If you look [at the Occupy protests], not just nationwide, but worldwide, you will see some pretty consistent themes developing. Those themes include: we have to deal with the systemically dangerous institutions, the 20 biggest banks that the administration is saying are ticking time bombs, that as soon as one of them fails, we go back into a global crisis. We should fix that. There’s no reason to have institutions that large. That’s a theme. That accountability is a theme, that we should put these felons in prison… That we should get jobs now, and that we should deal with the foreclosure crisis. So those are four very common themes that you can see in virtually any of these protest sites… I think, over time, you won’t necessarily have some grand written agenda, but you’ll have, as I say, increasing consensus. And it’s a very broad consensus.
Oct 21 2011
Oct 21 2011
Playing for Profits
After Bank of America was downgraded by the ratings agencies and over the objections of the FDIC but with Federal Reserve Chairman Ben Bernanke’s blessing, the Bank of America transferred millions of dollars of its worst derivatives to its Merill Lynch unit where they would be insured:
The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position.
Three years after taxpayers rescued some of the biggest U.S. lenders, regulators are grappling with how to protect FDIC- insured bank accounts from risks generated by investment-banking operations. Bank of America, which got a $45 billion bailout during the financial crisis, had $1.04 trillion in deposits as of midyear, ranking it second among U.S. firms.
“The concern is that there is always an enormous temptation to dump the losers on the insured institution,” said William Black, professor of economics and law at the University of Missouri-Kansas City and a former bank regulator. “We should have fairly tight restrictions on that.”
So why is the FDIC concerned and the Federal Reserve giving its blessing? masaccio at FDL explains:
Of course, the Fed loves it. Bank holding companies can do no wrong as far as the Fed is concerned. The risk to taxpayers, and the moral hazard issues are utterly irrelevant to Ben Bernanke and his buddies. Of course, given the vast conflicts of interest at the Fed, this isn’t a surprise.
There are reasons to be worried about this. First, BAC moved the derivatives at the request of counterparties. The counterparties have a right under their derivative contracts to demand collateral from BAC, as they did after the company’s rating was reduced earlier this year. BAC estimates that would require an additional $3.3 billion in collateral. The downgrade was due to judgment by the ratings agencies that the government was less likely to bail out BAC if it got into trouble. Thus, the effect of the downgrade was to increase the direct risk to the FDIC, by forcing it in effect to guarantee the derivatives of Merrill Lynch. Nice opinion, ratings agencies. I wonder who paid them for it?
Second, if the FDIC has to liquidate BAC, it will have to borrow from the Treasury to pay depositors, and it will have to bill the largest banks for additional fees to pay off the Treasury loans to the extent of actual losses. We have no idea of the interlocking relations of these giants, so we have no idea whether the collapse of one would wreck others. Media reports say there are concerns about the relationships between European banks and US banks, so there is reason for concern about the relations among US giants. If one collapse could lead to others, where is the money coming from to repay the Treasury? 
Third, 82% of derivatives in notional amount are interest rate swaps. Interest rates are at historic lows. What happens when they go back up to normal levels? 
Fourth, BAC has a huge position in credit default swaps, with a notional value of $4.1 trillion. . . . . as we saw with AIG, when CDSs go sour, the counterparty has the right to demand collateral right up to the moment the entity fails. In this case, that collateral would be cash, and it would directly reduce the amount of cash in the Bank. That would be a disaster for the FDIC, which would have to pay off the depositor losses up to the insured limit.
As Yves Smith explains this has an air of criminal incompetence with the tax payers having to foot the bill in the end:
This move reflects either criminal incompetence or abject corruption by the Fed. Even though I’ve expressed my doubts as to whether Dodd Frank resolutions will work, dumping derivatives into depositaries pretty much guarantees a Dodd Frank resolution will fail. Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. So this move amounts to a direct transfer from derivatives counterparties of Merrill to the taxpayer, via the FDIC, which would have to make depositors whole after derivatives counterparties grabbed collateral. It’s well nigh impossible to have an orderly wind down in this scenario. You have a derivatives counterparty land grab and an abrupt insolvency. Lehman failed over a weekend after JP Morgan grabbed collateral.
But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors. No Congressman would dare vote against that. This move is Machiavellian, and just plain evil.
It is well past time to do something about regulation and oversight of the Federal Reserve.
Oct 21 2011
Suck on these mighty lemon drops
Message to the One Percent: you can’t stop my world…
Oct 21 2011
Punting the Pundits
“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.
Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.
Paul Krugman: Party of Pollution
Last month President Obama finally unveiled a serious economic stimulus plan – far short of what I’d like to see, but a step in the right direction. Republicans, predictably, have blocked it. But the new plan, combined with the Occupy Wall Street demonstrations, seems to have shifted the national conversation. We are, suddenly, focused on what we should have been talking about all along: jobs.
So what is the G.O.P. jobs plan? The answer, in large part, is to allow more pollution. So what you need to know is that weakening environmental regulations would do little to create jobs and would make us both poorer and sicker.
Ari Berman: How the Austerity Class Rules Washington
In September the Committee for a Responsible Federal Budget (CRFB), a bipartisan deficit-hawk group based at the New America Foundation, held a high-profile symposium urging the Congressional “supercommittee” to “go big” and approve a $4 trillion deficit reduction plan over the next decade, which is well beyond its $1.2 trillion mandate. The hearing began with an alarming video of top policy-makers describing the national debt as “the most serious threat that this country has ever had” (Alan Simpson) and “a threat to the whole idea of self-government” (Mitch Daniels). If the debt continues to rise, predicted former New Mexico Senator Pete Domenici, there would be “strikes, riots, who knows what?” A looming fiscal crisis was portrayed as being just around the corner.
The event spotlighted a central paradox in American politics over the past two years: how, in the midst of a massive unemployment crisis-when it’s painfully obvious that not enough jobs are being created and the public overwhelmingly wants policy-makers to focus on creating them-did the deficit emerge as the most pressing issue in the country? And why, when the global evidence clearly indicates that austerity measures will raise unemployment and hinder, not accelerate, growth, do advocates of austerity retain such distinction today?
Funny, he doesn’t look like Marie Antoinette. But when former New York Times Executive Editor Bill Keller asks his readers if they are “bored by the soggy sleep-ins and warmed-over anarchism of Occupy Wall Street,” it displays the arrogance of disoriented royal privilege.
Perhaps his contempt for anti-corporate protesters was honed by the example of his father, once the chairman of Chevron. In any case, it is revealing, given the cheerleading support that the Times gave to the radical deregulation of Wall Street that occurred when Keller was the managing editor of the newspaper.
Michelle Chen: It’s NAFTA x3 as Free Trade Deals Sweep Through Congress
One day in September, Isidro Rivera Barrera, a contract worker and labor organizer who was campaigning at an Ecopetrol refining facility in Barrancabermeja, Colombia, was reportedly gunned down outside his home. His death was met with the usual silence-just business as usual in a country with one of the world’s worst human rights records for attacks on trade unionists. But now, the hushed suffering of Colombian workers reverberates in the U.S. Capitol, which has just passed a deal to bring even more business-as-usual to Colombia.
Congress last week approved three long-pending trade deals with Panama, South Korea and Colombia. The rationale behind each of them is dubious; there’s little evidence that the agreements will lift up the U.S. economy and plenty that they could lead to massive job loss in key sectors. But free trade deals have always been less about creating jobs than exporting neoliberal ideology to the Global South, thereby accelerating poor nations’ cascade toward low labor standards, environmental exploitation and deregulation.
Allison Kilkenny: Occupy Wall Street: Cutting Edge, Old-Fashioned Village
It seems like every day more news emerges about Occupy Wall Street’s plans to expand the movement. New chapters spring up across the country, more citizens join the cause, and now OWS even has its very own commercial.
As David Dayen reports, the commercial is set to run on national television thanks to LoudSauce, a crowd-funding group. Dayen applauds the commercial as an “innovative way to get the message out for a new kind of protest movement, one that refuses to let other people tell their story.”
David Graeber calls this a movement of “horizontals,” meaning people who don’t require traditional hierarchical structures to lead the movement, who believe in direct action and don’t rely on a messiah-like figure to guide them. Basically, OWS is the opposite of the traditional political party structure and, as such, neither political parties nor the establishment media devoted to covering those parties understand it.
John Nichols: Replace Biden? No, Embrace His Economic Populism
The 2012 presidential election is, as too many Republican debates to count have reminded us, barely a year away. And President Obama is still wrestling with some nasty poll numbers. A majority of Americans contacted for a new AP-GfK survey say the president does not deserve to be reelected, while only 46 percent favor a second term.
Sounds dismal for the president.
