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Taco John
07-21-2011, 11:12 PM
Audit: Fed gave $16 trillion in emergency loans

By Stephen C. Webster
Thursday, July 21st, 2011 -- 11:34 am

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank.

Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.

Of the $16.1 trillion loaned out, $3.08 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office's (GAO) analysis shows.

Additionally, asset swap arrangements were opened with banks in the U.K., Canada, Brazil, Japan, South Korea, Norway, Mexico, Singapore and Switzerland. Twelve of those arrangements are still ongoing, having been extended through August 2012.

Out of all borrowers, Citigroup received the most financial assistance from the Fed, at $2.5 trillion. Morgan Stanley came in second with $2.04 trillion, followed by Merill Lynch at $1.9 trillion and Bank of America at $1.3 trillion.

The audit also found that the Fed mostly outsourced its lending operations to the very financial institutions which sparked the crisis to begin with, and that they delegated contracts largely on a no-bid basis. The GAO report recommends new policies that would eliminate such conflicts of interest, and suggests that in the future the Fed should keep better records of their emergency decision-making process.

The Fed agreed to "strongly consider" the recommendations, but as it is not a government-run institution it cannot be forced to do so by lawmakers. The seven-member board of governors and the Fed chairman are, however, appointed by the President of the United States and confirmed by the Senate.

The audit was conducted on a one-time basis, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed last year. Fed officials had strongly discouraged lawmakers from ordering the audit, claiming it may serve to undermine confidence in the monetary system.

http://www.rawstory.com/rs/2011/07/21/audit-fed-gave-16-trillion-in-emergency-loans/

Taco John
07-21-2011, 11:14 PM
Bernie Sanders responds:

July 21, 2011

The first top-to-bottom audit of the Federal Reserve uncovered eye-popping new details about how the U.S. provided a whopping $16 trillion in secret loans to bail out American and foreign banks and businesses during the worst economic crisis since the Great Depression. An amendment by Sen. Bernie Sanders to the Wall Street reform law passed one year ago this week directed the Government Accountability Office to conduct the study. "As a result of this audit, we now know that the Federal Reserve provided more than $16 trillion in total financial assistance to some of the largest financial institutions and corporations in the United States and throughout the world," said Sanders. "This is a clear case of socialism for the rich and rugged, you're-on-your-own individualism for everyone else."

Among the investigation's key findings is that the Fed unilaterally provided trillions of dollars in financial assistance to foreign banks and corporations from South Korea to Scotland, according to the GAO report. "No agency of the United States government should be allowed to bailout a foreign bank or corporation without the direct approval of Congress and the president," Sanders said.

The non-partisan, investigative arm of Congress also determined that the Fed lacks a comprehensive system to deal with conflicts of interest, despite the serious potential for abuse. In fact, according to the report, the Fed provided conflict of interest waivers to employees and private contractors so they could keep investments in the same financial institutions and corporations that were given emergency loans.

For example, the CEO of JP Morgan Chase served on the New York Fed's board of directors at the same time that his bank received more than $390 billion in financial assistance from the Fed. Moreover, JP Morgan Chase served as one of the clearing banks for the Fed's emergency lending programs.

In another disturbing finding, the GAO said that on Sept. 19, 2008, William Dudley, who is now the New York Fed president, was granted a waiver to let him keep investments in AIG and General Electric at the same time AIG and GE were given bailout funds. One reason the Fed did not make Dudley sell his holdings, according to the audit, was that it might have created the appearance of a conflict of interest.

To Sanders, the conclusion is simple. "No one who works for a firm receiving direct financial assistance from the Fed should be allowed to sit on the Fed's board of directors or be employed by the Fed," he said.

The investigation also revealed that the Fed outsourced most of its emergency lending programs to private contractors, many of which also were recipients of extremely low-interest and then-secret loans.

The Fed outsourced virtually all of the operations of their emergency lending programs to private contractors like JP Morgan Chase, Morgan Stanley, and Wells Fargo. The same firms also received trillions of dollars in Fed loans at near-zero interest rates. Altogether some two-thirds of the contracts that the Fed awarded to manage its emergency lending programs were no-bid contracts. Morgan Stanley was given the largest no-bid contract worth $108.4 million to help manage the Fed bailout of AIG.

A more detailed GAO investigation into potential conflicts of interest at the Fed is due on Oct. 18, but Sanders said one thing already is abundantly clear. "The Federal Reserve must be reformed to serve the needs of working families, not just CEOs on Wall Street."

http://sanders.senate.gov/newsroom/news/?id=9e2a4ea8-6e73-4be2-a753-62060dcbb3c3

Taco John
07-21-2011, 11:15 PM
No official statement from Ron Paul yet.

jiveturkey
07-22-2011, 07:15 AM
Wouldn't it have been a lot cheaper to just pay off everyone's mortgage?

Hydrae
07-22-2011, 07:29 AM
So the group set up by the bankers in the first place is found to be in bed with the big banks and giving them sweetheart deals under the table. I hope no one is surprise at this finding.

BucEyedPea
07-22-2011, 07:29 AM
Holy crapola! It's more like a crime syndicate.

HonestChieffan
07-22-2011, 07:39 AM
What did they do that was wrong?

BucEyedPea
07-22-2011, 07:56 AM
What did they do that was wrong?

O.M.G. :deevee:

HonestChieffan
07-22-2011, 08:00 AM
That certainly was an excellent answer. I assume that there is more to this than the normal OMG the Fed!

BucEyedPea
07-22-2011, 08:11 AM
That certainly was an excellent answer. I assume that there is more to this than the normal OMG the Fed!

It's just incredible to me that you can't see what's wrong with what they did.
Who do you think pays for this kind of game? Plus, how many times has it been discussed in detail here? It's definitely socialism for the wealthy....and Sanders just wants the same game for the people. How 'bout no game like this for no one?

LOCOChief
07-22-2011, 08:23 AM
The Fed agreed to "strongly consider" the recommendations, but as it is not a government-run institution it cannot be forced to do so by lawmakers

This is why all partisan conversations on this or any other forum DO NOT MATTER.

How bout that fed reserve act people?

LOCOChief
07-22-2011, 08:24 AM
That certainly was an excellent answer. I assume that there is more to this than the normal OMG the Fed!

I can't believe you're seriously asking the question either.

I've got one for you:

What haven't they done wrong?

HonestChieffan
07-22-2011, 08:27 AM
It's just incredible to me that you can't see what's wrong with what they did.
Who do you think pays for this kind of game? Plus, how many times has it been discussed in detail here? It's definitely socialism for the wealthy....and Sanders just wants the same game for the people. How 'bout no game like this for no one?


Id just appreciate some unemotional explanation of what you and your fellow anti feders see as wrong in what the fed did.

