Federal Reserve Transparency - Audit the Fed

[Guest Fedup]

This was just sent to me. It is by the Economic policy journal. There are other good articles on this web site.

 

Fed chairman Bernanke simply doesn't know Fed history as well as Ron Paul (Or the history conveniently slipped his memory). As far as Watergate, it is common knowledge that the money ended up in the burglars' hands through some pretty fishy means. Even wikipedia has part of the story:

 

[Watergate burglar Bernard] Barker had attempted to disguise the origin of the funds by depositing the donors' checks into bank accounts which (though controlled by him), were located in banks outside of the United States. What Barker, Liddy, and Sloan did not know was that the complete record of all such transactions are held, after the funds cleared, for roughly six months. Barker’s use of foreign banks to deposit checks and withdraw the funds via cashier’s checks and money orders in April and May 1972 guaranteed that the banks would keep the entire transaction record at least until October and November 1972.

 

Wikipedia, also states:

 

Investigative examination of the bank records of a Miami company run by Watergate burglar Bernard Barker revealed that an account controlled by him personally had deposited, and had transferred to it (through the Federal Reserve Check Clearing System) the funds from these financial instruments.

 

Clearly, there were some very, very odd transactions that went down which may, or may not, have been abnormally facilitated by the Fed. Was this a normal Fed wire, or something more convoluted?

 

http://en.wikipedia.org/w/index.php?title=Watergate_scandal&oldid=345698141

[Guest Col. George W.]

Ron Paul and the Audit the Fed bill are up against the most powerful, richest lobby there is. It's going to be a miracle if this bill passes but we have to try and keep trying until we succeed.

[Guest benzinga]

Ben Bernanke has offered to release more information on the emergency aid given to investment banks by the Fed as he tries to defuse the congressional intentions of auditing the monetary policy. However, the Fed will support the legislation that will allow government officials to audit of six emergency programs.

 

Bernanke said that the deeper scrutiny of interest rate decisions would send a bad signal to the markets. Bernanke reiterated that the U.S economy is in “nascent” recovery stage, and needs low interest rates to continue to encourage demand from consumers, and businesses. The Fed will be able to keep interest rates low due to low inflation, and a weak labor market. The benchmark lending rate is likely to remain between 0 and 0.25 percent for a while.

 

The Fed is appealing to a U.S. court that is compelling it to release the names of the banks that took loans from the central bank during the financial crisis. The Fed argues that banks counted on confidentiality when borrowing from the Fed, without which the banks would not have turned to the central bank for assistance.

[Guest Deepcaster]

“Wherever we look at the world economy today, we see a wall of risk…and potential financial catastrophe. We see a large number of virtually bankrupt major sovereign states (US, UK, Spain, Italy, Greece, Japan and many more) teetering atop a financial system that is bankrupt, but is temporarily kept alive with phony valuations and unlimited money printing…

 

Governments like the US and the UK are committed to printing increasing amounts of worthless paper money in order to finance their growing deficits. The consequence of this rescue mission will be a hyperinflationary depression in many countries, due to many currencies becoming worthless.

 

The list of countries at risk of bankruptcy is increasing by the day. The acronym used to be PIGS (Portugal, Ireland, Greece and Spain). It is now PIIGSJUKUS and growing. The main contenders are currently: USA, UK, Japan, Spain, Italy, Greece, Ireland, France, Portugal, Baltic States, Eastern Europe and many more. On a proper accounting basis all of these countries are already bankrupt...”

 

“The Sovereign Debt Disaster”

 

Egon von Greyerz – Matterhorn Asset Management

 

Zurich, Switzerland, 2/23/10

 

“U.S. Rep. Darrell Issa…placed into the hearing record a five-page document itemizing the mortgage securities on which banks such as Goldman Sachs Group Inc. and Societe Generale SA had bought $62.1 billion in credit-default swaps from AIG.

