Jesse's Café Américain Tue 2009-12-01 22:16 EST

Draining the Swamp: The Fed's Tri Party Repo Machine

Jesse

A triparty repo transaction is a transaction among three parties: a cash lender acting on behalf of all holders of dollars (the Fed), a borrower that will provide collateral (dodgy debt holder in shaky financial condition), and a clearing bank, most likely a primary dealer like J.P. Morgan, which is only too happy to collect its fees as an agent of the Fed... This is the method of obtaining toxic assets from the books of non-primary dealers, and providing stability and liquidity from the aggregate value of all dollar holders to cover the misdeeds of diverse financial institutions and other favored parties. In other words, the Fed is draining the financial debt swamp and toxic waste dumps into your basement, if you hold Federal Reserve Notes.

drain; Fed's Tri Party Repo Machine; Jesse's Café Américain; swamping.

The Big Picture Sun 2009-10-11 16:08 EDT

Kaptur & Johnson on Bill Moyers

Former International Monetary Fund chief economist Simon Johnson and US Rep. Marcy Kaptur (D-OH) report on the state of the economy... MARCY KAPTUR: Think about what these banks have done. They have taken very imprudent behavior, irresponsible. They have really gambled, all right? And in many cases, been involved in fraudulent activity. And then when they lost, they shifted their losses to the taxpayer. So, if you look at an instrumentality like the F.H.A., the Federal Housing Administration. They used to insure one of every 50 mortgages in the country. Now it's one out of four. MARCY KAPTUR: Because what they're doing is they're taking their mistakes and they're dumping them on the taxpayer. So, you and I, and the long term debt of our country and our children and grandchildren. It's all at risk because of their behavior. We aren't reigning them in. The laws of Congress passed last year in terms of housing, were hollow. ... SIMON JOHNSON: And Rahm Emanuel, the President's Chief of Staff has a saying. He's widely known for saying, `Never let a good crisis go to waste'. Well, the crisis is over, Bill. The crisis in the financial sector, not for people who own homes, but the crisis for the big banks is substantially over. And it was completely wasted. The Administration refused to break the power of the big banks, when they had the opportunity, earlier this year. And the regulatory reforms they are now pursuing will turn out to be, in my opinion, and I do follow this day to day, you know. These reforms will turn out to be essentially meaningless.

Big Picture; Bill Moyers; Johnson; Kaptur.

Thu 2009-10-08 17:04 EDT

After subverting bank insolvency, our leaders are now about to make a mess of liquidity

FT.com | Willem Buiter's Maverecon

Unless there is a major change of direction among global economic and financial officialdom, we are at risk of ending up with a world in which liquidity provision is privatised and insolvency risk for banks is socialised. This would be the exact opposite of what makes sense: solvency is (or should be) a private good and liquidity is (or should be) a public good...The authorities should not waste their limited organisational capital to force banks to provide inefficiently the public good of liquidity when confidence and trust are low. They should instead focus on ways of enforcing hard budget constraints on banks - to confront them with the realities of insolvency in a way that separates shareholders, unsecured creditors, boards and managers from their investments while leaving the bank as a functioning organisation capable of continued intermediation.

leaders; liquidity; makes; Mess; subverting bank insolvency.

Bruce Krasting Fri 2009-09-04 18:30 EDT

Open Letter to FHFA's New Director Edward DeMarco - A Proposal for the Agency REO/Preferred Shares

Bruce Krasting

Let me welcome you to your new responsibilities. You have a very important job. There are a significant number of people in the financial world who lie awake at night worrying about the mortgage lenders you are responsible for. Fannie Mae, Freddie Mac and the FHLBs hold or guaranty $6.3 Trillion in residential mortgages. It is simply not possible for the US to get out of the mess we are in unless these Agencies are stabilized. Should those Agencies fail, all that has been done to heal the US financial sector will have been wasted. In a significant manner, your success or failure will determine the medium term course of the US economy.

Agency REO/Preferred Shares; Bruce Krasting; FHFA's New Director Edward DeMarco; Open Letter; proposed.

The IRA Analyst Tue 2009-09-01 19:21 EDT

Q2 2009 Bank Stress Test Results: The Zombie Dance Party Rocks On

...the Fed and Treasury spent all the available liquidity propping up Wall Street's toxic asset waste pile and the banks that created it, so now Main Street employers and private investors, and the relatively smaller banks that support them both, must go begging for capital and liquidity in a market where government is the only player left

IRA Analyst; Q2 2009 Bank Stress Test Results; Zombie Dance Party Rocks.

Wed 2009-04-01 00:00 EDT

AlterNet: The Only Way to Avoid Wasting Many Billions More: Take Over the Banks

by Joseph Stiglitz, The Nation

AlterNet; avoiding waste; bank; billions; take; way.

Wed 2009-02-11 00:00 EST

naked capitalism: How to Waste $350 Billion

TARP oversight

350; naked capitalism; Waste.

Mon 2008-12-15 00:00 EST

Michael Hudson and Jeffrey Sommers: The End of the Washington Consensus

Counterpunch; ``Total private-sector markets (in practice, markets run by the banks and money managers) have shown themselves to be just as destructive, wasteful and corrupt and, indeed, centrally planned as those of totally statist governments from Stalin's Russia to Hitler's Germany.''

ending; Jeffrey Sommers; Michael Hudson; Washington Consensus.

Tue 2008-09-23 00:00 EDT

Mish's Global Economic Trend Analysis: How Congress Intends To Waste $1.8 Trillion

paulson bailout plan

1; 8 trillion; Congress intended; Mish's Global Economic Trend Analysis; Waste.

Mon 2008-08-04 00:00 EDT

London Banker: What's up with the covered bond push?

"Whenever Henry Paulson at Treasury, Ben Bernanke at the Fed and Shiela Bair at FDIC agree on anything, American taxpayers should check for their wallets...When the troubled bank nonetheless fails, our golden circle creditors get the good collateral in an expedited release from FDIC under its new policy statement. The FDIC is left with all the toxic waste assets and liability for depositor insurance claims, with no prospect of recovery"

covered bond push; London Banker; s.

Thu 2007-05-10 00:00 EDT

The Black Commentator - Wanted: A Plan for the Cities to Save Themselves - Issue 52

"Rampaging capital lays waste to the nation and the world the principal source of war and the despoiler of American cities."

Black Commentator; Citi; Issue 52; plans; save; wants.