Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The

Exclusive: The Fed's $600 Billion Stealth Bailout Of Foreign Banks Continues At The Expense Of The Domestic Economy, Or Explaining Where All The QE2 Money Went

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Courtesy of the recently declassified Fed discount window documents, we now know that the biggest beneficiaries of the Fed's generosity during the peak of the credit crisis were foreign banks, among which Belgium's Dexia was the most troubled, and thus most lent to, bank. Having been thus exposed, many speculated that going forward the US central bank would primarily focus its "rescue" efforts on US banks, not US-based (or local branches) of foreign (read European) banks: after all that's what the ECB is for, while the Fed's role is to stimulate US employment and to keep US inflation mod

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Wow! Shocking disclosure....this means Bernanke has been exposed to be an even bigger loser than expected!

In summary, instead of doing everything in its power to stimulate reserve, and thus cash, accumulation at domestic (US) banks which would in turn encourage lending to US borrowers, the Fed has been conducting yet another stealthy foreign bank rescue operation, which rerouted $600 billion in capital from potential borrowers to insolvent foreign financial institutions in the past 7 months. QE2 was nothing more (or less) than another European bank rescue operation!

List of top 20 banks given free money:

BNP Paribas Securities Corp.
Barclays Capital Inc.
Cantor Fitzgerald & Co.
Citigroup Global Markets Inc.
Credit Suisse Securities (USA) LLC
Daiwa Capital Markets America Inc.
Deutsche Bank Securities Inc.
Goldman, Sachs & Co.
HSBC Securities (USA) Inc.
Jefferies & Company, Inc.
J.P. Morgan Securities LLC
MF Global Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Mizuho Securities USA Inc.
Morgan Stanley & Co. LLC
Nomura Securities International, Inc.
RBC Capital Markets, LLC
RBS Securities Inc.
SG Americas Securities, LLC
UBS Securities LLC.

And:

Furthermore the data above proves beyond a reasonable doubt why there has been no excess lending by US banks to US borrowers: none of the cash ever even made it to US banks!

And QE 3 :

to send the precious metal complex surging as it becomes clear that the dollar is now entirely worthless.

link

let me get this straight. basically, this is a "screw americans over" deal. a large portion of money that should have helped stimulate the economy (ignoring the flaws of keynesian economics) was sent to help foreign banks?

nice find.

reply to post by john124


The good news:

No hyperinflation, because no one in America got the money

Seriously though this makes me sick. The financial system is breaking the American citizen's backs saving.....BANKS IN OTHER COUNTRIES. It should be clear to everyone that the Fed has no concern about the wellbeing of the country it supposidly governs. What a sickening, corrupt institution.

One of the reasons we will be protesting it come this tuesday

It is THEIR money, they MAKE the rules, and WE have NO say in monetary policy.

In fact, they wouldn't even have told us this much had the politician's not been backed against a wall about it.

More fun quick-stepping for the FED and the IMF soon.....

Unless the media just ignores it entirely - as they do sometimes - in which case, when the presidential debates arrive... we will see that the first candidate to bring this up will be ridiculed for whatever weakness can be attributed to him or her....

certainly drives home the point of the invisible King
LIKE a thief in the night

Originally posted by Skerrako
reply to post by john124

 

The good news:

No hyperinflation, because no one in America got the money

Seriously though this makes me sick. The financial system is breaking the American citizen's backs saving.....BANKS IN OTHER COUNTRIES. It should be clear to everyone that the Fed has no concern about the wellbeing of the country it supposidly governs. What a sickening, corrupt institution.

One of the reasons we will be protesting it come this tuesday

It could be argued that it was American banks that caused the crisis in the first place with insider trading and toxic lending. The european banks were busy lending American banks money out with came to an abrupt end when the crisis started, leaving the European banks with no money to lend and over subscribed books. Of course the only people to profit out of all of this is the bankers themselves as they are all taking bonuses still and have been busy hoovering up all the stocks at rock bottom prices.

reply to post by Skerrako


This wasn't a "bailout of foreign banks" at all.

I think the point of QE2, in relation to foreign banks at least, was two fold.

Firstly, to cut them a bit of slack ... considering it was largely toxic US housing and consumer debt which got most of the US subsidiaries of these foreign banks into trouble in the first place. And secondly to help them continue to lend to US companies, US homeowners and US consumers ... thereby preventing a collapse in US domestic lending.

The hope was the foreign banks would lend that money to you good folks in the US, with you investing that money wisely in US businesses and US home produced consumer goods. That way your country would slowly ease itself out of the mire. That was the hope, at least.

Instead, most of the money your central bank created just got pumped into the stock exchange for a whirl around the merry-go-round. And it ended up in the pockets of those who promised the highest returns. And that wasn't with anyone anywhere near the USA, unfortunately. And as that money entered the markets, you got a little bubble developing. The good times had returned (allegedly).

And as QE2 ends, the liquidity dries up & the bubble slowly bursts. Oh, the market indices are now on the slide. Quelle suprise.

Why would US investors invest in the USA right now ? Patriotic sentiment isn't enough to sustain the balance sheets, unfortunately, it'd be naive to think otherwise. Profit generation & dividends is all that matters to Wall Street. They don't care about the little people in Main Street USA who are struggling.

Let's face it, much of US industry's on it's knees, real estate has further to fall & the service sector is just scraping on by. Those attractive parts of the US economy, pharmaceuticals & biotech, promise much but the lead times from investment to return are just way too long. That plus US interest rates are still very low.

