A Bloomberg report reveals that the U.S. government loaned banks $7.7 trillion in secret bailout funds at no interest and then borrowed the money back at interest.
 

From CNN Money:

Taxpayer-owned Fannie Mae just bought the servicing rights to a bunch of bad loans from the struggling Bank of America. Where does it end?

By Abigail Field, contributor

FORTUNE — Taxpayers may not realize it, but they just bailed out Bank of America again, this time to the tune of more than a half billion dollars.

The Charlotte, NC-based bank was one of the biggest recipients of bailout funds during the financial crisis. But Bank of America (BAC) continues to face deep problems related to its troubled mortgage portfolio and investors have battered the stock, which has plunged over 40% so far this year. That’s escalated concerns that the bank may need to raise more capital. Yves Smith at Naked Capitalism has even started a BofA death watch.

But apparently the federal government is determined to resurrect BofA: the Wall Street Journal reports the feds have just used Fannie Mae, which is controlled by the U.S. government, to infuse BofA with $500 million and ease one of the bank’s biggest headaches.

Yesterday afternoon on CNBC, Bank of America CEO Brian Moynihan mentioned that five of BofA’s six businesses were making money. The one black spot was its massive portfolio of problematic mortgages and the liabilities flowing from it. Moynihan also mentioned that BofA had just sold some “mortgage servicing rights” as part of its balance sheet strengthening efforts, but he didn’t elaborate.

According to the WSJ, Fannie Mae spent $500 million to buy the servicing rights to a big chunk of the “seven million loans still causing the most problems.” Although the $500 million is a paper loss to BofA, in that the rights were “originally worth more,” it looks like BofA is still getting a good deal because the portfolio’s “value is expected to deteriorate further.”

In fact, the deal is worth much more than $500 million to BofA, because getting rid of those servicing rights lifts a huge cost burden off BofA’s shoulders. And if securitized loans are involved, which they most likely are, the sale also limits the BofA’s potential liability to investors for its current servicing violations. Finally, the $500 million is surely more than the servicing rights are worth in an arms-length transaction. How do we know? Beyond the comment that the loans are expected to “deteriorate further,” the goal of the intervention can only be to fix Bank of America’s capital structure, which is easier for the government to do if it overpays for the rights.

In short, purchasing these servicing rights was another Troubled Asset Relief Program.

Read the rest.

I’m sure this has nothing to do with their stock chart looking like this…and that they might be having capital raising issues.

Do you know where YOUR deposits are?

Just so all of you are clear:  Bank of America just got over $500 Million in taxpayer money, but in just a few days, the “Supercommittee” of Congress is going to convene so it can raise your taxes and cut inconsequential things like Social Security, Medicare and Unemployment benefits.  No, no.  We can’t afford those.  We can only afford to keep giving money to the insolvent banking institutions so they can also keep handing out money to bankroll political campaigns.  YOU ARE MEANINGLESS!

ARE YOU GETTING THE PICTURE YET?  Now maybe you can understand what has been going on in London.

This week’s “Dan Rather Reports” presents an in-depth interview with Neil Barofsky, who recently stepped down as the Special Inspector General for TARP, more commonly known ; as the $700 billion dollar taxpayer bailout of the country’s biggest banks. Barofsky warns that the safeguards that are supposed to be in place to help avoid another bank meltdown are woefully insufficient – and that another, bigger crisis could be right around the corner.

The Big Picture

Glenn Beck finally connected the dots.  Not that we haven’t been hammering on this for over three years, but hey, again, better late than never.  Glenn Beck joins, Neil Cavuto, Dylan Ratigan and Eric Odom.

http://www.youtube.com/watch?v=J13EhFN0lDw

Yes, you ARE being robbed.  ‘Legally.’  Wall Street and the Big Banks were allowed to steal $14 TRILLION of taxpayer money in the past 3.5 years on the grounds of ‘economic emergency.’  The truth is, their fraudulent and criminal conduct rendered them insolvent, so the government was coerced (bribed and sometimes threatened) into transferring this enormous amount of YOUR money to them.  First in the form of TARP, TALF and the EESA and most recently through the Federal Reserve’s Quantitative Easing.  

