Article in the Huffington Post about how Lehman Bros. dumped a massive amount of junk on the NY Federal Reserve’s books. Essentially, when Lehman faced trouble in 2008, they had the NY Fed purchase products that couldn’t be sold on the free market. This effectively means the government was overpaying for these instruments. Lehman would come away with clean cash for their junk.
The article does a nice job of showing what an illegal dipstick Tim Geithner is. For me, it shows that we need to get a look under the hood of the Fed’s books. The Fed’s balance sheet has tripled over the past two years. There is no way they have investment grade or high quality instruments on their books. If we got a clean look at the Fed, I suspect the confidence in the markets would be in question.
Tip of the Hat: Calculated Risk
You should call your Congress representative and demand they support HR 1035, which authorizes us to Audit the Fed.