Wachovia Corp – #14 recipient of Fed’s “secret liquidity lifelines”

Wachovia Corp’s investment portfolio “began to go up in smoke” in the fall of 2008 with the collapse of the “housing boom.”  Depositors got nervous and began “pulling their money out of the bank.” (Giftopia  –  Matt Taibbi)

Something had to be done. The bank was deemed to be “systemically important” by a frantic Fed and FDIC.

Wells Fargo was urged to assist, but was naturally reluctant to get involved.  But then some old-fashioned “backroom” prompting by the Fed/Treasury sweetened the deal, and Wells Fargo stepped up to save the day.

Treasury Secretary Hank Paulson “promised” a deal that would work out to “an almost $25 billion tax break for Wells Fargo” going forward.  And then Wells Fargo received their TARP apportionment of $25 billion in cash.  Wells Fargo immediately decided it could “help the government out” and purchase Wachovia – for the fire-sale price of $12.7 billion.

Thank you America’s working family taxpayers.

Wachovia Corp., which almost collapsed in September 2008 because of a deposit run, floated itself with Federal Reserve funds the following month after becoming the object of a takeover battle between Citigroup Inc. and Wells Fargo & Co. Fed assistance for Charlotte, North Carolina-based Wachovia included a $29 billion loan on Oct. 6, 2008, from the discount window, the biggest of any U.S. bank during the crisis from the central bank’s 97-year-old lender-of-last-resort program. Wachovia also borrowed from the Term Auction Facility, bringing total Fed liquidity to $50 billion.

Peak amount of debt on 10/9/2008:  $50B

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Again, thank you, taxpayers. The banks, through outright stupidity, greed and mismanagement become financially ‘submerged’ when the markets wilted… and government rode in to the rescue with your Dollars. 

The banks regained their ‘healthy glow’ …  while main street America gets to remain ‘hubcap’ deep in debt and economic stagnation.

The Leviticus 25 Plan would level the playing field with equal access to liquidity for American families. It would restore economic liberty and provide dynamic, long-term benefits for all of main street America.

There is no other viable plan in America.  Anywhere.

Dexia SA – #13 recipient of Fed’s ‘secret liquidity lifelines’

Excerpts from  Bloomberg  Nov 28, 2011 :

“The biggest U.S. banks avoided the discount window, the Federal Reserve’s 97-year-old last-resort lending facility, partly out of concern that tapping it might brand them as weak. Dexia SA, a lender to local governments in Belgium, showed no such reservation.

The bank, based in Brussels and Paris, was the discount window’s biggest borrower during the crisis, tapping it for $37 billion in December 2008.

Dexia simultaneously borrowed $21.5 billion from temporary Fed programs that were primary sources of emergency funding for U.S.-based Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. In all, Dexia owed about 120 billion euros ($168 billion) to central banks at the end of 2008. As of June 30, 2011, it still had 34 billion euros of central-bank funding.”

      Peak amount of debt as of 12/31/2008:  $58.5B                                                               ……………………………………………….

Note again – the Federal Reserve extended billions of dollars to foreign banks.  It is now time for U.S. citizens to receive like access to liquidity. After all, it is our money.               The Leviticus 25 Plan.

21% of all housing properties in the foreclosure process – ‘vacant zombies’

Big-government central planning ….. carnage in the wake.                …………………………………………….

The Vacant Dead: One In Five Foreclosed Homes Is A Vacant Zombie                       Submitted by Tyler Durden on 03/13/2014

The latest foreclosure news out of RealtyTrac is out, and provides the latest proof that if there is a housing recovery somewhere, it sure isn’t in the US, where the dislocations in the supply/demand for real estate are so profound that one in five homes in the foreclosure process has been vacated by the distressed homeowner. To wit: “As of the first quarter of 2014, a total of 152,033 U.S. properties in the foreclosure process (excluding bank-owned properties) had been vacated by the distressed homeowner, representing 21 percent of all properties in the foreclosure process.

This means that neither the distressed homeowner or the foreclosing lender taking responsibility for maintenance and upkeep of the home, leading to a veritable army of Vacant Dead housing units that are spreading like zombies across the nation in the most improbable housing “recovery” of all time.

Quote Daren Blomquist, vice president at RealtyTrac:

“The biggest threat from foreclosures going forward is properties that have been lingering in the foreclosure process for years, many of them vacant with neither the distressed homeowner or the foreclosing lender taking responsibility for maintenance and upkeep of the home — or at the very least facilitating a sale to a new homeowner more likely to perform needed upkeep and maintenance.

“One in every five homes in the foreclosure process nationwide have been vacated by the distressed homeowner, but it is closer to one in three foreclosures in some cities,” Blomquist added. “These properties drag down home values in the surrounding neighborhood and contribute to a climate of uncertainty and low inventory in local housing markets.”

