March 27, 2008

FLASH: Senate to investigate Bush Administration meddling into Federal Reserve actions during Bear Stearns shotgun wedding fiasco


As you all know the Federal Reserve is supposed to be independent.

Yeah, right.

Ben Bernanke's head is so far up Goldman Sachs CEO Hank Paulson's ass (oops, I mean US Treasury Secretary Hank Paulson's ass) that they might as well be the same person.

The truth will eventually come out as to Paulson and Bush's role in the Bear fiasco, their commitment with no Congressional approval of $29 billion in taxpayer funds to bail out Bear Stearns, and the ongoing coordination between the Fed and the Treasury to bail out Paulson's investment banker gambler buddies using taxpayer money.

And now, shockingly, our corrupt Congress is going to investigate this matter. What, didn't Grassley get his hush money this month?

Grassley Asks Whether Paulson Pushed Fed Into Bear Stearns Deal

The top Republican on the Senate Finance Committee said he wants to know whether Treasury Secretary Henry Paulson pressured Federal Reserve Chairman Ben S. Bernanke into brokering the deal that allowed the sale of Bear Stearns Cos. to JPMorgan Chase & Co.

Iowa Senator Charles Grassley, who will be involved in one of two congressional inquiries into the deal, asked in an interview with Bloomberg Television yesterday whether Paulson pushed Bernanke into authorizing the $29 billion loan needed to make the sale or if the agreement was the result of an ``independent Fed decision.''

``We want to know the extent to which Paulson was involved in the deal,'' Grassley said. ``The extent to which this was a political decision by a political branch of government that was urged on the Fed is very important to me -- that that not happen.''

23 comments:

mairca izda debol said...

US taxpayers get $29B worth of risk and no possibility of profits. What a deal.

Paul E. Math said...

This kind of backlash will constrain the Fed's attempts to expand the money supply.

Bernanke may have some creative ideas as to how to fight deflation but since all of them screw responsible taxpayers and savers and some are becoming aware of that Bernanke will have some serious problems.

The money supply is contracting due to this process of deleveraging and the Fed can do very little about it. Deflation?

coveredwagon said...

Let's hear it for "Bananas" Bernanke! Our nation's finances are, well, just plain, BANANAS! Among many others, we can thank "Bubbles" Greenback, but where would we be without BANANAS?!?!?

DOPES said...

DUH, DON'T YOU THINK THE CLUE IS BUSH AND PAULSON GET ON TV RIGHT AFTER BERNANKE EVERY TIME ANOTHER SHOE FALLS OF THE CATERPILLAR'S LEGS???

DOPES!!!

Anonymous said...

Gee Grassly is doing a good job and he's an incumbent, would you vote to throw him out Keith! Most often your broad, sweeping, generalized statements undermine the good you do on this blog.

Anonymous said...

In an administration that holds conflicts of interest in high esteem, Paulson is on a par with Cheney.

These corporate puppet's blatant manipulation of the federal government can and should be prosecuted as traitorous conduct.

Paulson, Cheney and the rest of their thieving buddies are writing checks that their asses can't cash.

Payback is gonna be a bitch...

OFF WITH THEIR HEADS said...

Off with their Heads!

Do it NOW.

Anonymous said...

"We support a stromg dollar policy"

<*snicker*>

Anonymous said...

Be proud of the new Democratic majority you elected


CNN
With this in mind, some economists believe the Dodd-Frank proposal could cost more than $100 billion. This is obviously a pretty large number and because of this, there is a debate over whether taxpayer money should be used to bail out the relatively small percentage of homeowners that have run into problems paying their mortgages.

Sen. Barack Obama is one of the co-sponsors of Dodd's bill, and his rival for the Democratic nomination for president, Sen. Hillary Clinton, said she also supports it.

However, Clinton proposed a step beyond his plan Monday. She suggested having the FHA become a temporary buyer of so-called "underwater mortgages" -- loans where the principal is now more than a home's value.

Clinton has also talked about a new housing stimulus package to provide $30 billion directly to states and local governments to buy foreclosed or distressed properties. The cities and states could then resell the properties to low-income families or convert them into affordable rental housing.

Sen. John McCain, the presumptive Republican presidential nominee, also expressed a willingness to look at Democratic proposals in a speech about the economy Tuesday.

"I will not play election year politics with the housing crisis," he said. "I will evaluate everything in terms of whether it might be harmful or helpful to our effort to deal with the crisis we face now."

McCain cautioned he wasn't ready to sign onto a bailout, though.

"I have always been committed to the principle that it is not the duty of government to bail out and reward those who act irresponsibly, whether they are big banks or small borrowers," McCain said.

But Zandi, who is an economic advisor to McCain, said he believes McCain will support some kind of assistance to homeowners and borrowers.

"I think he...understands that the problems in the housing market are broad and deep and threaten the broader economy, and that there may be a role for the federal government to stem those losses," said Zandi, who cautioned he was not speaking on behalf of the McCain campaign.

Stanford Group's Valliere also said he doesn't believe McCain will be able to resist the growing tide to support federal help to troubled homeowners.

"You have to respect McCain's intellectual honesty on this but the Frank-Dodd bill is a steamroller that can not be stopped," he said.

traysea said...

I love this blog and proudly wear a tin foil hat when appropriate but this whole bitch and moan session around the "shotgun" wedding has to be a joke - right? You guys actually think it's about Bear Sterns or paying back the rich execs of wall street?

