Skip to comments.Fed Made Taxpayers Junk-Bond Buyers Without Congress Knowing
Posted on 07/01/2010 10:10:52 AM PDT by mojito
....By using its balance sheet to protect an investment bank against failure, the Fed took on the most credit risk in its 96- year history and increased the chance that Americans would be on the hook for billions of dollars as the central bank began insuring Wall Street firms against collapse. The Feds secrecy spurred legislation that will require government audits of the Fed bailouts and force the central bank to reveal recipients of emergency credit.
(Excerpt) Read more at ml-implode.com ...
The Fed doesn't use taxpayer funds. Congress made taxpayers junk-bond buyers with their backing of Fannie Mae and Freddie Mac.
Congress has already watered down the audit the fed legislation to the point that it is laughable. As far as what the fed did....It was against the law.
Put Ben in Prison.
That is very true, but watch out: you'll be attacked. You are not allowed to make sense when it comes to economics. You are supposed to be angry at the Fed, Goldman and the rest of Wall Street instead... Facts don't really matter.
Another article about politicians (mostly Democrats, but also some pseudo-conservatives or pseudo-”libertarians” or plain nuts like Ron Paul) who want to get their hands on monetary policies of still relatively independent quasi-government agency, by claiming that it is “secret” so they can use the ruse of “auditing” the Fed.
In fact, recent Fed has been more transparent and as unobscure as possible in policies than for most time since its creation. If the Fed “advertised” the policy or moves in advance, you would hear the same politicians screaming about people, funds and banks who made money from the Fed policy move not being kept “secret” longer...
Of course, the Fed and Treasury took “some risks” when entire financial system was in meltdown and the lifeblood of economic and private sector activity (commercial paer and credit) was all but frozen and “run on the banks” panic was all around. Fed and Treasury didn’t “fiddle” (or play lira) like Nero when Rome was burning. Fed took some measures backstopping few willing solid diversified (thanks to the 1998 repeal of Glass-Steagall Act) banks like JPMorgan and BoA (no thanks to Warren Buffett and Wells Fargo Bank where he is largest shareholder) to assume liabilities and bury the carcasses of dead Wall Street institutions, so these banks can “bail out” the deposits / commercial paper / investments of Main Street citizens, companies, pension funds etc.
This charade by politicians, pointing fingers everywhere and at everyone but themselves, reminds me of 9/11 Commission with Jamie Gorelick being a part of the Commission and asking questions instead of a being witness (or, better yet, accused) and answering questions about creation and conduct of her criminal policy.
This are the same politicians who vote on 2000+ pages of legislation they haven’t read and then say “We have to vote for it so you can find out what’s in it”!
http://www.freerepublic.com/focus/news/2546103/posts?page=15#15 - Who Would Finance Mortgages If Fannie, Freddie Disbanded?