Bloomberg fought for years to obtain 29,000 pages of Federal Reserve documents detailing the largest bailout in American history. They make for the must-read of the day, the month, the year. In its January issue, Bloomberg Markets magazine reports:
The Fed didn’t tell anyone which banks were in trouble so deep they required a combined $1.2 trillion on Dec. 5, 2008, their single neediest day. Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed’s below-market rates.
Saved by the taxpayers, the banks were able to effectively lobby against real regulation, such as a new Glass-Steagall Act. And:
While Fed officials say that almost all of the loans were repaid and there have been no losses, details suggest taxpayers paid a price beyond dollars as the secret funding helped preserve a broken status quo and enabled the biggest banks to grow even bigger.
That price has also been the worst economy since the Depression, a situation directly triggered by the dangerous business and swindles of the big banks and Wall Street. Many people may be sick of the methods of Occupy, but this latest revelation of the profiteering during crisis by the big banks shows why so many are angry with crony capitalism, its control of the government and the resulting inequality and danger to democracy. As shareholder activist Nell Minow tweeted last night after the release of the information, echoing a headline: “Break ’em up now. We’ve seen enough.”
And Don’t Miss: Ray Kachel’s journey from Seattle to Zuccotti Park.
Today’s Econ Haiku:
Forever to score a goal
Two-minute drill? Naw