UPDATE: Colorado banks bailed out by The Fed: BofA, Wells Fargo and more

by: Zappatero

Mon Nov 28, 2011 at 12:25:27 PM MST

The Treasury Department relied on the recommendations of the Fed to decide which banks were healthy enough to get TARP money and how much, the former officials say. The six biggest U.S. banks, which received $160 billion of TARP funds, borrowed as much as $460 billion from the Fed, measured by peak daily debt calculated by Bloomberg using data obtained from the central bank. Former Treasury Secretary Hank Paulson didn't respond to a request for comment.

The six -- JPMorgan, Bank of America, Citigroup Inc. (C), Wells Fargo & Co. (WFC), Goldman Sachs Group Inc. (GS) and Morgan Stanley -- accounted for 63 percent of the average daily debt to the Fed by all publicly traded U.S. banks, money managers and investment- services firms, the data show. By comparison, they had about half of the industry's assets before the bailout, which lasted from August 2007 through April 2010. The daily debt figure excludes cash that banks passed along to money-market funds.

Bank of America in Colorado here. Wells Fargo in Colorado here (PDF). Judging by their junk mail Citi does business here. They probably also lied to federal investigators. And JPMorgan and Goldman do business everywhere.

UPDATE: Goldman Sachs and other hedge fund operators were given advance notice of Freddie/Fannie actions by then-Secretary Paulson, a former GS exec - compelling some to see their lawyers immediately. (h/t Kos.)

UPDATE II: BofA, Well Fargo, and Citi may have* illegally foreclosed on military families:

Ten leading US lenders may have unlawfully foreclosed on the mortgages of nearly 5,000 active-duty members of the US military in recent years, according to data released by a federal regulator. [...]

The data released by the OCC are based on estimates prepared by lenders and their consultants. BofA said it is reviewing 2,400 foreclosures involving active-duty military families to see if they were conducted properly. Wells Fargo is reviewing 870 foreclosures and Citigroup is looking at 700 cases.

Those 3 banks operate in Colorado. Fort Carson, in Colorado Springs, is a primary hub of support for our military operations in Iraq and Afghanistan, has an enormous number of service members and their families who live both on base and in local off-base housing.

Would government regulation, something Republicans like Doug Lamborn and Mike Coffman are always complaining about, have helped reduce the amount of money we gave to banks so they wouldn't crash?

Duh......

While the emergency response prevented financial collapse, the Fed shouldn't have allowed conditions to get to that point, says Joshua Rosner, a banking analyst with Graham Fisher & Co. in New York who predicted problems from lax mortgage underwriting as far back as 2001. The Fed, the primary supervisor for large financial companies, should have been more vigilant as the housing bubble formed, and the scale of its lending shows the "supervision of the banks prior to the crisis was far worse than we had imagined," Rosner says.

Bernanke in an April 2009 speech said that the Fed provided emergency loans only to "sound institutions," even though its internal assessments described at least one of the biggest borrowers, Citigroup, as "marginal."

Citibank was worth $8 Billion at the time it received $40 Billion in bailouts.

What's the bottom line on these undisclosed, free loans to America's biggest and most profitable (on the Public Dime, no less) banks?

Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.

Or they might just be our Mayor and Governor and Elite Media (insert pretend link to some of Mike Rosen's lies about the President and Occupy) who would prefer the largest banks be bailed out by our citizens.

* - they may have illegally foreclosed on homes. I also may have gotten up this morning and had breakfast. - Z