Fed aided Wall Street to avert "contagion"

[Newsjock]

Source: Associated Press

WASHINGTON (AP) -- The Federal Reserve was scrambling to prevent a "contagion" from infecting the nation's financial system when it took unprecedented actions to back a Bear Stearns rescue package and provide emergency loans to big Wall Street firms.

The Federal Reserve released documents Friday providing insights into its private deliberations in March that led to those controversial decisions. The Fed's actions came at a time when credit and financial problems were intensifying, threatening to paralyze the entire financial system and plunge the economy into a recession.

Given the fragile conditions of the financial markets at that time, the Fed said it felt compelled to intervene because an "immediate failure" of Bear Stearns would bring about an "expected contagion."

... Democrats in Congress and other critics contend the Fed's actions are akin to a government bailout and are putting billions of taxpayer dollars at risk.


Read more: http://biz.yahoo.com/ap/080627/fed_credit_crisis.html

[benld74]

1. akin to a government bailout ?

Thats being WAAAYYY too nice! Prop up the economy UNTIL the next leader takes office and let him deal with the ramifications. ALL indicators are still going down, home prices, consumer confidence, stocks, etc. A depression not a recession is coming.

[Xipe Totec]

2. They're all for letting the free market work

until their buddies end up on the losing end of the deal.

Then they're worried about the consequences.

imagine that...

[Drum]

3. 'Zactly!

x(

[Pale Blue Dot]

4. i.e. It was all about to crash.

Congrats, Fed. You put off the Depression for another couple of months. :eyes:

[truedelphi]

10. And although it will take some months (or weeks) longer to hit us

It will be that much worse for the deflating of the dollar!!

[Trillo]

5. An admission of hierarchical, at the top, structural failure.

When private companies become too big and too centralized, with too many tentacles interconnecting to other companies, and little competition in the precise same biz, and they fail, they threaten everyone.

Gee, who wuda thought. So what is the Fed's solution? Give the remains to the competitor (JPMorgan), increasing corporate centralization and decreasing competition even more. Idiots. Effin idiots. Idiots with PhDs.

[The2ndWheel]

7. Works the same with governments

"When private companies become too big and too centralized, with too many tentacles interconnecting to other companies, and little competition in the precise same biz, and they fail, they threaten everyone."

Makes you wonder when you know that corporations and governments own more of life as each day goes by.

[UpInArms]

6. privatizing the profits and socializing the risks - the worst since

Stalin and complete totalitarianism

these criminals have completely subverted this government and all of the agencies that are to act in the best interests of the citizenry.

I.SPIT.ON.THEM.ALL.

[Spouting Horn]

14. That's a good way of putting it..

"Socializing the risk"

They're capitalists until they lose their own money and power.

[soothsayer]

8. "rescue" oh, that's neocon for hostile takeover (at the taxpayer's expense,

I might add).

gawd they play us for fools. And we make it wayyyy too easy.

http://www.solari.com/blog/?p=1065

Lots of short selling right before the 'collapse.'

and they're going to cook the books on it---in plain sight! and we'll do nothing.
http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_weil&sid=a70JZmfcakF0

[boomerbust]

9. Will they

Bail out GM? They are going to be the next to implode.

[hatrack]

11. Call me crazy, but I get the impression the vaccination didn't quite take . . .

:silly:

[cornermouse]

12. Looks like Bush is mopping up for his cronys to me.

[Mark D.]

13. I Can't Say It Enough

Expecting the Fed, as surely as any other elite banker system, to help 'fix' the root cause of problems in every economy (monetary policy) is like sending Godzilla to fix the power lines that he knocks down (those movie scenes come to mind when I say that).

So many Americans think the Fed is part of the govt. and not a private bank that got into power after banker elite like JP Morgan, Rockefeller and Rothschild, via market manipulation gave us the 'scare' that'd preceded the Great Depression, that gave us that central bank to 'protect against future downturns'. And shortly after we had the Great Depression, showing it worked SO well.

That also created by Morgan's hands for the most part. Morgan is the biggest hedge fund today, a cornerstone of the sub-prime mortgage debacle, and the biggest speculative buyer of energy futures, the cornerstone of the current high gas prices. Ie. he helped create the current worst economic slump since the Depression. 'He' being the members of JP's family running the business right now.

I urge anyone to watch Money As Debt and then The Money Masters to understand why all this happens and realize that without monetary policy change we'll never get out of debt. That since our money is only backed by debt, and nothing of real value.

And you can't pay back the big bank, when the money you use to pay it back with is lent to you by them, with interest. It's a vehicle to consolidate wealth for the upper elite at the top of the ultimate 'pyramid scheme'. They even put that on our dollars to remind us 'who is watching'.

While its unlikely things will change, we must at least try to let folks know why this damned economic car spins out of control regularly 'for no reason'. That is why. Personal and government fiscal responsibility helps, but it's ducking when the pimp throws a punch and blaming the victim.

As Naomi Klein's 'Shock Doctrine' points out, it worked again. The 'crisis' allowed the Fed to 'lend' money to rich Wall Street investors who played careless with money, at our expense. WE have to pay the interest on that 'loan'. We never will. $300 billion to them in those Fed. loans.

But propose $30 billion to help those foreclosed upon, some while they were fighting in these stupid wars, and Republicans who fully work for those elite and nobody else will block it as 'wasteful' and again blame the victims for falling for cleverly crafted schemes their banker owners put out there.

Bush gave the Fed sweeping new power in the markets to 'offset or prevent future downturns' and not only did the GOP, but the Democrats and most brainwashed citizens backed that move. They collapse the market/economy, and they are given MORE power to 'keep that from happening again'. Just great!