Last week, I wrote about the revelation that the size of the bailout was $7.77 trillion, much larger than publicly revealed during the time. Via reader Mark, I read this article by former congressman Alan Grayson that says that the audit that was enabled by legislation that he and Ron Paul initiated reveals that the size of the Federal Reserve bailout of the big banks all over the world is now even greater than that, to the tune of $26 trillion, which is almost twice the size of the entire GDP of the US, which is a little over $14 trillion. Grayson explains the key numbers that the audit revealed:

Page 131 – The total lending for the Fed’s “broad-based emergency programs” was $16,115,000,000,000. That’s right, more than $16 trillion. The four largest recipients, Citigroup, Morgan Stanley, Merrill Lynch and Bank of America, received more than a trillion dollars each. The 5th largest recipient was Barclays PLC. The 8th was the Royal Bank of Scotland Group, PLC. The 9th was Deutsche Bank AG. The 10th was UBS AG. These four institutions each got between a quarter of a trillion and a trillion dollars. None of them is an American bank.
…
Page 205 – Separate and apart from these “broad-based emergency program” loans were another $10,057,000,000,000 in “currency swaps.” In the “currency swaps,” the Fed handed dollars to foreign central banks, no strings attached, to fund bailouts in other countries. The Fed’s only “collateral” was a corresponding amount of foreign currency, which never left the Fed’s books (even to be deposited to earn interest), plus a promise to repay. But the Fed agreed to give back the foreign currency at the original exchange rate, even if the foreign currency appreciated in value during the period of the swap. These currency swaps and the “broad-based emergency program” loans, together, totaled more than $26 trillion. That’s almost $100,000 for every man, woman, and child in America. That’s an amount equal to more than seven years of federal spending — on the military, Social Security, Medicare, Medicaid, interest on the debt, and everything else. And around twice American’s total GNP.

These are staggering amounts. And it was all done under the radar, using the secrecy with which the Federal Reserve and the government use when it comes to serving the oligarchy.

Last Thursday, I wrote about how the Federal Reserve, in secret, committed itself to $7.77 trillion in support to the big banks. The Daily Show gives more details of the how the rip-off worked. It turns out that the Fed gave the banks money at interest rates of 0.01% (essentially free money) that the banks then used to buy US Treasury bonds. In essence the Fed was borrowing its own money back from the banks at much higher rates than it lent it out to the same banks. Any idiot could make money on such a deal and it should be no surprise that the banks made a quick $13 billion in profits, which they then doled out to their executives as huge bonuses as a reward for their business acumen.

The fact that there has been no outcry against Federal Reserve head Ben Bernanke shows how the entire government and the major media is in the tank for the banks. The secrecy under which the Federal Reserve acts must end. It is a public body that is supposed to work for the public interest. It should not be allowed to become the private slush fund of the oligarchy.

News reports are emerging that when the financial collapse was about to happen in the summer of 2008, Treasury Secretary Henry Paulson gave inside information on what the government was planning to do to a small group of insider investors who were in a position to take advantage of the news. Even they were shocked that he was telling them this.

He delivered that information to a group of men capable of profiting from any disclosure.

Around the conference room table were a dozen or so hedge-fund managers and other Wall Street executives — at least five of them alumni of Goldman Sachs Group Inc., of which Paulson was chief executive officer and chairman from 1999 to 2006. In addition to Eton Park founder Eric Mindich, they included such boldface names as Lone Pine Capital LLC founder Stephen Mandel, Dinakar Singh of TPG-Axon Capital Management LP and Daniel Och of Och-Ziff Capital Management Group LLC.

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One in four American children now live in poverty. This report follows some who have been forced to live in cars and trucks. While the story is sad, what it reveals about the resilience of children, their ability to think positively and find ways to overcome their adversity, is heartening.

Well, another Thanksgiving holiday has come and gone and we get the usual reports of the shopping madness that has become customary. This year thankfully there do not seem to have been any actual deaths caused by crowds stampeding to get items, though shoppers at one place did ignore or step over a dying elderly man on the floor. (Incidentally, Kevin Drum says that ‘Black Friday’ got its name for darker reasons than the one that business public relations flacks have managed to foist on the public.)

But there have been shootings as people tried to rob shoppers of their purchases. There were also reports of riots in which police were called to quell unruly crowds and used the now-ubiquitous pepper sprays to disperse them. The report below also said that police picked up and slammed a grandfather to the ground in a store, thinking that he was a shoplifter. Why is such force necessary, even if their suspicions turned out to be correct?

Black Friday Brawl at Buckeye Walmart: MyFoxPHOENIX.com

A disturbing escalation was that of a shopper who, probably inspired by recent police actions, brought her own pepper spray and used it to disable her competitors for Xboxes and other high-demand items. She apparently escaped with her spoils but later turned herself in. Given the mentality of such shoppers, I worry that next year more people will copy her example or even escalate it, maybe bringing truncheons to fend off rivals or use tear gas and even tasers.

I have been trying to understand the mentality of these shopping melees. I can understand people in war-ravaged or famine-stricken areas rioting to get at meager relief supplies of food and water. But an Xbox is without doubt a luxury item, not a necessity, however much people may desire one. I have no idea how much an Xbox costs or what the sale price was but I find it hard to imagine that it was the size of the savings that drove someone to actually pepper spray her fellow human beings. After all, look at the scene below where people fought each other to get waffle irons that were on sale for $2. It is bizarre to think that people are willing to forego elementary courtesy and consideration towards others for waffle irons.

