Tim Geithner gave GoldmanSachs, foreign banks, SECRET 0% loans while at New York Fed

During 2008, while still running the New York Federal Reserve Bank, Tim Geithner set up a secret loan program that lent more than $80 Billion to his former employer, Goldman Sachs, as well as foreign megabanks including UBS, the Royal Bank of Scotland, Credit Suisse, Deutsche Bank and Barclays at 0.01% interest!

Fed Gave Banks Crisis Gains on $80 Billion Secretive Loans as Low as 0.01%

Credit Suisse Group AG (CS), Goldman Sachs Group Inc. (GS) and Royal Bank of Scotland Group Plc (RBS) each borrowed at least $30 billion in 2008 from a Federal Reserve emergency lending program whose details weren’t revealed to shareholders, members of Congress or the public.
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“This was a pure subsidy,” said Robert A. Eisenbeis, former head of research at the Federal Reserve Bank of Atlanta and now chief monetary economist at Sarasota, Florida-based Cumberland Advisors Inc. “The Fed hasn’t been forthcoming with disclosures overall. Why should this be any different?”

The Fed had refused to reveal any of this under the FOIA until ordered to do so in Federal Court this past March.

“I wasn’t aware of this program until now,” said U.S. Representative Barney Frank, the Massachusetts Democrat who chaired the House Financial Services Committee in 2008 and co- authored the legislation overhauling financial regulation. The law does require the Fed to release details of any open-market operations undertaken after July 2010, after a two-year lag.

Records of the 2008 lending, released in March under court orders, show how the central bank adapted an existing tool for adjusting the U.S. money supply into an emergency source of cash. Zurich-based Credit Suisse borrowed as much as $45 billion, according to bar graphs that appear on 27 of 29,000 pages the central bank provided to media organizations that sued the Fed Board of Governors for public disclosure.

Who benefitted the most?

Geithner's former bosses at Goldman Sachs, who could use the money to leverage speculation that returned pure profit without anyone knowing the difference!

New York-based Goldman Sachs’s borrowing peaked at about $30 billion, the records show, as did the program’s loans to RBS, based in Edinburgh. Deutsche Bank AG (DBK), Barclays Plc (BARC) and UBS AG (UBSN) each borrowed at least $15 billion, according to the graphs, which reflect deals made by 12 of the 20 eligible banks during the last four months of 2008.
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The Fed opposed disclosing details of its open market operations because doing so would probably cause borrowers “substantial competitive harm,” according to a March 2009 declaration by Christopher R. Burke, vice president of the New York Fed’s markets group. The declaration is filed in federal court.

Revealing the borrowing “could lead market participants to inaccurately speculate that the primary dealer was having difficulty finding term funding against its collateral in the open market and that the dealer itself must therefore be in financial trouble,” Burke said in opposing a media request for records about the borrowing.
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“At such low interest rates, it’s no longer a rescue, it’s a profit-making enterprise,” Greenberger said. “By December, a lot of money was made off this program.”

Goldman Sachs, led by Chief Executive Officer Lloyd C. Blankfein, tapped the program most in December 2008, when data on the New York Fed website show the loans were least expensive. The lowest winning bid at an ST OMO auction declined to 0.01 percent on Dec. 30, 2008, New York Fed data show.

All this secret profit-making while Goldman Sachs and others were foreclosing our homes, refusing to re-negotiate troubled loans, and acting as if they were financially sound!

Geither's reward?
He now runs the Treasury, the source of all the funds the Fed creates fake money to buy to keep us "afloat."

jw

reply to post by jdub297


There used to be a saying if its good for General Motors it is good for America. I think we can use that same formula today. I can certainly use a no -interest loan and since the government is passing them out if I do not get mine I will scream loudly about discrimination and this government favoring of corporate elitists over the heart and soul of America, it's people. We are the reason the government exists at all and it should serve us at least as well and perhaps BETTER than it serves banksters and the largest companies.

Just another example of Democrats using their power to help themselves and their cronies get rich. Isn't this the guy who didn't even pay his taxes? And his idealology is that taxes are important???
Democrats and their greed, they're destroying America.

Originally posted by newcovenant
reply to post by jdub297

 

There used to be a saying if its good for General Motors it is good for America. I think we can use that same formula today. I can certainly use a no -interest loan and since the government is passing them out if I do not get mine I will scream loudly about discrimination and this government favoring of corporate elitists over the heart and soul of America, it's people. We are the reason the government exists at all and it should serve us at least as well and perhaps BETTER than it serves banksters and the largest companies.

Here's an even better application of that principal:

Recall hearing how GM, Chrysler, and AIG have "paid back" their bail-out money?

Know how they did it? Below-market interest government loans from DoE and DoT! They used government money to pay off government loans. I'd like some of that, too!
(As an aside, DoE is run by Henry Chu, who is directly responsible for the US paying "European gasoline prices;"
and DoT is run by Geithner, who keeps feeding the Fed US treasuries in exchange for their worthless dollars, which is directly responsible for the inflation in food, healthcare, housing, transportation, energy, commodities and clothing prices.)

All this after Barack Obama and Tim Geithner gave them a combined $70 Billion in capital by buying almost all of their worthless stock.

What is the net-effect? It forces everyone who had savings and investments to draw those down to make ends meet, thus bringing them into line/"equality" with the deadbeats who depend on the government for their food, housing, transportation and healthcare.

Look what they've done to my country.

reply to post by Kaiju

Democrats and their greed, they're destroying America.

Isn't that what they promised: to "transform" America?

This is the "change" they hoped for!