Alan Grayson: Which Foreign Banks Got The Fed's $500 Billion? - Bernanke: I Have No Idea
Video - Grayson and Bernanke - July 22, 2009
Given the dollar free-for-all announced this week for European banks, this short clip helps explain how the liquidity swaps will work.
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Here's an update from Bloomberg...
Former prosecutor, Alan Grayson wants details on the $553 billion in foreign central bank liquidity swaps that were issued last Fall in response to the global financial crisis. These swaps grew from $24 billion at end of 2007 to $553 billion at the end of 2008.
Specifically, Grayson wants to know who got it, how much they got, whether it is constitutional, why Congress was not consulted, and whether these swaps contributed to the near 30% concomitant rise in the U.S. Dollar? From Bernanke's testimony this morning before the House Financial Services Committee, I have transcribed the following exchange:
Grayson: "What's that (the $553 billion)?"
B-52: "Those are swaps that were done with foreign central banks..."
Grayson: "So who got the money?"
B-52: "Financial institutions in Europe and other countries..."
Grayson: "Which ones?"
B-52: "I don't know."
Grayson: "Half a trillion dollars and you don't know who got the money?"
B-52: "Um, um, the loans go to the central banks and they then put them out to their institutions..."
Grayson: "Let's start with which central banks?"
B-52: "Well there's 14 of them...I'm sure they're listed in here somewhere."
Grayson: "Who actually made that decision to hand out half a trillion dollars?"
B-52: "The FOMC."
Grayson: "Under what legal authority?"
B-52: "Section 14 of the Federal Reserve Act..."
There's much more (I only transcribed a portion of the first 90 seconds).
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Reader Comments (43)
Seems I remember some conspiracy nut hatch somewhere saying the swaps were part of a coming global bailout or something -- or does that involve the IMF? (I'm sure you've all read what horrible shape some of the Swiss, Austrian, and Irish banks are in -- more bailouts coming their way, but will the Fed be involved?)
http://www.newsweek.com/id/161199
I only wish I believed him. Do you?
4/6/09 -- He then lowered his voice: "It is true, as my Italian friend has said, that the crisis began in the US. I take responsibility, even if I wasn't even president at the time." And he underscored how important it is for him "that we now genuinely make progress. Thank you." Applause.
http://www.spiegel.de/international/world/0,1518,617639,00.html
7/21/09 -- "I love these folks who helped get us in this mess and then suddenly say, 'Well, this is Obama's economy,'" the president said, pointedly deviating from his prepared text. "That's fine. Give it to me!"
http://www.chicagotribune.com/news/politics/sns-ap-us-obama-owning-the-economy-analysis,0,6546000.story
I guess you're answering my question, but I'm talking abou the currency swaps Bernanke was talking about with Grayson (not credit default swaps).
And no, I don't believe Obama at all. The Great Bloviator is pretty darn good at saying things that you want to hear, you think he gets it -- he even says "Hey, I get it" and "Let me be clear." But he doesn't, and he isn't. Smoke, smoke, mirrors and more smoke. (Do you think he still smokes?). The only difference between him and President Cheney is that everyone knew Cheney was an evil, murderous, chicken-hawk bastard. With Obama, you almost want to like the guy (well, some of us do).
Here are 2 good links n Fed (central bank) Currency Swaps:
http://macroblog.typepad.com/macroblog/2008/09/thursdays-post.html
And here's a 2nd:
http://www.marketskeptics.com/2009/04/fed-using-currency-swaps-to-boost.html
Hope this helps.
Awesome. Thanks for the links.
That is some scary $#!t! Thanks for the links. Let's hope the Fed unwinds those swaps before those $500 billion in outstanding swaps translates into another $5 trillion of foreign denominated debt if the dollar does lose 9/10 of its value against the exchanged foreign currencies as a commenter noted in the second article.
Yeah these swaps deserve watching...it would be helpful to know which individual banks got the funds from the ECB and other Central Banks.
If we're talking about banks in Greece, Spain, or eastern europe, then there is a real fear those loans will not be repaid.
The Central Banks of those nations would then be on the hook for their end of the swap.
I also am unsure about this...why in the hell would you be against the Consumer Financial Protection Agency unless you are a bank...the FED will be hurt by their opposition to this new legislation, imo.
