Category Archives: bailout
Janet Yellen’s Senate hearing for approval to succeed Ben Bernanke began yesterday.
Backdoor Wall Street Bailout
Andrew Huszar, a former bond buyer for the Fed, wrote an interesting apology in the WSJ this week for his role in “quantitative easing”.
He says that the Fed never bought a mortgage bond in its 100 year history until he was hired in 2009 to buy $1.25 trillion of the things! In a single year. According to Huszar Bernanke spun the scheme as a plan to help Main Street but it was really “the biggest backdoor Wall Street bailout of all time”.
Chairman Ben Bernanke made clear that the Fed’s central motivation was to “affect credit conditions for households and businesses”: to drive down the cost of credit so that more Americans hurting from the tanking economy could use it to weather the downturn.
QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash.
The EU tried to tax Cypriot savings accounts up to 10% in exchange for a bail-out of the banking system. The attempted heist was broken up by the Cyprus parliament with 36-0 vote. So now the Cyprus banks are closed until Tuesday awaiting plan B.
Arnold Ahlert says the world banking system is running out of other people’s money -”we’re all Cypriots now”.
In return f
Eric Holder’s Justice Department sued Standard and Poor’s for giving bad advice. That bad advice consisted of high ratings the company gave for mortgage backed securities leading to the 2008 meltdown.
Jack Lew, the president’s nominee for Treasury Secretary, worked for Citigroup’s subprime department during the time leading up to the 2008 meltdown. Lew was rewarded with a nearly million dollar bonus following Citigroup’s government bail-out.
In an effort to divert attention from Lew (okay I made that up), the White House released Justice Department documents justifying the killing U.S. citizens without judicial review. I didn’t make that up.