Matt Taibbi: The Real Housewives Of Wall Street: How Morgan Stanley Wives Christy Mack & Susan Karches Ripped Off Taxpayers In Geithner-Bernanke Bailout Scheme
Illustration by Victor Juhasz
In another era, we would have seen Congressional hearings on this matter within days, yet a year has passed and...nothing. This type of fraud never grows old.
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By Matt Taibbi
For Rolling Stone
Why is the Federal Reserve forking over $220 million in bailout money to the wives of two Morgan Stanley bigwigs?
Most Americans know about that budget. What they don't know is that there is another budget of roughly equal heft, traditionally maintained in complete secrecy. After the financial crash of 2008, it grew to monstrous dimensions, as the government attempted to unfreeze the credit markets by handing out trillions to banks and hedge funds. And thanks to a whole galaxy of obscure, acronym-laden bailout programs, it eventually rivaled the "official" budget in size — a huge roaring river of cash flowing out of the Federal Reserve to destinations neither chosen by the president nor reviewed by Congress, but instead handed out by fiat by unelected Fed officials using a seemingly nonsensical and apparently unknowable methodology.
Now, following an act of Congress that has forced the Fed to open its books from the bailout era, this unofficial budget is for the first time becoming at least partially a matter of public record. Staffers in the Senate and the House, whose queries about Fed spending have been rebuffed for nearly a century, are now poring over 21,000 transactions and discovering a host of outrages and lunacies in the "other" budget. It is as though someone sat down and made a list of every individual on earth who actually did not need emergency financial assistance from the United States government, and then handed them the keys to the public treasure. The Fed sent billions in bailout aid to banks in places like Mexico, Bahrain and Bavaria, billions more to a spate of Japanese car companies, more than $2 trillion in loanseach to Citigroup and Morgan Stanley, and billions more to a string of lesser millionaires and billionaires with Cayman Islands addresses. "Our jaws are literally dropping as we're reading this," says Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont. "Every one of these transactions is outrageous."
But if you want to get a true sense of what the "shadow budget" is all about, all you have to do is look closely at the taxpayer money handed over to a single company that goes by a seemingly innocuous name: Waterfall TALF Opportunity. At first glance, Waterfall's haul doesn't seem all that huge — just nine loans totaling some $220 million, made through a Fed bailout program. That doesn't seem like a whole lot, considering that Goldman Sachs alone received roughly $800 billion in loans from the Fed. But upon closer inspection, Waterfall TALF Opportunity boasts a couple of interesting names among its chief investors: Christy Mack and Susan Karches.
Christy is the wife of John Mack, the chairman of Morgan Stanley. Susan is the widow of Peter Karches, a close friend of the Macks who served as president of Morgan Stanley's investment-banking division. Neither woman appears to have any serious history in business, apart from a few philanthropic experiences. Yet the Federal Reserve handed them both low-interest loans of nearly a quarter of a billion dollars through a complicated bailout program that virtually guaranteed them millions in risk-free income.
The technical name of the program that Mack and Karches took advantage of is TALF, short for Term Asset-Backed Securities Loan Facility. But the federal aid they received actually falls under a broader category of bailout initiatives, designed and perfected by Federal Reserve chief Ben Bernanke and Treasury Secretary Timothy Geithner, called "giving already stinking rich people gobs of money for no fucking reason at all." If you want to learn how the shadow budget works, follow along. This is what welfare for the rich looks like.
Continue reading at Rolling Stone...
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UPDATE - Maxine Waters asked Bernanke about Taibbi's story earlier this week...
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UPDATE - Matt Taibbi discusses the story with CNN's Eliot Spitzer...
John and Christy Mack pictured below.
Background...
How banks and hedge funds will scam the TALF
Why You Should Always Make Laura Blankfein Wait In Line
Jun 29, 2012 at 11:29 PM
Reader Comments (44)
http://www.moonbattery.com/archives/2011/04/us-taxpayers-fo.html
http://www.sovereignman.com/expat/irs-to-increase-pre-crime-enforcement
EXCLUSIVE: Senator’s husband’s firm cashes in on crisis
http://www.washingtontimes.com/news/2009/apr/21/senate-husbands-firm-cashes-in-on-crisis/
On the day the new Congress convened this year, Sen. Dianne Feinstein introduced legislation to route $25 billion in taxpayer money to a government agency that had just awarded her husband’s real estate firm a lucrative contract to sell foreclosed properties at compensation rates higher than the industry norms.
Thanks DB, sent this to as many people as I could. It is a great rolling stone article.
