A look back…

Background – Bear Stearns:

The Atlantic – Jan 25, 2011: Emails Suggest that Bear Stearns Cheated Clients out of Billions

“Former Bear Stearns mortgage executives who now run mortgage divisions of Goldman Sachs, Bank of America, and Ally Financial have been accused of cheating and defrauding investors through the mortgage securities they created and sold while at Bear.

Last week a lawsuit filed in 2008 by mortgage insurer Ambac Assurance Corp against Bear Stearns and JPMorgan was unsealed. The lawsuit’s supporting e-mails, going back as far as 2005, highlight Bear traders telling their superiors they were selling investors like Ambac a “sack of [sh#%].”

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According to the lawsuit, the Bear traders would sell toxic mortgage securities to investors and then sell back the bad loans with early payment defaults to the banks that originated them at a discount. The traders would pocket the refund, and would not pass it on to the mortgage trust, which was where it should have gone to be distributed to the investors who owned the bonds.

It was this blatant internal awareness inside the Bear mortgage trading division that the Ambac suits says led Bear to implement an across-the-board strategy to disregard its contractual promises and conceal the defective loans….

In 2007, when Ambac started to realize something was very wrong with its high-rated bonds, it demanded Bear provide loan-level detail and reviewed 695 non-performing loans in its portfolio. Ambac’s audit concluded that 80 percent of the loans showed an early payment default….

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Bloomberg  Nov 28, 2011:

Bear Stearns Cos. Chairman James “Jimmy” Cayne told the Financial Crisis Inquiry Commission that the Federal Reserve’s Primary Dealer Credit Facility, set up in March 2008 to supply emergency funding to brokerage firms, came “just about 45 minutes” too late. Without access to liquidity from the central bank, New York-based Bear Stearns had to sell itself to JPMorgan Chase & Co., ending 85 years as an independent firm. To prop up Bear Stearns while the deal could be negotiated, the Fed extended a $12.9 billion emergency loan to the firm through JPMorgan. After the deal was inked, the Fed supplied as much as $30 billion to Bear Stearns through the PDCF and single-tranche open market operations to float the firm while the takeover was pending.

Peak Amount of Debt on 3/28/2008: $30B

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U.S. citizens, who did not cheat and defraud investors by peddling toxic mortgage securities – deserve nothing less than to be granted the same access to liquidity that the Federal Reserve supplied to Bear Stearns and scores of other major banks and insurers during great financial crisis of 2007 – 2010.

The mechanism for this direct access to liquidity – a Citizens Credit Facility – via The Leviticus 25 Plan.

The Leviticus 25 Plan – An Economic Acceleration Plan for America
$95,000 per U.S. citizen –  Leviticus 25 Plan 2027 (57294 downloads )

A look back…

Bloomberg  Nov 28, 2011 – Excerpts:

“Wells Fargo & Co. became the largest U.S. home lender and fourth-biggest bank after purchasing Wachovia Corp. in 2008 as that bank was teetering near collapse. Wells Fargo, based in San Francisco, borrowed as much as $45 billion in February 2009, a day after regulators released details of how they would conduct stress tests on the nation’s 19 largest banks.

The Fed’s Term Auction Facility was “one of several programs offered by the government that Wells Fargo and other financial institutions were encouraged or required to participate in,” said Ancel Martinez, a spokesman for the bank.”

Peak amount of debt on 2/26/2009:  $45B                                            

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Wells Fargo
By Philip Mattera
Wells Fargo is the smallest of the four giants that now dominate the U.S. commercial banking business, but it has surpassed its larger counterparts in the extent to which it has been embroiled in a series of scandals involving reckless lending practices and customer deception.

Wells Fargo’s corporate rap sheet: https://www.corp-research.org/wells-fargo

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Honest, hard-working, tax-paying U.S. citizens, the backbone of our Republic, deserve nothing less than to be granted the same direct access to liquidity, through a U.S. Citizens Credit Facility, that the Fed so graciously provided to Wells Fargo & Co and other major banks during the height of the financial crisis.

The Leviticus 25 Plan – An Economic Acceleration Plan for America
$95,000 per U.S. citizen – Leviticus 25 Plan 2027 (57294 downloads )

A look back…

In 2007 and 2008, Lehman Brothers Holdings Inc engaged in some old-fashioned, end-of-quarter, creative ‘book-cooking” to disguise their quietly snowballing insolvency issues….

Their financial sleight-of-hand involved book-keeping entries known as “Repo 105s” – where late-quarter  temporary loans backed by ‘depressed’ assets were booked as ‘sales,’ with the revenues then ‘used’ to pay down debt.  This provided “window dressing” for their quarterly reports to, naturally, make ‘management’ look good.  Lehman would then ‘buy’ the asset back and add the old debt back in early in the new quarter.

Lehman ran up $50 billion worth of ‘Repo 105s’ in 2008.  Auditor Ernst & Young ‘winked’ at the Lehman ‘shell game.’

The financial crisis quickly blew the game up in the fall of 2008.

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Bloomberg  Nov 28, 2011 – Excerpts:                                                                       

“Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15, 2008, after U.S. Treasury Secretary Henry Paulson refused to authorize a government bailout for the New York-based securities firm. By then, the Fed had supplied liquidity to Lehman’s main brokerage unit, Lehman Brothers Inc., for months, reaching $31.1 billion in June 2008.

On the day of the bankruptcy, Lehman’s Fed loans reached $44.8 billion. Barclays Plc took over some of the debt after buying Lehman’s North American securities business, according to court testimony. Lehman Brothers Inc. repaid $38.5 billion on Sept. 18, and Barclays’s Fed borrowings jumped by $49.1 billion to $63.8 billion that day, the data show.”

Peak amount of Debt on 9/15/2008:  $46B    

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In review – ‘book-cooker’ Lehman Brothers received massive liquidity infusions from the Fed… and Barclays received massive Fed-generated liquidity access to buy ‘book-cooker’ Lehman.

Meanwhile, U.S. citizens, who did not ‘cook books,’ paid dearly for the shocking credit meltdown precipitated by Lehman and others. Hardworking Americans suffered through billions of dollars of lost income, catastrophic job losses throughout the economy, and millions of home foreclosures sat and watched the as Fed transfused Lehman and Barclays with tens of billions of dollars of ‘magically created’ electronic money, while Main Street America got nothing.

It is time now to level the playing field and grant U.S. citizens, through a Citizens Credit Facility, the very same access to Fed liquidity that Lehman, Barclays, and dozens of other banking titans received.

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
$95,000 per U.S. citizen – Leviticus 25 Plan 2027 (57294 downloads )