POWIP Piece of Work In Progress – Former Abode of Dan Collins

More About Tim Geithner and Lehman . . .

from the Valukas Report:

As Lehman Brothers careened toward bankruptcy in 2008, the New York Federal Reserve Bank came to its rescue, sopping up junk loans that the investment bank couldn't sell in the market, according to a report from court-appointed examiner Anton R. Valukas.

The New York Fed, under the direction of now-Treasury Secretary Tim Geithner, knowingly allowed itself to be used as a "warehouse" for junk loans, the report says, even though Fed guidelines say it can only accept investment grade bonds.

Meanwhile, the Fed and Geithner both strongly oppose a congressional measure to authorize an independent audit of the central bank and its lending facilities. The provision passed the House but is under attack in the Senate, where Banking Committee Chairman Chris Dodd (D-Conn.) says he hopes to stop it.

Without an audit, the Fed is able to conceal the specifics of what it holds on its balance sheet. If the Lehman deal is any indication, the Fed is hiding billions of dollars in toxic loans on its books.

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The Valukas report found clear evidence that the New York Fed knew that Lehman was sending it garbage that it had no intention to market. In other words, the baskets of assets were created for the specific purpose of selling to the Fed for far more than they were worth.

Lehman knew it too: "No intention to market" was scrawled on one of the internal presentations about the assets. A separate bank, Citigroup, later characterized the assets as "bottom of the barrel" and "junk" when Lehman tried to push them their way, according to the report.

TARP was supposed to buy up "toxic assets," but it wasn't supposed to do so by paying face value for junk and rewarding the institutions that gamed the system, and Geithner should be gone.

Oh, and by the way, fellow suckers, Senior Congressional Staff are exempt from HCR provisions. Nice, huh? One of many, I am sure, hidden f*ck you "Easter eggs" hidden throughout this sludgislation.

Dan Collins

Dan Collins is a dude who blogs. He used to blog elsewhere. Now he blogs here.

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