Saturday, April 10, 2010
The Fed “Owns Credit-Default Swaps ... On Debt Owed by California and Nevada. So the Fed Would Profit If One of Those States Defaulted on its Debt.”
In the you-can't-make-this-stuff-up department, NPR points out:
As part of the bailouts of AIG and Bear Stearns, the Federal Reserve Bank of New York spent more than $70 billion to buy toxic assets the companies owned. Last week, prompted by a lawsuit filed by Bloomberg News, the Fed finally told the world exactly what it bought.
The Fed now owns loans to Hilton hotels in Hawaii, Puerto Rico, Malaysia and Trinidad. It owns loans to the Miami airport, and the Civil Opera House in Chicago.
It also owned a loan to Crossroads Mall in Oklahoma City. Then, when the owners of the mall couldn't make the payments, the Fed foreclosed. So now it owns the mall, which includes a Chick-fil-A and an AMC theater.
The mall's for sale — cheap! "This lender owned distressed asset ... can be purchased at far below replacement cost," this listing says.
The Fed also owns credit-default swaps — basically, insurance policies that pay off if a borrower defaults on a loan. It holds swaps on the debt of Florida schools, and on debt owed by California and Nevada. So the Fed would profit if one of those states defaulted on its debt.
Granted, the Fed holds a very small percentage of outstanding CDS.
But it is a fitting symbol of the fact that the states - and American people's interests - are not necessarily aligned with the Fed's interests.
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what is the difference between an insurance
ReplyDeleteinstrument and a lottery? basically. with
insurance you are aquiring proportional financial protection against a "personal" loss.
as in you own or are the thing being insured.
it is not a money making, for profit (ph)
actiity. insurance.
.
lotteries are different, they are instruments
associated with something that has been called
gambling. there is a difference and the fed is
prohibited from gambling in lotteries. they know it and can't keep the secret. period.
end of story. they have commited a crime against the currency, or, treason. and....
so what is new?
.
but some things are "too big to.." sweep under
the carpet because they are too big.
.
that is what! they have pissed in the well or
...worse.
words are the building blocks of narratives.
insurance my ass.
http://www.cuttingthroughthematrix.net/radio/Alan_Watt_CTTM_Live_on_RBN.html
ReplyDelete.
alan watt
.
programing....
WTF?!
ReplyDeleteWho sold those CDS? Do they have the cash to make good if CA and NV default?!
The answer likely is HELL NO!
Which means if CA or NV default, then the US gov't will have to backstop the entities that sold said CDS's... Which means it will be printing money to bail out a company so it can pay the gov't what it owes!!!
What did you expect from Barak 'I got my campaign funds from bankers' Obama and his Chief of Staff Raham 'I got my personal fortune from bankers' Emanuel?
ReplyDeletethe Fed is also apparently betting against the American consumer since it owns credit card CDS from cap1 and bank of america too!!!
ReplyDeletehttp://blog.creditlime.com/2010/05/16/sicily-2/