 

These were the deals that pushed the insurer to the brink of insolvency -- and were eventually paid in full at taxpayer expense. The New York Fed, which secretly engineered the bailout, prevented the full publication of the document for more than a year…

 

The public can now see for the first time how poorly the securities performed, with losses exceeding 75 percent of their notional value in some cases. Compounding this, the document and Bloomberg data demonstrate that the banks that bought the swaps from AIG are mostly the same firms that underwrote the CDOs in the first place…

 

…Goldman Sachs underwrote $17.2 billion of the $62.1 billion in CDOs that AIG insured -- more than any other investment bank.

 

The list shows that the $21.2 billion in CDOs minted after 2005, mostly based on prime and commercial mortgages, performed as badly as or worse than the earlier subprime vintages…

 

…Philip Angelides, chairman of the Financial Crisis Inquiry Commission, at a hearing held by his panel on Jan. 13, questioned how banks could underwrite poisonous securities and then bet against them. ‘It sounds to me a little bit like selling a car with faulty brakes and then buying an insurance policy on the buyer of those cars’…

 

E-mails between Fed and AIG officials that Issa released in January show that the efforts to keep Schedule A under wraps came from the New York Fed…

 

AIG paid its counter­parties -- the banks -- the full value of the contracts… (at taxpayer expense! – ed.)

 

…Paris-based Societe Generale got the biggest payout from AIG, or $16.5 billion, followed by Goldman Sachs, which got $14 billion, and then Deutsche Bank and Merrill Lynch…” (emphasis added)

 

“Secret AIG Document Shows Goldman Sachs Minted Most Toxic CDOs”

 

Richard Teitelbaum, Bloomberg News, 2/23/10

 

“…the Federal Reserve Bank continues working with the Mexican government to make it easier for illegal aliens to export US money to their homeland.

 

The Fed is currently devising several programs that will extend banking services to illegal aliens…

 

…The Federal Reserve Bank is aiding lawbreakers in moving their cash around in the US and Mexico. This obviously includes the myriad alien gangs and more than 50,000 gang members who are involved in narcotics trafficking, identity theft, homicides, and other criminal activity…

 

‘Directo a Mexico,’ the name of the program, enables US commercial banks to make money transfers for Mexican workers through the Federal Reserve's own automated clearinghouse…”

 

“Corruption at Federal Reserve Bank goes unnoticed”

 

Jim Kouri, Law Enforcement Examiner, Examiner.com, 2/18/10

 

“Goldman Sachs Group Inc. managed $15 billion of bond sales for Greece after arranging a currency swap that allowed the government to hide the extent of its deficit.

 

No mention was made of the swap in sales documents for the securities in at least six of the 10 sales the bank arranged for Greece since the transaction, according to a review of the prospectuses by Bloomberg…”

 

“Goldman Sachs, Greece Didn’t Disclose Swap Contract”

 

Elisa Martinuzzi, bloomberg.com, 2/17/10

 

“Many of the banks that helped Greece create derivatives that concealed its borrowing are betting on default, hoping to make additional profit from the nation's financial troubles… Banks' and hedge funds' purchases of credit default swaps on Greek bonds are driving up the cost of borrowing that Greece needs to roll over its maturing debt…”

 

“Report: Banks that hid Greece's debt aim to profit from default”

 

The New York Times, 02/24/10

 

“America's Founding Fathers were afraid of any concentration of power in the republic. They were particularly afraid that banking interests could hijack our fledgling democracy.

 

And yet today, 234 years later, our Founding Fathers' worst fears have come true. Wall Street's stranglehold on the economy threatens our very prosperity, and the future of a truly democratic republic…”

 

“Wall Street’s Stranglehold on the Economy Is Choking Americans”

 

Shah Gilani, Money Morning, 1/26/10

 

“What does not kill me, makes me stronger.”

 

F.W. Nietzsche

 

The inexorable Momentum of Destructive Megatrends is impelling us toward an Economic and Markets Armageddon, about which we and a few other notable commentators have been writing for some time. The Denouement will not be at all pretty or short-lived.

 

Thus with the foregoing as Context we sketch an all-too-likely, in our view, Scenario of Coming Events and Consequences, and lay out key Guidelines for coping and profiting.

