Wachovia had grown into a coveted spot of the fourth largest bank holding company in the U.S. when the Mortgage Backed Securities mania imploded and Wachovia melted down and was eventually acquired by Wells Fargo.

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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.” (Griftopia – Matt Taibbi)

Something had to be done. The bank was deemed “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 taxpayers.

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Bloomberg  Nov 28, 2011 – Excerpts:

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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U.S. taxpayers to the rescue…

The banks regained their ‘healthy glow’ … while main street America remains buried in debt and now, roiled by inflation.

The Leviticus 25 Plan would level the playing field with equal access to liquidity, via a Citizens Credit Facility, for America’s hard-working, tax-paying families. It would restore economic liberty and provide dynamic, long-term benefits for all U.S. citizens.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2022 (3864 downloads)

Clearly, America needs a dynamic new economic acceleration plan that will get us back on a ‘sustainable fiscal path.’ There is just such a plan, loaded up and ready to launch….

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 The Federal Government Is on an Unsustainable Fiscal Path

U.S. Government Accountability Office (GAO) WatchBlog | March 12, 2020

Excerpts:

Growing debt is not just a number—it represents a threat to our economy and our ability to meet national needs and priorities.

The federal deficit (the amount of money spent vs. the amount collected) increased for the fourth consecutive year. This year—and for the foreseeable future—the annual deficit is expected to top $1 trillion. At the same time, the federal government is highly leveraged by debt, which further strains the nation’s fiscal condition. 

By the Numbers: A Trillion Dollar World

• Debt held by the public increased to $16.8 trillion in FY 2019 (or 79% of GDP)—up from $15.8 trillion (or 77% of GDP) at the end of FY 2018. This means that the value of debt was equal to 79% of the value of all goods and services produced in the U.S. in FY 2019. Long-term projections show continuing increases with debt held by the public growing faster than the economy.  This situation—in which debt grows faster than GDP—means the current federal path is unsustainable.  To change course, the nation will have to balance short-term priorities with a forward-looking plan for fiscal sustainability
• To put these numbers in perspective, debt held by the public as a share of GDP peaked at 106% just after World War II (in 1946) and has averaged 46% since. However, if current trends continue, the debt as a share of GDP in 2050 will be nearly twice that level and about 4 times the post-World War II average.
• Social Security spending already exceeds $1 trillion per year;  Medicare spending is expected to exceed $1 trillion per year by 2026. By 2032, net interest will exceed $1 trillion per year.
• Over the past 50 years, net interest costs have averaged 2% of GDP, but they  are projected to increase to 7.2% of GDP by 2049.

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The Leviticus 25 Plan is the most powerful economic acceleration plan in the world.

The broad, sweeping reductions in government outlays (federal, state, local) and massive new tax revenue streams will generate, conservatively, federal budget surpluses of $383 billion per year over each of its first five years of activation.

It will pay for itself entirely over a 10-15 year period.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2022 (3863 downloads)

The Federal Reserve extended hundreds of billions of dollars in emergency lending to foreign banks during the great financial crisis.

Dexia SA, a Franco-Belgian financial instution was one of the big ones.

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Dexia SA – 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                     ___________________________________________

Dexia SA suffered massive net losses during 2008 and 2009 from a stream of wild, reckless investments involving Icelandic Banks, Lehman Brothers, Washington Mutual, Greek government bonds, and of all things.. investments involving Bernard Madoff’s revolving Ponzi scheme.

Since Dexia had an office in New York, they qualified for massive liquidity infusions, courtesy of the U.S. Federal Reserve.

There is perfect justification in all of this for U.S. citizens to now be granted the same access to liquidity, to mitigate their own debt burdens, that was provided to major foreign banks including Dexia, Barclays, HSBC, UBS, Royal Bank of Scotland, Deutsche Bank and others.

It is now time for U.S. to level the playing field.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2022 (3857 downloads)

The U.S. Federal Reserve generously infused major Wall Street global financial institutions, including foreign banks, with massive liquidity infusions during the height of the great financial crisis of 2007-2010.