But it doesn’t necessarily have to be, if Obama and his aides keep their wits about them and take a few more signals from the one member of the administration who seems to “get it”: Vice President Joe Biden.
Jonathan Shell: Occupy Wall Street: The Beginning Is Here
Nothing is more striking about the Occupy Wall Street movement, which in a political instant has swept through not only the United States but the world, than its origin. It seemed to come out of nowhere, like a virgin birth. There were, of course, organizations that played a critical initiating role, which is gradually being acknowledged and rightly honored (see, for example, Nathan Schneider, “From Occupy Wall Street to Occupy Everywhere,” October 31). But it would be wrong to assign paternity in any ordinary sense to them, and they indeed disavow such a claim. On the contrary, the core activists in Liberty Plaza founded on the spot a decentralized, nonviolent pattern of “leaderless” self-organization that made every participant, old or new to the process, a “founding father” (or mother). The movement, you could say, was father and mother to itself. To join it was, immediately, to become it.
Oct 21 2011
Occupy Wall St. Livestream: Day 35
The resistance continues at Liberty Square, with free pizza 😉
“I don’t know how to fix this but I know it’s wrong.” ~ Unknown Author
Occupy Wall Street NYC now has a web site for its General Assembly with up dates and information. Very informative and user friendly. It has information about events, a bulletin board, groups and minutes of the GA meetings.
One of the groups that Health Care for the 99% is planning a major event on October 26, Get Wall Street out of Healthcare!! March Against the Health Insurance Industry. There is a planned march to the offices of Empire Blue Cross Blue Shield, WellCare and St Vincent’s Community Hospital which closed earlier this year due to bankruptcy. St Vincent’s is a casualty of profit-driven insurers and a healthcare system that leaves 50 million Americans uninsured. There are now no hospitals on the westside below 57th st. I am planning on participating in that march. Stay tuned.
Disgruntled Verizon Communications and Verizon Wireless workers and members of the labor union Communications Workers of America will be joining the “Occupy Wall Street” protest Friday in protest of “Verizon’s corporate greed.”
In a press release issued Thursday afternoon, the CWA said that about 1,000 Verizon workers will meet at Verizon’s headquarters in downtown Manhattan near Wall Street at 4 p.m. ET and march past Liberty Plaza/Zuccotti Park where “Occupy Wall Street” protesters are gathered. The march will end at a Verizon Wireless dealer on Broad Street. Many of the protesters are then expected to return to Liberty Park and stay through the night.
By: Cynthia Kouril at FDL
Please come to the meeting tonight or send our messages or write about people coming to the meeting of the combined Quality of Life and Financial District subcommittee
Real Estate Board of New York asking the city to prohibit Occupy Wall Street-style use of public space.
In fact, the Real Estate Board of New York is reportedly preparing to ask the city to endorse universally applicable rules prohibiting future Occupy Wall Street-style use of public space, along with the automatic right to close all spaces at night.
REBNY is the 1%.
The Board’s ranks consist of 12,000 owners, builders, brokers, managers, banks, insurance companies, pension funds, real estate investment trusts, utilities, attorneys, architects, marketing professionals and many other individuals and institutions involved in New York realty.
It didn’t sound like this was as bad as they expected. The Board of Realtors would still have to go through the city council process to get any changes and that won’t happen anytime soon.
Oct 21 2011
This Week In The Dream Antilles
Friday Dawn, Bahia Soliman, Mexico
Your Bloguero was awakened shortly before dawn this morning by the persistent dinging of his Blackberry. About 24 dings in rapid succession indicating the receipt of emails. Your Bloguero imagined that he had somehow, despite his best efforts to the contrary, achieved minor celebrity status. He was not sure how that could be, or what he could have done, but what else could have him receive 24 emails one after the other? Today, after all, is Friday. Friday is auspicious, your Bloguero thought. It’s a great day to open the floodgates of fame and adulation. Why not? No such luck. Opening one eye, your Bloguero discovered to his annoyance that the 24 messages were emails from his automated friends at Yahoo telling your Bloguero that he had sent email to a bad address, and that the email had been rejected by the recipient’s ISP. Your Bloguero opened his other eye. There was obviously a problem. Your Bloguero had not sent any emails to anybody on that account. So, your Bloguero’s razor sharp wit figured, somebody else had sent them. How very disappointing. It wasn’t fame that was dinging so insistently. It wasn’t adulation, praise, recognition. It wasn’t anything good. No. It was hackage. Plain and simple.