Full report:  http://www.realtytrac.com/content/foreclosure-market-report/realtytrac-february-2014-us-foreclosure-market-report-7997

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The Leviticus 25 Plan would provide American families with the same access to liquidity that the Fed provided to major banks and financial centers.

It would put a screeching halt to foreclosure activity in the U.S. and keep financially distressed American families in their homes.

There is no other economic acceleration plan in America with the dynamic benefits like The Leviticus 25 Plan.

 

Kotlikoff: Massive “fiscal gap” – the U.S. is “broke”

A country’s “fiscal gap” is a comprehensive measure of its total indebtedness – developed by economist Laurence Kotlikoff.

ZeroHedge 9-11-2013:                                                                                                 Laurence J. Kotlikoff is a William Fairfield Warren Professor at Boston University, a Professor of Economics at Boston University, a Fellow of the American Academy of Arts and Sciences, a Fellow of the Econometric Society, a Research Associate of the National Bureau of Economic Research, and President of Economic Security Planning, Inc., a company specializing in financial planning software.

I estimate the US fiscal gap at US$200 tn, 17 times the reported US$12 tn in official debt in the hands of the public. And this incorporates this year’s tax increases and spending sequestration. What would it take to come up with US$200 tn in present value?

 The US is arguably in worst fiscal shape than any other developed country. But Greece, the UK, and Japan are close runner ups. As mentioned, our fiscal gap is 10% of the present value of our future GDP. In Germany it’s around 5%, while Canada, Australia and New Zealand are close to zero. Even Italy’s long-term fiscal gap is just half of the US’s, yet Italian government bonds sell at a much lower price than US government bonds simply because people don’t understand the pension reforms that Italy has rolled out or that Italy has much better control of its healthcare spending.

Our country is broke. It’s not broke in 50 years or 30 years or 10 years. It’s broke today. Six decades of take as you go has led us to a precipice.

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Only one comprehensive solution has ever been formally presented:                              The Leviticus 25 Plan.

Credit Suisse – #12 recipient of Fed’s ‘secret liquidity lifelines’

Bloomberg  Nov 28, 2011Excerpts:

Credit Suisse Group AG, Switzerland’s second-biggest bank by assets, was the biggest user of the Fed’s single-tranche open market operations, or ST OMO, borrowing $45 billion in August 2008. Under ST OMO, securities firms swapped eligible mortgage bonds for cash.

The Zurich-based bank’s U.S. brokerage also used the Term Securities Lending Facility, which allowed firms to swap certain debt securities for Treasuries that could be loaned out or sold for cash. Credit Suisse took no part in any central bank’s collateralized funding facilities in the crisis, said Steven Vames, a bank spokesman in New York. TSLF doesn’t count because it involved no cash transfers, he said, and the bank borrowed from ST OMO only as a so-called primary dealer. Primary dealers weren’t required to bid in ST OMO.”

Peak Amount of Debt on 8/27/2008:  $60.8B

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What are single-tranche open market operations?

The Fed’s ‘secret liquidity lifelines that ran from 2007 – 2010 generally involved various credit facilities, set up to ‘rescue’ the banking system, and make banks ‘healthy.’

ST OMO’s were another unique form of liquidity infusions that provided “term funding” to the (big bank) Primary Dealers, primarily benefiting major European (Primary Dealer) banks. –  for the purpose of “mitigating heightened stress in funding markets.”

These ST OMO “secretive bailout operation” pumped out $855 billion between “March and December 2008.”

“These operations were conducted by the Federal Reserve Bank of New York with primary dealers as counterparties through an auction process under the standard legal authority for conducting temporary open market operations. In these transactions, primary dealers could deliver any of the types of securities–Treasuries, agency debt, or agency MBS–that are accepted in regular open market operations. By providing term funding to primary dealers, this program helped to address liquidity pressures evident across a number of financing markets and supported the flow of credit to U.S. households and business.”

“Well, not really. As the chart below shows the banks, pardon, primary dealers, that benefited the most from this secret iteration of Fed generosity were once again foreign banks, with the Top 5 borrowers being Credit Suisse, Deutsche Bank, BNP Paribas, RBS and Barclays. Together these five accounted for $593 billion of total borrowings, or 70% of the total.”

Below is a summary of who borrowed how much in total from the Fed’s ST-OMO program.

Source:  Fed Releases Details On Secret $855 Billion single-Trnache OMO Bailout Program: Just Another Foreign Bank Operation 

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And this brings us back again to the main point.

U.S. citizens deserve the same access to liquidity and credit guarantees that the Fed pumped out to rescue the banking system during the crisis period (2007 – 2010) when high-risk sub-prime debt took on ‘junk’ status, and fairly well ‘froze’ the system. 

Certain Fed operations, like single-tranche open market operations, heavily favored major European banks – designed to mitigate “heightened stress.”

It is now time for the Fed to activate a credit facility to help relieve “heightened stress” at the family level in America.      

The Leviticus 25 Plan.