As part of the bailouts of AIG and Bear Stearns, the Federal Reserve Bank of New York spent more than $70 billion to buy toxic assets the companies owned. Last week, prompted by a lawsuit filed by Bloomberg News, the Fed finally told the world exactly what it bought.
The Fed now owns loans to Hilton hotels in Hawaii, Puerto Rico, Malaysia and Trinidad. It owns loans to the Miami airport, and the Civic Opera House in Chicago.
It also owned a loan to Crossroads Mall in Oklahoma City. Then, when the owners of the mall couldn't make the payments, the Fed foreclosed. So now it owns the mall, which includes a Chick-fil-A and an AMC theater.
The mall's for sale — cheap! "This lender owned distressed asset ... can be purchased at far below replacement cost," the listing says.
Planet Money Podcast
The Fed Wants To Sell You A Mall In OklahomaApril 6, 2010
The Fed also owns credit-default swaps — basically, insurance policies that pay off if a borrower defaults on a loan. It holds swaps on the debt of Florida schools, and on debt owed by California and Nevada. So the Fed would profit if one of those states defaulted on its debt.
Here's how Vincent Reinhart, a former Fed economist who now works at the American Enterprise Institute, describes the odd state of the bank's balance sheet:
"You should have the image of Chairman Ben Bernanke flying to a speaking engagement," Reinhart says. "And he can look out the window and look down and say, 'Boy, I own a piece of that, I own a piece of that, I own a piece of that, I own a piece of that.' "
The New York Fed, which bundled the assets into special companies called Maiden Lane I, II and III, says it only bought the assets because the crisis was so extreme.
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Of course it profits at our expense. It was created to profit at our expense. We fart and it profits. That's the way it is has been since 1913. Why is everyone so surprised all of a sudden? What is it so complicated here to understand? People created a cartel to loan money to the government and get in return interest payment, knowing full well that if government would not have money, it'll pay with its gold first. When it runs out of gold, it'll pay with ever increasing taxes. Why the hell it surprises everyone only after almost a hundred years? Where have you been all this time before? On another planet?
ReplyDeleteThe Fed does not legally own anything since it created the money out of nothing. It does has not have any skin in the game or economic interest in the peoperties aquired! Every firm should fight a Fed foreclousre, case law in Kansas says this is a winner! The orginal note holder was made whole, no economic loss no damages!
ReplyDeleteContracts are ilegal if they are not an agreement between equal parties.
ReplyDeleteThat is not unfair extortion
Long live the financial coup, free money the carry trade ,Bush ,Bernanke ,Obama and the U.S Taxpayer! Capital is being restored to profitability with the greatest transfer of wealth between classes to the rich in the history of the world.
ReplyDelete. Americans ! Your patriotic self sacrifice to save the system will go down in the annals of history as the stuff of legend. Never have so many given up so much to so few without even a fight.
The cleverness of the new “ investment” strategies of the banksters and great innovative banking practises invented and patented as kosher by American banksters for selling government backed bonds are a world first in convenient government Ponzis schemes for banksters and the rich.
Clever banksters bonuses for bringing in the profits are assured . As pointed out in earlier comments on this blog the benefits of the internal carry trade are highlighted in more detail along with other neat trickeries now being revealed at the “Automatic earth blogspot” Where you can read how the Glorious Internal Carry Trade is now so simple and easy. Requiring just a short walk to collect the loot .
“… combined with the Federal Reserve's resolve to keep base rates at record lows, ((this))provides the White House with a neat little scheme that could both make sure its debt is sold, and boost bank capital at the same time. It's not something new, either, but it could be made to grow considerably. Wall Street banks can borrow from the Fed at 0.25%-0.5% right now, then walk a few -virtual- blocks down the street to the Treasury Department, buy Treasuries that yield 4% today and likely much more in the months and years to come, and basically sit on their hands while the money flows in.”
The Dorothy theory,Bonds run amuck.
http://theautomaticearth.blogspot.com/
Thank you Geither, Thank You Americans ! And long live free money, the carry trade and the financial coup!
Wall Street wiped out millions of jobs and Ben was part of it! Still not one person has been arrested!
ReplyDeletehttp://americaspeaksink.com/2010/04/unemployment-long-term-problem-with-short-term-solution/
I think our only chance would be to tell the Fed to fuck off, reneg/cancel our phony debt with them, print our own money. Yes, the USA is lame and we make nothing, however we have oil, farmland, and resources to take care of our own.
ReplyDeleteJust give up on the global crap, and become an island onto ourselves.
Silly, impossible thought when the bankers own our government and media.
I sincerely believe if all TVs in the USA died just for ten days, about 10% more would wake up. As long as that propaganda tool is sitting in every living room and bedroom the battle is lost.
Go Mickelson, hit a home run!
One only need to read the comments on this website to realise that America is full of communist like bloggers with human rights prejudices and the anarchistic belief that the middle class has equal rights with the idle class. That they, like the rich , are entitled to a free lunch and hand outs or a high paying job .Just because they are Americans .
ReplyDeleteThey direct their propaganda attack on the rich and property right at the “Fed” by raising un-amerikan so called “social” values. This is class war propaganda by a communist middle class and lower classes attempting to organise as classes against rich individuals rights .And the rights of corporations the philanthropic heart of America .
But the insidious real target of these ideological communists is really to usurp control of Treasury that is now legally authorised by congress to loot all current and future revenues of Treasury and expand the national debt to banksters.
This financial coup in Congress has bi-partisan support( Bush,McCain,and Obama) and was necessary to ensure that this kind of communist resistance was overcome and that more free money flowed to bankrupt capital in the American way. The laws of the land and the treasury in cooperation with the Fed now authorises all the banksters properly get a fair share of the free money loot that flows to their hard earned capital . This socialisation of past losses and guarantee of future profit is a fair and just reward for American enterprise ,to those who actually were prepared to risk their capital for America’s benefit.
So, whats new? The coup was actualy only an improvement to the free money system. To an american right of banking capital to free money guaranteed by law. The Fed already had a long established right by law to fractional reserve banking and to create fiat paper money/debts out of fresh air for americans .
Corporations are legal persons after all. And as individual “persons” are entitled to legal protection at law under the great US constitution from attacks by communists and socialisers . A constitutional right of persons to equality and non-discrimination that is guaranteed by amendment as interpreted by the courts . It’s a good thing America has Patriot Acts to protect the long suffering rich and legal persons from these rabid class war fanatics.
Long live free money for the rich..