Your Tax Money at Work

The Fed seems to lending so much that billions and trillions don't have any value.
The Fed just pumped $41 billion into the US financial system today. At $41, it is the fourgh largest intervention.

http://biz.yahoo.com/ap/071101/fed_markets.html?.v=2

And how about the Federal Home Loan Banks? These banks were established during the Great Depression to provide funds to make mortgages more affordable. Yes, that's right the Great Depression. They have $1.15 TRILLION of debt out standing! Here is the excerpt from Bloomberg.

To meet the sudden demand, the institutions sold $143 billion of short-term debt
in August and September, according to the FHLBs' Office of Finance. The sales
pushed outstanding debt up 21 percent to a record $1.15 trillion, an amount that
may become a burden to U.S. taxpayers because almost half comes due before
2009.

So who is taking all the risk for all this debt? You guessed it! It's the tax payers. We subsidize the Financial Institutions (As per the article, it saved private banks about $1billion).

If others were unable to meet the liabilities, taxpayers would be on the
hook, they said.

U.S. lawmakers need to ensure ``the institutions don't blow up in the
taxpayer's face,'' Representative Christopher Shays of Connecticut, a Republican
on the House Financial Services Committee that is responsible for oversight of
the system, said in an interview.

And what are you doing to ensure that it doesn't blow up? We will leave that for the next generation.

Kevin Depew has an excellent primer on the FHLB mess. Read point # 2 in the followin link.
http://www.minyanville.com/articles/index.php?a=14693

How about paying the tax payers for taking on these risks? How about cancelling the Countrywide dividend to pay for at least part of it? How about taking away Mozilo's stock money?