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« Taxpayers Dollars Still Bailing Out Insolvent Banks Including Citigroup, JPMorgan, Wells Fargo & Bank Of America | Main | Must See Video: Fox News Hacked »
Wednesday
Jun082011

What An Audit Of The Fed Might Reveal About Maiden Lane I, II, III

A look back at an $80 billion taxpayer give-away to JPMorgan and AIG...

The fear among Fed watchers is that the securities held by the 3 Maiden Lane LLCs, are virtually worthless.  But it's really just an extrapolation because the Federal Reserve has never released any detail on the securities.  Outside of broad classification, we have no fracking idea what was put into these vehicles in the first place. 

A few basics:

The original Maiden Lane (ML I) was created to help JP Morgan and Jamie Dimon with its purchase of Bear Stearns. (Not incidentally, Dimon was on the Board of the New York Fed and so had influence on its decision to backstop the deal...wtf? how is it possible that serving on the board of the semi-private bank (NYFed) that regulates your bank (JPM) is not considered a conflict of interest?) 

We can presume they are the worst of Bear's assets because they were rejected by JPM and shoved off on B-52 and Kohn.  Size is $28.5 billion; likely loss is $20-25 billion.  But we don't know, because they won't tell us what securities b-52 keeps in the closet.  Recognizing the theme?!!

ML II and III were created to purchase a combined $52.5 billion of the most toxic RMBS (and maybe CMBS, but we aren't sure, again, because they won't reveal any details) on the books at AIG.  These were the most radioactive, securitized slogs that Casanno had said one-year before wouldn't cost AIG a dime.  Size=$52.5 billion.  Potential Loss=$52.5 billion.

This particular confluence of the ugly and the unknown (ML LLC), is exactly why we need an outside, independent audit of the Federal Reserve.  They are brazen to the point of despair.  Conflicts of interest are apparently required attachments for any one looking to advance at the Fed.

Find out all you want on all 3 Fed versions of Wysteria Lane at the link below.  Wait, I lied.  Find out all the Fed wants you to know about Maiden Lane is more accurate.

From the New York Fed (there's more information on the site):

In 2008, as part of extending support to specific institutions, under section 13(3) of the Federal Reserve Act, the Federal Reserve Board authorized the New York Fed to facilitate formation of three limited liability companies.

Maiden Lane LLC (ML LLC) was formed to facilitate the merger of the Bear Stearns Companies, Inc. and JPMorgan Chase & Co. The New York Fed extended credit to ML LLC to acquire certain assets of Bear Stearns.

Maiden Lane II LLC (ML II LLC) and Maiden Lane III LLC (ML III LLC) were formed to facilitate the restructuring of the New York Fed’s financial support to American International Group (AIG). The New York Fed extended credit to ML II LLC to purchase residential mortgage-backed securities from the securities lending portfolio of several regulated U.S. insurance subsidiaries of AIG. The New York Fed extended credit to ML III LLC to purchase multi-sector collateralized debt obligations from certain counterparties of AIG Financial Products Corp.

 

 

 

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Reader Comments (6)

Most important video to date.

http://dailybail.com/home/the-fed-under-fire-the-federal-reserve-is-the-black-hole-in.html


The Video that ignited the great furor about the Fed

http://dailybail.com/home/there-are-no-words-to-describe-the-following-part-ii.html


Please watch them both if you have not done so.
Jul 17, 2009 at 8:01 AM | Registered CommenterDailyBail
Nice work, Daily Bail.
Jul 17, 2009 at 8:57 AM | Unregistered CommenterJames H
UPDATE ON THE LCROSS...

The first shots have been posted...the good news..."Future LROC images from these sites will have two to three times greater resolution."

http://www.nasa.gov/mission_pages/LRO/multimedia/lroimages/apollosites.html

That's pretty good for government work. So far, to be honest, I am not impressed. I would have built a little remote controlled helicopter that could be dropped from the probe and take an impressive photo up close. Hey, we hit golf balls and drove a dune buggy on the moon 40 years ago. As I keep saying, I find the whole story of the space race today when compared to the past accomplishments are a bit strange to say the least.
Jul 18, 2009 at 1:42 AM | Unregistered Commentergobias bluth
President Obama's Favorite Banker
As long term EPJ readers know, for some time, I identified Jamie Dimon/JPMorgan Chase as having favored banking status in the Obama Administration, along with Goldman Sachs. See The Gifting of Washington Mutual Bank to Jamie Dimon and Gov Shovels More Cash to JPMorgan Chase .

Oh, I knew something was going on. And was pretty blunt about it:

...just how did the government's fair haired boy Jamie Dimon at JPMorganChase end up not needing to raise any capital?

more http://www.economicpolicyjournal.com/2009/07/president-obamas-favorite-banker.html

JPMorgan CEO Jamie Dimon Donates Serious Cash to Democrats

http://www.opensecrets.org/news/2009/07/jpmorgan-ceo-jamie-dimon-donat.html
Jun 9, 2011 at 9:44 AM | Unregistered CommenterLiberatedCitizen
If Jamie Dimon was working at the New York Fed on 9-11-2001, he should be questioned as to why the N.Y. Fed needed emergency conditions in the two weeks following that day. The fed CLAIMED utter chaos by the destruction of the WTC computer center, when actually, a mirror computer center across town maintained continuity. This two week period was reported to be when Bush and Co. laundered $220 billion in counterfeit securities that matured on 9-12-2001. The asset collateral for this huge amount was The Marcos gold and the World War II Black Eagle gold taken by the Nazis and adopted by the OSS. The real securities were absorbed into the economic system somehow. Google Leo Wanta, Jeff Prager, Marcos Gold, CIA dumping 220 billion in Russian rubles on the market, New York Fed, Deutschebank, Banque Suisse.
Jun 10, 2011 at 8:31 PM | Unregistered CommenterHoward T. Lewis III
If Jamie Dimon was working at the New York Fed on 9-11-2001...

---

jamie dimon was ceo of bank one in 2001...

http://en.wikipedia.org/wiki/Jamie_Dimon
Jun 11, 2011 at 12:16 PM | Registered CommenterDailyBail

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