‘Wall Street banks are reaping outsized profits by trading with the Federal [sic] Reserve,’ Henny Sender reports today. The FED is one of Wall Street biggest customers for shit with no value. “You can make big money trading with the government,” said an executive at a leading investment management firm. “The government is a huge buyer and seller and Wall Street has all the pricing power.”
If you’re unsure how this works, msnbc’s Dylan Ratigan recently broke it down real well (8:39):
U.S. House members charged last week that Goldman Sachs is using its status of being a U.S.-funded welfare baby to increase risk to the financial system and wants to know why the FED is letting this happen.
Goldman Sachs 666
“The group on Monday sent a letter to the FED asking for an explanation of why Goldman Sachs is being allowed to speculate wildly even while officially redesignating itself a bank holding company, which theoretically means stricter regulation,” Ryan Grimm wrote at The Huffington Post last week. “The bank designation gives Goldman access to dirt-cheap Federal Reserve loans.
“Goldman then applied to the Federal Reserve for an exemption to the rules, saying that it takes time to alter a business model. The exemption was granted in February — and Goldman went on to take even greater risks. Its Value-at-Risk model, a widely used measure of the risk of loss, recently showed potential trading losses at $245 million a day; in May 2008, it was $184 million a day.
“The bets paid off in the most recent quarter as the market rose and Goldman posted stellar earnings. Morgan Stanley, meanwhile, was similarly given an exemption by the Fed but did what it said it would do and reduced its risk. The company lost money, largely as a result of that decision.
“The likely result: Other players on Wall Street will follow Goldman back toward the cliff they dangled over just months ago. In announcing its lousy earnings, Morgan Stanley assured that it will increase the risk it takes in the future. Citigroup is racing to increase its exposure, too, handing another billion dollars worth of chips to its riskiest traders, bringing its hedge fund operations to close to $2 billion. On the brink of collapse, it had scaled such investing down to around $800 million.”
How is Goldman Sachs so lucky to be so privileged by the FED? Goldman Sachs is the FED. Glenn Beck is a dipshit, but he proves the point very well (10:06):
In fact, 96% of credit derivatives’ risk are in the hands of five Wall Street banks rights now, — Goldman Sachs, JP Morgan Chase, Bank of America, Citigroup, and Morgan Stanley — David Katz reported at CFO Magazine and continued: “Unlike the financial firms, which both use derivatives and issue them for profit, nonfinancial companies seem mostly to use derivatives just to hedge specific risks, according to Fitch.” (h/t: Washington’s Blog)
Banks bailed out with FED funny-money are now charging more than 150% interest on ‘short-term, payday loans to people with no savings’, consumer advocates are saying — though, the Federal Deposit Insurance Corporation (FDIC) suggested that these be capped at 36%, last September (IPS).
But, The New York Times’ David Brooks’ dumbass says the FED “seems to have done a good enough job” since it was made public that the U.S. financial system had collapsed in September of last year. Ignorance of the FED’s failures is one thing. Ignorance of the FED as a whole is disastrous.
The mainstream so-called “left” just refuses to discuss the greatest harm to anything nearly resembling some sort of true economic justice. The sad truth is that it isn’t difficult to see why.
Sure, Mr. Ratigan discussed it during his 10AM EST show and “Morning Joe” has had Rep. Ron Paul (R-TX) on periodically to tease him for wanting to abolish the FED, but the gatekeepers of this “left” are the intellectual class who monopolize the prime time slots at msnbc: Chris Matthews, Keith Olbermann, and Rachel Maddow.
Constitutional lawyer Glenn Greenwald has relentlessly attacked msnbc’s parent company General Electric (GE) for its retention of communications consultant to corporations Richard Wolffe as a ‘political analyst’ and Brian Stelter’s article in The New York Times on GE curbing Mr. Oblermann’s attacks on FOX News Channel (FNC) — especially attacks on Mr. Olbermann’s time slot rival on FNC, Bill O’Reilly. Mr. O’Reilly has headed the campaign of exposing GE’s relations with Iran. Mr. Olbermann’s and Mr. O’Reilly’s attacks have been great for the TV ratings of their respective programs, but bad for GE’s public relations. GE and FNC’s parent company, News Corp, reached a deal that GE bashing would halt from Mr. O’Reilly and O’Reilly bashing would halt from Mr. Olbermann.