On a side note, Sanders saying the Fed needs approval from congress on loans is on the surface a bit nuts and even more crazy to think anyone will feel better knowing this bunch of loons incompetents and nutjobs approving anything will make people feel more secure. They cannot agree on the composition of the coffee cups in the congressional cafeteria.

BucEyedPea
07-22-2011, 08:27 AM
How bout that fed reserve act people?

Yeah, they exist soley because the govt allows them too. How arrogant they are!

BucEyedPea
07-22-2011, 08:32 AM
Id just appreciate some unemotional explanation of what you and your fellow anti feders see as wrong in what the fed did.
Unemotional? Lolz! There's nothing wrong with having a strong feeling on corruption.

On a side note, Sanders saying the Fed needs approval from congress on loans is on the surface a bit nuts and even more crazy to think anyone will feel better knowing this bunch of loons incompetents and nutjobs approving anything will make people feel more secure. They cannot agree on the composition of the coffee cups in the congressional cafeteria.

If you think I am advocating the congress or govt to deal with such areas—you're wrong, even if the Constitution clearly says congress is the one to coin money. BTW that's "coin" not print.

I do see how you've bought into the reasons for even having a Fed, or that it's even independent.
You missed nearly everything discussed if you think I am in that camp. You're clearly a Hamiltonian ( keep it under the control of our new aristocrats) who thinks such an institution is even necessary. It isn't. I am for free-market money since it's a commodity that responds to supply and demand.

HonestChieffan
07-22-2011, 08:37 AM
I assume then we are just hearing the same old anti Fed rant and this will go in the ash heap of the Fed is evil rages.

BucEyedPea
07-22-2011, 08:39 AM
I assume then we are just hearing the same old anti Fed rant and this will go in the ash heap of the Fed is evil rages.

You're spinning and relying on making accusations only. Like I said it's been argued here extensively already. Check the search.

I support free-enterprise capitalism; you prefer cartel capitalism for cronies. Or should I say plutocrats.

HonestChieffan
07-22-2011, 08:43 AM
Im not spinning. Nor am I stating a position.

I asked a very simple question of those of you who see the OP and assume wrongdoing and illegal or nefarious actions and Motives. My question contains no spin when I ask what do you see that they did that was "wrong".


Lets try to answer a simple question with out invoking the memory of Alexander Hamilton into this news story. And answer it with no needless reference to your own political stands.

BucEyedPea
07-22-2011, 08:46 AM
Im not spinning. Nor am I stating a position.

I asked a very simple question of those of you who see the OP and assume wrongdoing and illegal or nefarious actions and Motives. My question contains no spin when I ask what do you see that they did that was "wrong".


Lets try to answer a simple question with out invoking the memory of Alexander Hamilton into this news story. And answer it with no needless reference to your own political stands.

Who said anything about "motives." We're discussing what they did which is actions.
I already answered the rest. As to Hamilton he was in favor or cartel capitalism for plutocrats which is what this is.

HonestChieffan
07-22-2011, 08:48 AM
Who said anything about "motives." We're discussing what they did which is actions.
I already answered the rest. As to Hamilton he was in favor or cartel capitalism for plutocrats which is what this is.



What you deem an answer is undecipherable to me.

BucEyedPea
07-22-2011, 08:49 AM
What you deem an answer is undecipherable to me.

I noticed. Your answer is also in the two original articles as well.

Dave Lane
07-22-2011, 08:50 AM
I assume then we are just hearing the same old anti Fed rant and this will go in the ash heap of the Fed is evil rages.

Kinda like the Obama is evil crap ends up in the ash can

Hydrae
07-22-2011, 09:01 AM
How about, the Fed should not exist in the first place and certainly should not be sending Trillions of US dollars out of the country.

LOCOChief
07-22-2011, 09:08 AM
I assume then we are just hearing the same old anti Fed rant and this will go in the ash heap of the Fed is evil rages.

Fan of the fed huh?

BucEyedPea
07-22-2011, 09:09 AM
How about, the Fed should not exist in the first place and certainly should not be sending Trillions of US dollars out of the country.

That's another obvious wrong besides the "conflicts of interest" and who pays for all this.

Mr. Flopnuts
07-22-2011, 09:10 AM
How is this not all over the news? Oh, corporate welfare is MUCH more expensive than standard welfare. How about we drug test the leaders of these financial institutions.

HonestChieffan
07-22-2011, 09:10 AM
Fan of the fed huh?

Im not defending the fed, I would just like more understanding of what they did that was so wrong. If I knew more I may even come to the conclusion that there was wrong doing.

patteeu
07-22-2011, 09:10 AM
You're spinning and relying on making accusations only. Like I said it's been argued here extensively already. Check the search.

I support free-enterprise capitalism; you prefer cartel capitalism for cronies. Or should I say plutocrats.

Is it really so hard to answer his simple question? If the answer is so obvious, you shouldn't have any difficulty putting it into words.

BucEyedPea
07-22-2011, 09:11 AM
How is this not all over the news? Oh, corporate welfare is MUCH more expensive than standard welfare. How about we drug test the leaders of these financial institutions.

Corporate statist media likes the set-up.

BucEyedPea
07-22-2011, 09:11 AM
Did you say something pat?

patteeu
07-22-2011, 09:12 AM
Did you say something pat?

Yes, I did. I notice that you didn't though.

BucEyedPea
07-22-2011, 09:13 AM
Huh! I suspect pesky interventionism—again.

FD
07-22-2011, 09:38 AM
The Fed is the lender of last resort in a crisis, that's one of its main jobs. I don't see anything wrong with that.

BucEyedPea
07-22-2011, 10:07 AM
The Fed is the lender of last resort in a crisis, that's one of its main jobs. I don't see anything wrong with that.

Yeah, as if the article is really about that aspect.

petegz28
07-22-2011, 10:13 AM
The Fed is the lender of last resort in a crisis, that's one of its main jobs. I don't see anything wrong with that.

I do when we are talking about lending out more money than our GDP and in secret. That is scary, scary power. They get to choose who gets what and how much without any congressional oversite. That is sick power.

Chocolate Hog
07-22-2011, 10:16 AM
What did they do that was wrong?

Dumbass. Must be a Democrat.

HonestChieffan
07-22-2011, 10:17 AM
I do when we are talking about lending out more money than our GDP and in secret. That is scary, scary power. They get to choose who gets what and how much without any congressional oversite. That is sick power.

You do understand its loaned short term and in a period of time it can be loaned, repaid, loaned again....and in total the amount is loaned is cumulative.

Secrecy in this case must be maintained so you are not giving away information that could and would be used by a competitor. That does not mean no oversight but you cannot expect business loans to be discussed on the floor of the house so everybody you compete with is seeing your transactions.

