Banks Make Billions Printing/Lending Money When They Don’t Have To Worry About Being Paid Back!

Banks Make Billions Printing/Lending Money When They Don't Have To Worry About Being Paid Back! - Miller on the MoneyImagine a bank creating unlimited funds to lend, earning billions in fees and interest, with no worries about the borrower defaulting. It’s happening today – big time!

This week’s reading stack began with a Wolf Street article, “Deep-Junk-Rated Carvana gets $4.5 Billion from New Investors, after Shares Collapsed by 79%….”.

Despite regularly losing money and a deep junk bond rating, they managed to raise $4.5 billion through stock and bond offerings. Moody’s downgraded Carvana’s credit rating. Wolf Street explains:

“What Moody’s is saying is that despite large leverage, persistent losses, and persistent negative cashflows, Carvana has been able to bamboozle public markets into forking over more money to keep it afloat, and that ability to extract money from new investors to pay off existing investors is why the outlook is “stable” after today’s downgrade.”

The big banks are co-conspirators. Why?

Wolf Street answers:

“After the junk-bond offering (Carvana) will have more debt….

But for now, no problem: Investors are still chasing yield and they’re still buying the dips, and they’re still smelling an opportunity to sell those shares to the greater fool, hoping that the world hasn’t run out of greater fools yet.”

The Casino Banks will peddle their stocks and bundle their debt into high yield, fee-based mutual funds, telling the market they are safe, not to worry – passing the credit risk to a greater fool.

My reading stack didn’t let me down. The Carvana situation is a pimple on a gnat’s behind when you look at the big picture. This Wall Street on Parade (WSOP) article tells us:

“…. Over time, the Fed has also been granted a supervisory role by Congress over Wall Street’s megabanks alongside its ability to bail them out when its crony brand of supervision fails. There was an epic failure in the Fed’s supervision of the Wall Street megabanks in the leadup to the 2008 financial crash and the September 2019 repo blowup. In both cases, the Fed made trillions of dollars in cumulative loans at below-market interest rates to the trading units of these megabanks in order to resuscitate them and cover up its own failure to properly supervise the banks.

The convulsions the stock market (recently) experienced…that investors will continue to witness in the days ahead, are inextricably tied to the failure of Congress to strip the Fed of a supervisory role over these global megabanks.

There is no better snapshot of the Fed’s failure as a banking supervisor than this…the Office of the Comptroller of the Currency’s Report on Bank Trading and Derivative Activities. Table 14…that the 25 largest bank holding companies in the U.S. are sitting on $234 trillion notional (face amount) in derivatives but just five bank holding companies are responsible for $200.18 trillion of that exposure or 86 percent of the total. Those mega bank holding companies are: JPMorgan Chase, Citigroup, Goldman Sachs, Morgan Stanley and Bank of America.

The table clearly shows that the most dangerous form of these derivatives – the same credit derivatives that blew up Wall Street in 2008 – are also concentrated at those same five bank holding companies.”

Kudos to Pam and Russ Martins for their investigative reporting. They have provided us with tons of data, and many sad stories about being stonewalled, as the Fed refuses to comply with Freedom Of Information Act (FOIA) requests for information.

These banking holding companies are also the owners of the Fed. They are hiding the information from the public and Congress, while receiving trillions in bailout dollars, causing inflation to skyrocket.

In January they reported, There’s a News Blackout on the Fed’s Naming of the Banks that Got Its Emergency Repo Loans; Some Journalists Appear to Be Under Gag Orders.

“…. The Federal Reserve released the names of the banks that had received $4.5 trillion in cumulative loans in the last quarter of 2019 under its emergency repo loan operations for a liquidity crisis that has yet to be credibly explained. Among the largest borrowers were JPMorgan Chase, Goldman Sachs and Citigroup, three of the Wall Street banks that were at the center of the subprime and derivatives crisis in 2008 that brought down the U.S. economy. That’s blockbuster news. …. Not one major business media outlet has reported the details of the Fed’s big reveal.

…. On October 24, 2019, we reported the following:

“The New York Fed will now be lavishing up to $120 billion a day in cheap overnight loans to Wall Street securities trading firms…. In addition, it is increasing its 14-day term loans to Wall Street…. Those term loans…have been occurring twice a week,…bringing the total weekly offering to an astounding $690 billion.

…. If the same Wall Street firms are getting these loans continuously rolled over, they are effectively permanent loans. (That’s exactly what happened during the 2007-2010 Wall Street collapse: some teetering Wall Street casinos received, individually, $2 trillion in cumulative loans that were rolled over for two and one-half years – without the authorization or even awareness of Congress or the American people. One bank, Citigroup, received over $2.5 trillion in Fed loans, much of them at an interest rate below 1 percent, at a time when it was insolvent and couldn’t have obtained loans in the open market at even high double-digit interest rates.)”

…. Obviously, the banks that were borrowing the largest sums on a perpetual basis from the Fed were the “chronically illiquid.” JPMorgan Chase and Citigroup’s Citibank are among the largest deposit-taking, federally insured banks in the U.S. Americans have an urgent need to know why they needed to borrow from the Fed on an emergency basis in the fall of 2019.

Shhh zipped lips EmojiTheories abound…(about) why this story is off limits to the media. One theory goes like this: the Fed has made headlines around the world in recent months over its own trading scandal – the worst in its history. Granular details of just how deep this Fed trading scandal goes have also been withheld from the public as well as members of Congress.

