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« Larry 'I Wrecked The Harvard Endowment' Summers As Realized In Cinema From 'The Social Network' | Main | Hedge Fund Manager John Paulson's Very Bad Year »
Friday
Jun292012

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.

Take Action! Audit the Fed - Sign the Petition

--

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...

---

UPDATE - Maxine Waters asked Bernanke about Taibbi's story earlier this week...

---

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

 

 

AUDIT THE FED - SIGN THE PETITION

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Reader Comments (44)

When we thought we have heard it all over the last two years with this socialist Obama regime a new a quite unique way to spend our money that we are "borrowing from China" is to fix Mexican trucks at our expense. How many more days are there left in this Presidency?

http://www.moonbattery.com/archives/2011/04/us-taxpayers-fo.html
Apr 12, 2011 at 6:05 PM | Unregistered CommenterTaterSalad
Apr 12, 2011 at 6:25 PM | Registered CommenterDailyBail
Re-posting just because....

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.
Apr 12, 2011 at 7:16 PM | Unregistered Commenterjohn
that Feinstein story deserves to be reposted over and over again....maybe i'll throw it up on the front page...
Apr 12, 2011 at 7:51 PM | Registered CommenterDailyBail
It's too bad that this sort of Imperial decadency is so common; yet we're helpless to stop it. The best consolation is that HELL is real, and examples such as this are destined to immeasurable suffering.
Apr 12, 2011 at 9:46 PM | Unregistered CommenterRob
Tatersalad, just want to make sure you know that a republican appointed Greenspan and a republican appointed Bernanke. Let's not pretend that Obama is the only traitor. The republicans are just as treasonous.

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.
Apr 13, 2011 at 1:43 AM | Unregistered CommenterBenny and the Talibanks
How many at the bottom are sharpening the Pitch Forks & Guillotine to deal with the ELITE ?
Apr 13, 2011 at 1:53 AM | Unregistered CommenterTR
The ELETE rule the airwaves. They will pin blame on people like government workers or union members, when in fact it's a small group of conspirators in Wall Street and the Banking community.
Apr 13, 2011 at 3:25 AM | Unregistered CommenterBenny and the Talibanks
Apr 13, 2011 at 9:32 AM | Registered CommenterDailyBail
Woman 'killed husband amid rows over property costs'

http://www.bbc.co.uk/news/uk-england-hampshire-13057762
Apr 13, 2011 at 9:33 AM | Registered CommenterDailyBail
Apr 13, 2011 at 9:34 AM | Registered CommenterDailyBail
Everybody knows the rich deserve what they steal, blame the poor and middle class.
Apr 13, 2011 at 9:53 AM | Unregistered CommenterS. Gompers
Hey Benny and the talibanks just so you know obama re-appointed bernanke and then filled his administration with more goldman sachs goons like tax cheat timmy and he's been on the payroll of the banks for years that's a part of the problem pointing out the other guys appointments you don't get it the republicans are gone and you still want to make it a left/right issue. If you want to look to the past ask yourself why obama was pulling down major bucks from these guy's when he was still a junior senator.

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/
Apr 13, 2011 at 10:54 AM | Unregistered CommenterLiberatedCitizen
It doesn't matter what president is in power..... they all represent the corporate interests including the banks. YES we live in a fascist country!

Until the system collapses ...there is not hope....unless pitchforks go on sale this weekend.
Apr 13, 2011 at 12:35 PM | Unregistered Commentertruthseeker
It's good to be an oligarch. No sure thing like getting a put and an option on the same asset.

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?
Apr 13, 2011 at 3:25 PM | Unregistered CommenterHarold Crews
Charlie Rose's wife is a sister to one of these banksters-wives. This helps gaurantee his interviews of Kissinger and Brezinki etc. will be respectful.

Have to grease the skids for more centralized banking.
Apr 13, 2011 at 4:01 PM | Unregistered CommenterGabe
Gabe....can you post a link?
Apr 13, 2011 at 5:02 PM | Unregistered Commenterjohn
While both of these women should repay 100% of go to jail we should remember that history teaches us that class warfare is just another war. Rich vs. Poor, Black vs. White.... Don't buy into class warfare issues at all if you do then the focus in never on the real problem but rather fighting with people in general. For those of you who supported the right. Just remember "Tarp" was "W's baby. For those of you on the left Obama is just another traitor just like "w"
Apr 13, 2011 at 7:32 PM | Unregistered CommenterDarel
Liberated Citizen,
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.
Apr 14, 2011 at 2:59 AM | Unregistered CommenterBenny and the Talibanks
We have a government of the bankers, by the bankers and for the bankers. Elections are just a show. Productive civil society is being sucked dry by the growing state parasite. The state and its evil twin the Fed are the primary tools used by elite to control and thus exploit the common working man. Anarchy looks better every day, bring it on.
Apr 14, 2011 at 4:48 PM | Unregistered CommenterMark Davis
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?