HonestChieffan
07-22-2011, 10:17 AM
Dumbass. Must be a Democrat.

Please don't tell anyone.

FD
07-22-2011, 10:18 AM
I do when we are talking about lending out more money than our GDP and in secret. That is scary, scary power. They get to choose who gets what and how much without any congressional oversite. That is sick power.

Is there something about the current debate that gives you confidence in Congress to act quickly and effectively in a crisis?

petegz28
07-22-2011, 10:20 AM
You do understand its loaned short term and in a period of time it can be loaned, repaid, loaned again....and in total the amount is loaned is cumulative.

Secrecy in this case must be maintained so you are not giving away information that could and would be used by a competitor. That does not mean no oversight but you cannot expect business loans to be discussed on the floor of the house so everybody you compete with is seeing your transactions.

I don't give a flying fuck. You are talking about an organization with the power to print money at the expense of the tax payer, loan it out to whomever they wish in whatever amounts they wish and do it all in secret. These are not "business loans. And yes, I can expect it to be disucussed on the floor when you are talking about $16 trillion and no one knows WTF it is going/

petegz28
07-22-2011, 10:30 AM
Is there something about the current debate that gives you confidence in Congress to act quickly and effectively in a crisis?

They sure seemed to act quick enough in the bailout, didn't they? If they Fed wants to lend money they need to be telling people WTF is getting the money and why. This secret crap is bullshit.

Then again, some of you will never come to the realization the the Federal Reserve is a secret and corrupt organization to begin with.

petegz28
07-22-2011, 10:32 AM
The audit was conducted on a one-time basis, as mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, passed last year. Fed officials had strongly discouraged lawmakers from ordering the audit, claiming it may serve to undermine confidence in the monetary system.

In other words people may see what we really do.

HonestChieffan
07-22-2011, 10:35 AM
I don't give a flying ****. You are talking about an organization with the power to print money at the expense of the tax payer, loan it out to whomever they wish in whatever amounts they wish and do it all in secret. These are not "business loans. And yes, I can expect it to be disucussed on the floor when you are talking about $16 trillion and no one knows WTF it is going/

Well then.

Taco John
07-22-2011, 12:02 PM
What did they do that was wrong?

They acted as though they are the World bank and bailed out the rest of the world at the expense of the American taxpayer, with the poor and people on fixed incomes who will experience the impact first through inflation. We're talking about the organization that controls the US dollar operating outside of any oversight, and essentially sucking the US economy into a massive vaccuum of the world's debt without any reasonable expectation that they'll ever see repayment. They are basically bridging the debt of the banks of the world on the American Taxpayer's back - meanwhile Americans can't get loans. Essentially, the Federal Reserve applied "too big to fail" across the world at the expense of the American.

Mr. Flopnuts
07-22-2011, 12:10 PM
So in essence our entire National debt is corporate welfare. Yet everyone says this is okay, and fuck poor people who got fleeced on their hhomes, or lost their jobs and are collecting welfare. They're the real problem. Brilliant.

BucEyedPea
07-22-2011, 12:29 PM
So in essence our entire National debt is corporate welfare. Yet everyone says this is okay, and **** poor people who got fleeced on their hhomes, or lost their jobs and are collecting welfare. They're the real problem. Brilliant.

All created out of thin air too! If we did anything remotely like this we'd be hauled in for fraud.

FD
07-22-2011, 12:44 PM
They acted as though they are the World bank and bailed out the rest of the world at the expense of the American taxpayer, with the poor and people on fixed incomes who will experience the impact first through inflation. We're talking about the organization that controls the US dollar operating outside of any oversight, and essentially sucking the US economy into a massive vaccuum of the world's debt without any reasonable expectation that they'll ever see repayment. They are basically bridging the debt of the banks of the world on the American Taxpayer's back - meanwhile Americans can't get loans. Essentially, the Federal Reserve applied "too big to fail" across the world at the expense of the American.

The loans weren't paid back?

Jaric
07-22-2011, 01:11 PM
Wouldn't it have been a lot cheaper to just pay off everyone's mortgage?

Yes. But it works better for the bankers if they get the mortgage money AND the 16 trillion of tax dollars.

petegz28
07-22-2011, 01:12 PM
So in essence our entire National debt is corporate welfare. Yet everyone says this is okay, and **** poor people who got fleeced on their hhomes, or lost their jobs and are collecting welfare. They're the real problem. Brilliant.

The entire purpose of the Federal Reserve is to generate global debt. Beit through corporate welfare or some other method, it exists to generate debt owed to the Federal Reserve and its choice selection of bankers.

Think about it. You have an institution devised by 7 powerful men in secret with the ability to print money out of thin air, loan it out at interest rates they set and loan it to anyone they wish in secret. The icing on the cake is they do not even fall under control of the Fed Gov. They are their own entity. How sweet is that? An institution that uses the full faith and credit of our Government to back their money they print out of thin air and they do not have to answer to the government. It is the sweetest scam in the history of the world.

BucEyedPea
07-22-2011, 01:17 PM
RPT-States negotiating immunity for banks over foreclosures (http://www.reuters.com/article/2011/07/20/foreclosure-banks-immunity-idUSL3E7IK4EN20110720)


Big Bank Crime (and Punishment (?))
The states are negotiating immunity for big banks on their fraudulent foreclosures and robo-signing and who knows what else. This shows the power and payoffs of the big banks: Bank of America, Wells Fargo, CitiGroup, JPMorgan Chase, and Ally Financial. It shows the selectivity in prosecuting crimes committed in corporations by corporate figures. The states like getting the big bribe of $25 billion. In the offices of Congress and state houses and bureaus of regulation, like the FED, sit many others who irresponsibly encouraged banking, financial, and lending practices that created the credit boom. They'll do it again. They're already doing it again. They never stopped.- Michael S. Rozeff (http://www.lewrockwell.com/blog/lewrw/archives/91375.html)


White Collar Criminal Racket!


NEW YORK, July 20 (Reuters) - State attorneys general are negotiating to give major banks wide immunity over irregularities in handling foreclosures, even as evidence has emerged that banks are continuing to file questionable documents.

A coalition of all 50 states' attorneys general has been negotiating settlements with five of the biggest U.S. banks that would include payment of up to $25 billion in penalties and commitments to follow new rules. In exchange, the banks would get immunity from civil lawsuits by the states, as well as similar guarantees by the Justice Department and Department of Housing and Urban Development, which have participated in the talks.

State and federal officials declined to say if any form of immunity from criminal prosecution also is under discussion. The banks involved in the talks are Bank of America, Wells Fargo, CitiGroup, JPMorgan Chase and Ally Financial.

