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Federal Reserve gave billions in secret loans to same big banks that deny and cancel loan modifications

The $700 billion Wall Street ‘public’ bailout was chump-change compared to multi-trillion-dollars the Federal Reserve doled out in secret to big banks and corporations.

Thanks to an amendment U.S. Senator Bernie Sanders from Vermont was able to include in the Wall Street reform bill passed last year, the American people are beginning to discover the unprecedented ‘backdoor’ bailout the financial institutions received from the Federal Reserve, care of, Ben Bernanke.

What has been disclosed so far

What we have learned so far from the disclosure of more than 21,000 transactions is that trillions and trillions of dollars in near-zero interest loans and other financial arrangements by the Federal Reserve was doled out to every major financial institution in this country.

Among those are:

  • Goldman Sachs, which received nearly $600 billion
  • Morgan Stanley, which received nearly $2 trillion
  • Citigroup, which received $1.8 trillion
  • Bear Stearns, which received nearly $1 trillion
  • Merrill Lynch, which received some $1.5 trillion in short term loans from the Fed

Corporations and foreign private banks also made out like bandits

We also learned that the Fed’s multi-trillion bailout was not limited to Wall Street and big banks, but that some of the largest corporations in this country also received a very substantial bailout. Among those are General Electric, McDonald’s, Caterpillar, Harley Davidson, Toyota and Verizon.

Perhaps most surprising is the huge sum that went to bail out foreign private banks and corporations including two European megabanks — Deutsche Bank and Credit Suisse — which were the largest beneficiaries of the Fed’s purchase of mortgage-backed securities.

Deutsche Bank, a German lender, sold the Fed more than $290 billion worth of mortgage securities. Credit Suisse, a Swiss bank, sold the Fed more than $287 billion in mortgage bonds.

The ‘story’ Americans were told

The Fed said that this bailout was necessary to prevent the world economy from going over a cliff. But three years after the start of the recession, millions of Americans remain unemployed and have lost their homes, life savings and ability to send their kids to college.

Meanwhile, big banks and corporations have returned to making huge profits and paying their executives record-breaking compensation packages as if the financial crisis they started never happened.

The four largest banks in this country (Bank of America, JP Morgan Chase, Wells Fargo, and Citigroup) issue half of all mortgages in this country. We now know that these banks received hundreds of billions from the Fed. How many Americans could have remained in their homes, if the Fed required these bailed-out banks to reduce mortgage payments as a condition of receiving these secret loans?

Full audit on all the ‘monkey business’ due in July 2011

The Government Accountability Office is conducting a top-to-bottom audit of all of the emergency lending the Fed provided during the financial crisis, which is to be completed on July 21, 2011. This audit will take a hard look at all of the potential conflicts of interest that took place with respect to the Fed bailout.

Fight, fight, fight

So you, the struggling homeowner, trying to get a loan modification approved – don’t go down without a fight. This blog and the special report I have available for you, gives you the tools to fight for a fair loan modification and much more – if you take action now.
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Source: http://www.huffingtonpost.com/rep-bernie-sanders/a-real-jaw-dropper-at-the_b_791091.html

Technorati Tags: wall street bailout, bank bailout, federal reserve, Senator Bernie Sanders

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3 Responses to Federal Reserve gave billions in secret loans to same big banks that deny and cancel loan modifications

  1. Jim Collins on 02/02/2011 at 16:34

    Yep, this is just one more reason, though we really don’t need one, that the Fed should be audited, all it’s transactions exposed – such as the ones detailed here – and then get shut down and control of our monetary system returned to Congress, as the Constitution states.
    And where do you suppose they get all the money to make spend these multi-billions of dollars? They effectively print it, which is the cause of inflation and just further deflates are already near valueless dollar.
    And instead of examining and reining in the Fed so they don’t waste this ton of money what does Congress do? Among many useless things, it established the HAMP program to supposedly help people with loan modifications. But as we know, that is a failed program. Failed because of the poor job done by Treasury, but also by the unwillingness of these companies (that got the big bucks from the Fed) to help people with their underwater loans.

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