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The Spectacle Blog
It seems that the upshot of last week’s revelations that the Fed provided enormous emergency loans to the biggest names on Wall Street is a controversy over whether the Fed loaned out $7.7 trillion, as some outlets have reported.
That’s a shame, because the total amounts loaned out are sort of beside the point. Bloomberg’s original story, which led off the coverage, reported that the Fed made $7.7 trillion in total commitments for the worst-case scenario, but only lent out $1.2 trillion. Those numbers appear to be accurate.
Now, $1.2 trillion is a lot of money, by any standard, and in comparison to TARP. Yet the dollar amount is not as important as the fact that the Fed gave banks like Goldman Sachs and Citigroup what they needed to stay afloat. If all the banks needed to avoid bankruptcy was $1 million and the Fed gave them that $1 million when no one else would, that $1 million would be hugely significant.
The fact that certain critics have fixated on an overblown loan figure shouldn’t overshadow the real story here, which is that a number of big banks got a lifeline from the Fed that the public, and Congress, didn’t know about until well after the fact.
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More Blog Posts by Joseph Lawler
http://spectator.org/blog/2011/12/08/fed-secrecy-its-the-influence
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Jack in Wi| 12.8.11 @ 3:07PM
Audit the Fed and find out how much damage has been done. Then figure a way to get rid of it for once and for all. No sane person believes anything that comes out of Bernanke's mouth.
crazy| 12.8.11 @ 3:39PM
The problem is there's no evidence that the big guys have done anything to rein in the financial instruments of mass destruction they created in the 90's to profit from risky investments directly or indirectly by hedging the very investments they promoted.
Until they do something to reform or rein in this stuff the FED will keep inflating the money supply, the Treasury will keep printing money and the rest of us will pay with inflated prices, near-zero interest and overly risky stocks and/or bonds.
Clint| 12.8.11 @ 5:18PM
" Asked if he would get rid of the Federal Reserve, (Dr.Ron ) Paul said he did not want to close it down in one day, but reign it in with an audit, or by not allowing it to print money.
"It was scary yesterday when all the world banks came together. The fear is that the IMF (International Monetary Fund) will set the money standard," he said."
The Tea Party Rebellion Is Here.
Linda Joy Adams| 12.9.11 @ 1:54AM
then there is the withholding of monies that agencies have had issued to people and companies. Such as social security checks, the million dollars for each injured federal worker to be put in trust for medical care and the multiple thefts of id and claims over at Medicare that started 8/08 and went re tor on all comas back to 1/06 and only one pa to doctor,etc and the rest still at the Fed. Collusion to steal and the person or company is liable for the overpayment and no letters of waiver can be issued anymore as one can get with a stolen credit card. Over 5 million in my name and their investor's company: affiliated computer services was given the order: let her die and have refused to input a decade of oxygen claims that federal workers comp had approved for life before they took over. Congress won't allow criminal investigations or internal audits and civil rights complaints are 'disappeared' . Abolish the Fed: at least if the sec of treasury did this he or she could be arrested. Insiders say the multiple thefts at Medicare are over a trillion with many dead as diagnosis codes were altered on claims and created a fraudulent national health insurance claims data base that' not under HIPPAA as govt contractors are exempt and if any doctor uses it for a medical history , injuries and deaths have occurred. according to a congressional study done over 4 years ago. Federal criminal investigaros can do nothing due to Congressional immunity to all govt contractors. will one person in Congress introduce a bill to end this, now! Linda joy Adams with files and monies missing in 5 federal agencies under the control of affiliated computer services. And am being told i have to sue the federal reserve to get themonies returned to the appropriate agencies to pay for my medical care in order to live.
JimH| 12.9.11 @ 8:59AM
The Fed policy is best expressed by the Dire Straits song: Money For Nothing.