Pattern In “Fed” Bail-Outs?

(Conspiracy Nation, 03/18/08) – A possible pattern in recent “Federal” Reserve bail-outs has been seen. Charts at http://www.save-a-patriot.org/files/view/whofed.html indicate who actually owns stock in the “Federal” Reserve. Among the primary stockholders listed are J.P. Morgan and Lehman Bros. J.P. Morgan, in turn, announced two days ago it would be acquiring the troubled Bear Stearns investment bank at $2 per share. Ordinary Bear Stearns stockholders are outraged at the low price being paid and are considering legal action. But not under discussion is how the Bear Stearns buyout, worked out in conjunction with the “Federal” Reserve, may represent a conflict of interest. Since J.P. Morgan, according to the charts mentioned, is a primary owner of the “Fed,” that means the “Federal” Reserve is hardly a neutral party in the arrangement.

Lehman Bros. is also listed as a primary owner of the “Federal” Reserve. Today's Wall Street Journal, on its front page, suggests that Lehman Brothers Holdings Inc. might be the next Bear Stearns. (“Lehman Finds Itself In Center Of a Storm,” by Susanne Craig). In December 2007, the “Fed” quietly tip-toed into something it calls a “Term Auction Facility.” It began in essence to purchase mortgage-backed securities which the “free market” did not want. It is hard to find good information on this startling “Fed” innovation. The unasked (and unanswered) question is: Is it legal for the “Federal” Reserve to purchase shaky securities from troubled Wall Street firms? To slide around this unasked question, the “Fed” is saying these “loans” are temporary, lasting only 28 days. But it has been suggested that these “temporary” “loans” will be continuously rolled over, making them effectively permanent. If Lehman Bros. is the next beneficiary of “Fed” largesse, the conflict-of-interest situation arises again: Lehman Bros. is listed as a primary owner of the “Federal” Reserve, which gives the appearance again of “one hand washing the other.”

Reportedly, the “Fed” has about $800 billion to play with. It earns money by dealing in U.S. Treasury bonds. But Wall Street woes caused by wild gambles involve trillions of dollars. So there is seemingly a limit to how many mortgage-backed securities the “Fed” can swallow. Except one report on NPR has mentioned that, if the “Fed” goes beyond $800 billion, then the U.S. taxpayer will be footing the bill for over-runs. There is even talk among some Congress-persons of having the government begin to guarantee individual mortgages. There are smoke and mirrors obscuring the truth of these matters. Much of the financial press is intimately linked with Wall Street and so grinds out sheafs of distracting, confusing “news” reports. Many U.S. politicians are also in the pocket of Wall Street and they too have been less than forthright.

Besides what looks like a conflict-of-interest in “Fed” involvement with J.P. Morgan and possibly soon with Lehman Bros., it is worth recalling a past “economic crisis” in 1992. Back then, presidential candidate Bill Clinton promised that, once elected, he would “focus like a laser on the economy.” But then magically, in January of 1993, the “economic crisis” had disappeared from news reports. So Bill Clinton did not have to “focus like a laser on the economy” after all. This “big crisis” situation is again being replayed in an election year, this time with Hillary Clinton as the candidate. One wonders, Will the “big crisis” have disappeared come January 2009?

To spell it out: The Wall Street “big crisis” now underway might boil down to a disguise for money to be looted from the “Fed” and into the vaults of J.P. Morgan and Lehman Bros. Ben Bernanke is the “inside man.” He tells his buddies, “I will leave the back door unlocked.” Later, the police sergeant lines up the suspects. Bernanke is in the line-up. But the crowd is enticed by Bernanke's beard. “Reminds me of the 1960s!” they sigh. “Ah, remember how idealistic we were?” So Bernanke is obviously “a brother” and could not possibly be part of the notorious Wall Street gang. Bernanke smirks as he is let go. But the veteran police sergeant retorts, “That's all right, Benny. You'll screw up. They always do. And when that happens, I'll be around.” (Speculation only.)

Conspiracy Nation

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