I blame reality TV for this development. I think what we are seeing is people shopping as if it were some kind of reality show of the kind seen on TV with themselves as contestants and in which the prizes are the goods on sale. The winners are those who snag the best deals and can then boast to their friends about it. And just like the shows, people are encouraged to do whatever it takes to ‘win’. One person reinforced this view by going so far as to describe the pepper-spraying woman as a ‘competitive shopper’, a benign euphemism for a person with a mean attitude to life.

The stores and the media feed this mentality, relentlessly hyping their sales with their publicity about the limited numbers at low prices and midnight store openings and the like, all contributing to a race-like mentality. Apparently after Walmart opened its stores at 10 pm on Thanksgiving, the sales in various sectors of the store begin at different times, with the items kept in pallets covered in plastic that are then removed at the sale time. It does not take a genius to predict that this will cause trouble as crowds of shoppers cluster around the pallets, salivating as they wait for the bell or whistle or whatever that signals that the race has begun.

On the one hand, one can dismiss this as the aberrations of a few people who have lost their sense of proportion. And as long as the numbers remain small, we can perhaps ignore it. But I worry about what the increasing numbers of people who are willing to shove aside, trample, and pepper spray their fellows in order to get at merchandise that they could well do without tells us about ourselves. It is not a good sign when the social fabric of concern for their fellow beings is torn apart in the desire to get some bauble.

I have little sympathy for those people who are choosing to subject themselves to bodily harm and insults to their dignity in this way. The people I feel sorry for are the low-level store workers who have no choice but to be there and risk getting hurt in the scrums. Because the stores are opening at midnight on Thanksgiving or, in the case of Walmart, even earlier, these workers do not get to enjoy the holiday. In these hard times, some may welcome the opportunity to get extra hours of work at overtime rates (at least I hope they get that) but I am sure there are many who would much rather forego that to spend a quiet holiday with their loved ones. There is even a petition to the Target department store company to ‘save Thanksgiving’ by not having these midnight openings.

I hope it catches on.

Last week in a post on the Greek crisis, I said that the extent of US banks’ liability for risky debt (either in the form of loans that may go bad or credit default swaps that may turn out to be bad bets) was not clear. Recall that banks give out loans to governments and then take ‘insurance’ on those loans in the form of credit default swaps (CDS) in case the governments cannot pay back the loans. But if the loans go bad and the banks that issued the CDS cannot pay up on the insurance claims, these banks could face huge losses.

Now a news report says that Goldman Sachs and JP Morgan Chase have involvements totaling more than $5 trillion of debt globally but they are not divulging how much if that is in the troubled PIIGS countries (Portugal, Ireland, Italy, Greece, and Spain). Bank of America, Citigroup, and Morgan Stanley also have taken similar risks.

I wrote earlier with respect to the Greek debt crisis that the banks that were described by the phrase ‘too big to fail’ were not a loose and undefined category but that there is an actual list of 29 banks that governments feel obliged to bail out if they get in trouble. Of these 17 are based in Europe, eight in the US, and four in Asia. Of course, knowing that they are too big to fail only encourages these banks to thumb their noses at the normal rules of the marketplace and take excessive risks with other people’s money for their own benefit, which is what has caused all these problems in the first place.
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It is interesting how the Occupy Wall Street movement has triggered so much interest and discussion about wealth and income inequalities in the nation. Now comes a study that shows that the wealth of households headed by people over 65 has increased to 47 times that of households headed by people 35 and younger, compared to a ratio of just 10 in 1984.

It is natural for older people to have more wealth since they have had more time to earn and save. But this rapid rise in inequality is not healthy. What is even more disturbing is that the median net wealth of the younger group has actually declined dramatically in this period. A society that has a minority of old and very rich people and a large number of young and poor people is not a healthy or stable society.

The financial news of recent weeks has been consumed with the so-called Greek debt crisis. Whenever there is news that a deal has been reached to bail out that government, stock markets rise. When the deal seems to have collapsed, the markets fall. Although the reports act as if the Greek government or people are being bailed out, it is actually international banks that are the benficiaries. What I find extraordinary is that news reporters and commentators talk as if ‘calming the markets’ is the most important thing in the world and thus governments must do everything they can to make stock markets go up, even if those moves have devastating effects on ordinary people. This is why we need massive protests against the financial oligarchy, to show governments that there are other important elements of society whose interests need to be considered.
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Matt Taibbi makes the case that removing our money from Bank of America is one concrete action that we can take to show our disgust with the banking industry. Targeting one of the worst culprits is a better strategy because we cannot boycott the entire industry. If we can shake one of the main institutions, it will cause other banks to fear if they will be the next to have a bull’s-eye painted on them

I used to feel the same way about earlier boycotts of gas companies to protest gouging practices. General boycotts will fail because people eventually need gas. It would be better to pick a particular gas company and boycott only them because such an action can be continued indefinitely. After the BP oil spill, if people stopped buying only BP gas, that would have forced them to take the public outcry more seriously.