"On or about March 16th, 2008, George W. Bush, both personally and through his Treasury Secretary Henry Paulson, caused to be provided to JP Morgan/Chase a bribe(1) ultimately flowing from the United States Treasury in an amount not to exceed $30 billion dollars US, via The Federal Reserve, in order to induce JP Morgan/Chase to assume the liabilities and assets of Bear Stearns and Company at a price not determined in the free market or via public bidding, in violation of the limitations expressly set forth in The Federal Reserve Act of 1913, 12 USC Ch 6."
Why is Bear Stearns Trading at $6 Instead of $2?
In effect, the Federal Reserve decided last week to overstep its legal boundaries – going beyond providing liquidity to the banking system and attempting to ensure the solvency of a non-bank entity. Specifically, the Fed agreed to provide a $30 billion “non-recourse loan” to J.P. Morgan, secured only by the worst tranche of Bear Stearns' mortgage debt. But the bank – J.P. Morgan – was in no financial trouble. Instead, it was effectively offered a subsidy by the Fed at public expense. Rick Santelli of CNBC is exactly right. If this is how the U.S. government is going to operate in a democratic, free-market society, “we might as well put a hammer and sickle on the flag.”
Constitutional Crisis
by Richard K. Brawn, CCREA (retired), MPA | March 27, 2008
Is preservation of personal financial benefits justification to destroy even one principle of our Constitution? This question is raising a new and much insidious fear. A realization is dawning that interests in key positions within the Executive Branch have created a constitutional crisis that will further hollow out U.S. Constitutional protections for private ownership and contract sanctity. In the post Bear Stearns period, the provisions of Article 1 Section 8 and 9 of the US Constitution mean even less now than they did before. A rational fear gathering force in the market is belief that America will not abide by its own Constitutional guarantees. If the United States of America will set aside clear principle because of fear of economic loss, what principles will stand to protect personal wealth and private property.....Article 1 Section 8 (an excerpt):
Article 1 Section 9 (an excerpt):Ok, now you have refreshed your memory, here is the situation. .
Article 1 Section 8 gives Congress authority to create the Federal Reserve Bank and Federal Reserve Board which may use only the powers granted to Congress. Section 9 denies to the Congress and therefore the FED the authority to take any money from the Treasury except as allowed by a specific lawful appropriation by the whole Congress.....
http://www.tickerforum.org/cgi-ticker/akcs-www?post=37889
Here’s what they did: http://www.federalreserve.gov/newsevents/press/orders/orders20080401a1.pdf
Here’s why it was illegal:
The Constitution of the United States
Article I:
All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.
Article I, Section 7, Paragraph 1:
All bills for raising revenue shall originate in the House of Representatives; but the Senate may propose or concur with amendments as on other Bills. (emphasis added)
Article I, Section 8, Paragraph 1:
The Congress shall have the power to lay and collect taxes, duties, imposts and excised, to pay the debts and provide for the common defense and general welfare of the United States.... (emphasis added)
In addition, further EXCLUSIVE powers of Congress:
Article I, Section 8, Paragraph 2:
To have the power to borrow money on the credit of the United States
Article I, Section 8, Paragraph 5:
To coin money, regulate the value thereof....
Article I Section 9, Paragraph 7:
No money shall be drawn from the treasury, but in consequence of appropriations made by law; and a regular statement and account of receipts and expenditures of all public money shall be published from time to time.
So then you'll need to prove that (a) the Fed took money from the Treasury AND (b) that it was not lawfully appropriated.
Wrong.