And who, your Bloguero wondered, might have decided to hack this account? This was the account associated with your Bloguero’s postings on various group blogs. Had your Bloguero so enraged someone with something he had recently written that he provoked such a hack? Your Bloguero could only hope. Was this pay back of some kind? Your Bloguero should be so lucky. Who would have done that? What followed were the kind of pre-coffee conspiracy theories reserved for such abrupt, early wakings. In two words, incipient paranoia. But alas. Even this was too puffed up, too egocentric, too self important. Your Bloguero wasn’t being treated to well deserved, well earned attack. No. Nothing that good. Nothing that heroic. The email had a link in it. It was commercial spam from Romania for erection enhancement. If you will pardon the pun, how very deflating. How contracting. What a lame way to start Friday: changing the password so it won’t happen again.
The next thing will doubtless be responding to the numerous emails – your Bloguero received one while writing this — telling him he has been hacked. And telling the recipients, that yes, your Bloguero knows and he’s changed his password and he regrets any inconvenience.
How disappointing. From web hero to complete sucker in a nanosecond.
This Week In The Dream Antilles is usually a weekly digest. Sometimes, like now, it isn’t actually a digest of essays posted in the past week at The Dream Antilles. For that you have to visit The Dream Antilles.
Oct 21 2011
On This Day In History October 21
This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.
Find the past “On This Day in History” here.
October 21 is the 294th day of the year (295th in leap years) in the Gregorian calendar. There are 71 days remaining until the end of the year.
On this day in 1959, On this day in 1959, on New York City’s Fifth Avenue, thousands of people line up outside a bizarrely shaped white concrete building that resembled a giant upside-down cupcake. It was opening day at the new Guggenheim Museum, home to one of the world’s top collections of contemporary art.
Guided by his art adviser, the German painter Hilla Rebay, Solomon Guggenheim began to collect works by nonobjective artists in 1929. (For Rebay, the word “nonobjective” signified the spiritual dimensions of pure abstraction.) Guggenheim first began to show his work from his apartment, and as the collection grew, he established The Solomon R. Guggenheim Foundation in 1937. Guggenheim and Rebay opened the foundation for the “promotion and encouragement and education in art and the enlightenment of the public.” Chartered by the Board of Regents of New York State, the Foundation was endowed to operate one or more museums; Solomon Guggenheim was elected its first President and Rebay its Director.
In 1939, the Guggenheim Foundation’s first museum, “The Museum of Non-Objective Painting”, opened in rented quarters at 24 East Fifty-Fourth Street in New York and showcased art by early modernists such as Rudolf Bauer, Hilla Rebay, Wassily Kandinsky, and Piet Mondrian. During the life of Guggenheim’s first museum, Guggenheim continued to add to his collection, acquiring paintings by Marc Chagall, Robert Delaunay, Fernand Leger, Amedeo Modigliani and Pablo Picasso. The collection quickly outgrew its original space, so in 1943, Rebay and Guggenheim wrote a letter to Frank Lloyd Wright pleading him to design a permanent structure for the collection. It took Wright 15 years, 700 sketches, and six sets of working drawings to create the museum. While Wright was designing the museum Rebay was searching for sites where the museum would reside. Where the museum now stands was its original chosen site by Rebay which is at the corners of 89th Street and Fifth Avenue (overlooking Central Park). On October 21, 1959, ten years after the death of Solomon Guggenheim and six months after the death of Frank Lloyd Wright the Museum opened its doors for the first time to the general public.
The distinctive building, Wright’s last major work, instantly polarized architecture critics upon completion, though today it is widely revered. From the street, the building looks approximately like a white ribbon curled into a cylindrical stack, slightly wider at the top than the bottom. Its appearance is in sharp contrast to the more typically boxy Manhattan buildings that surround it, a fact relished by Wright who claimed that his museum would make the nearby Metropolitan Museum of Art “look like a Protestant barn.”
Internally, the viewing gallery forms a gentle helical spiral from the main level up to the top of the building. Paintings are displayed along the walls of the spiral and also in exhibition space found at annex levels along the way.
Most of the criticism of the building has focused on the idea that it overshadows the artworks displayed within, and that it is particularly difficult to properly hang paintings in the shallow windowless exhibition niches that surround the central spiral. Although the rotunda is generously lit by a large skylight, the niches are heavily shadowed by the walkway itself, leaving the art to be lit largely by artificial light. The walls of the niches are neither vertical nor flat (most are gently concave), meaning that canvasses must be mounted proud of the wall’s surface. The limited space within the niches means that sculptures are generally relegated to plinths amid the main spiral walkway itself. Prior to its opening, twenty-one artists, including Willem de Kooning and Robert Motherwell, signed a letter protesting the display of their work in such a space.