Let’s rewind to November 2008 when I wrote: “When serious talk about bailout began, there was no greater cheerleader for corporate welfare in the MSM than CNBC. Fast forward two months later to last Wednesday and General Electric Co., parent company of NBC Universal, receives ‘FDIC Insurance’ for up to $139bn in debt for GE Capital.
“God is in the TV, so what better way to sell the taxpayer than a cable business network? Why stop there? Might as well indoctrinate the viewers of their general news networks. Lucky for them, a historic election was going on and damn lucky for them, the candidate they shamelessly backed 24/7 on the network was the historic candidate.
“Let’s cut through the crap here and let’s cut through it now. ‘FDIC Insurance’ covering $139bn of GE Capital’s debt is the federal government absolving the corporation of their risk at a premium. Still too complicating? OK, let’s try again. If GE Capital’s business practices show profit, GE pockets the profit; if they go broke, the government WILL (without any doubt, thanks to the ‘insurance’) cover the loss — meaning you and I, the taxpayers, assume all of GE’s risk while GE is the proprietor of their rewards. General Electric is getting a juicy piece of the very same bailout that their networks have been selling to the masses.”
It’s 100% uncontroversial that GE will guide msnbc programming in the interest of GE stack performing well. Without the FED, GE’s financial can’t perform at all.
Now, why won’t GENBC’s top three prime time heavyweight gatekeepers of the mainstream “left” — who never hesitate to comment on anything — advocate abolishing the FED — an institution stealing from hundreds of millions of working people as a middleman for Wall Street in the public eye?
GENBC is Wall Street and Wall Street is banking on the FED’s existence, its secrecy, and its tyranny. If this isn’t the reason for its prime time commentators’ silent shilling, a semi-rational individual can only conclude that Mr. Matthews, Mr. Olbermann, and Ms. Maddow are all either sinister puppets or fuckin’ stupid.
On the brighter side: 75% of the American people support auditing the FED, H.R. 1207 by Rep. Ron Paul (R-TX) to do just that has 282 co-sponsors in the U.S. House, and senators like Bernie Sanders (I-VT) are coming back at the FED’s apologists, swinging. It’s nowhere near the end of institutional economic injustice, but a brighter side.
Tonight, Mr. Olbermann blasted Mr. Stelter, Mr. O’Reilly and News Corp. CEO Ruppert Murdoch in his “Worst Person in the World” segment… on the day/day after Mr. Greenwald calls him out to be a tool. I wouldn’t be surprised if GE thinks this one segment in the 24-hour news cycle for idiots will “debunk” Mr. Greenwald’s timeless empirical evidence and reason from Brian Stelter’s article (3:19):
I caught a segment of Ms. Maddow on “HBO’s Real Time with Bill Maher”. I didn’t catch much of it, but she seemed to remain tight-lipped in the segment discussing the FED as one of the other panelists raved about the FED’s greatness and the necessity of its secrecy… Rachel Maddow keeping her mouth shut on one of the greatest tools of institutional tyranny in the U.S.? I’m supposed to believe this Rhodes Scholar had nothing to say?
I want to tip my hat to Adam Kokesh, 2010 New Mexico congressional candidate, for tellin’ it like it is today: “With [H.R. 1207], what we’re gonna be doing is raising the issue in such a way that we’re gonna pull the curtain back for the American people and force them to see what our currency system is really all about… [W]e’ve granted this incredible power to an organization that has no accountability, that is just another government scheme to steal from the poor to give to the rich.” (7:24):
Vodpod videos no longer available.
I’ll have Mr. Kokesh on Little Alex in Wonderland Radio Aug. 13.
Despite Mr. Olbermann’s dog-and-pony show Monday evening, he issued an on-the-record statement to Mr. Greenwald saying he has “found nothing materially factually inaccurate about” Mr. Greenwald’s coverage on this issue. Mr. Olbermann also announced that Mr Wolffe will no longer be on his program.
I finally watched the complete segment from Bill Maher’s show with Ms. Maddow on the panel as the FED was discussed. She said nothing while Prof. Niall Ferguson shilled for the bankster cartel. If I had the video, I’d share it, but the HBO Copyright Nazis pull clips from the web very fast. If you have HBO, you can watch it onDemand around the 20 or 25 minute mark of the July 31 program.