If the media were now to focus on yet another scandal at the Fed… – there might be legislation introduced in Congress to strip the Fed of its supervisory role over the megabanks and a restoration of the Glass-Steagall Act to separate the federally insured commercial banks from the trading casinos on Wall Street.”

It came together for me in this report:

“If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks…. will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered….

The issuing power should be taken from the banks and restored to the people, to whom it properly belongs.”

— Thomas Jefferson

“As long-term readers of ‘Wall Street On Parade’ know, we have regularly warned that the failure of Congress to meaningfully reform Wall Street by restoring the Glass-Steagall Act poses a national security threat to our nation in times of crisis.

…. The Fed’s balance sheet has ballooned from less than $1 trillion before the financial crisis in 2008 to $9 trillion today as a result of its willingness to perpetually bail out Wall Street. American taxpayers are on the hook for 98 percent of the Fed’s balance sheet and thus have a critical interest in demanding both transparency and accountability from the Fed.”

Man caught in mouse trap in risk business conceptThis is a cruel joke! The Federal Reserve, a group of unelected people, operating in secrecy, put the American Taxpayers on the hook for trillions, while their owners make billions in profits & bonuses. They lend money to anyone, anywhere, without worry about default. When they win, they keep the profits, when the lose taxpayers bear the loss.

Help is NOT on the way…

WSOP educates us on the nominees for a new Fed Regulator. The first nominee, Sarah Bloom Raskin withdrew her name because Wall Street fears she might actually do her job.

WSOP tells us about current nominee, Michael Barr. He was instrumental in getting Glass-Steagall repealed. He also worked for Obama’s treasury secretary, Tim Geithner. They quote David Dayen:

Lying face emoticon pinocchio“Michael Barr was Tim Geithner’s right hand during the Dodd-Frank process, and several staffers involved in the legislation have told me that he was more of a hatchet man who was instrumental in weakening the reform and untruthful along the way.”

They quote Jeff Hauser, Executive Director of the Revolving Door Project:

“Barr…is still part of a network of advisors to NYCA Partners, a venture capital fund that brings Wall Street and Silicon Valley together to carve up Americans’ finances via regulation-dodging fintech apps.

He once sat on the Board of…a think tank which has called for throwing out almost everything which keeps our financial regulatory system accountable to the public, such as FOIA law and public comment period….”

The nominee for Fed regulator got Glass-Steagall repealed, made sure Dodd-Frank was a terrible disaster and believes financial regulation should NOT be accountable to the public – and lies along the way. No wonder the public doesn’t trust Congress or the bankers!

The American people are “The Greater Fool”. What happens when the Carvana’s and others with trillions in debt comes due? The Fed will either use taxpayer money to “extend and pretend” or there will be massive defaults all over the world. If they pour in more money, expect the dollar to eventually collapse. It’s a Monopoly game where the banker wins every time.

Americans are fed up, and prices are skyrocketing. Unless Congress gets a real wakeup call, many pundits predict complete economic collapse. A lot of people belong in jail….

Miller on the Money Free Retirement Planning ReportFor more information, check out my website or follow me on FaceBook.

Until next time…

Dennis

www.MillerOnTheMoney.com

“Economic independence is the foundation of the only sort of freedom worth a damn.” – H. L. Mencken

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Cricket
Cricket

It sure sounds a lot like money laundering.

Anonymous
Anonymous

Except, No. The FED does not print money, they instead print bank reserves which must remain within the banking system… so no, the FED is not in the business of creating money, that’s the purview of banks.

Anonymous
Anonymous

No time to read what you typed?

Ghost

This video from Alex Christoforou (of The Duran) has so much information about the billions being pilfered from our Treasury by the Corruptocrats lining up to be seen with the little dictator, Zelensky, who has even set up a Crowdfunding account to glean as many dollars as he can before he is abandoned by NATO and Biden in favor of a new narrative aimed at Somalia.

The rush to get the $40 billion through is to make sure the Big Guy gets his 10 percent before he abandons Ukraine in favor of a more popular war. Whomever is guiding this idiot has no concern at all for optics now. They are playing the End Game, I think.

And, Alex is correct about the rhetoric; Biden is definitely being sent to poke the dragon now. A senile old puppet on a string being led to destroy our country. Not forced, but willingly led. I believe we will see his fake funeral soon.

Anonymous
Anonymous

” …into forking over more money to keep it afloat, and that ability to extract money from new investors to pay off existing investors…”

It’s BLM all over Again! Bernard Lawrence Madoff

Maybe they could call it the BM Maneuver?

Steve Z.
Steve Z.

Denis, Denis….the owners of the FED own the media and they own the politicians and they own every stinking’ thing there is to own.
Maybe that’s why we don’t hear anything about it.
In 2007 the FED doled out $26-29 Trillion to its friends in banking.
“It’s a big club and you and I are not in it”…said George

BL
BL

Really?? If they (the banks) are lending and don’t worry if they are paid back ….well FMD, I’m going to the bank tomorrow and borrow a cool MILLION. 🙂 I would be glad to help with the laundry.

We need to get in on this scam……

mark
mark

Words matter;

Title mistake.

Banks Make Billions Printing/Lending BULLSHIT UNBACKED FIAT CURRANCY When They Don’t Have To Worry About Being Paid Back!

For the love of God…this is not complicated.

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