Also, fwiw, this is now the lead story on Patrick.net tonight.
Here is how much the ECB drew over some months:
Totals of all outstanding auctions (3 maturities):
$212B as of Nov 18
$224B as of Nov 20
$236.5 as of Nov 28
$294B as of Dec 2
$267B as of Dec 10
$262B as of Dec 16
$246B as of Dec 17
$257B as of Dec 23
$254B as of Dec 30
$237B as of Jan 7
$227B as of Jan 15
$229B as of Jan 22
$186B as of Jan 27
$179B as of Feb 9
$190B as of Feb 11
$186B as of Feb 19
$135B as of Feb 24
$144B as of Feb 25
$145B as of Mar 5
$152B as of March 11
$150B as of March 18
$165B as of March 26
$164B as of April 1
$167B as of April 7
$151B as of April 8
$129B as of April 22
$129B as of April 30
$56.9 as of July 2
Perhaps the Fed has prodded the ECB into winding down the use of these swaps as they are supposed to be temporary.
The ECB/Fed are charging in excess of 1% rate for 1 week US$ while published 3 mo. US$ LIBOR is around 0.5%. Sort of a penalty rate now, begs question of why would a Euro institution still be using this facility?
the congressmans inquisition would have been more timely if he brought this up 8 months ago....better late than never.
Link:
http://www.ecb.int/mopo/implement/omo/html/index.en.html
Good question. In the spirit of constructive paranoia, does this suggest that the LIBOR as published bears little relation to actual rates? I would almost be willing to believe that this has something to do with the looming banking issues in Europe, but in that case why would they wind down the swaps? I don't remember how high the LIBOR was 6 or 5 months ago, but at one point wasn't 1% a discount to the LIBOR?
What, so he could be a fascist instead? Go troll somewhere else.
Also, not sure I get this point :
"...if he understood what he was doing, would not support Ron Paul's bill. "
Are you saying he's undermining the Democratic playbook by calling for a Fed audit?
Regardless of your views on him, how can you not regard him as an anti-bailout leader?
Excellent contribution, thanks. FWIW, everyone's comments here have been read by Congressman Grayson. He wrote a story about this video and mentioned (and gave the link) to our coverage of the hearing and questioning and mentioned he enjoyed reading the coverage and comments.
So if you have any messages for Rep. Grayson, you can add them to the comments here.
I still believe the key issue here is the safety of the swaps and the issue of their repayment....and it's difficult to make any determination because we don't know which individual banks received them.
If Rep. Grayson is indeed reading these comments, great job man! We love what you are doing and regard you as an anti-bailout leader. I wish my own congressmen didn't sell out on the bailout by flip-flopping after Senate rubber stamped that abomination. It has been refreshing to see you on so many MSM news outlets speaking the truth. Keep up your youtube video updates. They are fantastic. You are getting the word out there.
Great comments...not that you doubted us but here is the grayson guest column on naked capitalism where he mentions several aticlesw about his testimony, including ours....
http://www.nakedcapitalism.com/2009/07/guest-post-representative-alan-grayson.html
I could be completely wrong, but his article on NC smelled like it was written by one of his LAs who is a former blogger, no idea of his name...but either way, the blogosphere noise is being picked up in DC...peace out...
Sorry to be off-topic, but did anybody else notice the guy on the left sound asleep?
@ James
I honestly do not believe the Fed wants to monetize the debt, despite their quantitative easing. I've heard Bernanke discuss it enough and Richard Fisher, a severe hawk, also talk about the issue.
I think there was a massive demand for dollar reserves at the height of the crisis, and the Fed was just greasing the wheel. The dollar would have spiked even more dramatically had these swaps not been in place which would have then inevitably led to a dollar collapse right about now as the fear is finally fading and demand for riskier currencies is returning.
They're for entertainment purpose only.
You see you take a swap and you place it under half a walnut shell. Then you take two other empty half walnut shells and you SWAP them around & around after which the investor has to uncover where the SWAP is. Obviuosly they'll NEVER find it because it's up your sleeve by then!
TA -DA!
Tomorrow: an in-depth explanation of Reverse Forward Split Derivatives ..and their effects on proper bowel movements.
