by Nomi Prins
66 New Generation Research, “20 Largest Public Company Bankruptcy Filings 1980- Present,” BankruptcyData.com, http://www.bankruptcydata.com/Research/Largest_Overall_All-Time.pdf.
67 David Teather, “Rubin Cleared of Enron Impropriety,” The Guardian, January 4, 2003, http://www.guardian.co.uk/business/2003/jan/04/corporatefraud.enron; Landon Thomas Jr., “Cold Call,” New York, February 11, 2002, http://nymag.com/nymetro/news/bizfinance/columns/businessclass/5693.
68 Rex Nutting and Matt Andrejczak, “Citi’s Rubin Made a Call for Enron,” MarketWatch, January 11, 2002, http://www.marketwatch.com/story/ex-treasury-chief-rubin-made-acall-on-behalf-of-enron?siteid=mktw.
69 Richard A. Oppel Jr., “Senate Report Says Rubin Acted Legally in Enron Matter,” New York Times, January 3, 2003, http://www.nytimes.com/2003/01/03/business/senate-report-says-rubin-acted-legally-in-enron-matter.html.
70 Mark Lewis, “Rubin Red-Faced Over Enron?” Forbes, February 11, 2002, http://www.forbes.com/2002/02/11/0211rubin.html.
71 Michael Hirsch, “ ‘Government Sachs’ Is Back,” Newsweek, March 5, 2009, http://www.newsweek.com/id/187705; Peter S. Goodman, “The Reckoning,” New York Times, October 8, 2008, p. 3, http://www.nytimes.com/2008/10/09/business/economy/09greenspan.html.
72 Board of Governors of the Federal Reserve System, “FOMC Statement,” press release, August 7, 2007, http://www.federalreserve.gov/newsevents/press/monetary/20070807a.htm.
73 Craig Torres, “Bernanke Spoke with Rubin as Credit Crisis Worsened (Update 1),” Bloomberg, October 3, 2007, http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=ae21h4HAD6Ag.
74 Board of Governors of the Federal Reserve System, “Federal Reserve Board Discount Rate Action,” press release, August 17, 2007, http://www.federalreserve.gov/newsevents/press/monetary/20070817a.htm.
75 Federal Reserve Bank of New York, Historical Changes of the Target Federal Funds and Discount Rates, 1971 to Present, December 22, 2008, http://www.newyorkfed.org/markets/statistics/dlyrates/fedrate.html.
76 Tom Bawden and Susan Thompson, “Goldman Sachs Makes $4bn Profit on Daring Sub-Prime Bet,” The Times, December 15, 2007, http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article3054952.ece.
77 “Citi May Have a New Mess on Its Hands,” BusinessWeek, November 12, 2007, http://www.businessweek.com/magazine/content/07_46/b4058049.htm.
78 “Statement from Citigroup on the Resignation of C.E.O. Charles O. Prince III,” New York Times, November 5, 2007, http://www.nytimes.com/2007/11/05/business/05citi-text.html.
79 Citigroup, “Citi Board Names Vikram Pandit Chief Executive Officer and Sir Win Bischoff Chairman,” press release, December 11, 2007, http://www.citigroup.com/citi/press/2007/071211a.htm.
80 Citigroup, “Citi Reports Fourth Quarter Net Loss of $8.29 Billion, Loss Per Share of $1.72,” press release, January 16, 2009, http://www.citigroup.com/citi/press/2009/090116a.htm.
81 Marshall Eckblad, “Citi’s Rubin Is Now a ‘Senior Counselor,’ ” Wall Street Journal, August 26, 2008, http://online.wsj.com/article/SB121969810713370413.html.
82 Jonathan Stempel, “Citigroup Stock Drops to 13 year Low, Fear Grows,” Reuters, November 19, 2008, http://www.reuters.com/article/newsOne/idUSTRE4AI91420081119.
83 Nomi Prins and Krisztina Ugrin, “Bailout Tally,” June 2009, http://www.nomiprins.com/bailout.html.
84 Citigroup, “Robert E. Rubin Announces His Retirement from Citi,” press release, January 9, 2009, http://www.citigroup.com/citi/press/2009/090109d.htm.
85 Ibid.
86 Heidi N. Moore, “Ken Wilson: The Goldman Sachs Man Behind Your Bailouts,” Wall Street Journal, July 21, 2008, http://blogs.wsj.com/deals/2008/07/21/ken-wilson-the-goldman-sachs-man-behind-yourbailouts.
87 Ibid.
88 Eric Dash, “Wachovia Hires a Treasury Insider to Lift It Out of Its Banking Woes,” New York Times, July 10, 2008, http://query.nytimes.com/gst/fullpage.html?res=9D02E1D61E3BF933A25754C0A96E9C8B63; Wachovia Corporation, Officers & Directors: Robert K. Steel, https://sites.wachovia.com/inside/page/0,,132_155_13180,00.html.
