Viral Bank Fraud

Crossposted from The Stars Hollow Gazette

$7.7 Trillion in unsecured loans to the Too Big To Fail Accounting Fraud Banks on which they generated $13 Billion profit from the float between their .01% (free) interest borrowing costs and the usurious amounts they charged their customers.

Which they promptly paid out in bonuses and dividends and didn’t use to deleverage the toxic waste they are still carrying on their books as assets at full fictional value instead of marking to market at the 50% discount it deserves.

Umm, this is not news.  It’s been blog reported for months now but perhaps this piece from Bloomberg with it’s fancy interactive graph will finally get it the attention it deserves.  I’ll note their headline is designed to minimize the amounts involved and point out the total-

The amount of money the central bank parceled out was surprising even to Gary H. Stern, president of the Federal Reserve Bank of Minneapolis from 1985 to 2009, who says he “wasn’t aware of the magnitude.” It dwarfed the Treasury Department’s better-known $700 billion Troubled Asset Relief Program, or TARP. Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

Some reports from around the web-

• Wall Street Banks Earned Billions In Profits Off $7.7 Trillion In Secret Fed Loans Made During The Financial Crisis
  
  By Travis Waldron, ThinkProgress
  
  Nov 28, 2011 at 9:30 am
• Did you hear about the $7 trillion secret Fed bailout of the banks? Yeah, neither did anyone else.
  
  By John Aravosis, Americablog
  
  11/28/2011 08:00:00 AM
• Explosive Bloomberg Report Details Fed’s Monster Bank Bailouts: $7.77 Trillion
  
  By: Scarecrow, Firedog Lake
  
  Monday November 28, 2011 7:00 am
• Bloomberg Reveals Massive Fed Emergency Lending During Financial Crisis
  
  By: David Dayen, Firedog Lake
  
  Monday November 28, 2011 6:16 am
• Just a few billion among friends
  
  by digby, Hullabaloo
  
  11/27/2011 06:50:00 PM
• Quelle Surprise! Banks Lied About Bailout Funds and Got $13 Billion in Profit from Them
  
  Yves Smith, Naked Capitalism
  
  Monday, November 28, 2011
• Chart of the day, Morgan Stanley bailout edition
  
  Felix Salmon, Reuters
  
  Nov 27, 2011 23:55 EST

Employees at the six biggest banks made twice the average for all U.S. workers in 2010, based on Bureau of Labor Statistics hourly compensation cost data. The banks spent $146.3 billion on compensation in 2010, or an average of $126,342 per worker, according to data compiled by Bloomberg. That’s up almost 20 percent from five years earlier compared with less than 15 percent for the average worker. Average pay at the banks in 2010 was about the same as in 2007, before the bailouts.

Lobbying expenditures by the six banks that would have been affected by the legislation rose to $29.4 million in 2010 compared with $22.1 million in 2006, the last full year before credit markets seized up — a gain of 33 percent, according to OpenSecrets.org, a research group that tracks money in U.S. politics. Lobbying by the American Bankers Association, a trade organization, increased at about the same rate, OpenSecrets.org reported.

“Banks don’t give lines of credit to corporations for free,” he says. “Why should all these government guarantees and liquidity facilities be for free?”

In the September 2008 meeting at which Paulson and Bernanke briefed lawmakers on the need for TARP, Bernanke said that if nothing was done, “unemployment would rise — to 8 or 9 percent from the prevailing 6.1 percent,” Paulson wrote in “On the Brink” (Business Plus, 2010).

The U.S. jobless rate hasn’t dipped below 8.8 percent since March 2009, 3.6 million homes have been foreclosed since August 2007, according to data provider RealtyTrac Inc., and police have clashed with Occupy Wall Street protesters, who say government policies favor the wealthiest citizens, in New York, Boston, Seattle and Oakland, California.