Saturday, January 23, 2010

Fed, Bernanke Cover Up Wall Street Welfare Moms' Receipts

A friend who teaches finance at a college near New York City (he doesn't want me to divulge his name because his college has threatened to fire any professor who reads my blog) has forwarded a telling Bloomberg report in response to my blog supporting the reappointment of Ben Bernanke.

Bloomberg reports that the Federal Reserve Bank required AIG to file a report four times, insisting that AIG delete more than 1,000 pieces of information concerning the bank bailouts. According to Bloomberg:

"AIG was asked to limit what the public knew about the Maiden Lane transactions. The payments have been called a “backdoor bailout” by lawmakers because banks, including Goldman Sachs Group Inc. and Societe Generale SA, were reimbursed at 100 cents on the dollar for mortgage-linked securities that had declined in value."

The Fed, for instance, redacted the information that the price AIG paid for default swaps was nearly 100 percent of market value. The aggregate cost of the transaction, according to the article, was over $15 billion. That's alot of poor people's tax money going down the tube of Wall Street's incompetence.

Moreover, a schedule A that included sensitive information was omitted from AIG's filing with the SEC. The article states:

"the SEC said in a Dec. 30, 2008, letter that AIG was 'required to file the entire agreement, including all exhibits, schedules, appendices.' After consultation with the New York Fed, AIG requested confidential treatment for the Schedule A, and on Jan. 14, 2009, AIG amended a filing saying that the 'confidential portion of this Schedule A has been omitted' and provided to the SEC."

AIG says that they were not the ones who wanted the confidentiality. The schedule would have showed the large subsidies being paid to Wall Street. The Fed, acting on behalf of Wall Street, encouraged the SEC to cover up the identities of the bankers.

It is not news that the Fed acts on behalf of Wall Street and the money center banks. It is been providing these welfare moms on Wall and Broad with welfare slips for more than 75 years.

The question to be asked now is whether an appointee of the Democratic Party-dominated Senate would be an improvement over Chairman Bernanke. It is tempting to say that if Harry Reid and his fellow extremists appointed an even more aggressive Fed chairman, with a policy even more expansive than Bernanke's, all hell might break loose, and this could be the death knell of the Fed. But I cannot hope for ill to come to this nation. As bad as Bernanke is, the Democrats seem likely to appoint someone worse unless the group that opposes Bernanke makes their aim clear.

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