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« How Goldman Sachs & Merrill Lynch Created Garbage, Paid Themselves HUGE Bonuses & Treasury Covered It All Up | Main | MUST SEE - Mastercard Commercial For Bank Bailouts »
Thursday
Dec022010

Fed's Emergency-Loan Borrowers Included Foreign Banks, Goldman Sachs, GE, McDonalds, PIMCO & Michael Dell

As you will read below, Bernie Sanders is on the war path.

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Source - Bloomberg

The Federal Reserve’s emergency lending during the financial crisis spanned the global economy, from the largest U.S. financial firms to community banks, hedge funds and a fast-food company.

The Fed, in compliance with orders from Congress, today named recipients of $3.3 trillion in emergency aid. Among them were U.S. branches of overseas banks, including Switzerland’s UBS AG; corporations such as General Electric Co. and McDonald’s Corp.; and investors like Pacific Investment Management Co. and computer executive Michael Dell.

Lawmakers demanded disclosure, over the Fed’s initial objections, as U.S. central bankers pushed beyond their traditional role of backstopping banks to stem the worst financial panic since the Great Depression. The Fed posted the data on its website to comply with a provision in July’s Dodd- Frank law overhauling financial regulation.

“Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations,” Senator Bernard Sanders, the Vermont Independent who wrote the provision on Fed disclosure, said in a statement today. “As a result of this disclosure, other members of Congress and I will be taking a very extensive look at all aspects of how the Federal Reserve functions.”

Political Scrutiny

The release will heighten political scrutiny of the central bank already at its most intense in three decades. The Fed’s Nov. 3 decision to add $600 billion of monetary stimulus has sparked a backlash from top Republicans in Congress, who said in a Nov. 17 letter to Chairman Ben S. Bernanke that the action risks inflation and asset-price bubbles.

The information, which also includes the amounts of transactions and interest rates charged, spans six loan programs as well as currency swaps with other central banks, purchases of mortgage-backed securities and the rescues of Bear Stearns Cos. and American International Group Inc.

The U.S. subsidiaries of European financial institutions, led by Zurich-based UBS and Brussels-based Dexia SA, were some of the largest users of a Fed program providing emergency short- term funding to companies. The biggest U.S.-based user was bailed-out insurer American International Group Inc., at $60.2 billion.

The presence of foreign banks in the program underscores the squeeze in dollar liquidity after the collapse of Lehman Brothers Holdings Inc. on Sept. 15, 2008. UBS, Switzerland’s largest bank, was the biggest borrower from the Commercial Paper Funding Facility, tapping the program 11 times for borrowings that peaked at $37.2 billion.

The Fed determined that McDonald’s, while not listed as a borrower under the CPFF, benefited from the program as a “parent/sponsor” of Golden Funding Corp., which sold a total of $203.5 million in commercial paper.

Emergency Programs

The emergency programs included the Term Asset-Backed Securities Loan Facility, which has supported billions of dollars in credit to small businesses, credit card borrowers, and students, and the Term Auction Facility, which helped banks get cheaper funding.

Pimco, the world’s largest bond fund, tapped the TALF 96 times between April 2009 and March 2010 for a total of $7.25 billion, making the Newport Beach, California-based firm one of the largest borrowers under the program, which was different from most of the others in that the Fed had to entice firms to participate.  Dell’s MSD Capital LP was among investors that included hedge funds and pension plans, according to the data.

In the TAF, Bank of America had loans for $45 billion outstanding from the facility as of Jan. 15, 2009, while Wells Fargo had loans for $45 billion on Feb. 26, putting them at the top of the borrowers’ list.

Congress excluded one Fed lending program from disclosure, the discount window, which is the subject of a 2008 lawsuit filed by Bloomberg LP, parent of Bloomberg News, against the central bank. A group of banks is appealing to the Supreme Court over lower-court decisions ordering the Fed to identify loan recipients. The program peaked at $110.7 billion in October 2008.

At Goldman Sachs Group Inc., Wall Street’s most profitable securities firm, borrowing from the Primary Dealer Credit Facility peaked at $24 billion in October 2008. “Without question, direct government support was critical in stabilizing the financial system, and we benefitted from it,” Chief Executive Officer Lloyd Blankfein said in January 2010.

Michael DuVally, a Goldman Sachs spokesman in New York, said today that the Fed’s actions “were very successful.”

Continue reading at Bloomberg...

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Background on the lawsuit that forced Wednesday's announcement:

Bloomberg Sues Fed to Force Disclosure of Collateral

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKr.oY2YKc2g

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Reader Comments (11)

Dec 2, 2010 at 5:28 AM | Registered CommenterDailyBail
Fed's Emergency-Loan Borrowers Ranged From Bank of America to McDonald's

http://www.bloomberg.com/news/2010-12-01/fed-crisis-borrowers-ranged-from-bank-of-america-to-mcdonald-s.html

source...
Dec 2, 2010 at 5:29 AM | Registered CommenterDailyBail
Bloomberg Sues Fed to Force Disclosure of Collateral (Update1)

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aKr.oY2YKc2g

Background on lawsuit that forced the disclosure...
Dec 2, 2010 at 5:31 AM | Registered CommenterDailyBail
Dec 2, 2010 at 5:53 AM | Registered CommenterDailyBail
Dec 2, 2010 at 6:10 AM | Registered CommenterDailyBail
Dec 2, 2010 at 6:11 AM | Registered CommenterDailyBail
Dec. 1 (Bloomberg) -- Federal Reserve Bank of Richmond President Jeffrey Lacker said the central bank’s release of documents today is a “good step” for transparency and shows how policy makers are accountable to U.S. taxpayers.

http://www.businessweek.com/news/2010-12-01/fed-s-lacker-says-data-release-is-good-step-to-transparency.html

sure after you get sued to release info it's easy to say you complied all along...
Dec 2, 2010 at 6:12 AM | Registered CommenterDailyBail
Federal Reserve Bank of Richmond President Jeffrey Lacker said he’s leaning against continuing the central bank’s plan to purchase $600 billion in U.S. Treasuries as the U.S. economy strengthens.

“I personally am not well disposed to going on with it, but we will see how the data breaks,” Lacker said today in an interview on Bloomberg Radio’s “The Hays Advantage,” with Kathleen Hays. “I was one at the last meeting who thought the risks exceeded the benefits. The benefits are kind of small. Risks, while small, would have made me tilt against doing it.”

http://www.bloomberg.com/news/2010-12-01/fed-s-lacker-not-disposed-to-600-billion-purchases-update1-.html
Dec 2, 2010 at 6:16 AM | Registered CommenterDailyBail
But ... wer'e all "globalists" now, aren't we? There is no such thing as "foreign".
Cum Bay-yah Mother Fuckers, Cum Bay YAH
Dec 2, 2010 at 9:56 AM | Unregistered CommenterWil Martindale
I am not a globalist.
Dec 2, 2010 at 10:36 AM | Unregistered CommenterS. Gompers

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