If Hillary’s puppets, Barack Obama and Kathleen Sebelius, sincerely wanted to lower unemployment (9.5%) and underemployment (18%), they could do, oh so easily:
• Repeal Obamacare post haste….why spend a trillion dollars to buy health care for the 32 million Americans who are currently receiving it for free?
• Give current Medicaid and Medicare recipients vouchers and let them purchase whatever health insurance fits their needs…this would cut the cost of these corrupt programs by an amazing 70%
• Sell all government hospitals…Army, Navy, Air Force, VA, US Public Health Service…sell all the government hospitals to the highest bidder…and instead, give this group of patients vouchers and let them buy with the vouchers, whatever health insurance that fits their needs….many of these patients would end up using the same hospitals, doctors and nurses… but for all parties, on a happier, more polite, more professional, outcome orientated, fee for service basis
• Issue a federal mandate that would allow patients to cross state lines, in order to purchase (more competitive) health insurance….in other words break up those cozy BCBS monopolies like the (BCBS) scam that Sebelius and her trial lawyer cronies ran in Kansas, for years and years.
Do these things and bingo, our economy rights itself almost overnight. But continue as Hillary’s shadow government, including Geithner and Bernanke….continue as Hillary’s Marxists have been manipulating us, and we will continue our national slide into the dark abyss.
To learn more about Sebelius’ role in Hillary’s corrupt shadow government go to www.sebeliuscoverups.com or just search:
George Meredith MD Comments
George Meredith MD
Virginia Beach
Is that an ignoble goal?
Sorry to be off-topic, but I know there was an article related to a bank run being orchestrated for 12-7 or so. Here is an article that brings a different perspective.
http://poorrichards-blog.blogspot.com/2010/12/wikileaks-founder-julian-assange-has.html
no one is clean...hard to completely trust any politician...but i applaud positive effort where i see it...and grayson fought the good fight against the fed...
story is getting picked up elsewhere...
Why not? We’re on the hook for GLOBAL securities fraud, courtesy of the Federal Reserve House of Rothschild, just like we explained nearly 2 years ago, with the AIG pass through bailout of the default swaps on those same securities. The link above shows you the depth of the fraudulent equity you bailed out on worthless mortgage backed securities … on behalf of the FEDs largesse.
And as home values continue to collapse, including ours, we will continue to bail out the difference on those fraudulent valuations. We will bail it out through the fine work of Erskine and Bowles deficit commission, and their fascist austerity regimen, which includes robbing the social security account you paid into your entire working life — for starters.
The banks get to claim those false valuations on their spreadsheets, and extort big bonuses against that fraudulent equity “profit”, while taxpayers bailout their collapse. And the same banks betting the other way on that collapse (acting as counterparty’s) get bailed out yet again.
But when WE, the homeowner (who gave NO permission to use our loan instruments as a betting chips in the FED’s laundered equity swindle) are rated for creditworthiness, where is OUR equity?
When we go to sell our home for 30% less than it was deemed to be worth in 2006, where is that long line of buyers beating the door down like black Friday to bid on such a GREAT DEAL as that?
If your mortgage servicer sent Guido to your doorstep - to hold a gun to your head – would you agree to turn over 30% of your principle in cash, or just have them add that to the note?
Or would you just respond “whatever” so as to not miss another moment of Jersey Shores?
http://letthemfail.us/archives/6888
great post wil...enjoyed it...
http://scienceblogs.com/pharyngula/2010/12/hooo-weeee_look_what_the_state.php
Read this one...wow...
http://www.examiner.com/county-political-buzz-in-philadelphia/debt-so-what-s-all-the-fuss-about
That is really a smoke screen, the Ark is really to take the elite down the river de Nile on their government sponsored Exodus from the plagues and pestilences the created.
I understand your desire to have an "insider" like Grayson to provide revelations, but those that do not participate properly are disposed of including Wellstone, JFK, Bono...to name a few. Ever heard of good cop bad cop? These politicians are masters at acting and law. And if you knew the truth about our government and why it exists, you would be appalled!