 

Many of the themes about which we have previously written are now coming to a head, as the foregoing indicates. Thus we reiterate and weave them together in the following Scenario and recapitulate Guidelines for Profit and Protection.

[Guest Cray]

The crooks stole our homes and insurance. Now they say it is not worth squat. I had to read it for myself.

 

 

(Bloomberg) -- The U.S. and the U.K. have moved “substantially” closer to losing their AAA credit ratings as the cost of servicing their debt rose, according to Moody’s Investors Service.

 

The governments of the two economies must balance bringing down their debt burdens without damaging growth by removing fiscal stimulus too quickly, Pierre Cailleteau, managing director of sovereign risk at Moody’s in London, said in a telephone interview.

 

Under the ratings company’s so-called baseline scenario, the U.S. will spend more on debt service as a percentage of revenue this year than any other top-rated country except the U.K., and will be the biggest spender from 2011 to 2013, Moody’s said today in a report.

 

 

[Guest 1984]

Debt slavery in the U.S.A.

 

Really?

 

If you have the time, you may be interested in watching these 2 feature length featured movies about the World economy, War, terrorism, the New World Order, religion, and pretty much everything you’ve ever known or thought you knew. Not just another conspiracy theory, this series is the Grand Mother of all conspiracy theories:

 

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I like the part 2 to this movie better, and part 3 comes out in October 2010!

 

CLICK HERE TO WATCH

"ZEITGEIST II: THE ADDENDUM"

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[BlackSun]

Securities and Exchange Commission v. Goldman, Sachs & Co. and Fabrice Tourre, 10 Civ. 3229 (BJ) (S.D.N.Y. filed April 16, 2010)

 

The SEC Charges Goldman Sachs With Fraud In Connection With The Structuring And Marketing of A Synthetic CDO

 

The Securities and Exchange Commission today filed securities fraud charges against Goldman, Sachs & Co. ("GS&Co") and a GS&Co employee, Fabrice Tourre ("Tourre"), for making material misstatements and omissions in connection with a synthetic collateralized debt obligation ("CDO") GS&Co structured and marketed to investors. This synthetic CDO, ABACUS 2007-AC1, was tied to the performance of subprime residential mortgage-backed securities ("RMBS") and was structured and marketed in early 2007 when the United States housing market and the securities referencing it were beginning to show signs of distress. Synthetic CDOs like ABACUS 2007-AC1 contributed to the recent financial crisis by magnifying losses associated with the downturn in the United States housing market.

 

According to the Commission's complaint, the marketing materials for ABACUS 2007-AC1 — including the term sheet, flip book and offering memorandum for the CDO — all represented that the reference portfolio of RMBS underlying the CDO was selected by ACA Management LLC ("ACA"), a third party with expertise in analyzing credit risk in RMBS. Undisclosed in the marketing materials and unbeknownst to investors, a large hedge fund, Paulson & Co. Inc. ("Paulson"), with economic interests directly adverse to investors in the ABACUS 2007-AC1 CDO played a significant role in the portfolio selection process. After participating in the selection of the reference portfolio, Paulson effectively shorted the RMBS portfolio it helped select by entering into credit default swaps ("CDS") with GS&Co to buy protection on specific layers of the ABACUS 2007-AC1 capital structure. Given its financial short interest, Paulson had an economic incentive to choose RMBS that it expected to experience credit events in the near future. GS&Co did not disclose Paulson's adverse economic interest or its role in the portfolio selection process in the term sheet, flip book, offering memorandum or other marketing materials.

 

The Commission alleges that Tourre was principally responsible for ABACUS 2007-AC1. According to the Commission's complaint, Tourre devised the transaction, prepared the marketing materials and communicated directly with investors. Tourre is alleged to have known of Paulson's undisclosed short interest and its role in the collateral selection process. He is also alleged to have misled ACA into believing that Paulson invested approximately $200 million in the equity of ABACUS 2007-AC1 (a long position) and, accordingly, that Paulson's interests in the collateral section process were aligned with ACA's when in reality Paulson's interests were sharply conflicting. The deal closed on April 26, 2007. Paulson paid GS&Co approximately $15 million for structuring and marketing ABACUS 2007-AC1. By October 24, 2007, 83% of the RMBS in the ABACUS 2007-AC1 portfolio had been downgraded and 17% was on negative watch. By January 29, 2008, 99% of the portfolio had allegedly been downgraded. Investors in the liabilities of ABACUS 2007-AC1 are alleged to have lost over $1 billion. Paulson's opposite CDS positions yielded a profit of approximately $1 billion.

