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The Real Housewives of Wall Street: Last December, the Federal Reserve
reluctantly agreed to release details of a crisis emergency loan program of
$3.3trn in which foreign banks were among the biggest beneficiaries and this
week, Rolling Stone magazine reported on a curious series of loans amounting to
The author of the Rolling Stone article is Matt Taibbi who won fame last year
a colourful article on Goldman Sachs, the investment bank: "The world's
most powerful investment bank is a great vampire squid wrapped around the face
of humanity, relentlessly jamming its blood funnel into anything that smells
like money. In fact, the history of the recent financial crisis, which doubles
as a history of the rapid decline and fall of the suddenly swindled dry American
empire, reads like a Who's Who of Goldman Sachs graduates."
The Fed had provided
details of more than 21,000 transactions with banks under several programs
dating from 2007, including the Term Auction Facility (TAF).
Barclays which acquired the US operations of Lehman Brothers in September 2008,
borrowed a cumulative $232bn from the TAF through various subsidiaries. Other
borrowers included Allied Irish banks, Bank of Ireland, Bank of Scotland, Royal
Bank of Scotland, Société Générale, Dresdner Bank and Bayerische
Landesbank and Dexia of Belgium
latest article, Matt Taibbi, relied on information passed to him by
the office of the socialist and independent US senator, Bernie Sanders of
The reporter says if you want to get a true sense of what the "shadow
budget" is all about, all you have to do is look closely at the taxpayer
money handed over to a single company that goes by a seemingly innocuous name:
Waterfall TALF Opportunity. At first glance, Waterfall's haul doesn't seem all
that huge - - just nine loans totaling some $220m, made through a Fed bailout
program. That doesn't seem like a whole lot, considering that Goldman Sachs
alone received roughly $800bn in loans from the Fed. But upon closer inspection,
Waterfall TALF (Term Asset-Backed Securities Loan Facility) Opportunity boasts a
couple of interesting names among its chief investors: Christy Mack and Susan
Taibbi says Christy is the wife of John Mack, the chairman of Morgan Stanley.
Susan is the widow of Peter Karches, a close friend of the Macks who served as
president of Morgan Stanley's investment-banking division. Neither woman appears
to have any serious history in business, apart from a few philanthropic
experiences. Yet the Federal Reserve handed them both low-interest loans of
nearly a quarter of a billion dollars through a complicated bailout program
that virtually guaranteed them millions in risk-free income.