So where's the profit factor in all this ? Where to make a good profit in the current US economy ?

I'd love to know what you'd have done in your capacity as ATS's own financial guru, assuming the Fed had come along to you through the medium of a European Bank, with a couple of million dollars on the cheap, with little if any conditions attached. Where would you have invested it to get the maximum return ?

In deadbeat USA, where you'd be lucky to break even ... or overseas ?

With all due respect most of those stated banks are based in the UK and the UK economy is in a worse state than the US so your point doesn't really hold any creedence.

Originally posted by Bob Sholtz
let me get this straight. basically, this is a "screw americans over" deal. a large portion of money that should have helped stimulate the economy (ignoring the flaws of keynesian economics) was sent to help foreign banks?

nice find.

Bang on and ya its more than just a srew ya tho its outright theft and the traitors who did it deserve to hang for it.
All the way up to Obama the newest puppet king of the Bankers and war mongers.

reply to post by Niall197

I'd love to know what you'd have done in your capacity as ATS's own financial guru, assuming the Fed had come along to you through the medium of a European Bank, with a couple of million dollars on the cheap, with little if any conditions attached. Where would you have invested it to get the maximum return ?

Farmland, Guns, Gold and Silver

Originally posted by Skerrako

Farmland, Guns, Gold and Silver

edit on 12-6-2011 by Skerrako because: (no reason given)

The Fed would've done better just giving the money away to wise people like you

The Fereral Reserve Bank is a commercial enterprise, they don't give money away to anyone. The US derivatives hokey has never been properly explained, if I was a US citizen, I would demand to know those responsible for every unpaid mortgage dollar that was tied to these derivatives, and where are they, and what are they doing now. Those people are the niddy gritty of all of this, was it really ice cream for nothing? Was everything really insured for them, for the niche above them ad infinitum, I don't think so. Ask yourself who could perpetrate such a universal scam.

Our economy is a global one. Has been since the time of the first depression. The united states playing the role of the lender is certainly not new.

I think the idea is that we support the global economy so that the entire world can recover from the lending crisis that we initiated. If America simply let the rest of the world flounder, and kept pumping 100% of the money into American banks, the world would have collapsed around us and eventually taken us down with it.

I know its easy to get upset about where public money is being spent, but desperate times call for desperate measures. If America had stepped up to bat in this sort of way in 1929, rather then adopting isolationist policies, maybe the Great Depression could have been avoided, or at least managed more effectively.

reply to post by SPACEYstranger


The global economy is a scam of indefinite porportions. The same people(bankers) who made america strong are the same people(bankers) who are destroying her. I am not saying it is wise to be an isolationist, because it is stupid, but america should come first and that is a no brainer.

We have reached a point in world history, where private central banks and multinational corporations dictate the laws to each national government and politicians have no choice but to make them happy. The citizenry is looked upon as either an asset or liability to those corporations. Remember corporations are artificial persons that have almost as many rights as natural persons.

In other words, we have state capitalism, where the nation itself is a corporation for the super elite!

i say we round up all members of fed arrest them for grand theft and seize all of their assets here and abroad use them to found a national bank of america. i believe that is what Kennedys intentions were before he was shot .

This is being ignored by MSM - and by ATS, by and large. Are we just so disgusted we've given up? Aren't surprised? Where is the outrage?

the financial crisis was cause by our good old government and fanny and freddy and senators frank and dodd

and the mortage industry and inflating the market and the buying and selling mortages.

thats who cause this and they pumped billions on to it where wall street and banks come in is because the good old us government guranteed those mortages.

those same banks are multinational banks where the government pumped billions in from tarp and the federal reserve in its lack of infinite wisdom bought all those trouble assets and printed more money to pay those banks from what the government guaranteed not once but twice.

the tarp baliouts was the us government covering its own duplicity at our expense and that wasnt enough they are still pumping money in so the truth doesnt come out.

people just love to hate the banks the favorite scapegoats and the government runs with it

its called misdirection and people fall for it.

the us government is the villian here because they created the mess and they are still trying to cover their butts.

nothing was fixed or ever will be fix

and it is a sad state of affairs.

Ironically enough, everyone is angry with their government while the banks generally stay out of the people's crosshairs. I noticed Deutsche is on the list, well, they reported profits of €2,1 billion in the first quarter of this year alone. They are allowed to enrich themselves while we suffer. They must be loving their heads off how the governments are abused for taking the blame of this crisis. No surprise, as the Fed is a privately owned institution belonging to the same people who brought this crisis upon us and most "representatives" have been brought to power by these very people through bribes.

As a Dutch person, I am angry with my government for wasting billions on Greece, which is to default sooner or later anyway while an increasing number of Dutch people needs to make use of food banks and our retirement funds are being cut, but what can you do? One Dutch politician was ridiculed thirty years ago for saying that it would be a very stupid move to allow Greece to join the EU, but Bilderberg succeeded. The shadow government of the world, which includes all of the banking elites have pushed their globalization agenda hard so they could create more artificial wealth.

Those European banks are far larger than the American banks, Deutshe Bank has around 2.5 trillion in capitalization -- American banks are nowhere near that size Maybe the multinationals are trying to bankrupt the U.S? This is a perfect way of making sure we cannot reindustrialize. No capital, no savings, no credit.