 

The Commission's complaint, which was filed in the United States District Court for the Southern District of New York, charges GS&Co and Tourre with violations of Section 17(a) of the Securities Act of 1933, 15 U.S.C. §77q( a ), Section 10( B ) of the Securities Exchange Act of 1934, 15 U.S.C. §78j( B ) and Exchange Act Rule 10b-5, 17 C.F.R. §240.10b-5. The Commission seeks injunctive relief, disgorgement of profits, prejudgment interest and civil penalties from both defendants.

 

The Commission's investigation is continuing into the practices of investment banks and others that purchased and securitized pools of subprime mortgages and the resecuritized CDO market with a focus on products structured and marketed in late 2006 and early 2007 as the U.S. housing market was beginning to show signs of distress.

Edited April 17, 2010 by BlackSun

[Guest HUMAN]

Audit the Fed. No more bandage solutions.

[Guest Keller Rohrback L.L.P.]

Keller Rohrback L.L.P. Investigates Goldman Sachs & Co Regarding Alleged Fraudulent Misrepresentation of ABACUS 2007-AC1

 

Keller Rohrback L.L.P. (www.krclassaction.com) announces that it is investigating Goldman Sachs & Co., a subsidiary of The Goldman Sachs Group, Inc. (NYSE:GS), regarding the marketing of ABACUS 2007-AC1 (“ABACUS”). ABACUS is a synthetic collateralized debt obligation (“CDO”) that was marketed to investors in early 2007. Investors in ABACUS have lost over $1 billion. In addition we are investigating other synthetic CDO’s marketed by Goldman Sachs in which Goldman or persons acting in concert with Goldman bet against securities Goldman sold to its client.

 

The SEC recently filed a complaint against Goldman for “making materially misleading statements and omissions” in connection with the marketing of ABACUS. ABACUS was structured and tied to the performance of subprime residential mortgage-backed securities.

 

If you invested in ABACUS 2007-AC1, or a similar synthetic CDO, you may contact paralegal Jennifer Tuato’o or attorneys Elizabeth Leland, Derek Loeser, or Lynn Sarko toll free at (800) 776-6044, or via e-mail at investor@kellerrohrback.com.

 

Keller Rohrback is one of America’s leading law firms handling securities-related litigation. We are committed to helping investors protect their investment options. Keller Rohrback serves as lead and co-lead counsel in numerous class action cases. Keller Rohrback has successfully provided class action representation for over a decade. Its trial lawyers have obtained judgments and settlements on behalf of clients in excess of seven billion dollars.

 

Attorney Advertising. Prior Results Do Not Guarantee A Similar Outcome.

 

CONTACT:

Keller Rohrback L.L.P.

Jennifer Tuato’o, Paralegal

(800) 776-6044

investor@kellerrohrback.com

www.krclassaction.com

[Guest Kane]

Most of you have JUST become aware of what the FED Reserve really is… A Government Sponsored Enterprise designed for Grand Theft of our NATIONS personal wealth since 1913.

[Guest Steve H. Hanke]

Military history is written by the victors. Economic history is written by central bankers. Lawrence H. White calculated that, in 2002, 74% of the articles on monetary policy published by U.S. economists in U.S.-edited journals either appeared in journals published by the Fed, or were authored (or co-authored) by current or former Fed staff economists.

[Guest Fedup]

It bothers me that Goldman Sach's and other Wall Street banks profited from human misery. Let's audit the Central Bank (Federal Reserve) and see what really happened.

