Busted: Bankers and The Global Economy

August 2, 2008

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.

March 3, 2008

Kid Gloves for Bankers?

Filed under: banking, credit, federal reserve, money — Tags: , , , , , , , — digitaleconomy @ 7:55 pm

Today, the Fed sent out what I call a puzzling press release.

The Federal Reserve Board on Monday encouraged the institutions it supervises to report on their loan modification efforts in a consistent way and to consider using the HOPE NOW alliance’s loan modification reporting standards for their serviced loans.

We strongly support efforts to improve the collection of data on loan-modification activities. We encourage the institutions we supervise that service subprime mortgage loans to report on their progress in a consistent way. This will make it easier for regulators, the mortgage industry, lawmakers, and homeowners to assess the effectiveness of these efforts,” said Federal Reserve Board Governor Randall S. Kroszner.

What is with the banking cheerleading? We “encourage”? Where is the call to responsibility? Where is the demand for accountability? Not with the Fed and yet, they’ve been placed in authority to handle what the current administration will not. When are bankers going to be called out for what they’ve done or are the powers that be just too afraid? Tell me what you think!

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