Oct 21 2011
2011 World Series- Rangers at Cardinals Game 2
And how are things working out for you Mr. Selig (warning- NY Post link)? From a more reputable source–
(T)he overnight ratings for the Series – which have dwindled over the years – were 8 percent below last year’s overnights for Game 1. Fox can only hope the Fall Classic will go beyond four or five games, because interest substantially builds for sixth and seventh games(.)
Last year’s five-game Series averaged 14.2 million viewers – the second-lowest after 13.6 million in 2008. In 2009, the New York Yankees-Philadelphia Phillies series drew 19.4 million viewers.
Your shouldn’t really need any other reasons to hate on the Rangers, but just in case–
“With all due respect to the Cardinals and their legendary fan base, it’s really their bad luck that they’re running up against the Texas Rangers, a team of destiny poised to win the World Series,” Perry said in a statement. “The Cardinals have had a great run, but this is about the here and now, and as Gov. Nixon and his fellow Missourians are about to discover, you simply can’t mess with Texas.”
Didn’t look too much like a team of destiny last night.
Even if the Cardinals win again today, a 2 – 0 deficit is not impossible to overcome though a Red Bird loss will force them to win a game in Arlington (which they should be planning on anyway). However a Rangers loss will send them home looking plenty vincible. It would be the same way they opened against the Giants last year when they were gone in 5.
The Cardinals will be starting Jaime Garcia, the Rangers Colby Lewis. On paper this is a mismatch, Garcia is 0 – 2 in the post season with a 5.74 ERA and Lewis has a 4 – 1 record and 2.37.
On the other hand the Rangers still have a Pujols problem and the Cardinals have been particularly effective against right handers (remember, the Rangers only have a single lefty in the Bullpen) while the Rangers are unimpressive against leftys.
About that Senior/Junior League stuff–
Part of the NL strategy, though, is not just filling out the lineup card. It’s getting your players into the game in the high-leverage moments that decide the outcome.
(I)n what turned out to be the Rangers’ last gasp, that seventh inning, Washington pinch hit Craig Gentry for David Murphy and then Esteban German for pitcher Alexi Ogando.
Both struck out. Gentry seemed overmatched, not only by lefty Marc Rzepczynski but also by the moment. German, meanwhile, hadn’t batted in nearly a month.
Left unused was the Rangers’ best right-handed bat on the bench, Yorvit Torrealba.
In the merry-go-round of pinch hitters and relievers that inning, Rangers reliever Alexi Ogando’s night was wasted by only facing two batters.
It’s not rocket science, this National League stuff. They have books and things.
Oct 21 2011
Federal Reserve In Need Of Supervision
Preferably some independent adult supervision
What was revealed in the audit was startling: $16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. From the period between December 2007 and June 2010, the Federal Reserve had secretly bailed out many of the world’s banks, corporations, and governments. The Federal Reserve likes to refer to these secret bailouts as an all-inclusive loan program, but virtually none of the money has been returned and it was loaned out at 0% interest. Why the Federal Reserve had never been public about this or even informed the United States Congress about the $16 trillion dollar bailout is obvious – the American public would have been outraged to find out that the Federal Reserve bailed out foreign banks while Americans were struggling to find jobs.
To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. The entire national debt of the United States government spanning its 200+ year history is “only” $14.5 trillion. The budget that is being debated so heavily in Congress and the Senate is “only” $3.5 trillion. Take all of the outrage and debate over the $1.5 trillion deficit into consideration, and swallow this Red pill: There was no debate about whether $16,000,000,000,000 would be given to failing banks and failing corporations around the world.
In late 2008, the TARP Bailout bill was passed and loans of $800 billion were given to failing banks and companies. That was a blatant lie considering the fact that Goldman Sachs alone received 814 billion dollars. As is turns out, the Federal Reserve donated $2.5 trillion to Citigroup, while Morgan Stanley received $2.04 trillion. The Royal Bank of Scotland and Deutsche Bank, a German bank, split about a trillion and numerous other banks received hefty chunks of the $16 trillion.
Angry? Check out page 131 of the GAO Audit to see the actual amounts that each institution received.