REUTERS REPORT PROMPTS LETTER

Reuters reported Monday that major banks and other loan servicers have continued to file questionable documents in foreclosure cases. These include false mortgage assignments, and promissory notes with suspect or missing "endorsements," which prove ownership.

The Reuters report also showed continued "robo-signing," in which lenders' employees or outside contractors churn out reams of documents without fully understanding their content. The report turned up several cases involving individuals who were publicly identified as robo-signers months ago.

Reuters found that such activity has continued even after 14 major mortgage lenders signed settlements with federal bank regulators promising to halt such practices and give remediation to some homeowners who were harmed....

Brainiac
07-22-2011, 01:22 PM
Yes. But it works better for the bankers if they get the mortgage money AND the 16 trillion of tax dollars.
How sure is everybody about that $16 Trillion figure? Is it real?

I saw this question posed on another site, and it seems like a legitimate question to me.

Since 16.1 trillion in loans is clearly IMPOSSIBLE, I was curious to see just how the real data was tortured into aggregating to 16.1 trillion dollars

Found it in footnote ... To wit

If an institution borrowed 10 billion overnight, but each day, for thirty days, rolled over that 10billion dollar loan it shows up in the aggregate "aggregate borrowing" 300 billion dollars. If that same institution borrowed the same 10 billion dollars for the same 30 days but did the initial loan as a 30 day term loan instead, that loan shows up as "aggregate borrowing" of only 10 billion dollars.

Cute!

This 16.1 trillion dollar figure is one of those "gee whizzz" numbers that has little bearing on what happened in reality, but is designed to elicit a particular response from the reader.

Like saying I have a 150,000 dollar mortgage. I refinanced it twice to get lower rates

According to this logic I borrowed 450,000 dollars.

That $16,000,000,000,000 number sounds fishy to me. I'm not saying that I deny it, but I wouldn't mind seeing something to verify it.

FD
07-22-2011, 01:24 PM
Yes. But it works better for the bankers if they get the mortgage money AND the 16 trillion of tax dollars.

What do tax dollars have to do with anything? These were short term collateralized loans that have been all paid back.

BucEyedPea
07-22-2011, 01:25 PM
What do tax dollars have to do with anything? These were short term collateralized loans that have been all paid back.

Where does the money come from to loan them though? That's the million-dollar question.
And who pays for that? The taxpayers.

petegz28
07-22-2011, 01:30 PM
How sure is everybody about that $16 Trillion figure? Is it real?

I saw this question posed on another site, and it seems like a legitimate question to me.


That $16,000,000,000,000 number sounds fishy to me. I'm not saying that I deny it, but I wouldn't mind seeing something to verify it.

This is the number that came out of the audit. The way the Fed has been printing money, $16 tril is not a surprise to me. It means nothing to them. They can print all they want. They don't have to pay it back to anyone. It's theirs. It was their printing machines that made it.

Stewie
07-22-2011, 01:51 PM
What do tax dollars have to do with anything? These were short term collateralized loans that have been all paid back.

Paid back? Really? Wow! I'm sure glad the banking system is so healthy that they can repay $16 trillion. I'm pretty sure the banks are bleeding money... and that's with phony accounting.

Brainiac
07-22-2011, 02:00 PM
This is the number that came out of the audit. The way the Fed has been printing money, $16 tril is not a surprise to me. It means nothing to them. They can print all they want. They don't have to pay it back to anyone. It's theirs. It was their printing machines that made it.
I understand that. But the point is that the footnote to the audit explained that they count the same funds multiple times whenever the loan gets rolled over.

I'm just trying to separate the actual facts of this situation from preconceived notions about the evils of the Federal Reserve. The headline makes it sound like $16 Trillion was actually spent on this, which is highly unlikely. Pontificating about the evils of the Federal Reserve do not add credibility to the $16 Trillion number.

Stewie
07-22-2011, 02:02 PM
I understand that. But the point is that the footnote to the audit explained that they count the same funds multiple times whenever the loan gets rolled over.

I'm just trying to separate the actual facts of this situation from preconceived notions about the evils of the Federal Reserve. The headline makes it sound like $16 Trillion was actually spent on this, which is highly unlikely. Pontificating about the evils of the Federal Reserve do not add credibility to the $16 Trillion number.

These loans are not repaid. They are rolled over ad infinitum. The Fed calls them "loans" to fool people only because they might be repaid in 100 years... but probably not.

Dallas Chief
07-22-2011, 02:06 PM
Wouldn't it have been a lot cheaper to just pay off everyone's mortgage?

No way. This way they can keep their thumbs pressing down on everyone. We owe, we owe, so it's off to work we go... kinda thing...

I heard somewhere that it would have caused hyper-inflation as well, or some such economic calamity. Who the hell knows? It has all become so absurd...FML

HonestChieffan
07-22-2011, 02:34 PM
They acted as though they are the World bank and bailed out the rest of the world at the expense of the American taxpayer,


Were the loans defaulted on?

HonestChieffan
07-22-2011, 02:35 PM
Where does the money come from to loan them though? That's the million-dollar question.
And who pays for that? The taxpayers.

Really?

Stewie
07-22-2011, 02:37 PM
Were the loans defaulted on?

Your and idiot. Could you please add some more compelling information?

petegz28
07-22-2011, 02:39 PM
Do some of you not see the problem with handing out trillions in loans to companies who were ready to collapse due to their bad business decisions (in some cases), using those very companies to facilitate all this lending and then watching several of them paying out record level bonuses in some cases?

HonestChieffan
07-22-2011, 02:41 PM
Your and idiot. Could you please add some more compelling information?

No it was a question not a statement. So stick your stupid comment up your ass if you want to ignore it.


What the hell is it with you people that asking an open honest question is answered with that sort of crap.

FD
07-22-2011, 02:44 PM
Do some of you not see the problem with handing out trillions in loans to companies who were ready to collapse due to their bad business decisions (in some cases), using those very companies to facilitate all this lending and then watching several of them paying out record level bonuses in some cases?

What about all the aspects of the financial industry that were not insolvent, but were on the verge of failure because of liquidity problems when markets seized up? Should we have let the entire financial system collapse because a very small segment of it was insolvent, causing investors to panic and become risk averse?

Stewie
07-22-2011, 02:44 PM
No it was a question not a statement. So stick your stupid comment up your ass if you want to ignore it.


What the hell is it with you people that asking an open honest question is answered with that sort of crap.

Educate yourself. If you really don't understand how those "loans" work, why are you posting?

Those "loans" will never be paid back. EVER!

HonestChieffan
07-22-2011, 02:47 PM
Educate yourself. If you really don't understand how those "loans" work, why are you posting?

Those "loans" will never be paid back. EVER!


That was the reason I asked a question. You are as incapable of answering this as BEP was at the get go.


