Photo: The Daily Bail
Ever since 2008, we’ve been waiting for juicy details about the bailout.Which banks were given emergency loans? How much they were given? Which firms were repeat offenders?
Until yesterday, all we really knew was that trillions had been lent and spent.
But finally, on December 1st, the Fed released a trove of documents that reveals how it attempted to prop up an economy teetering on the edge of complete collapse by spending big in the banking sector.
The loans amounted to nearly $9 trillion in short-term loans: 'an amount that is more than half of the national economic output of the United States,' according to the New York Times. The bulk of the money went out during 2008, at the peak of the crisis.
Barclays Capital, which on September 18th 2008, was handed almost $48 billion through the PDCF loan program.
The loan was 'tied to its acquisition of pieces of Lehman,' according to the WSJ. Morgan Stanley came in second with a $47.6 billion overnight loan 8 days later.
On October 1st 2008, the Fed dispersed $300,000 to Boston-based investment bank State Street Advisors through the AMLF facility - the smallest individual loan out of the central bank's emergency lending program. State Street was a major loan recipient though - this tiny loan is just one of many.
Goldman obtained 84 loans worth almost $600 billion through the emergency overnight PDCF loan program.
The top beneficiaries of the MBS facility were far and away Deutsche Bank and Credit Suisse, from which the Fed purchased $293 and $287 billion in MBS respectively.
We're not surprised the Fed wanted to keep that one under wraps... as well the fact it gave generously to RBS, BNP and BarCap with taxpayer dollars through TAF.
Our government's bailing out foreign banks is the last thing taxpayers want to hear.
They both borrowed $15 billion on three separate occasions from TAF, the 'first and longest-lasting' emergency facility initiated by the Fed in '07.
The TAF aimed to let banks obtain cheaper funding without risking the stigma of loans from the central bank's discount window.
Companies like McDonalds, Harley Davidson, and Verizon all got loans through the Commercial Paper Funding Facility (CPFF), the short-term i.o.u.'s that firms can't live without if they want make payroll and pay vendors.
JPMorgan took PDCF loans only 3 times.
(NB: Their delinquent child, Bear Stearns tapped the facility daily from April to June of 2008). The PDCF program began in March '08, lasted 23 months and was effectively a cheap overnight loan system very similar to the Fed's discount window (details of which are still being suppressed.)
Goldman Sachs tapped it 84 times; Morgan Stanley tapped 212 times in one year; Citi tapped it daily until April 2009; Bank of America tapped it every trading day from Sept. 18, 2008 to May 12, 2009 - over 1,000 times.
On the 20th of December, 2007, the Fed gave out its first emergency loan. The First National Bank of Nevada received $10 million from the TAF facility.
The Wilimington-based fund received a $10.9 million loan on the 29th of March this year, from the TALF facility. Obviously this is the last recorded emergency loan that we know of, since 'discount window and open market operation transactions after July 21, 2010, will be posted with a two-year lag,' the Fed explained.
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