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The Federal Reserve's Role In The Financial Collapse by Gretchen Morgenson

This is an adaptation from "Reckless Endangerment", an exploration of the origins of the recent financial crisis, by Gretchen Morgenson and Joshua Rosner. The book will be published today by Times Books. This excerpt examines the cozy relationship between Alan Greenspan's Federal Reserve and the banks the Fed was charged with regulating. This is the second of three excerpts.

To regulators at the Federal Reserve Board, the financial crisis of 1998 and the collapse of the giant hedge fund Long-Term Capital Management had been an undeniably terrifying event. Officials at the prestigious New York Fed knew how extraordinary it had been for them to help the hedge fund; they were sensitive to the fact that they had aided in a speculator's rescue and worked hard to downplay their role.

In the months and years after the rescue, many Fed officials spoke publicly of the lessons to be learned from the disaster. Chief among them were the dangers of increasingly interconnected world markets and economies and the threats of institutions that had grown so large that their failures could imperil the entire financial system.

"It was a humbling and enlightening experience for us all," said Roger Ferguson, a member of the Board of Governors of the Federal Reserve, in a 1998 speech touching on the Long-Term Capital rescue. "It should cause all of us to reassess our practices and our views about the underlying nature of market risks."


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See & Hear: "Big Sucking Sound," dark side of

This article & book unfolds a little of the mystery surrounding one of the worst forced rescues of a private horde fund (see: hedge fund, dark side of) that was very bad & went worse (see: force, dark side of). The article delves into the inner workings of a very bad bank that regularly funds banks with your cash (see: Discount Window, dark side of | hear: "Big Sucking Sound," dark side of). The Fed Discount Window is like an express "Jiffy Loan" ® to increase debt that you become obligated to recuse when it goes bad.

Silver Bear Cafe is very highly recommended to make connection to the value of silver as money.

Excerpt from, ""Reckless Endangerment"

    In other words, the Fed was busy becoming a pushover, not a policeman.

    "It was explicit in those years, if you worked inside the Fed, that you were partners with the banks," said a former Fed official. "You were not adversaries."

    These quotes belie the Fed mischief (see: Fed, dark side of).

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul

Saving "Long Term Capital Management" w/ Your Cash!

Hide your silvervare!

Your cash was pumped into "Long Term Capital Management" (LTCM) to save it. Here @ DailyPaul we even have documentation exposing, "Who done it?" Who was the man that showed the Fed how to save LTCM with your cash? Told the Fed how to do it? Then did it?

Very Interesting Banker. 30 Year Trouble Shooter. Busy Man.
Submitted by Mark Twain on Sun, 11/07/2010

Long-Term Capital Management (LTCM) - Who done it?
One man behind the Fed curtain "Done it!"

  • 1998, the principal negotiator of the rescue of LTCM
  • Rescue?
    • Sponsored by The Fed
    • Employed by the Fed.
    • Loaned your money to bailout LTCM @ Rickard's bequest.
    • Gave away your wealth while he worked @ the Federal
  • Fed Reserve Bank of New York.
  • Who done it? Go to the link above. One page tells.

If you are amused, but still doubt that what happened wasted you cash, there are 500 K reports of incidents & other related matters available upon request by searching for, ""Long Term Capital Management."

Disclaimer: Mark Twain (1835-1910-To be continued) is unlicensed. His river pilot's license went delinquent in 1862. Caution advised. Daily Paul