The ‘rich’ are not evil.  CRIMINALS are evil.  When those criminals are given a license to steal by our own government, that is beyond evil.  This is not a partisan issue.  BOTH sides of the aisle have enabled this theft.  It was initiated under George Bush and his Treasury Secretary, Hank Paulson and continued and increased through Obama’s administration and his Treasury Secretary Timothy Geithner – all aided by the Federal Reserve and Ben Bernanke.   These people on Wall Street are rich because they STOLE YOUR MONEY!  They are CONTINUING to steal your money.  (Linked in our right-hand column you can read our documented evidence over the past 4 years against some of the biggest players in this mess – even better, watch Inside Job for free over at NetFlix. )

Until this massive fraud and corruption is stopped, prosecuted and those responsible put in jail, our economy will not improve.  Indeed, it will get worse.  Much worse.  At some point, in the not-so-distant future, our country will collapse.

Nothing else matters right now but THIS issue.  It has been the ONLY important issue for the past four years.  It is unfortunate that FedUpUSA and Market-Ticker have been the only ones consistently exposing the fraud and preaching about the urgency of this.  Perhaps now we will have some help.  Maybe on Good Friday, miracles really can happen.

When will you WAKE UP AMERICA?!  STOP THE LOOTING AND START PROSECUTING!

Military.com posted an article discussing the various proposals for ‘balancing’ the ever-ballooning budget.

There has been some recent buzz about the House of Rep­re­sen­ta­tives propos­ing more cuts to vet­er­ans’ ben­e­fits. This time, the focus has fallen on VA Health­care and exclud­ing some vet­er­ans over oth­ers. Here is what you need to know about the debate.

The House Bud­get Com­mit­tee recently announced plans to cut $6 bil­lion from VA Health­care for 1.3 mil­lion vet­er­ans who are in Pri­or­ity Group 7 and 8. Roughly 10 per­cent of these, some 130,000 vet­er­ans, will be forced out of the VA sys­tem with no avail­able alter­na­tives. Vet­er­ans from Group 7 & 8 have either a 0 per­cent service-connection or no service-connected rat­ing. While this does not mean the vet­eran is fit as a fid­dle, it does imply they do not need the amount of care needed for other vets. These vet­er­ans pay co-pay and have incomes over $32,000 and net-worths under $80,000, depend­ing on geog­ra­phy. In other words, they aren’t dirt poor but cer­tainly not wealthy, either.

The Con­gres­sional Bud­get Office believes the U.S. can save $62 bil­lion over the next 10 years by remov­ing ser­vices for these vet­er­ans alto­gether. Accord­ing to the agency, 90 per­cent of the vet­er­ans in ques­tion have access to some form other health­care other than VA funded. How­ever, the CBO does not com­ment on whether the alter­na­tive health­care is afford­able.

I’m going to say right up front that this is reprehensible.  Not only is it disgusting, it’s pointless to pretend that ANY of these proposed cuts to VA benefits will be anything but a microscopic drop of water in an ocean.  Let’s talk about some reality here. 

So, let’s see….our overall spending on defense is only about 1/6th of our total budget outlay, or as indicated here, $744 billion.  Of that, only a tiny fraction goes towards healthcare to our current and retired military.  Keeping in mind that these brave men and women were willing to sacrifice their very LIVES to do their jobs, let’s compare that to banker welfare expenditures over the past 4 years.

First we have TARP, the Troubled Asset Relief Program, the program that has essentially been welfare for Wall Street bankers given by Congress to cover the massive Ponzi scheme they created by selling worthless securities to unsuspecting suckers like your pension and retirement fund managers.  This program allowed the US government to purchase assets and equity from financial institutions to ‘strengthen’ the financial sector.

Then we have TALF the Term Asset-Backed Securities Loan Facility, the program designed to allow the Federal Reserve to use taxpayer money to buy ‘distressed’ (I prefer ‘worthless’) loans.

Then we have the EESA, the Emergency Economic Stabilization Act of 2008.  Initiated under Bush, through acts of extortion by then Treasury Secretary Hank Paulson.  This spawned TARP cited above, as well as expanded the powers of the US government to basically use taxpayer money wherever and whenever Wall Street deemed it needed it.  This was where we got the ‘we’ll see tanks in the streets if we don’t get this money’ threat from Hank Paulson. 

1.  The Government As Investor:  Total expenditure of taxpayer money – $9.0 TRILLION.  This includes direct investments in financial institutions, purchases of ‘high-grade’ corporate debt and purchases of mortgage-backed securities issued by Fannie Mae, Freddie Mac and Ginnie Mae (the latter of which is the only legitimately government-guaranteed entity). 

