Fed rescue program too bizarre to be true

Michael Lewis

To naive critics this came as just more evidence that the Fed had mistaken the wants of a handful of rich people for the needs of the wider society.

The documents and “assets” used as collateral by the Fed include

– a vault in the Fed basement filled with young women, who claimed, in broken but excited English, they had been repo-ed by the Italian government.

– Traces of a powdery substance belonging to the giant Mexican international commodities firm, Los Zetas.

– Hastily scrawled receipts for several hundred million dollars in short-term loans to the Taliban.

Others documents include email from Fed Chairman Bernanke to the CEOs of the big banks saying, “Dudes, we have another trillion if you want it. And do we need to change the accounting rules for you again? We know how those pesky toxic assets can screw up your chances of paying yourself bonuses.”

Los Zetas did, in fact, receive $1 billion in bailout funds to “enable them to expand their production and distribution networks” with the expectation that profits would be sent to US banks where they would magically disappear.

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