If you who have your panty in a wad expect to win anyone with no stand over to your side you will need to be a bit more informative than snarky stupid comments that seem to demonstrate your lack of understanding more than mine. At least I am willing to ask in an attempt to learn.

Stewie
07-22-2011, 02:55 PM
That was the reason I asked a question. You are as incapable of answering this as BEP was at the get go.


If you who have your panty in a wad expect to win anyone with no stand over to your side you will need to be a bit more informative than snarky stupid comments that seem to demonstrate your lack of understanding more than mine. At least I am willing to ask in an attempt to learn.

Sorry.

Here's the deal. The Federal Reserve can print money at will. They print $16 trillion and call it a "loan." The $16 trillion goes to pay off the bad investments of big banks around the world. That is, investing in US mortgages, GM, Lehman going bankrupt, etc. The $16 trillion goes to pay the winners on the gamble.

The losers couldn't pay, the taxpayer fills in the void.

dirk digler
07-22-2011, 02:59 PM
Sorry.

Here's the deal. The Federal Reserve can print money at will. They print $16 trillion and call it a "loan." The $16 trillion goes to pay off the bad investments of big banks around the world. That is, investing in US mortgages, GM, Lehman going bankrupt, etc. The $16 trillion goes to pay the winners on the gamble.

The losers couldn't pay, the taxpayer fills in the void.

Got to love the American way to fuck over the middle class. Not only does the big banks make fraudulent mortgages, they get bailed out for it to the tune of trillions of dollars, get to give lavish bonuses to their employees while the middle class has to foreclose on their house and lose everything.

Mr. Flopnuts
07-22-2011, 03:04 PM
Got to love the American way to fuck over the middle class. Not only does the big banks make fraudulent mortgages, they get bailed for it to the tune of trillions of dollars, get to give lavish bonuses to their employees while the middle class has to foreclose on their house and lose everything.

And all the while, no one goes to jail, no one suffers, and they get even BIGGER bonuses the following year. The Fed, and every banking institution involved (roughly all of them) just looked everyone in the world in the eye and said "Fucking do something about it!"

We're fucked.

HonestChieffan
07-22-2011, 03:06 PM
So you contend this was 16 trillion dollars, not 1 trillion loaned 16 times?

None of this is reported in anything I have found and it is very likely that the "news" people have no clue what they are writing and the readers are less informed.

The issue the OP deals with is not the supply of money, it has to do with loans made over a period of time and the recipients of those loans. It does not address the supply of money or the Feds printing of the same. So if possible, rather than going off on another Fed is bad bunny trail, it would be constructive to stay on the issue orriginally stated.

The fed loaned money....that is normal and within the scope of the feds role is it not?

They loaned money to banks, both foreign and domestic..again normal and within the scope of their role.

It seems from what I can get out of this is that we once again have people who automatically ascribe negatives to anything the fed does saying they are somehow committing a wrong from doing exactly what they are supposed to do.

There is no evidence the loans were not repaid. If so, we should see that and the OP would have been far more impactive had they reported 16 trillion oin loans were in default. I contend they are not.

There is further no evidence that 16 trillion was loaned at one time, more to the point, it may have been 1 trillion loaned 16 times each time repaid or it is 1 trillion rolled over 16 times...in any case, the $16 trillion number is hard to swallow and not supported by any information in the OP.

There is interest paid on the loans and no mention is made on the income generated by the loans as reported.

Bottom line is there is not nearly enough information to reach a conclusion of right or wrong for those who would like to understand it. For those who just kneeejerk OMG the fed is evil, its all they need.


Id love to know the real truth.

Stewie
07-22-2011, 03:09 PM
So you contend this was 16 trillion dollars, not 1 trillion loaned 16 times?

None of this is reported in anything I have found and it is very likely that the "news" people have no clue what they are writing and the readers are less informed.

The issue the OP deals with is not the supply of money, it has to do with loans made over a period of time and the recipients of those loans. It does not address the supply of money or the Feds printing of the same. So if possible, rather than going off on another Fed is bad bunny trail, it would be constructive to stay on the issue orriginally stated.

The fed loaned money....that is normal and within the scope of the feds role is it not?

They loaned money to banks, both foreign and domestic..again normal and within the scope of their role.

It seems from what I can get out of this is that we once again have people who automatically ascribe negatives to anything the fed does saying they are somehow committing a wrong from doing exactly what they are supposed to do.

There is no evidence the loans were not repaid. If so, we should see that and the OP would have been far more impactive had they reported 16 trillion oin loans were in default. I contend they are not.

There is further no evidence that 16 trillion was loaned at one time, more to the point, it may have been 1 trillion loaned 16 times each time repaid or it is 1 trillion rolled over 16 times...in any case, the $16 trillion number is hard to swallow and not supported by any information in the OP.

There is interest paid on the loans and no mention is made on the income generated by the loans as reported.

Bottom line is there is not nearly enough information to reach a conclusion of right or wrong for those who would like to understand it. For those who just kneeejerk OMG the fed is evil, its all they need.


Id love to know the real truth.

These are loans that are never repaid. There's no interest rate, there's no payback period.

FD
07-22-2011, 03:11 PM
These are loans that are never repaid. There's no interest rate, there's no payback period.

Rolling over a loan is a pretty different thing from never repaying it. I think thats whats got you all confused in this thread.

HonestChieffan
07-22-2011, 03:14 PM
These are loans that are never repaid. There's no interest rate, there's no payback period.

I think you know better than that, that is patently absurd.

Stewie
07-22-2011, 03:15 PM
Rolling over a loan is a pretty different thing from never repaying it. I think thats whats got you all confused in this thread.

Umm... Rolling over a loan forever is the same as never repaying it.

Stewie
07-22-2011, 03:16 PM
I think you know better than that, that is patently absurd.

So, the US has a $14 trillion deficit and rising because?....

FD
07-22-2011, 03:22 PM
Umm... Rolling over a loan forever is the same as never repaying it.

Rolling over a loan and rolling it over forever are not the same things.

HonestChieffan
07-22-2011, 03:22 PM
So, the US has a $14 trillion deficit and rising because?....

Because the fed gifted 16 trillion dollars to banks?



Really?

Hydrae
07-22-2011, 03:25 PM
So you contend this was 16 trillion dollars, not 1 trillion loaned 16 times?

None of this is reported in anything I have found and it is very likely that the "news" people have no clue what they are writing and the readers are less informed.

The issue the OP deals with is not the supply of money, it has to do with loans made over a period of time and the recipients of those loans. It does not address the supply of money or the Feds printing of the same. So if possible, rather than going off on another Fed is bad bunny trail, it would be constructive to stay on the issue orriginally stated.

The fed loaned money....that is normal and within the scope of the feds role is it not?