Aside: the former bro-in-laws Mr. Mack & Charlie Rose are old Dukie buddies.
Apr 15, 2011 at 9:27 AM | Unregistered CommenterJosie
Apr 15, 2011 at 9:47 AM | Unregistered Commenterjohn
yes josie...words can't really do it justice...if it were feasible, i would pin this story to the top of the site for a month...
Apr 15, 2011 at 10:12 AM | Registered CommenterDailyBail
I am tempted to say use the internet read watch...Check for yourself...do you not believe Rose's wife is sisters with the thieves? I don't have the inclination to prove it to you ...just stand back and watch the SHTF.

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.
Apr 15, 2011 at 10:17 AM | Unregistered CommenterGabe
yes...charlie rose's wife is the sister of mack's wife...i can confirm...
Apr 15, 2011 at 10:20 AM | Registered CommenterDailyBail
Get this Morgan Stanley defaulted in Japan the largest default ever! What's that they say about a moral obligation to repay your debts? That obviously doesn't apply to these filthy crooks the people in Japan are really suffering and they default!

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/
Apr 16, 2011 at 1:50 PM | Unregistered CommenterLiberatedCitizen
@ john

Yes, read the NYT article. Gretchen M. continues the fight...
Apr 16, 2011 at 9:26 PM | Unregistered Commenterjosie
lc...thanks for the morgan stanley japan default link...
Apr 16, 2011 at 10:58 PM | Registered CommenterDailyBail
unfricken believable ! when do they line them up against the wall.
viva la revolution .
Apr 17, 2011 at 6:20 AM | Unregistered Commentermick
It took 9 years, 8 months to bring justice to Osama Bin Laden. Hopefully, we will get these financial terrorist traitors before 9 years.
May 4, 2011 at 3:18 AM | Unregistered CommenterBenny and the Talibanks
Steven Ravnitzky of Morgan Stanley (Scottsdale, AZ) steals money from the elderly.
Jun 10, 2011 at 1:26 AM | Unregistered CommenterRip Off
Why don't you provide some detail, ripoff...
Jun 10, 2011 at 1:38 AM | Registered CommenterDailyBail
DB-Can you keep this story at the top of front page? Apart from Grayson questioning the moronic Fed inspector, this story, to me, says it all. Who runs our country, and for whom...
Jun 10, 2011 at 9:35 AM | Unregistered CommenterJosie
i agree josie...i will keep it up near the top all weekend...and i will add it to my sidebar...i've needed to update the stories in my right column for a long, long time...it deserves some high-value real estate for sure...it is beyond pale...
Jun 10, 2011 at 12:04 PM | Registered CommenterDailyBail
My comment from April still applies...Un-freakin'-believable...

"...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?..."
Jul 5, 2011 at 3:51 PM | Unregistered CommenterJosie
The enemy is identifiable. Bernanke, Geithner, et al, are pirates maintaining the same loyalties as Bluebeard, Blackbeard, Sir Henry Morgan, Sir Francis Drake, and others. The S.E.C. was virtually dismantled by Bush 43, who maintains this same pirate loyalty. The S.E.C. head he installed did as well, and the infiltration continues. There will be no S.E.C. prosecutions. The F.T.C. just signed on a British agent to a senior position. The fox is in the chicken coop. I repeat, the fox is in the chicken coop.

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.
Jul 5, 2011 at 4:23 PM | Unregistered CommenterHoward T. Lewis III
Jul 5, 2011 at 11:34 PM | Unregistered CommenterTR
A more powerful Big Brother is not the answer. The statist system is designed by the foxes for the foxes to watch the chickens. It is naive to think that regulation by the state (US Imperial Federal Government in this case) will have any other result. Corporations and fractional reserve banking are scams that could not exist in a true free-market. They are symbiotic organs of the same body: the state, corporations and fractional reserve banks. To glorify the state as your savior while slamming banks and corporations is childish. Changing Clinton to Bush to Obama is all just a show to keep the suckers busy bleating on about democracy. True freedom requires free-markets and the abolition of the archaic state apparatus used to enforce political slavery of the masses. We have a government of the politicians, by the corporations and for the banks.
Jul 6, 2011 at 10:36 AM | Unregistered CommenterFreetruth
The Bernank was questioned about this article today, July 13th, by Maxine-baby (not a fan). His response was telling: squirmy, smirking, called the article inaccurate, and first stated that the TALF was open to "any" US company. Then later stated any "qualified" US company...

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!
Jul 13, 2011 at 1:38 PM | Unregistered CommenterJosie
thanks for the heads up josie...i will look for the clip on youtube...and i'm not surprised by maxine...she always wonders why no minorities took part as opposed to questioning why the program existed in the first place...and how it might have been abused...
Jul 13, 2011 at 4:48 PM | Registered CommenterDailyBail
DB-

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...?
Jun 30, 2012 at 10:42 AM | Unregistered CommenterJosie
Google Filthy criminals in the U.S. Kleptocracy and their Corporate Whoremasters
Jun 30, 2012 at 1:40 PM | Unregistered Commenterchristina marlowe

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