Senator Bernie Sanders released his report on Friday and appeared with Dylan Ratigan to discuss the problems and conflicts within the Fed.
October 19, 2011
WASHINGTON, Oct. 19 – A new audit of the Federal Reserve released today detailed widespread conflicts of interest involving directors of its regional banks.
“The most powerful entity in the United States is riddled with conflicts of interest,” Sen. Bernie Sanders (I-Vt.) said after reviewing the Government Accountability Office report. The study required by a Sanders Amendment to last year’s Wall Street reform law examined Fed practices never before subjected to such independent, expert scrutiny.
The GAO detailed instance after instance of top executives of corporations and financial institutions using their influence as Federal Reserve directors to financially benefit their firms, and, in at least one instance, themselves. “Clearly it is unacceptable for so few people to wield so much unchecked power,” Sanders said. “Not only do they run the banks, they run the institutions that regulate the banks.”
Sanders said he will work with leading economists to develop legislation to restructure the Fed and bar the banking industry from picking Fed directors. “This is exactly the kind of outrageous behavior by the big banks and Wall Street that is infuriating so many Americans,” Sanders said.
The corporate affiliations of Fed directors from such banking and industry giants as General Electric, JP Morgan Chase, and Lehman Brothers pose “reputational risks” to the Federal Reserve System, the report said. Giving the banking industry the power to both elect and serve as Fed directors creates “an appearance of a conflict of interest,” the report added.
The 108-page report found that at least 18 specific current and former Fed board members were affiliated with banks and companies that received emergency loans from the Federal Reserve during the financial crisis.
In the dry and understated language of auditors, the report noted that there are no restrictions in Fed rules on directors communicating concerns about their respective banks to the staff of the Federal Reserve. It also said many directors own stock or work directly for banks that are supervised and regulated by the Federal Reserve. The rules, which the Fed has kept secret, let directors tied to banks participate in decisions involving how much interest to charge financial institutions and how much credit to provide healthy banks and institutions in “hazardous” condition. Even when situations arise that run afoul of Fed’s conflict rules and waivers are granted, the GAO said the waivers are kept hidden from the public.
The report by the non-partisan research arm of Congress did not name but unambiguously described several individual cases involving Fed directors that created the appearance of a conflict of interest, including:
Stephen Friedman In 2008, the New York Fed approved an application from Goldman Sachs to become a bank holding company giving it access to cheap Fed loans. During the same period, Friedman, chairman of the New York Fed, sat on the Goldman Sachs board of directors and owned Goldman stock, something the Fed’s rules prohibited. He received a waiver in late 2008 that was not made public. After Friedman received the waiver, he continued to purchase stock in Goldman from November 2008 through January of 2009 unbeknownst to the Fed, according to the GAO.
Jeffrey Immelt The Federal Reserve Bank of New York consulted with General Electric on the creation of the Commercial Paper Funding Facility. The Fed later provided $16 billion in financing for GE under the emergency lending program while Immelt, GE’s CEO, served as a director on the board of the Federal Reserve Bank of New York.
Jamie Dimon The CEO of JP Morgan Chase served on the board of the Federal Reserve Bank of New York at the same time that his bank received emergency loans from the Fed and was used by the Fed as a clearing bank for the Fed’s emergency lending programs. In 2008, the Fed provided JP Morgan Chase with $29 billion in financing to acquire Bear Stearns.At the time, Dimon persuaded the Fed to provide JP Morgan Chase with an 18-month exemption from risk-based leverage and capital requirements. He also convinced the Fed to take risky mortgage-related assets off of Bear Stearns balance sheet before JP Morgan Chase acquired this troubled investment bank.
Lets not forget who President Obama chose to replace Rahm Emanuel, Bill Daley, son of legendary Chicago Mayor Richard J. Daley (D) and brother of the more recent Mayor Richard M. Daley (D). Oh, I forgot, Geithner is also the architect of Bill Clinton’s NAFTA Agreement that Obama promised to fix and Midwest Chairman of JPMorgan Chase.
Then there is our Treasury Secretary, Tim Geithner, a protégé of Lawrence Summers and Robert Rubin, who while president of the Federal Reserve Bank of New York, played a large role in directing the Federal Government’s spending on the late-2000s financial crisis, including allocation of $350 billion of funds from the Troubled Asset Relief Program enacted during the previous administration.
None of these people should be allowed anywhere near either the Federal Reserve or the Treasury. Most of them should be in jail.