I'm now thinking that hit squads are the only answer to get our money back.
http://ftalphaville.ft.com/blog/2011/04/13/544866/taibbi-takes-aim-at-the-talf/
http://www.aleablog.com/latest-scam-talf/
http://www.bbc.co.uk/news/uk-england-hampshire-13057762
http://news.travel.aol.com/2011/04/11/british-banker-dies-in-plunge-from-singapore-hotel-rooftop-bar/
Barack’s Wall Street Problem is Now America’s
http://www.noquarterusa.net/blog/2008/09/21/baracks-wall-street-problem-is-now-americas/
With The Obama Administration Infested with Goldman Sachs People, How Real is the Obama/Democratic Attack on Big Banks?
http://my.firedoglake.com/fflambeau/2010/04/21/with-the-obama-administration-infested-with-goldman-sachs-people-how-real-is-the-obamademocratic-attack-on-big-banks/
Until the system collapses ...there is not hope....unless pitchforks go on sale this weekend.
But really is this payment for past services, payment for future services or a combination. What is the return to the FED? Is it angling to be a global central bank?
Have to grease the skids for more centralized banking.
Did you even read my post. I was calling out a republican blowhard, but I fully acknowledged in my post that Obama and his merry band of American traitors (Pelosi, Feinstein, Frank, Dodd) should also be tried for treason and punished to the full extent of the law.
WTF? You are f'n kidding, right? Please tell me I'm reading the Onion?
Aside: the former bro-in-laws Mr. Mack & Charlie Rose are old Dukie buddies.
http://www.nytimes.com/2011/04/14/business/14prosecute.html?_r=3&pagewanted=1
however
Charlie rose promoting Kissinger..promoting Iraq war:
http://www.charlierose.com/view/interview/2143
Rose promoting Zebrinski and China agression story to justify bigger military industrial complex:
http://www.charlierose.com/view/interview/11382
Rose Promoting Brezinski and obama presidency:"people have to support obama or else"
http://www.youtube.com/watch?v=QlFVoHDNgcQ
Charlie Rose pushing the "global solution" here and promoting the taxpayers bailing out Morgan Stanley and Goldman, JP Morgan etc.
http://www.charlierose.com/view/interview/9302
There is much much more if you want to see how the world works you have to look at who makes the decisions...who are the "experts" on foreign policy...where do they come for? who do they have a history of working for? what organizations have they helped build? who funded those? why are the big publicized debates contained within a paradigm that don't allow certain questions to be asked? why will these people only go on certain shows...certain controlled interviews? why the universal MSM hate for certain views that seem to be completely benign..like questioning the monetary system or the Fed or the many wars or the real motivations and vested interests for wars? or questions what the "experts" tell us are our "national interests"? I could tell you my opinion after thousands of hours of research but you wouldn't believe it....if you haven't spent an equal amount of years and read about the history of who benefitted and who promoted our foreign policy decisions the last 100 years then you can just trust the TV...see how that works out for you.
http://news.yahoo.com/s/nm/20110415/bs_nm/us_morgan_stanley_real_estate
It should be noted though that Japan's government is filled with a lot of scum bags just like ours is and they knew a tsunami could cause a problem but they were wined and dined and allowed safety lapses and cover ups. There is talk of moving the capital from Tokyo I bet they know more about that probably paid off Japanese or American officials and decided to get out.
http://pajamasmedia.com/blog/contributions-to-obama-campaign-track-bailout-money/
Yes, read the NYT article. Gretchen M. continues the fight...
viva la revolution .
"...I'm just numb. Really, you cannot make this shit up. The Fed hands these M/S wives $220 mil at close to 0%, thru an offshore, tax-evading shell company, where the principals "only" put up a $15 mil investment? The only collateral is the trash paper they buy? And the loan is not guaranteed by them personally?
WTF? You are f'n kidding, right? Please tell me I'm reading the Onion?..."
American investors sit there on their hands waiting for the inevitable crash not knowing it is being done to them with their lazy minds declining to respond until it is too late. Their agents or investment directors use their computers to sucker in as many people as possible and collect as many commissions as possible with no personal risk. TELL THE WORLD. IT IS ALL TRUE. The enemy is standing right in front of us but we need arrests at once.
http://www.redesign.rumormiller.com/story.php?title=ron-paul-is-all-talk-and-no-action
Really, Ben? Isn't Waterfall TALF Cayman-based? How did Waterfall "qualify"? Is TALF still going? Can I get in on this boondoggle? I am a US company but am willing to open a branch in the Caymans...
Unfortunately, that's as far it went with Ben. Maxine wanted to know why minorities did not get a slice; not that slices were being given away...idiot!
Thanks for reposting! Still makes me numb...and then irate. I forgot about The Bernank being questioned by the idiot Maxine and his lame-ass response. And all the while Big Ben knew M/S and John Mack was sucking/gulping from the discount window teat. Truly f'n unbelievable...
I'm still wondering how a Cayman shell qualifies under the TALF...?