Bloomberg demanded to know. The media publisher has been fighting the Federal Reserve to find out who received glorified interest-free money via the discount window during the 2008 financial crisis. After over two years of legal maneuvering and a Supreme court decision, Bloomberg finally found out, 2 CDs, 894 pdfs and 29,000 pages worth of finding out.
It ain't pretty. Foreign Banks got most of the money.
The biggest borrowers from the 97-year-old discount window as the program reached its crisis-era peak were foreign banks, accounting for at least 70 percent of the $110.7 billion borrowed during the week in October 2008 when use of the program surged to a record.
It's astounding, why would the Federal Reserve be bailing out China, Libya and European banks?
Dexia SA (DEXB), based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed’s “discount window” lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender later seized by the German government, drew $24.5 billion.
Especially why would the Fed loan $300 billion to Dexia SA who is implicated in defrauding taxpayers? Why would the United States be lending at zero interest, money to China at all?
Bank of China, the country’s oldest bank, was the second- largest borrower from the Fed’s discount window during a nine- day period in August 2007 as subprime-mortgage defaults first roiled broader markets. The Chinese bank’s New York branch borrowed $198 million on Aug. 17 of that month.
Zerohedge has some of the borrowers and amounts details. In spite of losing a Supreme Court case, it appears the Fed. requires you to fill out a form to get the information directly. We put up one spreadsheet here.
Senator Bernie Sanders asked the Fed why Libya received discount window loans?
Sen. Bernie Sanders (I-Vt.) today questioned why the Federal Reserve provided more than $26 billion in credit to an Arab intermediary for the Central Bank of Libya.
The total includes at least $3.2 billion in loans that the Fed was forced to make public today in addition to earlier revelations under a Sanders provision in the Wall Street reform law.
Sanders also asked why the Libyan-owned bank and two of its branches in New York, N.Y., were exempted from sanctions that the United States this month slapped on other Libyan businesses to pressure Col. Moammar Gadhafi’s government.
“It is incomprehensible to me that while creditworthy small businesses in Vermont and throughout the country could not receive affordable loans, the Federal Reserve was providing tens of billions of dollars in credit to a bank that is substantially owned by the Central Bank of Libya,” Sanders said.
In a letter to Federal Reserve Chairman Ben Bernanke and others, Sanders asked why the central bank made at least 46 emergency, low-interest loans to the Arab Banking Corp., in which the Central Bank of Libya owns a 59 percent stake.
Sanders also asked the question we've said repeatedly, how can one lend money to one branch of the government and the other borrow money from another branch and call this anything but a glorified Ponzi Scheme?
The Fed loans, at interest rates as low as 0.25 percent, relied on U.S. Treasury securities as collateral. In other words, at the same time that the Arab Banking Corp. was borrowing money at almost zero interest from one arm of the government, the Fed, it was lending money at a higher interest rate to another arm of the U.S. government, the Treasury Department.
Rolling Stone Journalist Matt Taibbi is pouring over the 21,000 transactions and found this gem. We have housewives of Wall Street executives getting bank bail out money.
Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?
We kid you not. The Federal Reserve made it possible for rich housewives to get free money.
Christy and her pal Susan launched their investment initiative called Waterfall TALF. Neither seems to have any experience whatsoever in finance, beyond Susan's penchant for dabbling in thoroughbred racehorses. But with an upfront investment of $15 million, they quickly received $220 million in cash from the Fed, most of which they used to purchase student loans and commercial mortgages. The loans were set up so that Christy and Susan would keep 100 percent of any gains on the deals, while the Fed and the Treasury (read: the taxpayer) would eat 90 percent of the losses. Given out as part of a bailout program ostensibly designed to help ordinary people by kick-starting consumer lending, the deals were a classic heads-I-win, tails-you-lose investment.
Here are some more details ferreted out. Seems everyone got a piece except the American people.
The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loans each to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. "Our jaws are literally dropping as we're reading this," says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. "Every one of these transactions is outrageous."
So, why then, isn't all of Congress in an uproar, with only Bernie Sander's office and Ron Paul really speaking up?
Normally I find most of Ron Paul's positions odious and economic fiction, yet his statement on this report really calls cash on the absurdity of the Federal Reserve funding a terrorist state.
There are other suspicious and insidious discount window borrowings as well. For example, one of the top 5 discount window loan recipients, Wachovia, borrowed while being acquired by Wells Fargo:
Wachovia Corp borrowed $29 billion from the discount window on Oct. 6, in the week after it almost collapsed, the data show. Wachovia agreed in principle to sell itself to Citigroup Inc. on Sept. 29, before announcing a definitive agreement to sell itself to Wells Fargo & Co. (WFC) on Oct. 3. The Wells Fargo deal closed at the end of 2008.
You know who else was on this story long before it broke? Alan Grayson, who was voted out of Congress in 2010. America, what can one expect when voters remove people from office who try to expose what's really going on and vote in people who want to destroy social security, safety nets per their uber-rich billionaire donor mandates?
In the below video clip Bloomberg hunts the Federal Reserve discount window loan documents on air for Goldman Sachs, who claimed they were just fine during 2008,....and find them:
It's astounding how this all is being swept under the rug. Three years later and we have one Senator calling for an investigation into Goldman Sachs for violating the law. To date, there have been no criminal charges and fines that are mere slaps on the wrist. While many ponder why no one has gone to jail, any real action, simply doesn't happen.
One has to give credit to Bloomberg news on this story, else even this much would have never been disclosed.