Featured Stories World News Commentary Money Watch Multimedia Prison Planet U.S. News Science And Technology

Fed’s Rules Let Brokers Turn Junk Into Cash at Height of Financial Crisis

  • Print The Alex Jones Channel Alex Jones Show podcast Prison Planet TV Infowars.com Twitter Alex Jones' Facebook Infowars store

Matthew Leising
Bloomberg
April 2, 2011

At the height of the financial crisis, the Federal Reserve allowed the world’s largest banks to turn more than $118 billion in junk bonds, defaulted debt, securities of unknown ratings and stocks into cash.

Collateral of those asset types made up 72 percent of the total $164.3 billion in market-rate securities pledged to the Fed on Sept. 29, 2008, two weeks after the bankruptcy of Lehman Brothers Holdings Inc., according to documents released yesterday. The collateral backed $155.7 billion in loans on the largest day of borrowing from the Primary Dealer Credit Facility, which was created in March 2008 to provide loans to brokers as Bear Stearns Cos. collapsed.

“The fact that the Fed was willing to accept that collateral was indicative that collateral was very hard to come by at the time,” said Craig Pirrong, a finance professor at the University of Houston. It also highlights “the seriousness with which the Fed viewed the situation,” he said.

Fed spokesman David Skidmore declined to comment yesterday. No public money was lost in the Fed’s emergency lending programs, Chairman Ben S. Bernanke testified to the Senate Banking Committee in July, 2010. The loans didn’t represent permanent cash given to the dealers and had to be repaid the next day.

Full article here

Stock up with Fresh Food that lasts with eFoodsDirect (AD)

Feds Rules Let Brokers Turn Junk Into Cash at Height of Financial Crisis  260310banner2

This article was posted: Saturday, April 2, 2011 at 2:30 am





Infowars.com Videos:

Comment on this article

Comments are closed.

Watch the News

FEATURED VIDEOS
Rick Perry's Border Solution is A Bait and Switch See the rest on the Alex Jones YouTube channel.

The UN Treaty That Created Violent Drug Gang Culture Revealed See the rest on the Alex Jones YouTube channel.

© 2013 PrisonPlanet.com is a Free Speech Systems, LLC company. All rights reserved. Digital Millennium Copyright Act Notice.