EconomicPicData has a nice chart this morning on credit default swaps for financial firms…
See especially General Electric but all these firms have spreads that are signalling increased risk in owning their debt … instability is roaring back to these undercapitalized, overleveraged firms …
Now lets cross reference this to membership on the Board of Directors of the New York Federal Reserve Bank which is developing all these credit programs for financial firms…
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Board of Directors of the Federal Reserve Bank of New York
Jamie Dimon (bio) Chairman and CEO JPMorgan Chase
Jeffrey R. Immelt (bio) Chairman and CEO, General Electric Company
Stephen Friedman (bio) Chair, Chairman , Stone Point Capital, LLC (retired Chairman of Goldman Sachs)
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And let’s revisit the issue of lack of transparency in these matters…
Dec. 12 (Bloomberg) — ~~~~ “The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.
Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.
The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.
“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.
The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank loans don’t have the oversight safeguards that Congress imposed upon the TARP.
Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA.
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