It sure didn't take long to come down from a happy Earth Day weekend. This from the Huffpost. Of course, it's pretty much been completely overlooked by the national media. Damn it pisses me off.
Largest Banks Likely Profited By Borrowing From Federal Reserve, Lending To Federal Government
A newly-released study from the Congressional Research Service bolsters claims that the nation's largest banks profited off the Federal Reserve's financial crisis-era programs by borrowing cash for next to nothing, then lending it back to the federal government at substantially higher rates.
The report reinforces long-held beliefs that the banking system in essence engaged in taxpayer-financed arbitrage: They got money for free, then lent it back to Uncle Sam while collecting juicy returns. Left out of the equation are the millions of everyday borrowers, like households and small businesses, who were unable to secure loans needed to tide them over until the crisis ended.
The Fed released records under pressure in December and March that showed the extent of its largesse. The CRS study shows for the first time how some of the most sophisticated financial firms could have taken the Fed's money and flipped easy profits simply by lending it back to another arm of the government.
The report was requested by Sen. Bernie Sanders (I-Vt.), who likened the crisis-era emergency loans to " Direct corporate welfare to big banks," in a statement. The cash likely was lent back to Uncle Sam in the form of Treasuries and other debt " instead of using the Fed loans to reinvest in the economy," Sanders added.
In all, more than $3 trillion was lent to financial institutions from the Fed, and terms were generous. Junk-rated securities were pledged as collateral for taxpayer-backed loans. The Fed did not provide conditions for how the money was to be used. (Bernanke should go to jail. my words)
As part of one Fed program, on 33 separate occasions, nine firms were able to borrow between $5.2 billion and $6.2 billion in U.S. government securities for four-week intervals, paying one-time fees that amounted to the minuscule rate of 0.0078 percent.
In another, financial firms pledged more than $1.3 trillion in junk-rated securities to the Fed for cheap overnight loans. The rates were as low as 0.5 percent.
Story continues below
During one three-month period in 2009, Bank of America borrowed more than $48 billion at rates ranging from 0.25 to 0.5 percent. Meanwhile, the largest U.S. lender tripled its holdings of Treasuries and other taxpayer-backed debt to about $15 billion -- securities that yielded 3.5 percent.
During the third quarter of 2009, the bank borrowed $2.9 billion from the Fed through a program that charged 0.25 percent interest. In that same period, Bank of America increased its holdings of taxpayer-backed federal debt by $12 billion, according to the Congressional Research Service. Those securities yielded an average of 3.2 percent.
I know this is dry stuff, but if you can stomach it, here's the whole story HuffPost
This should make your blood boil. At the very least, move your banking to a local bank and boycott the bastards.