Lenders Of Last Resort...To Themselves

Lender Of Last Resort... To Themselves
With US Taxpayers' Dollars!
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By Randolph Buss | March 2008

Notes:
Markets: I do not foresee the BEAR going away anytime soon right now. The crisis has not ended— it's only taking a rest. In fact, Goldmans Sachs and JP Morgan have stepped right up to take advantage of the Fed's lending window. I believe the DAX may be headed to 6000 as stated last week and DOW 11,000 is a target and I foresee a weakness throughout 2008 in major markets.

ALL COMMODITIES: My warning from 3 days ago should/would have been well heeded— the parabolic run-up in prices was unsustainable ... volatility in gold, silver and oil have seen large corrections. Most likely this is due to hedge fund coverings as the crisis takes effect and some cashing out was required to cover margin calls. I DO NOT believe that these were due to markets believing that inflation is under control. I address this further in the blog below.

INVEST: I remain long oil, gold, silver, alternative energy, agro, petrol energies.

In case you may have not fully understood the slyness of what the Fed is doing, it has now by-passed its own lending policies and allowed primary dealers the same reduced borrowing rate as for commercial banks. Under a private Fed— which is under NO control mechanism of the real US Federal government— it has in fact decided to simply save its own neck by mandating policy for which a) it saves itself, and b) the US taxpayer shall pay. How is this possible? Because the Fed is a private company owned by many of those listed as Primary Dealers ... so in company terms, the Board of Directors has voted to give itself (each Primary Dealer member) a billion dollar raise, or some multiple or portion thereof[[sounds like under BB, they are running riot: normxxx]].

In deciding to charge securities firms such as Goldman Sachs Group Inc., Morgan Stanley and Lehman Brothers Holdings Inc. the same rate as commercial banks, the Fed used 1920s-era authority provided by Congress to set interest rates that the law says "shall be fixed with a view of accommodating commerce and business," the Fed staff official said.

List of the Primary Government Securities Dealers Reporting to the Government Securities Dealers Statistics Unit of the Federal Reserve Bank of New York:

BNP Paribas Securities Corp. Banc of America Securities LLC Barclays Capital Inc. Bear, Stearns & Co., Inc. (bankrupted ... bought by JP Morgan) Cantor Fitzgerald & Co. Citigroup Global Markets Inc. Countrywide Securities Corporation Credit Suisse Securities (USA) LLC Daiwa Securities America Inc. Deutsche Bank Securities Inc. Dresdner Kleinwort Wasserstein Securities LLC. Goldman, Sachs & Co. Greenwich Capital Markets, Inc. HSBC Securities (USA) Inc. J. P. Morgan Securities Inc. Lehman Brothers Inc. Merrill Lynch Government Securities Inc. Mizuho Securities USA Inc. Morgan Stanley & Co. Incorporated UBS Securities LLC.

The Federal Reserve Bank is a private company, authorized in 1913 by a Congressional Act called the Federal Reserve Act of 1913. In a very real sense, the US Government under President Woodrow Wilson outsourced the control of U.S. money and banking to the bankers themselves. Some of the Fed's large (officially) non-voting stockholders as of 2006 are:

• Citibank


• Bank of America


• UBS Warburg


• JP Morgan/Chase


• Wells Fargo

A true lender of last resort .... too f* right. Video on the Fed

  M O R E. . .

Normxxx    
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