Once again, I leave these three links to documents that reveal some of the most amazing truths that are unknown to 95% of Americans. Before a problem can be solved, you must have all the facts and the correct perspective. Good day!
http://freedom-school.com/belligerent-claimant.pdf
http://freedom-school.com/perceptions.pdf
http://freedom-school.com/nord-davis/pardon-me-5.pdf
i worked on capitol hill 2 decades ago (in Congress) in my 20s...i've seen more than you can imagine...i have many friends who remain staffers...others who have ventured from staff into lobbying...my eyes are wide open...i examine all stories looking for truth...not sure what you are implying about grayson...i could care less about him politically or that he's gone from congress...if it were a rhesus monkey going after donald kohn and bernanke, i would glorify the rhesus monkey...know what I'm saying...
in this battle against the dark side, we will utilize anyone who even briefly fights for what is good...
But still.....read the documents. What is contained within the documents are what everyone on Capitol Hills knows, and most of us do not.
Is it worse to lie about taking steriods or lying about over $3 trillion dollars in near free money to just about anyone who wanted it.
Ben Bernanke is a criminal and is guilty of treason.
"WoW" DB, more true'r words if thAre ever was.......we need anyone, Anybody, Someone, why I'ed evan like to see our #-1 man put on the Darth-Vader helment on and pick up his Light-Wand...?
At this point, how could it get any darker ?
I feel sorry for the people of New Zealand (or any other country) who may take loans from those "borrower" banks - rape of yet more people who will be labeled deadbeats - isn't enough to rape the American people, the Fed wants to take it worldwide! Who is the beneficiary of all this "money"?
The changes, there comein down hard on you and me, my heart just can't take it, I wonder about the children and those yet to experience birth and wonder how for them this world will be.
I feel for us as well, more deeply so, for were acting as if life had no worth or meaning, oh but how much more so "it doe's"
Just look around and fill your cup, fill it till it's full, full of all the meaningful things you deeply feel, let it run over, let it spell into the hearts as nourishing drink for all mankind, earth and for the children as well.
Oh say can't ya see what were doing to the memory of all those who fought and died for you and me so that we could have a life that had true meaning, something to honor and hold, oh say can't you see life was never meant to be a wholesale market place.
Say you can't see, go ahead and sell yourself that lie.
That lie, that lays deep within that say;s, no I don't see, I really just don't understand and I'll say...
You lie, you lie, you lie, and how ya wanna sell your lie too me.
After all this time that you dreamed and schemed on how someday that lie would pay big dividends.
Now that you see your lie really has no worth, you want to wholesale your lie to me .
Lying on a wholesale scale, come and get the lie before it's to late.
Come get your phony shallows worth of lie's, buy into what you deeply know that ain't
Wholesale mankind's heart, go ahead, sell it off piece by piece until it's torn all a part.
We have Wall Street players standing side by side,
yes we have Wall Street marching to the drum in step with the bull market beat, hedging the funds, while marketeers go out into the small towns of this country, to sell yet another one, oh see how all the bull market boys are playing with our money, while having fun.
The markets down, with no one left to trust, and here you and I are left lurching in the dust and yet with that were advised to invest and save a dime while the wall street gang hedge our funds for more money to them make come.
They tell us all is good, all is calm, even if all are working for next to nothing,no reason to sound the alarm.
Were like marching ants in and out the merchants doors looking for all the bargains, reading the signs that say "discount", look! were in heaven we saved a dime, not a life however that slaved for the item in hand, but we saved a dime!
Cheep labor is a must for markets to rise, go not hear, for these Americans ask far way to much.
Go to some far off land, where slave labor can be controlled ,while the bull market boys beat the Wall Street drum,
look out shoppers cause here we come.
Were coming to a city near you,
too a small town, look! another small town going down.
Oh happy days are here again, there here again, and you lie, you lie, you lie.
Not only I, but my children and their children and theirs to come will be working twice as hard to pay the debt which the Wall Street boys sold to you and I.
We trusted and this is what we got, oh my Lord is it not too late to turn the tide, tell us how rough the the ride will be, and what it is we must now do if were to survive.
Do we continue to trust as we have, or do we now stand as the creation of man, that which we were made too be.
Let us now begin and tell them we know they lied, and that we refuse to be lied to ever again.
By:
Richard Bastian
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