Hello, John. Whomever has termed it a "Fed bailout" can not be certain that it is. But, if it is, it won't be the first time. See Penn Central Railroad, 1970 and the relevant House Banking and Currency Investigation, 1972. The Fed Chairman, Arthur Burns, would have preferred to provide the Penn Central w/ a direct infusion of newly created money, but that was against the rules.
---------------------------------------------------------------------
Mr. Burns: "Everything fell through. We couldn't lend it to them ourselves under the law...I worked on this thing in other ways."
-- Chris Welles' The Last Days of the Club
---------------------------------------------------------------------
What people also aren't seeing, or possibly overlooking, is that placing those financial institutions as fiduciaries is like issuing a license to steal.
I have to think that, someway and somehow, private interests will be served at the expense of the public.
Like I've said, and you, John, have reiterated: "The proponent argument is that the Fed afforded LTCM no monies. Also, that the monies were gotten from the institutions at risk." But who can know with any certainty the actual origin of the loans that reportedly sourced from those institutions? Because they told us so? No, no. They operate like gangsters and con men.
This sort of complication happens every time there is trouble inside the banking system. It goes straight to the nature of a system that is a marvel of creative bookkeeping. The term ledgerdemain also comes to mind.
Some may think I was joking when I said this, but it is true that the Federal Reserve opens its books for no one. Nothing short of an Act of Congress will arrange an audit of the Federal Reserve Bank.
John, you say, "My point is that no tax dollars were used (is this correct?)."
When, now?
Later, via another recapitalisation scheme?
Who's to know? |
