Citigroup Following the repeal of the Glass-Steagall Act in 1998, Citigroup dove headlong into the derivatives market. “By 2007 Citi was the largest issuer of CDOs [Credit Default Obligations] … $49 billion worth when the world’s total production was $442 billion.” (Source: Bailout Nation)
Citi later took advantage Structured Investment Vehicles (SIVs) to move high-risk investments off their balance sheets – into “Enron-like side pockets.”
When the housing market began staggering badly in 2007 under the weight of increasing loan delinquencies and foreclosures, “Citigroup’s SIVs were festooned with $87 billion of toxic assets, mortgage-related CDOs, and other long-term paper…. ”
Short-term financing dried up, and the SIVs worked their way back “in-house.” And “by December 2007, Citi assumed $58 billion of debt to ‘rescue’ $49 billion in Assets.” (Bailout Nation)
The Federal Reserve then cranked open the “Secret Loan” fire hose to flood Citi (and scores of others) with massive liquidity injections (or, in the common parlance, ‘free money’).
Citigroup – #2 recipient of Fed Secret Loans (2008-10) Bloomberg – Nov 28, 2011
“Citigroup Inc., the third-largest U.S. bank by assets, received a $45 billion capital injection in 2008 from the U.S. Treasury. The New York-based lender got a bigger bailout from the Federal Reserve: $99.5 billion of emergency loans, about the cost of paying, clothing, housing, arming and transporting the U.S. Army for fiscal 2011. On Jan. 20, 2009, as the bank’s shares fell to $2.80, down almost 90 percent in a year, its Fed loans included $34.1 billion from the Term Securities Lending Facility, $25.1 billion from the Commercial Paper Funding Facility, $25 billion from the Term Auction Facility, $14 billion from the Primary Dealer Credit Facility and $1 billion from single-tranche open market operations.”
The point of this little historical ‘look back’ is to simply restate the case that U.S. citizens deserve nothing less than equal access to credit extensions that was provided to Morgan Stanley, Citi, and the scores of other financial enterprises whose high risk investment profiles led to financial calamity and rescue action by the Federal Reserve.
It is time now for the Fed to extend credit to American families via a “U.S. Citizens Credit Facility.”
The Leviticus 25 Plan 2017 – $75,000 per U.S. citizen The Leviticus 25 Plan 2017 (1398)