GAO audit report on Fed loans of $16.1 Trillions to banksters

[girl gone mad]

It appears that there is plenty of money to hand out to financial grifters and parasites, but when it comes time pay back the people who actually worked and paid into the system, Our Washington Betters pretend the government is broke and start whining about "shared sacrifice".

http://www.correntewire.com/gao_audit_report_on_fed_loans_of_161_trillions_to_banksters :

Yes, $16.1 Trillion. Not $12, not $13, not $14...but $16T!

The U.S. Federal Reserve gave out $16.1 trillion in emergency loans to U.S. and foreign financial institutions between Dec. 1, 2007 and July 21, 2010, according to figures produced by the government's first-ever audit of the central bank. Last year, the gross domestic product of the entire U.S. economy was $14.5 trillion.

Of the $16.1 trillion loaned out, $3.08 trillion went to financial institutions in the U.K., Germany, Switzerland, France and Belgium, the Government Accountability Office's (GAO) analysis shows.

The audit also found that the Fed mostly outsourced its lending operations to the very financial institutions which sparked the crisis to begin with, and that they delegated contracts largely on a no-bid basis. The GAO report recommends new policies that would eliminate such conflicts of interest, and suggests that in the future the Fed should keep better records of their emergency decision-making process. (My emphasis)

[PoliticAverse]

1. 16 #$%*ING TRILLION! n/t

[FreakinDJ]

2. A LARGE part to Foreign Banks

just wonderful

[banned from Kos]

9. Not really - loans went to US chartered BRANCHES of foreign banks

Like it or not Credit Suisse USA serves US depositors although their parent is Swiss.

The idea is to protect US depositors no matter where HQ is.

[MilesColtrane]

3. $909 billion still outstanding

Maybe we should send Emilio the Hammer and some of the boys to these banks to get the rest of our money back.

[ixion]

4. I really don't know what's worse: The brazen depravity of our corporate-government corruption

or our seemingly boundless willingness to tolerate it. :(

[Agony]

5. and we complain about 3rd world corruption?

this is corruption on a massive scale.

[nc4bo]

6. This is so hard for me to believe that my intestines actually rumbled.

Not even joking.

What in the hell are we doing?! When seen in black and white, it's crystal clear. :mad:

[econoclast]

7. Since 16.1 trillion ic clearly IMPOSSIBLE

I was curious to see just how the real data was tortured into admitting to 16.1 trillion dollars

Found it in footnote ... To wit

If an institution borrowed 10 billion overnight, but each day, for thirty days, rolled over that 10 billion dollar loan it shows up in the "aggregate borrowing" totals as  300 billion dollars.    If that same institution borrowed the same 10 billion dollars for the same 30 days but did the initial loan as a 30 day term loan instead, that loan shows up as "aggregate borrowing" of only 10 billion dollars.   

Cute!

This 16.1 trillion dollar figure is one of those "gee whizzz" numbers that has little bearing on what happened in reality, but is designed to elicit a particular response from the reader.

Like saying I have a 150,000 dollar mortgage.   I refinanced it  twice to get lower rates

According to this logic I  borrowed 450,000 dollars.

It is sad commentary on politics today that even a GAO audit contains BS like this. The actual bailout numbers are bad enough!!! They fad to spin the freaking Audit?!?!? Why can't someone just speak the unvarnished truth?!? Sad. And irritating as he'll.

[nc4bo]

11. Thanks for breaking that down....

Even at the true #, it's obscene. It's obscene because so much is invested in corporate interests and The People have to beg for crumbs. I'm sure the majority of Americans are not as fast and loose with their money as the corporate whores are with theirs and ours. We lose our homes, our jobs, our property, sometimes our freedom and what do the real thieves lose? For them it's WIN/WIN.

[gratuitous]

8. Well, to be fair (and it pains me to point it out)

That $16.1 trillion figure is made up of several repeated loans of the same money. For example, an emergency loan of, say, $5 billion in an overnight loan that was rolled over every day for a month would be counted at $150 billion under this accounting. The amount at risk was only $5 billion on any given day. So the $16.1 trillion figure doesn't represent the actual total dollar amount at risk from the loans.

But the point of "shared" sacrifice is valid: Because the banksters played irresponsibly with house money, the rest of us have to take it in the shorts so that the "too big to fail" financial institutions don't absorb the free market impact of their reckless ways. Now, while it may serve a certain logic to prop up the big financial institutions (as interconnected as global finance is, a failure here can ruin millions of people elsewhere), the major failure is the failure to enact any systemic reforms (viz. regulations, enforcement, etc.) to prevent a repeat of this fiasco. Instead, our political leaders seem determined not only to let the Big Money Boyz off the hook, but to reward them for being so irresponsible in the first place at the expense of everyone else, and leave the apparatus in place for it all to happen again.

[Generic Other]

10. This is just hard to swallow isn't it?

There is no escape.