One of the biggest recipients of the Fed’s generosity: Switzerland-based Credit Suisse…

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Bloomberg  Nov 28, 2011 – Excerpts:

“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:  https://elischolar.library.yale.edu/cgi/viewcontent.cgi?article=1113&context=journal-of-financial-crises

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Another highlight: Credit Suisse’s ‘corporate rap sheet’: https://www.corp-research.org/credit-suisse

__________________________________

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 U.S. Citizens Credit Facility to grant direct liquidity access to U.S. citizens – to eliminate debt and help relieve “heightened stress” at the family level in America.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2022 (3853 downloads)

The Council on Foreign Relations, founded in 1921, is a non-profit American organization, populated with senior government figures and politicians, bankers, lawyers, intelligence officers, and other from the elite class.  With offices in New York and Washington, D.C., it is viewed as the nation’s “most influential foreign-policy think tank.”

They were certainly headed in the right direction with this 2014 proposition…

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Seeking Alpha / Sep 2, 2014  5:55 AM ET – Excerpts

When an article appears in Foreign Affairs, the mouthpiece of the policy-setting Council on Foreign Relations, recommending that the Federal Reserve do a money drop directly on the 99%, you know the central bank must be down to its last bullet.

The September/October issue of Foreign Affairs features an article by Mark Blyth and Eric Lonergan titled “Print Less But Transfer More: Why Central Banks Should Give Money Directly To The People.” It’s the sort of thing normally heard only from money reformers and Social Credit enthusiasts far from the mainstream. What’s going on?

The Fed, it seems, has finally run out of other ammo. It has to taper its quantitative easing program, which is eating up the Treasuries and mortgage-backed securities needed as collateral for the repo market that is the engine of the bankers’ shell game. The Fed’s Zero Interest Rate Policy (ZIRP) has also done serious collateral damage. The banks that get the money just put it in interest-bearing Federal Reserve accounts or buy foreign debt or speculate with it; and the profits go back to the 1%, who park it offshore to avoid taxes. Worse, any increase in the money supply from increased borrowing increases the overall debt burden and compounding finance costs, which are already a major constraint on economic growth.

Meanwhile, the economy continues to teeter on the edge of collapse….

______________________________

The Council on Foreign Relations (CFR) is generally on the right track. Their proposal, however does nothing to effect massive debt elimination, re-balance government budget deficits, or restore economic liberty in America. It does nothing to free people from the heavy hand of government, controlling and restricting them in the management of their daily affairs.

The Leviticus 25 Plan does restore economic liberty in America, and it frees people from oppressive government programs that actually keep them in poverty and servitude.

The Leviticus 25 Plan would effect wide-scale debt elimination at the family level, thereby helping to insulate millions of Americans from potentially devastating effects of another severe economic contraction.

The Plan would eliminate massive government restrictions and control over healthcare, and replace it with individual control  and consumer choice in healthcare access.

The Leviticus 25 Plan would balance the federal budget – immediately in Year One.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2022 (3852 downloads)

“You never change things by fighting against the existing reality. To change something, build a new model that makes the old model obsolete.”  – Buckminster Fuller

It is time for a new qualitatively new economic model: The Leviticus 25 Plan

Excerpts from Bloomberg  Nov 28, 2011:

“Merrill Lynch & Co.’s stock surged 30 percent after the New York-based securities firm announced an agreement to sell itself to Bank of America Corp. in September 2008. The deal didn’t stop the firm’s liquidity from shrinking by about $27 billion in three days that month, according to internal Federal Reserve Bank of New York documents. In the ensuing weeks, the firm drew as much as $62.1 billion from the Federal Reserve’s Primary Dealer Credit Facility, Term Securities Lending Facility and single-tranche open market operations. After the takeover closed on Jan. 1, 2009, Charlotte, North Carolina-based Bank of America let Merrill’s Fed loans roll off while increasing its own liquidity draws from the central bank.”

