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To: Les H who wrote (295355)	12/3/2010 3:33:56 PM
From: patron_anejo_por_favor	Respond to of 306849

Tariffs? I think not....if we tried it, we'd have a wall 'o treaury bond offers at the next opening bell. Got 20% interest rates?

To: Les H who wrote (295355)	12/3/2010 3:54:36 PM
From: Les H	Read Replies (2) \| Respond to of 306849

The Great Depression Scholar Act is Getting Old Bernanke’s big claim to economic godliness is that he studied the Great Depression. It just doesn’t seem like he studied what lead up to it or exacerbated it. Then, as still now, Wall Street banks were overleveraged. They were sitting on too many risky loans. The Fed was one of their key subsidizing lenders then, as now, and by the middle of 1929, the Fed was worried. So it began raising interest rates (this, according to Bernanke, was the main problem he didn’t want to repeat, but he’s oblivious to the fact that it was the reckless lending and manipulating, not the interest rate moves, that did the most damage and hid the most problems). Back in the ’20s, the NY Fed began extending more loans to the big banks at the same time they were trying to restrain them from speculative activities. Which of course didn’t work. Nicely asking banks not to speculate with cheap money is like asking a hungry lion not to roar. The Fed could have put on the brakes and checked the borrowing of the Wall Street banks, but it didn’t. It didn’t during the years that Bernanke first took the helm. And, it doesn’t now. Even if Bernanke understood the causes of the Great Depression, he didn’t apply them. If he did, Bernanke would have put more blame where it’s due. Banks did not merely lend predatorily–they pushed, scooped up, repackaged, and resold loans to the Nth frenzied degree. You can’t continue to blame ‘the economy’ for that. (That’s what people like Class A New York Fed director, and JPM Chase CEO, Jamie Dimon do, while pocketing more profits from fees to offset loan related losses.) The underlying financial process has not been terminated. In 1930, the Fed pushed for the creation of, and funded, new 3-month Treasury bills, to give banks another avenue to access short-term money as their loans and trusts were imploding. It worked for the biggest banks that had the most access. The smaller banks folded. Sort of like what is still happening now. indypendent.org Mortgage-Backed Securities Purchase Program Aided Foreign Private Banks Private foreign banks also received billions from the Fed in exchange for mortgage backed securities (MBS). The Fed created its MBS program in November 2008 and eventually paid out $1.25 trillion. These facts were known. What we did not know was that approximately half of these purchases were from overseas financial firms, including billions from Barclays Capital (U.K.), Credit Suisse (Switzerland), Deutsche Bank (Germany), Royal Bank of Scotland (England), UBS (Switzerland) and Nomura Securities (Japan). The numbers are huge. Duetsche Bank sold some $290 billion worth of MBS to the Fed. Term Securities Lending Facility Loaned Free Money The Huffington Post reported that like U.S. banks, major European firms benefited from the Term Securities Lending Facility. Under this program, the banks were loaned securities for four-week intervals while paying fees that amounted to a whopping 0.0078 percent. Five EU firms took advantage of this free money AIG Redux? When AIG sent $24 billion to Société Générale and Deutsche Bank, Congress launched an investigation. Now these amounts look relatively small. Why lend to foreign banks, who could petition for help from their central banks overseas? How did these loans benefit the American taxpayer? How much has been paid back? From our accounting at the Center for Media and Democracy, approximately $2 trillion in Fed loans are still outstanding. (The Fed accounted for 13 programs, we accounted for 21). When asked why Canadian banks were getting aided by the Federal Reserve, Canadian trade analyst Ellen Gould pointed out, “The United States is a signatory to the World Trade Organization’s (WTO) Agreement on Financial Services. Under that pact, the Fed cannot favor a U.S. bank with 20,000 employees over a foreign bank with 20 employees. It is required to treat all banks with a subsidiary in the United States the same.” While our treaty obligations are clear and well known to the administration -- as Tim Geithner was a key negotiator of the WTO financial service agreement back in the late 1990’s -- I favor Gould’s second theory. With a little more digging, we might find out that all these foreign banks are in fact Goldman Sachs counterparties. prwatch.org