They loaned money to banks, both foreign and domestic..again normal and within the scope of their role.

It seems from what I can get out of this is that we once again have people who automatically ascribe negatives to anything the fed does saying they are somehow committing a wrong from doing exactly what they are supposed to do.

There is no evidence the loans were not repaid. If so, we should see that and the OP would have been far more impactive had they reported 16 trillion oin loans were in default. I contend they are not.

There is further no evidence that 16 trillion was loaned at one time, more to the point, it may have been 1 trillion loaned 16 times each time repaid or it is 1 trillion rolled over 16 times...in any case, the $16 trillion number is hard to swallow and not supported by any information in the OP.

There is interest paid on the loans and no mention is made on the income generated by the loans as reported.

Bottom line is there is not nearly enough information to reach a conclusion of right or wrong for those who would like to understand it. For those who just kneeejerk OMG the fed is evil, its all they need.


Id love to know the real truth.

Ok, now I get to ask you a question. Is it really the place of the Fed to loan money to foreign entities such as banks and countries? That is where my first and biggest problem with this is at. They print money, thus reducing the value of the dollars in my pocket due to there being more in circulation and then give to entities that have no involvement in our tax system. If this is the role of the Fed, I have less desire to keep them around than before and I want to see them gone already.

HonestChieffan
07-22-2011, 03:34 PM
Ok, now I get to ask you a question. Is it really the place of the Fed to loan money to foreign entities such as banks and countries? That is where my first and biggest problem with this is at. They print money, thus reducing the value of the dollars in my pocket due to there being more in circulation and then give to entities that have no involvement in our tax system. If this is the role of the Fed, I have less desire to keep them around than before and I want to see them gone already.

I dont know honestly where it starts and stops in todays banking and financial world. Banks and financial institutions operate with out borders. What is a US Bank? Most banks have and always have loaned money and traded back and forth regardless of borders. That goes back a long long time.

The US was borrowing money from the French and the Dutch when we were fighting a revolution. Our banks and the federal government were borrowing an then and do today.

We borrow as do other countries. I think, and I may be totally wrong, that the US Government borrowing is generally through bonds not through direct loans. But to address your question, I suppose it is the feds place to do that, it always has, its not a new thing, and will in the future. But that is not a "printing money"issue

I agree they have been far to willing to address currency issues and solvency issues by printing money. But the move to do QE 1 and QE2 is a separate issue from making a loan to a bank that operates in the US when we had a true currency crisis. The money supply has expanded far to much, to fast, and ultimately we will see as a result major inflation, its just a matter of time and that is never ever good.

BucEyedPea
07-22-2011, 03:45 PM
I dont know honestly where it starts and stops in todays banking and financial world. Banks and financial institutions operate with out borders. What is a US Bank? Most banks have and always have loaned money and traded back and forth regardless of borders. That goes back a long long time.
This answer is off-the-mark and irrelevant because the Fed is a creation of the US govt and is part of it, which operates as a cartel and bars entry for others. It's not exactly a private sector creation which can and should operate beyond borders.

BucEyedPea
07-22-2011, 03:47 PM
Really?

The fact that you respond like this to that shows you haven't a clue how it's set up to work.

HonestChieffan
07-22-2011, 03:53 PM
This answer is off-the-mark and irrelevant because the Fed is a creation of the US govt and is part of it, which operates as a cartel and bars entry for others. It's not exactly a private sector creation which can and should operate beyond borders.


Im sure your answer or retort makes some sense to you but once again Im just not able to grasp it. I am just not at your level on this or something.



Why is my response irrelevant? I thought that was actually quite relevant. Banks do operate globally do they not?

How can one entity be a cartel? I would have supposed, but Im not as up on all these labels as you, that as a single entity they would be a monopoly. Who else is part of the cartel?

Was the fed ever a private sector creation and what does that have to do with the question Mr Hydrea and I were discussing?

In my response to Mr Hydrae, can you illuminate he and I on both his question and my clearly irrelevant and misguided answer?

HonestChieffan
07-22-2011, 03:56 PM
The fact that you respond like this to that shows you haven't a clue how it's set up to work.


well help us all.

Stewie seemed to imply the 14 trillion dollar debt was the result of loaning 16 trillion in unpaid never to be paid back, no interest loans by the fed. Maybe the math is just to much for me.

Plus I think there are other stuff that makes up the debt. But again, Im no expert. Maybe Ive just been wrong all these years.

Stewie
07-22-2011, 04:02 PM
well help us all.

Stewie seemed to imply the 14 trillion dollar debt was the result of loaning 16 trillion in unpaid never to be paid back, no interest loans by the fed. Maybe the math is just to much for me.

Plus I think there are other stuff that makes up the debt. But again, Im no expert. Maybe Ive just been wrong all these years.

I didn't imply that at all. The $16 trillion is the "off-balance accounting" system. Kind of like Enron.

petegz28
07-22-2011, 04:03 PM
What about all the aspects of the financial industry that were not insolvent, but were on the verge of failure because of liquidity problems when markets seized up? Should we have let the entire financial system collapse because a very small segment of it was insolvent, causing investors to panic and become risk averse?

Possibly. More to the point, however, was the fact that no one knew who the Fed was lending money too and for what reasons. It's one thing to help out banks, I guess, but it is another to do it totally in secret.

Hydrae
07-22-2011, 04:41 PM
I dont know honestly where it starts and stops in todays banking and financial world. Banks and financial institutions operate with out borders. What is a US Bank? Most banks have and always have loaned money and traded back and forth regardless of borders. That goes back a long long time.

The US was borrowing money from the French and the Dutch when we were fighting a revolution. Our banks and the federal government were borrowing an then and do today.

We borrow as do other countries. I think, and I may be totally wrong, that the US Government borrowing is generally through bonds not through direct loans. But to address your question, I suppose it is the feds place to do that, it always has, its not a new thing, and will in the future. But that is not a "printing money"issue

I agree they have been far to willing to address currency issues and solvency issues by printing money. But the move to do QE 1 and QE2 is a separate issue from making a loan to a bank that operates in the US when we had a true currency crisis. The money supply has expanded far to much, to fast, and ultimately we will see as a result major inflation, its just a matter of time and that is never ever good.

Sorry for the slow response, just got home from work (crap it is hot out there with no AC! :cuss: ).

Yes, we did borrow money for the revolution. I believe that came from the countries, not banks within the countries but I have no idea if this is true or not. If this had been done by the Treasury Department I think I would have less issue (or at least a different response) but it wasn't, it was done by a private group using government money.

HonestChieffan
07-22-2011, 04:53 PM
Sorry for the slow response, just got home from work (crap it is hot out there with no AC! :cuss: ).