Peak amount of debt on 09/26/2008:  $62.1B

A little more background information – on some of the investment practices engaged in by Merrill Lynch during the several years immediately preceding the $62.1B secret bailout: 

DealBook-NYTimes reported on January 25, 2011:

“Merrill Lynch Settles S.E.C. Fraud Case”                      

Merrill Lynch “ agreed to pay $10 million on Tuesday to settle fraud accusations by securities regulators.”                                                                                            “The Securities and Exchange Commission had accused Merrill of fraud, saying that the firm misused private information from its customers to place trades on its own behalf and that the firm repeatedly charged its customers trading fees without their knowledge.”

Bank of America: Corporate Rap Sheet

Bank of America – Corporate Rap Sheet – Aug 1, 2020

Bank of America acquired Merrill Lynch on Sep 24, 2001.

Note their ‘corporate rap sheet.”

In August 2009 BofA agreed to pay $33 million to settle SEC charges that it misled investors about more than $5 billion in bonuses that were being paid to Merrill employees at the time of the firm’s acquisition. In February 2010 the SEC announced a new $150 million settlement with BofA concerning the bank’s failure to disclose Merrill’s “extraordinary losses.” At the same time, New York Attorney General Andrew Cuomo filed civil fraud charges against Lewis personally, as well as BofA’s former chief financial officer Joseph Price for “duping shareholders and the federal government.”

In May 2011 FINRA fined Merrill $3 million for misrepresenting loan delinquency data when selling residential subprime mortgage securities, and in October 2011 fined it $1 million for failing to properly supervise one of its registered representatives who was operating a Ponzi scheme. More FINRA fines came in 2012: $1 million for failing to arbitrate disputes with employees; $2.8 million (plus $32 million in remediation) for unwarranted fees; and $500,000 for failing to file hundreds of required reports. In December 2011 BofA agreed to pay $315 million to settle a class-action suit alleging that Merrill had deceived investors when selling mortgage-backed securities.  June 2012 court filings in a shareholder lawsuit against BofA provided more documentation that bank executives knew in 2008 that the Merrill acquisition would depress BofA earnings for years to come but failed to provide that information to shareholders. In September 2012 BofA announced that it would pay $2.43 billion to settle the litigation.

The Countrywide acquisition also came back to haunt BofA. In June 2010 it agreed to pay $108 million to settle federal charges that Countrywide’s loan-servicing operations had deceived homeowners who were behind on their payments into paying wildly inflated fees. Four months later, Countrywide founder Angelo Mozilo reached a $67.5 million settlement of civil fraud charges brought by the SEC. As part of an indemnification agreement Mozilo had with Countrywide, BofA paid $20 million of the settlement amount, which consisted of a $22.5 million penalty (a record amount for a case against a public company executive) and $45 million in “disgorgement of ill-gotten gains.” A criminal case against Mozilo was shelved.

In May 2011 BofA reached a $20 million settlement of Justice Department charges that Countrywide had wrongfully foreclosed on active duty members of the armed forces without first obtaining required court orders. And in December 2011 BofA agreed to pay $335 million to settle charges that Countrywide had discriminated against minority customers by charging them higher fees and interest rates during the housing boom. In mid-2012 the Wall Street Journal reported that “people close to the bank” estimated that Countrywide had cost BofA more than $40 billion in real estate losses, legal expenses and settlements with state and federal agencies.

BofA faced its own charges as well. In December 2010 it agreed to pay a total of $137.3 million in restitution to federal and state agencies for the participation of its securities unit in an alleged conspiracy to rig bids in the municipal bond derivatives market. In January 2011 BofA agreed to pay $2.8 billion to Fannie Mae and Freddie Mac to settle charges that it sold faulty loans to the housing finance agencies. In September 2011 the Federal Housing Finance Agency sued BofA and other firms for abuses in the sale of mortgage-backed securities to Fannie Mae and Freddie Mac.

BofA was one of five large mortgage servicers that in February 2012 consented to a $25 billion settlement with the federal government and state attorneys general to resolve allegations of loan servicing and foreclosure abuses. An independent monitor set up to oversee the settlement reported in August 2012 that BofA had not yet completed any modifications of first-lien mortgages or any refinancings. The New York Attorney General later sued BofA for breaching the terms of the foreclosure settlement.

