6 Shocking Revelations About Wall Street's "Secret Government"

[marmar]

AlterNet / By Les Leopold

6 Shocking Revelations About Wall Street's "Secret Government"
Top officials willfully concealed the true extent of the 2008-'09 bailouts from Congress and the public.

November 30, 2011 |


We now have concrete evidence that Wall Street and Washington are running a secret government far removed from the democratic process. Through a freedom of information request by Bloomberg News, the public now has access to over 29,000 pages of Fed documents and 21,000 additional Fed transactions that were deliberately hidden, and for good reason. (See here and here.)

These documents show how top government officials willfully concealed from Congress and the public the true extent of the 2008-'09 bailouts that enriched the few and enhanced the interests of giant Wall Streets firms. Here’s what we now know:

* The secret Wall Street bailouts totaled $7.77 trillion, 10 times more than the $700 billion Troubled Asset Relief Program (TARP) passed by Congress in 2008.

* Knowledge of the secret bailout funds was not shared with Congress even while it was drafting and debating legislation to break up the big banks.

* The secret funding, provided at below-market rates, gave Wall Street banks an additional $13 billion in profits. (That’s enough money to hire more than 325,000 entry level teachers.) ..................(more)

The complete piece is at: http://www.alternet.org/economy/153274/6_shocking_revelations_about_wall_street%27s_%22secret_government%22/

[newfie11]

1. But of course none of them will see the inside of a jail cell n/t

[PETRUS]

2. Just read this & was about to post it myself! K&R

[geckosfeet]

3. "The entire banking system should have been reorganized from top to bottom"

The last three "shocking revelations" - demonstrating that congress and the senate are less relevant in regulating Wall Street than say, the treasury secretary, the federal reserve and financial sector executives.

Yes, Wall Street should be regulated. It is clear, for better or worse, the health the US and world economies are intimately connected to it. A business sector that has such a consequential impact on the economies of the world economy needs to be regulated.

6 Shocking Revelations About Wall Street's "Secret Government

• The secret loans financed bank mergers so that the largest banks could grow even larger. The money also allowed banks to step up their lobbying efforts.


• While Henry Paulson (Bush's Secretary of the Treasury) was informing Congress and the public that only minor reforms were needed to protect Fannie and Freddie from collapse, he met secretly with leading Wall Street hedge fund managers -- among them his former colleagues at Goldman Sachs -- to alert them that he was about to nationalize the giant mortgage companies – a move that would eradicate nearly all the stock value of the companies. This information was enormously valuable because it allowed these hedge funds to short Fannie and Freddie and thereby make a fortune.


• While Timothy Geithner was head of the NY Federal Reserve, he argued against legislative efforts by Senator Ted Kaufman, D-Delaware, to limit the size of banks because the issue was “too complex for Congress and that people who know the markets should handle these decisions," Kaufman recalls. Meanwhile, Geithner was fully aware of the enormous secret loans while Senator Kaufman was kept in the dark. Barney Frank, who was authoring key bank reform legislation was also not informed of the secret loans. No one in Congress was told.

As many of us suspected, all the big banks were on their knees begging for help – secretly – while telling their investors, the public and Congress that all was well. They had gambled and lost. Under the rules of ideal capitalism, they should have suffered some "creative destruction," and seen their shareholder value eliminated through bankruptcy, and their managers replaced. The entire banking system should have been reorganized from top to bottom as well. Instead, these colossal failures were secretly rewarded.

[bulloney]

6. You hit it, geckosfeet.

It's not enough to punish and leave it at that.

The entire system is broken and corrupt. It needs checks and balances that reach to our government itself to prevent this "revolving door" we currently have where people from Goldman Sachs and the like are appointed to agencies that are supposed to regulate the banks. Classic fox and henhouse.

ALL activities by banks using public money must be open. Violations must result in punishments severe enough to deter corrupt activities and carried out.

[geckosfeet]

8. Well, I was just quoting the author. Nonetheless - we all agree.

[Frustratedlady]

4. Let me think...why did Martha spend time in prison? Hmmm.

Why did "they" go after Eliot Spitzer? Didn't he know too much?

I'm sure there are more incidents that are connected to these WS clowns, in some way or other. Am I wrong?

[xchrom]

5. Recommend

[groovedaddy]

7. Congressional oversight with the Fed has ALWAYS been an issue. This is a culmination of un-checked

power.

[russspeakeasy]

9. Thanks marmar.