Busted: Bankers and The Global Economy

March 16, 2008

Fed Emergency Move (on Sunday)

In reaction to U.S. economic turbulence last week, the Fed reacted in emergency sessions on Sunday by dropping the primary credit rate from 3-1/2 percent to 3-1/4 percent. The Fed claims that its reaction is to preserve liquidity for well-functioning markets in the U.S. economy. Based on information that we possess, “Busted Bankers” expects a rough week for the U.S. financial community.

fed-reserve-shot-1.jpgIn a partial enhancement of a recent press release, the Federal Reserve Board voted unanimously to authorize the Federal Reserve Bank of New York to create a lending facility to improve the ability of primary dealers to provide financing to Wall Street banking securities markets. This lending facility will be available for business on Monday, March 17 and will be in operation for at least six months. Credit extended to primary dealers under this facility may be collateralized by a broad range of investment-grade debt securities. In updated news regarding cost, the interest rate charged on lending credit will be the same as the primary credit rate, or discount rate, at the Federal Reserve Bank of New York. The Fed is expecting massive “temporary” bailouts in exchange for banking securities this week and in the immediate future. The Fed has admitted to monetary profits from this endeavor at the cost of the primary credit rate.

The purchase takeover of Bear Stearns by JP Morgan, the fifth-largest U.S. investment bank and a major securities repackager, was also approved in this weekend session. Remember that the economy wouldn’t be in this position if the majority of bankers had not been involved in financial improprieties and blatant greed.


1 Comment

  1. I saw this post and thought it was a joke. Then I saw the press releases. Two days from their meeting, and they drop the rate on a Sunday? If this isn’t panicking, I don’t know what is.

    Comment by joetaxpayerblog — March 16, 2008 @ 8:18 pm

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