In September 2012 BofA settled federal allegations that it discriminated against recipients of disability income. In January 2013 BofA was one of ten major lenders that agreed to pay a total of $8.5 billion to resolve claims of foreclosure abuses. At the same time, BofA by itself agreed to pay $10.3 billion ($3.6 billion in cash and $6.75 billion in mortgage repurchases) to Fannie Mae to settle a new lawsuit concerning the bank’s sale of faulty mortgages to the agency. BofA also agreed to sell off about 20 percent of its loan servicing business.

In April 2013 the National Credit Union Administration announced that BofA had agreed to pay $165 million to settle claims relating to losses from the purchases of residential mortgage-backed securities.

In May 2013 BoA agreed to pay $1.7 billion to MBIA to settle a long-running lawsuit in which the bond insurer had sued Countrywide for misleading it about the quality of mortgages packaged into securities that MBIA agreed to insure.

In August 2013 the Justice Department filed a civil suit charging BofA and its Merrill Lynch unit of defrauding investors by making  misleading statements about the safety of $850 million in mortgage-backed securities sold in 2008.

In October 2013 a federal jury found BofA’s Countrywide unit liable for the sale of defective mortgages to Fannie Mae and Freddie Mac. A former Countrywide midlevel manager, Rebecca Mairone, was found individually liable in the civil fraud case.

In December 2013 Freddie Mac announced that BofA had agreed to pay $404 million to settle claims by the mortgage agency that the bank had sold it hundreds of thousands of defective home loans.

That same month, the SEC announced that BofA would pay $131.8 million to settle allegations that Merrill Lynch had misled investors about collateralized debt obligations.

In March 2014 the Federal Housing Finance Agency announced that BofA would pay $9.3 billion to settle the case involving the sale of deficient mortgage-backed securities to Fannie Mae and Freddie Mac. The total included $3.2 billion in securities repurchases.

In April 2014 the U.S. Consumer Financial Protection Bureau ordered BofA to pay $727 million to compensate consumers harmed by deceptive marketing of credit card add-on products.

That same month, BofA disclosed that it had mistakenly overstated its capital by $4 billion.

In July 2014 a federal judge ordered BofA to pay $1.27 billion in damages after being found guilty by a jury in a case involving defective mortgages sold by Countrywide. (In May 2016 a federal appeals court overturned that penalty.)

That case paled in comparison to the $16.65 billion settlement BofA reached with the Justice Department the following month to resolve federal and state claims relating to the practices of Merrill Lynch and Countrywide in the runup to the financial meltdown. The amount was made up of about $10 billion in cash  payments and $7 billion in so-called mortgaged relief to consumers.

In December 2014 FINRA fined Merrill Lynch $4 million as part of a case against ten investment banks for allowing their stock analysts to solicit business and offer favorable research coverage in connection with a planned initial public offering of Toys R Us in 2010.

In May 2015 the Federal Reserve fined BofA $205 million for “unsafe and unsound” practices relating to foreign exchange markets.

In June 2016 the SEC announced that Merrill Lynch would pay $415 million to settle allegations that it misused client cash to engage in trading for the company’s benefit.

In September 2016 the SEC announced that Merrill would pay a $12.5 million penalty for maintaining ineffective trading controls that failed to prevent erroneous orders from being sent to the markets and causing mini-flash crashes.

In 2019 Merrill Lynch Commodities entered into a non-prosecution agreement and agreed to pay $25 million to resolve criminal charges of manipulating the market for precious metals futures contracts. 

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The Leviticus 25 Plan provides U.S. citizens with the same direct access to liquidity that was provided to the likes of Wall Street ‘rap sheet’ titans Merrill Lynch and Bank of America at the height of the financial crisis.

The Leviticus 25 Plan is a dynamic economic initiative providing direct liquidity benefits for American families, while at the same time scaling back the role of government in managing and controlling the affairs of citizens.  It is a comprehensive plan with long-term economic and social benefits for citizens and government.

The inspiration for this plan is based upon Biblical principles set forth in the Book of Leviticus, principles tendering direct economic liberties to the people.

The Leviticus 25 Plan – An Economic Acceleration Plan for America

$90,000 per U.S. citizen – Leviticus 25 Plan 2022 (3839 downloads)