Do you guys realize the meltdown would of hurt all the common people? We aren't out of the wood yet either.

I'll give you this.. if you want to investigate all the BS around many presidents and congress etc ( federal reserve etc) playing with the free market -- I'll give you that..

We're in the mess b/c of the former administrations (and the ones before that did similar things).. but seriously.. are we really wanting to see Wall Street meltdown right now to depression times?

If you do, then I feel I wouldn't want you as my neighbor.

However, if the essence of this post is to shame on all our crappy leaders for getting us to this breaking point (oh and all the multi-national corps and other countries are also to blame)....

the whole thing is a shame -- yep it's a mess - but why waste energy thinking someone is going to jail or is going to be impeached?

As a taxpayer, I am pissed to have to pay but the alternative was worse.

It's amazing how the media is downplaying the crisis for what it is.

Peace and good luck..
Traysea

Anonymous said...

The bad odor of Ben Bern's hasty and aggressive intervention to facilitate the BSC deal could be smelt thousands of miles away. He was obviously using taxpayers' money to save someone's ass. But the fart was too big to be hushed.

It is a fact now that a ranking GOP Senator has alluded to a possible government tampering with the Fed.

But regardless of the outcome of any upcoming Congressional scrutiny, the Fed's "independence" is now questioned and the Fed's image is tarnished.

The least Ben Bern could do now is to resign.

MAX

sucker said...

for that piker sum they get trillions in "bogus" paper ??????????????????????????/

Anonymous said...

The only thing that I want to know is how much money the Congressmen and Senators have taken in (bribes) PAC money from the Banks/Lenders MBA and others involved with Mortgages. I want to know how much each one got paid, before I will listen to anything they have to say about "reform".
I am not impressed with a corrupt group of senators posing for the camera.

How about a few replacement shows on the HGTV channel.

Flip this house.>Flip this Senator
Buy Me.>Buy that Congressman
What's it worth?>What's the vote worth?
Designed to Sell.>Designed to obey.
Divine Design.>Divine control.

Anonymous said...

On May 23, 1933, Congressman, Louis T. McFadden, brought formal charges against the Board of Governors of the Federal Reserve Bank system, The Comptroller of the Currency and the Secretary of United States Treasury for numerous criminal acts, including but not limited to, CONSPIRACY, FRAUD, UNLAWFUL CONVERSION, AND TREASON.

Full article at
http://www.liveleak.com/view?i=db9_1206632416

Bill in AZ said...

traysea said:
As a taxpayer, I am pissed to have to pay but the alternative was worse.

You are stone cold wrong.

If you weren't too lazy to spend the thousands of hours it takes to truly understand real world economics and the machinations of the central banks, you would know this. Instead, you spout the brainwashings you have grown up with, and the crap you've read in textbooks your whole life. On the surface it sounds very sensible and compassionate to say "the alternative is worse" or "who wants an economic meltdown?". Believe me, the VERY LAST thing that I (or anyone here) wants is for the average American citizen to suffer at the hands of these criminals. That is exactly what drives 99% of the people on this site, and their passion to do something about it. What you fail to understand is that the "alternative" you mention (basically, a violent free market correction) is exactly the best possible thing for Americans in the long run. There is currently incredible malinvestment in the system, and the price MUST be paid. When these banks are bailed out, YOU AND I pay for it. If they fail, THEY pay for it. Of course there will be collateral damage. A depression will probably ensue. However, if the government kept it's socialistic hands out of it, that depression would be over in less than a year, the system would be purged, and most of the malinvestments absorbed by THOSE MOST RESPONSIBLE FOR THEM. In the scenario that you champion, we still get the depression, but instead it lasts for 10 years as the cost is slowly extracted from the average American instead.

It is precisely because of the fantastic inability of the average person with average intelligence (i.e., people like you) to understand what is really happening, that these bankers are able to get away with this crap over and over and over and over again.

Pick up some books, brother.

Anonymous said...

Be proud of the new Democratic majority you elected

And be proud of electing the Republican majority and President that started/accelerated getting us to where we are today.

Refuse to buy overpriced said...

Hey bill in az,

Best post I've seen yet on HP.

Refuse to buy overpriced said...

Truly discouraged to see that Zandi is a McCain adviser.

Don't listen to him John! You're courage has served our country well for years, we need it now more than ever.

Anonymous said...

And the Dog,and Pony Show gets a rollin.
The Voters will buy it up like overpriced houses in Vegas with helocs.
Keep swallowing that crap - Morons.
Senate my ass.

SHAKSTER

Anonymous said...

Senate "investigation" will be another dog and pony show to con the sheeple. The Senate is nothing but a bunch of bought and paid for Wall Street poodles.

Lost Cause said...

There is 15 years of interest on the $29B, and rollover costs I suppose. All of it was borrowed money.

Lost Cause said...

traysea said:
As a taxpayer, I am pissed to have to pay but the alternative was worse.

Who really thinks that the dreaded unwinding is going to stop happening because of this? It is just postponing the inevitable. It is better to get things over with, than to suffer this slow water torture.

Anonymous said...

If the industry that marketed these loans went to the Courts( based on current laws they would lose ). The bail-outs are a attempt to avoid what would be a legal nightmare .

Also there would be so many borrowers that could be prosecuted for loan fraud that it isn't funny .

The bail-outs are a attempt to avoid the legal system that would create the biggest lawsuits and criminal proceedings in history .