stern’s 2003 City Journal article, “ACORN’s Nutty Regime for Cities.” (For a shorter but helpful piece, try Steven Malanga’s “Acorn Squash.”)

Sol Stern explains that Acorn is the key modern successor of the radical 1960’s “New Left,” with a “1960’s-bred agenda of anti-capitalism” to match. Acorn, says Stern, grew out of “one of the New Left’s silliest and most destructive groups, the National Welfare Rights Organization.” In the 1960’s, NWRO launched a campaign of sit-ins and disruptions at welfare offices. The goal was to remove eligibility restrictions, and thus effectively flood welfare rolls with so many clients that the system would burst. The theory, explains Stern, was that an impossibly overburdened welfare system would force “a radical reconstruction of America’s unjust capitalist economy.” Instead of a socialist utopia, however, we got the culture of dependency and family breakdown that ate away at America’s inner cities — until welfare reform began to turn the tide.

While Acorn holds to NWRO’s radical economic framework and its confrontational 1960’s-style tactics, the targets and strategy have changed. Acorn prefers to fly under the national radar, organizing locally in liberal urban areas — where, Stern observes, local legislators and reporters are often “slow to grasp how radical Acorn’s positions really are.” Acorn’s new goals are municipal “living wage” laws targeting “big-box” stores like Wal-Mart, rolling back welfare reform, and regulating banks — efforts styled as combating “predatory lending.” Unfortunately, instead of helping workers, Acorn’s living-wage campaigns drive businesses out of the very neighborhoods where jobs are needed most. Acorn’s opposition to welfare reform only threatens to worsen the self-reinforcing cycle of urban poverty and family breakdown. Perhaps most mischievously, says Stern, Acorn uses banking regulations to pressure financial institutions into massive “donations” that it uses to finance supposedly non-partisan voter turn-out drives.
According to Stern, Acorn’s radical agenda sometimes shifts toward “undisguised authoritarian socialism.” Fully aware of its living-wage campaign’s tendency to drive businesses out of cities, Acorn hopes to force companies that want to move to obtain “exit visas.” “How much longer before Acorn calls for exit visas for wealthy or middle-class individuals before they can leave a city?” asks Stern, adding, “This is the road to serfdom indeed.”

IN YOUR FACE

Acorn’s tactics are famously “in your face.” Just think of Code Pink’s well-known operations (threatening to occupy congressional offices, interrupting the testimony of General David Petraeus) and you’ll get the idea. Acorn protesters have disrupted Federal Reserve hearings, but mostly deploy their aggressive tactics locally. Chicago is home to one of its strongest chapters, and Acorn has burst into a closed city council meeting there. Acorn protestors in Baltimore disrupted a bankers’ dinner and sent four busloads of profanity-screaming protestors against the mayor’s home, terrifying his wife and kids. Even a Baltimore city council member who generally supports Acorn said their intimidation tactics had crossed the line.

Read Full Story

Source:  National Review/Posted:  Townhall.com