2.  The Government as Insurer:  Total expenditure of taxpayer money – $1.7 TRILLION.  Includes insuring debt issued by financial institutions and guaranteeing poorly performing assets owned by banks and Fannie Mae and Freddie Mac.

3.  The Government as Lender:  Total expenditure of taxpayer money – $1.4 TRILLION.  A significant expansion of the government’s traditional overnight lending to banks, including extending terms to as many as 90 days and allowing borrowing by other financial institutions, which includes foreign banks.

Sources

This only includes figures up through February 2009.  (Is your hair on fire yet?)

Now, let’s add in the most recent and nefarious taxpayer theft of all, ‘quantitative easing.’  What’s that?  Here’s a primer:

http://www.youtube.com/watch?v=PTUY16CkS-k

While it is often explained as ‘printing money out of thin air’ – that’s not quite accurate.  It is more specifically, printing money guaranteed by your future production.  It borrows against the taxpayer’s future potential to actually produce something of value.  If it sounds a little bit like exploitation or slavery, that’s because that is exactly what it is, which is precisely why the Federal Reserve is content to allow you to think it is printing money out of thin air.  As distasteful as that is, it’s preferrable to the truth.

Each time the Federal Reserve prints money for which there is no current production to support, it is ‘pulling forward demand’ or, devaluing the US dollar.  This is, in effect, a stealth tax on you, the taxpayer, as it then costs you more of those devalued dollars to purchase the things you need.  This is commonly referred to as price inflation.  So, you get hit on both sides.  Your future production has been used as collateral for these new dollars created and at the same time, it causes you to need to produce more to afford the things you need to live – like food and energy (gas, oil).  Conveniently those two catagories of expenditures are not included in the government’s calculation of inflation, (the Consumer Price Index or CPI). 

So, what is your total liability for the two rounds of Quantitative Easing performed by the Federal Reserve?

$2.7 TRILLION.

So, let’s see, $14.8 TRILLION has been spent on WELFARE FOR WALL STREET BANKERS!

Now, tell me how there is ANY justification for cutting health care benefits to our Veterans.

While you’re at it, tell me what items can be cut from the budget that even comes close to the liability our government has created by bailing out insolvent banking institutions.

Wake up America.  I don’t care where you stand on the current wars, are you willing to throw our troops under the bus for Wall Street welfare?!!

Who and what else are you willing to throw under the bus to allow our government to continue to support and hide massive corruption?

STOP THE LOOTING & START PROSECUTING!

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Gee, he didn’t only vote for TARP, he supported it.

Yeah, and he did exactly nothing about those Wall Street “problems” he rants about after the fact either, including refusing and failing to shut those banks down and break them up.

http://www.youtube.com/watch?v=mxUcj4sZvbY

Click “play” to start right where Ryan makes excuses for his vote. 

I’m going to go hurl now – we’ve established what sort of snake Ryan is, which simply amplifies what I’ve said thus far – his so-called plan is a farce and will do nothing to solve the problem.

You vote for these jackasses you deserve what you get.

Dailybail

We’ve been over the numerous BS excuses that US Dollar destroyer extraordinaire Ben Bernanke has made for QE enough times that today I’d rather simply focus on the REAL reason he continues to funnel TRILLIONS of Dollars into the Wall Street Banks.

I’ve written this analysis before. But given the enormity of what it entails, it’s worth repeating. The following paragraphs are the REAL reason Bernanke does what he does no matter what any other media outlet, book, investment expert, or guru tell you.

Bernanke is printing money and funneling it into the Wall Street banks for one reason and one reason only. That reason is: DERIVATIVES.

According to the Office of the Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activities for the Second Quarter 2010 (most recent), the notional value of derivatives held by U.S. commercial banks is around $223.4 TRILLION.

Five banks account for 95% of this. Can you guess which five?

click to enlarge

Looks a lot like a list of the banks that Ben Bernanke has focused on bailing out/ backstopping/ funneling cash since the Financial Crisis began, doesn’t it? When you consider the insane level of risk exposure here, you can see why the TRILLIONS he’s funneled into these institutions has failed to bring them even to pre-Lehman bankruptcy levels.

Ben Bernanke is a stooge and a fraud, but he is at least partially honest in his explanations of why he wants to keep printing money. The reason is to try to keep interest rates low. Granted, he’s failing miserably at this, but at least he understands the goal.