Yes, we did borrow money for the revolution. I believe that came from the countries, not banks within the countries but I have no idea if this is true or not. If this had been done by the Treasury Department I think I would have less issue (or at least a different response) but it wasn't, it was done by a private group using government money.


Lord man, no AC?

I was out in this crap for three hours. Im gettin too old.

We borrowed from syndicates as I recall my history...French Government and Dutch private lenders....I believe Adams was one of the lead dogs getting the money in Amsterdam.


Its Friday. have a beer. Get some AC.

patteeu
07-23-2011, 05:56 AM
Your and idiot. Could you please add some more compelling information?

You may know everything there is to know about this subject, but so far in this thread you haven't added any information at all, compelling or otherwise. HCF has asked questions. Interestingly, instead of answers, he gets insults in return.

HonestChieffan
07-23-2011, 06:11 AM
You may know everything there is to know about this subject, but so far in this thread you haven't added any information at all, compelling or otherwise. HCF has asked questions. Interestingly, instead of answers, he gets insults in return.

Your mother wears army boots and you are a poopy head

chiefzilla1501
07-23-2011, 07:46 AM
Giving loans to financial institutions actually makes sense, except for the fact that banks are irresponsible about how they use that money. Instead of pumping that back into the markets and improving the housing market, they're using it to pay off executive compensation and bonuses.

I'd personally prefer not bailing most businesses out, period. But the fact remains that until we do something about outrageous compensation/bonuses, stuff like this is doomed to fail.

banyon
07-23-2011, 07:57 AM
I'm going to have to side with the fringe nutballs on this one. If foreign banks needed to be bailed out, then their taxpayers and their central banks should've been the ones to bear the burden.

This is like a form of economic treason.

The Fed needs to be revised for accountability and transparency. Perhaps scrap it and start over. It would be for the 4th time.

mlyonsd
07-23-2011, 08:03 AM
I'm going to have to side with the fringe nutballs on this one. If foreign banks needed to be bailed out, then their taxpayers and their central banks should've been the ones to bear the burden.

This is like a form of economic treason.

The Fed needs to be revised for accountability and transparency. Perhaps scrap it and start over. It would be for the 4th time.This.

BucEyedPea
07-23-2011, 09:34 AM
Your mother wears army boots and you are a poopy head

The answers are in the article and in my first rhetorical questions to you. Plus taco answered it in a different way. Ya' know as in who pays for this. The article has words like "secret", "foreign", "conflict of interest" etc etc.

Also, if you knew the definition of a Whig that would tell you even more. Do you know what that is? Do you see how these financial corporations are acting?
It's not an insult. I don't consider being called a conservative an insult. So look it up instead of pat defending you like a helpless women. ( something patteeu attacked taco for doing at one time for me).

That's all that needs to be said as to what is wrong here. It's pretty obvious. But if you need to be educated to see what others see, then you should be educating yourself instead of using the easy way out and asking others to do your work. Because it is more work than a post. You can even use the search here on this very board because I am not going to write a very long post trying to educate someone on a message board who can't even look up a definition.

BucEyedPea
07-23-2011, 09:40 AM
Im sure your answer or retort makes some sense to you but once again Im just not able to grasp it. I am just not at your level on this or something.



Why is my response irrelevant? I thought that was actually quite relevant. Banks do operate globally do they not?

How can one entity be a cartel? I would have supposed, but Im not as up on all these labels as you, that as a single entity they would be a monopoly. Who else is part of the cartel?

Was the fed ever a private sector creation and what does that have to do with the question Mr Hydrea and I were discussing?

In my response to Mr Hydrae, can you illuminate he and I on both his question and my clearly irrelevant and misguided answer?
Seriously HCF, with questions like these, a few posts are not going to do it. You need to get some books.

BucEyedPea
07-23-2011, 09:43 AM
Giving loans to financial institutions actually makes sense, except for the fact that banks are irresponsible about how they use that money.

Why do you think this is, though?

banyon
07-23-2011, 09:44 AM
Seriously HCF, with questions like these, a few posts are not going to do it. You need to get some books.

Pretty typical. "My education is so great that it doesn't allow me to actually coherently explain my views, but you need to just read the books I did."


Makes for great conversation.

HonestChieffan
07-23-2011, 09:50 AM
Seriously HCF, with questions like these, a few posts are not going to do it. You need to get some books.

I am beginning to understand I need to make them simple. They seem to be far to complex. Either that or my inability to get any answer when a question is asked is a function of people just not wanting to respond.

It must be my fault.

BucEyedPea
07-23-2011, 09:58 AM
Pretty typical. "My education is so great that it doesn't allow me to actually coherently explain my views, but you need to just read the books I did."


Makes for great conversation.

So being hostile interventionist is how the noble lead the way right?

That's not the point—at ALL!

It has nothing to do with how I view my education. It has to do with the fact that he can't even bother to see 1) that he got an answer from me and some others 2) that he can't even bother to look up a word which would help him understand what someone meant. Others look things up when they read posts so why can't he. He just doesn't want to bother. He expects someone to spend over an hour posting a long involved post to instruct him when he could read about it. ( in the article for starters) Then he'll just post ask more questions.

His demands on others time to be educated are something he should do or he is not being serious but mocking that there is nothing really wrong here or to know, so if you don't want to remain glued to this one thread to waste time explaining what needs no explaining then you are wrong too. His game is easily seen through.

BucEyedPea
07-23-2011, 10:01 AM
I am beginning to understand I need to make them simple. They seem to be far to complex. Either that or my inability to get any answer when a question is asked is a function of people just not wanting to respond.

It must be my fault.

You already made it simple. And you got some simple answers. No answer will suffice with you because your mind is made up that there is nothing wrong here. Your game is easily seen through. I think it's time you go back to focusing on Obama with another pasted article—often with no link.

banyon
07-23-2011, 10:01 AM
So being hostile interventionist is how the noble lead the way right?

That's not the point—at ALL!

It has nothing to do with how I view my education. It has to do with the fact that he can't even bother to see 1) that he got an answer from me and some others 2) that he can't even bother to look up a word which would help him understand what someone meant. Others look things up when they read posts so why can't he. He just doesn't want to bother. He expects someone to spend over an hour posting a long involved post to instruct him when he could read about it. ( in the article for starters) Then he'll just post ask more questions.

His demands on others time to be educated are something he should do or he is not being serious but mocking that there is nothing really wrong here or to know, so if you don't want to remain glued to this one thread to waste time explaining what needs no explaining then you are wrong too. His game is easily seen through.

So you agree that you didn't meaningfully attempt to answer his questions?

HonestChieffan
07-23-2011, 10:02 AM
I ask a question and all you see is a game.

BucEyedPea
07-23-2011, 10:05 AM
I ask a question and all you see is a game.

