Crony Corporations and Criminal Banking Institutions: True Cost of Bailouts was $14 Trillion

The financial coup d'etat: bankers are demanding (and getting) governments to rebuild their loan reserves at labor's expense, thereby making ordinary people bear the burden of 'bailing out' the economic elite. Working households, of course, are the most affected, with spending cuts and high unemployment taking a punishing toll. More austerity is coming under the guise of reducing the federal debt, assuring greater deprivation. The worst is yet to come. - Stephen Lendman, Destructive Neoliberal Austerity, thepeoplesvoice.org, November 23, 2010

True Cost of Bailouts: $14 Trillion

December 24, 2009

NYC Magazine - Although the cost of the Wall Street bailout is usually said to be around $700 billion, the real cost of economic recovery is at least 20 times larger, according to a recent breakdown of ALL of the government recovery programs by Mother Jones Magazine.

The $700 billion bailout that people usually allude to is only the cost of the TARP program that was passed in late 2008 and, even then, the bill that contained the $700 billion for TARP cost $850 billion because of all of the earmarks inside the bill.

Here’s a look at other programs that will ultimately result in $14 trillion in bailouts for Wall Street:

The Money Market Mutual Fund which began in September of 2008 is a program in which the government would “insure the holdings of publicly offered money market mutual funds” and will cost up to $3 trillion.

The Public-Private Investment Fund is a government program that buys up to $5 billion worth of bad assets from big corporations. Ultimately, this is projected to cost anywhere between $500 billion and $1 trillion.

The Fannie Mae and Freddie Mac stock that the government bought alone cost the taxpayer $400 million. The mortgage backed securities that the government bought from Fannie Mae and Freddie Mac will ultimately cost up to $300 billion.

The asset guarantee that the government made to Citibank will cost us around $300 billion.

Other huge costing programs include the asset guarantee that the government made to Bank of America ($118 billion), HAMP, the Treasury exchange stabilization fund, and several Federal Reserve programs which total as much as $7 trillion, making the total bill that the taxpayer has to foot a whopping $14 trillion.

Federal Reserve bailout programs went to Commerical Paper Funding Facility, Mortgage-backed securities purchase, Term Asset-Backed Securities Loan Facility, Foreign Central Bank Currency Liquidity Swaps, Money Market Investor Funding Facility, Treasury Purchase Program, GSE Program, Primary Dealer Credit Facility, The Asset-Backed Commercial Paper (ABCP) Money Market Mutual Fund (MMMF) Liquidity Facility, JPMorgan Chase (JPMC)/Lehman Brothers, Open Market Operations, Tri-Party Repurchase Agreements, Primary Credit, Temporary Reserve, Single-Tranche Repurchase Agreements, Term Auction Facility, AIG, Maiden Lane II and III (AIG), Maiden Lane I (Bear Stearns), The Term Securities Lending Facility, and JPMC/Bear Stearns Loan.

And we were worried that the $700 billion bailout was financially irresponsible…

Fed Handed Out $3.3 Trillion in Crony Deals

December 2, 2010

Above Top Secret - Half of the criminal fed’s actions have been brought to light.

3.3 trillion taxpayer dollars were handed out in crony deals to banks and other industries.

All the start-ups that stood to benefit from the collapse of the behemoths were denied justice in the market by the criminal actions of a handful of men.

The WaPo reports:

The banks universally hailed the Fed on Wednesday.

“In late 2008, many of the US funding markets were clearly broken,” Goldman Sachs said in a statement, echoing similar comments made by Bank of America and Citigroup. “The Federal Reserve took essential steps to fix these markets and its actions were very successful.”

By 2009, Goldman and other Wall Street firms were reporting their best profits ever. That allowed these banks to pay out huge salaries again, but it also drew the ire of lawmakers and ordinary Americans.

Of course they universally hailed the Fed.

Without the Fed, they would all be bankrupt.

The entire purpose of the Fed is to prevent the mega commercial banks from going out of business.

One man made the call to allocate nearly a quarter of the entire American GDP to all manner of crony corporations and criminal banking institutions.

Democracy? LOL

And of course, this $3.3 trillion does not include the bailouts of Fannie and Freddie, nor does it include all the money allocated by congress. Those bailouts are in the tens of trillions.

Basically every major corporation in America got money taken from the pockets of the tax payer in some manner. Either through direct bailouts by the Fed, handouts from congress, or crony government deals.

The message to industry is as follows:

Washington pays.

Ford, BMW, Toyota Took Secret Government Money

December 4, 2010

Jalopnik - In the depths of the financial collapse, the U.S. Federal Reserve pumped $3.3 trillion into keeping credit moving through the economy. It eventually lent $57.9 billion to the auto industry — including $26.8 billion to Ford, Toyota and BMW.

The Fed on Wednesday was forced to reveal the identity of the companies it aided during the crisis, after contending to Congress that keeping their identities and the details of such lending secret was essential. Much of Wall Street, and corporate giants such as General Electric, Harley Davidson and McDonald's, took advantage of the Fed's help.

We've done the math on how the Fed propped up the auto industry.

While Chrysler and General Motors had to go to Congress to beg for cash in 2008, every other automaker's finance arm was having trouble as well. Typically, once they lend money to a buyer, they sell the loan, get the cash upfront, then pump the proceeds back into the business. They also take out short-term loans called commercial paper that keeps the day-to-day business afloat. The crash cut the circuit, raising the chances the automakers couldn't make loans to buyers and keep selling new vehicles.

That's where the Fed stepped in. In normal circumstances, the Fed only lends money to banks, leaving the decisions about who should get credit to them. But when the financial markets started to collapse in late 2008, the Fed set up several programs to lend money directly to corporations, a highly unusual step.

According to the data, from October 2008 through June 2009 the fed bought $45.1 billion in commercial paper from the credit arms of four automakers -- Ford, BMW, Chrysler and Toyota -- along with GMAC (the former General Motors credit arm). Of those, Ford sold the most, with $15.9 billion.

The Fed also lent $13 billion to investors who bought bonds backed by loans to new car buyers from automakers and banks. The Fed made clear that while investors got the loans, the move was meant to keep the lenders in business; the credit arms of Ford, Chrysler, Nissan, Volkswagen, Honda and Hyundai all benefited directly.

Ford spokeswoman Christin Baker said the two programs "addressed systemic failure in the credit markets, and that neither program was designed for a particular company, or even a particular industry." Ford Credit has disclosed through SEC filings and conference calls with media and investors that it was taking part in both programs.

BMW told Bloomberg that the Fed lending "supported our financial profile and offered us an additional funding source, especially at times when the money markets and capital markets did not function properly and efficiently."

According to the Fed, the commercial paper loans have been paid in full, while some $2 billion remains outstanding on loans for bond investors.

The secrecy surrounding the details of the loans only masked how much aid corporate America and Wall Street needed. While General Motors and Chrysler took the brunt of the blowback for relying on government handouts, the reveal of the Fed numbers show that a far bigger slice of the U.S. auto industry needed help.

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