Of course, Bernanke tells the public and Congress that the reason we need low interest rates is to support housing prices. He doesn’t mention that $188 TRILLION of the $223 TRILLION in notional value of derivatives sitting on the Big Banks’ balance sheets is related to interest rates.

Yes, $188 TRILLION. That’s thirteen times the US’ entire GDP, and nearly four times WORLD GDP.

Now, of course, not ALL of this money is “at risk,” since the same derivatives can be traded/spread out dozens of ways by different banks as a means of dispersing risk.

However, given the amount of money at stake, if even 4% of this money is “at risk” and 10% of that 4% goes wrong, you’ve wiped out ALL of the equity at the top five banks.

Put another way, Bank of America (BAC), JP Morgan (JPM), Goldman (GS), and Citibank (C) would CEASE to exist.

If you think that I’m making this up or that Bernanke doesn’t know about this, consider that his predecessor, Alan Greenspan, knew as early as 1999 that the derivative market, if forced into the open and through a public clearing house, would “implode” the market. This is DOCUMENTED. And you better believe Greenspan told Bernanke this.

In this light, all of Bernanke’s monetary policies and efforts are focused on doing one thing and one thing only: trying to shore up the overleveraged, derivative-riddled balance sheets of the Too Big to Fails, or Too Bloated to Exist, as I like to call them.

The fact that the bank executives taking this money and using it to pay themselves and their employees record bonuses only confirms that these folks have NO interest in taking care of shareholders or their businesses. They’re just going to take the money and run for as long as this scheme works.

I don’t know when this will come unraveled. But it WILL. At some point the $600+ TRILLION behemoth that is the derivatives market will implode again. When it does, no amount of money printing will save the Too Bloated To Exist banks’ balance sheets.

At that point, it’s game over for Wall Street and the Fed.

Graham Summers for SeekingAlpha

The media is finally waking up.  Along with Fox News’s Larry Kudlow, now Dylan Ratigan of MSNBC sees the clear correlation between the Federal Reserve (with permission from Congress) devaluating the US dollar (QE I, II and lordknowshowmanymore) and the skyrocketing prices of essential commodities for the rest of the world.  The simple fact is that commodities are priced in US dollars.  If the dollar is going down in value, it takes more of these other countries’ currency to purchase them.  All countries other than the US must first exchange their own currency for US dollars before purchasing needed commodities like wheat, beans, rice and sugar.  This makes essential food impossible for them to afford. 

Egypt used to produce nearly all the wheat it needed to sustain its people – but now, it imports almost all of its wheat supply.  In the past year, Egypt has experienced a 47% increase in the price of its wheat.  For people making only $2.00/day on average, exactly how long is it before many starve?  This situation is playing out across the globe.  Starving people do desperate things.

Visit msnbc.com for breaking news, world news, and news about the economy

Now when you turn on the news and you watch the violence breaking out all over the world, you’ll know who to blame.  While you’re at it, realize that the other pertinent fact here is that all this US dollar devaluation is for one reason and one reason only:  to hide the insolvency of the major US banks.  These are the very same banks commiting massive fraud against millions of homeowners across the country.   The very same banks that Congress forced you to support with your taxpayer money.

The banks, Congress and this Administration is desperately hoping you don’t figure this out.  Our government is now completely devoid of any morality or ethics.  Are you?

The Cycle of Corruption

Two Americas: 12 Facts That Show That Those Who Are Too Big To Fail Are Thriving On The Bailout Money That Our Politicians Gave Them Even As The Economic Suffering Of Ordinary Americans Continues To Deepen

In this video, Chairman Ted Kaufman of the TARP Congressional Oversight Panel introduces the COP December report “A Review of Treasury’s Foreclosure Prevention Programs.”  The full report is available online here.

After two years of such reports, all of which have been varying levels of fail, we are no further along in the process of solving this crisis.  Let us not forget that two years after the beginning of the Savings and Loan Crisis, we have more than 1,000 convictions for fraud.  These convictions weren’t just bit players, they were the executives, presidents, vice presidents and board members.

So far, this time, we have nothing.  It certainly isn’t due to lack of evidence of the massive fraud.  On FedUpUSA alone, we have the official expert testimony of William K. Black, Elizabeth Warren, Janet Tavakoli, Chris Peterson and Adam J. Levitin, just to name a few.  Across the country there have been numerous court rulings at the Appellate level and above which confirm the enormous fraud.

So we are left to ask:  Why have we not STOPPED THE LOOTING AND STARTED THE PROSECUTING?

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