No wonder Goldman was able to withstand the panic period that took Lehman Brothers down. They were being propped up by the Fed.
The $80 billion initiative, called single-tranche open- market operations, or ST OMO, made 28-day loans from March through December 2008, a period in which confidence in global credit markets collapsed after the Sept. 15 bankruptcy of Lehman Brothers Holdings Inc, reports Bloomberg.
Units of 20 banks were required to bid at auctions for the cash. They incredibly paid interest rates as low as 0.01 percent that December, when the Fed’s main lending facility charged 0.5 percent. For a large portion of that period, the Fed Funds rate was over 2.00% Got that? Goldman and the other banksters could borrow at 0.01% and loan out in the Fed Funds market at over 2.00%. ---all in secret.
Here's more from Bloomberg:
“This was a pure subsidy,” said Robert A. Eisenbeis, former head of research at the Federal Reserve Bank of Atlanta and now chief monetary economist at Sarasota, Florida-based Cumberland Advisors Inc. “The Fed hasn’t been forthcoming with disclosures overall. Why should this be any different?”
Congress didn't even know about this $80 billion dollar bailout of the banksters:
Congress overlooked ST OMO when lawmakers required the central bank to publish its emergency lending data last year under the Dodd-Frank law.Just something else for Ron Paul to put on his list, when he holds this hearing.
“I wasn’t aware of this program until now,” said U.S. Representative Barney Frank, the Massachusetts Democrat who chaired the House Financial Services Committee in 2008 and co- authored the legislation overhauling financial regulation.