Passive aggression disguising things.

banyon
07-23-2011, 10:07 AM
Oh, yeah, it's time for trick #5: Lawn chair psychology analysis in lieu of substance.

BucEyedPea
07-23-2011, 10:17 AM
Did you say something?

banyon
07-23-2011, 10:18 AM
Did you say something?

Heck, I never even knew I was off "fake ignore". Could you send me a warning next time, so I'll know?

BucEyedPea
07-23-2011, 10:19 AM
Huh?

banyon
07-23-2011, 10:21 AM
Huh?

No, the conversation is over. I'm on fake ignore. Did you forget already?

BucEyedPea
07-23-2011, 10:27 AM
hmmmmm

Jaric
07-23-2011, 10:35 AM
Oh, yeah, it's time for trick #5: Lawn chair psychology analysis in lieu of substance.

You're only saying that because of a traumatic childhood experience you've been repressing.

BucEyedPea
07-23-2011, 10:45 AM
You're only saying that because of a traumatic childhood experience you've been repressing.

Nah, he's just here to flame and escalate things—as usual.

teedubya
07-23-2011, 11:16 AM
For anyone who understands fractional reserve banking, this makes total sense that they would loan out $16 trillion.

The first "bailout" gave authorization to print $800 billion... and the 2nd bailout gave authorization for another $800 billion. That's 1.6 trillion. Fractional reserve allows them to loan that money out 10x... so $16 trillion was the number I've expected them to loan out.

FD
07-23-2011, 12:58 PM
For anyone who understands fractional reserve banking, this makes total sense that they would loan out $16 trillion.

The first "bailout" gave authorization to print $800 billion... and the 2nd bailout gave authorization for another $800 billion. That's 1.6 trillion. Fractional reserve allows them to loan that money out 10x... so $16 trillion was the number I've expected them to loan out.

Is this a joke?

Because every single thing you just wrote is wrong.

BigChiefFan
07-23-2011, 01:06 PM
Is this a joke?

Because every single thing you just wrote is wrong.

No, he's right. Fractional reserve banking allows you to loan out 10 times what is deposited. That's why it's called FRACTIONAL.

nstygma
07-23-2011, 01:11 PM
No, he's right. Fractional reserve banking allows you to loan out 10 times what is deposited. That's why it's called FRACTIONAL.so really, 90% of the 16trillion could be just electronic money, numbers in software?

nstygma
07-23-2011, 01:15 PM
since loaning 16 trillion is a mouseclick and a signature away, prop up all these companies and let them learn from their mistakes, or let them all fail? is that their reasoning?

BigChiefFan
07-23-2011, 01:18 PM
so really, 90% of the 16trillion could be just electronic money, numbers in software?No, they loaned out $16 trillon, but they only need 10% of that, to do so.

Yes, the money is electronic, but the loans value is for the $16 trillon. It's a Ponzi Scheme. Here's the definition of Federal Reserve Banking...


Fractional Reserve Banking

What Does Fractional Reserve Banking Mean?
A banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Most countries operate under this type of system.

Also known as "fractional deposit lending". Investopedia explains Fractional Reserve Banking
Many U.S. banks were forced to shut down during the Great Depression because so many people attempted to withdraw assets at the same time. Today there are many safeguards in place to prevent such an instance from occurring again, but the fractional-reserve banking system remains in place.

http://www.investopedia.com/terms/f/fractionalreservebanking.asp

nstygma
07-23-2011, 01:34 PM
No, they loaned out $16 trillon, but they only need 10% of that, to do so.

Yes, the money is electronic, but the loans value is for the $16 trillon. It's a Ponzi Scheme. Here's the definition of Federal Reserve Banking...doesn't that only apply to "depository institutions" like banks?(link (http://en.wikipedia.org/wiki/Reserve_requirement)) i wouldn't think the FED is under that rule. but honestly I'm not sure.
to me, it appears that the FED has infinite money to disperse at will, in order to do their job, which is supposed to be keeping the banking systems running right and averting financial crises. sounds like a video game

chiefzilla1501
07-23-2011, 03:59 PM
Why do you think this is, though?

I think partially because the government was reckless in lending the money. But on the private sector side, while I'm a free enterprise guy myself and I am a huge proponent of pumping money into the private sector, we can't ignore that corporate greed and excess is also crippling the economy.

The problem is that banks took bailout money and pumped a bunch of it into bonuses and not back into the housing market. To me, it's actually quite disgusting that these leaders don't have the common sense to know that if you borrow money for a reason, you should use it for that reason. That's like asking my friend for $5 for lunch because I forgot my wallet and then spending that $5 on a toy.

So while the government should be blamed for reckless lending, these private sector leaders should be absolutely ashamed that they recklessly spent taxpayer money on... themselves.

BucEyedPea
07-23-2011, 04:02 PM
So while the government should be blamed for reckless lending, these private sector leaders should be absolutely ashamed that they recklessly spent taxpayer money on... themselves.

Why were they reckless though is what I was aiming at? It's because this type of system creates moral hazard because they know they will be bailed out. That does not encourage any reponsibility on their part if they know they won't suffer the consequences. Our nation's history has traditionally exempted banks from such things even as far back as the 19th century with govt would grant bank holidays. Such things encourage this reckless behavior.

suzzer99
07-24-2011, 08:05 AM
Bank holidays encourage reckless behavior?

teedubya
07-24-2011, 12:02 PM
No, they loaned out $16 trillon, but they only need 10% of that, to do so.

Yes, the money is electronic, but the loans value is for the $16 trillon. It's a Ponzi Scheme. Here's the definition of Federal Reserve Banking...


Fractional Reserve Banking

What Does Fractional Reserve Banking Mean?
A banking system in which only a fraction of bank deposits are backed by actual cash-on-hand and are available for withdrawal. This is done to expand the economy by freeing up capital that can be loaned out to other parties. Most countries operate under this type of system.

Also known as "fractional deposit lending". Investopedia explains Fractional Reserve Banking
Many U.S. banks were forced to shut down during the Great Depression because so many people attempted to withdraw assets at the same time. Today there are many safeguards in place to prevent such an instance from occurring again, but the fractional-reserve banking system remains in place.

http://www.investopedia.com/terms/f/fractionalreservebanking.asp

Man, everything you wrote is wrong, is this a joke? LMAO.

Right on, man. Most people don't know what they don't know, yet defend their ignorance aggressively.

FD
07-24-2011, 12:19 PM
Man, everything you wrote is wrong, is this a joke? LMAO.

Right on, man. Most people don't know what they don't know, yet defend their ignorance aggressively.

The "fraction" in fractional reserve banking is based on the cash reserve ratio. Do you really think reserve requirements apply to the Fed's short term lending? Does that make any sense at all? And you are accusing others of ignorance?