G.e. And Jpmorgan Got Lots Of Fed Help In ’08

[interestrateripoff]

http://www.nytimes.com/2010/12/06/business/economy/06fed.html?_r=1&ref=business

Newly disclosed records show that during the 2008 financial crisis, the Federal Reserve essentially lent $16.1 billion to General Electric by buying short-term corporate i.o.u.’s from the company at a time when the public market for such debt had nearly frozen.

And on Sept. 15, 2008, the day Lehman Brothers filed for bankruptcy protection, JPMorgan Chase received a $3 billion loan from the Fed. The loan was extended under one of several Fed programs tapped by the Wall Street bank, one of the more robust financial institutions to weather the crisis.

The two companies received help even as their chief executives, Jeffrey R. Immelt of G.E. and Jamie Dimon of JPMorgan, sat on the nine-member board of the Federal Reserve Bank of New York.

Neither executive was involved in creating the emergency programs, which were approved by the Fed’s board of governors in Washington. Both companies also disclosed that they were among scores of institutions that received support from the Fed. Nevertheless, some policy experts expressed discomfort with the situation.

“In my view, it is an obvious conflict of interest for C.E.O.’s of banks and large corporations who serve on the Fed’s board of directors to have received cheap loans from the Fed,” Senator Bernard Sanders, a Vermont independent who wrote the legal provision requiring the Fed to make the disclosures, said in a statement on Sunday.

“While they got a huge amount of government support, small businesses are going bankrupt because they can’t receive affordable credit, workers are losing their homes to foreclosure, and consumers are being charged 25 percent to 30 percent interest rates on their credit cards by the very same banks that were bailed out,” he added.

Still at least the big boys remain in business.

[Errol]

JP Morgan needed help with silver shorts. Probably.

[Redcellar]

Too big to go bust.

Even GM didn't technically go bust. It's still around. Just ask and ye shall receive. :angry:

[Guest spp]

JP Morgan needed help with silver shorts. Probably.

“Errol will you tell American people to whom Fed Res lent $2.2 trillion of their dollars?”

I prefer the $13 silver days. Someone please naked short it...anyone....hello...please??

[Shroud]

I have read the definition on shorting, but could someone explain how the above will actually affect the prices? (still learning).

[Guest spp]

Nice Chris.

Clued up Physical hoarders v Industrial users v Bullion banks

During a currency/trade war.

You were all warned!

[interestrateripoff]

Ok, here's the deal.

There is no massive above-ground reserve of silver in existence, apart from the COMEX futures exchange which holds about 100m ounces.

This is significant because there is no reserve which can be sold into the market to fulfill physical demands for the metal.

No Central Bank has stockpiles of silver.

Next, consider that the short position in silver equates to between 500m? and 3.5bn? ounces of silver.

This short position is silver that has been sold as paper where the seller does not own the physical metal. Buyers of this "paper silver" are effectively taking a bet that the

seller of the paper silver will pay them the price difference between what they buy and sell for (this is called cash settling).

If the buyer demands physical metal instead of cash, (this happens in the futures market where the buyer "stands for delivery") then the seller of the paper silver has to find the physical metal to deliver it. The 500m Oz short position is estmated at something like 6 months of the entire world production of silver.

Typically only a few of the paper silver buyers "stand for delivery", so the sellers know they can sell effectively unlimited quantities of paper and keep the price down. However, the paper games have reached such proportions that a few notable large buyers (e.g. Eric Sprott) have spotted that by demanding the metal they can force the sort sellers of paper silver to find the physical metal.

Finding the physical metal in a period where American Silver Eagle sales just hit a record, Physical silver ETFs are launching all over the place and hedge funds and large investors are sensing that there is not enough metal to go round: well, it could be astonishing to watch them scramble to find the metal.

Most silver holders know know about this, and aren't likely to give up their silver metal lightly; let's say $100 per ounce? That might convince me to sell some. But, knowing the paper sellers have to find metal at any price to fulfill their obligations means supply of metal to the market may be very restricted

So the only way they can cover their position because it's so large is to create more bits of paper with promises of silver and hope no one ever asks for it? Whilst they scramble to find what physical silver they can to deliver to those that want it?

I can't see how this scam cannot possible fail especially if you have say the US taxpayer and Fed giving you unlimited quantities of money to stay solvent. Seems like a top plan.