[Guest ff]

Ron Paul stated that Bernie Sanders has sold out and sided with Chris Dodd to gut Audit the Fed in the Senate. His "compromise" is what the Adminstration and banking interests want: they'll allow the TARP and TALF to be audited, but no transparency of the FOMC, discount window operations or agreement with foreign central banks. We need to take aciton and stop this!

[Guest Franco]

That is odd. Senator Sanders told MSNBC's Dylan Ratigan, "I frankly have never seen an amendment, not only which has the kind of right-left support that we're seeing right now, but it's also true among grassroots organizations." Should a measure allowing Congress to audit the Federal Reserve pass? Yes, according to 87 percent of the respondents to a Wall Street Journal poll. It does not seem that Sanders is going against the measure.

 

Here is Senator Sanders Floor speech yesterday.

 

[Guest Campaign For Liberty]

Congressman Paul believes that Bernie Sanders has corrupted the Fed transparency amendment on the House floor.

 

[Guest Tea Party Patriot]

Well look at what happened yesterday. The biggest stock plunge in history was reportedly from an error that just happened to originate from CITIBANK.

 

This will make conditions worse. We want a true audit of the Federal Reserve. The President, Wall Street, and the Senate does not want it. Everyone else does. We deserve and up or down vote to audit the Federal Reserve.

 

Call your Senator today and tell them you want 604 Audit the Fed.

[Luke_Wilbur]

Senators Jim DeMint (R-S.C.) and Bernie Sanders (I-Vt.) discuss how they want the GAO to "Audit the Fed" amendment that they plan to offer to the financial regulation bill this week with CNBC's Larry Kudlow:

 

[Guest Fedup]

I want to know what the Federal Reserve did with the $2 trillion that was dispersed to bank cartels around the globe.

[Guest bmull]

I read all three versions of the Sanders amendment carefully, and I believe Sanders made a good call if the decision was compromise with Dodd or have no amendment at all.

 

The big differences with the compromise are:

-Single audit covering December 1,2007 to May 2010 rather than open-ended audit until all bailout funds are recovered.

-Specific parameters on the audit focusing on whether proper procedures were followed and what could be done to improve Fed governance. However it is not clear that the audit is limited to these items.

-Fed website still must report lots of previously undisclosed details about the bailout measured–who got what and why.

[Guest Groucho]

You might want to sit down for this one, but, The Federal Reserve Board is controlled by a board of directors who are ... anyone ... anyone ... the CEO's of the megabanks, but of course.

No conflict of interest there!!!

Un-Frickin'-Real!

[Guest BadFish]

"The Fed is appealing to a U.S. court that is compelling it to release the names of the banks that took loans from the central bank during the financial crisis. The Fed argues that banks counted on confidentiality when borrowing from the Fed, without which the banks would not have turned to the central bank for assistance."

 

HA HA HA! Yea Right! Who else is going to give these banks hundreds and hundreds of billions of dollars if not the Fed?

 

Give me a break already!

 

My BS meter just exploded ...

[Guest HUMAN]

All we need to do is Audit the Fed, and we WILL all KNOW where the money is being spent by the fed in ALL fields.

-----------------------------------------------------------------------------------------------

 

"The Fed is appealing to a U.S. court that is compelling it to release the names of the banks that took loans from the central bank during the financial crisis. The Fed argues that banks counted on confidentiality when borrowing from the Fed, without which the banks would not have turned to the central bank for assistance."

 

HA HA HA! Yea Right! Who else is going to give these banks hundreds and hundreds of billions of dollars if not the Fed?

 

Give me a break already!

 

My BS meter just exploded ...

[Guest BadFish]

Who will audit the Fed? Goldman Sachs or Congressmen and Senators who have been paid by Goldman Sachs?

[Guest Tea Party Patriot]

We have won a small victory, but a victory nonetheless. The Senate voted 96-0 to audit the Federal Reserve during this crisis.

 

http://www.youtube.com/watch?v=8LJdp6RDHC0

 

I am willing to bet this will open a can of worms and we will eventually see what really happened.

[Guest Fedup]

Now we will see where the our $2 trillion went