89 Joseph A. Giannone, “Goldman Banker to Advise Paulson on Banks,” Reuters, July 21, 2008, http://www.reuters.com/article/gc06/idUSBNG24956720080721.
90 Susanne Craig, “In Ken Wilson, Paulson Gets Direction from the Go to Banker of Wall Street,” Wall Street Journal, July 22, 2008, http://online.wsj.com/article/SB121668792760272225.html .
91 Craig, “In Ken Wilson, Paulson Gets Direction from the Go-to Banker of Wall Street.”
92 Heidi N. Moore, “Goldman Banker Wilson Starts First Day at Treasury to Fix the Markets,” Wall Street Journal, August 7, 2008, http://blogs.wsj.com/deals/2008/08/07/kenny-your-country-has-you-goldman-banker wilson-starts-first-day-at-treasury.
93 Steve Gelsi, “Paulson Files to Sell $500 mln of Goldman Stock,” MarketWatch, June 30, 2006, http://www.marketwatch.com/News/Story/43xRFhd1RRlnqg1H1BkmTP4?siteid=google&dist=TNMostMailed.
94 The Aspen Institute, “Snapshot: Robert K. Steel,” n.d., http://www.aspeninstitute.org/people/robert-steel.
95 U.S. Department of the Treasury, “Statement by Treasury Secretary Henry M. Paulson, Jr. on Staff Changes in the Office of Domestic Finance,” press release: HP 1073, July 9, 2008, http://www.treas.gov/press/releases/hp1073.htm.
96 Dash, “Wachovia Hires a Treasury Insider to Lift It Out of Its Banking Woes”; Robert Schroeder, “Fannie Mae, Freddie Mac Bill Clears Committee,” March 29, 2007, MarketWatch, http://www.marketwatch.com/news/story/fannie-mae-freddie-mac-regulation/story.aspx?guid={CDAF5B87-2C23-423C-B45B-1A38D1F3902F}.
97 Neil Irwin, “Steel Steps Down from Treasury Post to Take Over at Struggling Wachovia,” Washington Post, July 10, 2008, http://www.washingtonpost.com/wp-dyn/content/article/2008/07/09/AR2008070901938.html.
98 Ibid.
99 Dash, “Wachovia Hires a Treasury Insider to Lift It Out of Its Banking Woes.”
100 David Mildenberg and Ari Levy, “Wachovia Hires Steel to Mend Investor Relationships (Update 2),” Bloomberg, July 10, 2008, http://www.bloomberg.com/apps/news?pid=20601087&sid=apkYD10LUGtY&refer=home.
101 Ben White and Eric Dash, “Wachovia, Looking for Help, Turns to Citigroup,” New York Times, September 26, 2008, http://www.nytimes.com/2008/09/27/business/27bank.html.
102 Wachovia Corporation, “Wachovia Details 2nd Quarter Loss; Outlines Initiatives to Preserve and Generate Capital, Protect Strong Liquidity and Reduce Risk,” press release, July 22, 2008, https://www.wachovia.com/foundation/v/index.jsp?vgnextoid=c9956c772350f110VgnVCM200000627d6fa2RCRD&vgnextfmt=default&keyguid=69817798ebbdc110VgnVCM100000127d6fa2RCRD.
103 Mildenberg and Levy, “Wachovia Hires Steel to Mend Investor Relationships (Update 2).”
104 New York Times, “Companies: Wachovia Corporation News,” New York Times, n.d., http://topics.nytimes.com/top/news/business/companies/wachovia_corporation/index.html.
105 Andrew Ross Sorkin, “Lehman Files for Bankruptcy; Merrill Is Sold,” New York Times, September 14, 2008, http://www.nytimes.com/2008/09/15/business/15lehman.html.
106 Kara Scannell, David Enrich, and Dan Fitzpatrick, “Steel’s TV Remarks on Wachovia Probed,” Wall Street Journal, January 24, 2009, http://online.wsj.com/article/SB123275454114111651.html .
107 Ibid.
108 Aaron Lucchetti, Randall Smith, and Jenny Strasburg, “Morgan Stanley in Talks with Wachovia, Others,” Wall Street Journal, September 18, 2008, http://online.wsj.com/article/SB122168156315148901.html.
109 Chad Bray, “Wachovia Lost Deposits as Citi Fought Wells Bid,” MarketWatch, October 11, 2008, http://www.marketwatch.com/news/story/wachovia-lost-depositsciti-fought/story.aspx?guid={F4CC7E6D-94CA-4BE8-8447-5D4F2C2B2AD9}.
110 Andrew Ross Sorkin, ed., “Citi Blasts Wachovia-Wells Fargo Merger Plan,” New York Times, October 3, 2008, http://dealbook.blogs.nytimes.com/2008/10/03/citiblasts-wachovia-wells-fargo-mergerplan.
111 Wachovia Corporation, “Wachovia Statement: Wachovia’
s Board Approves Wells Fargo Merger Proposal,” press release, October 3, 2008, https://sites.wachovia.com/inside/page/0,,134_307^1806,00.html.
112 Rob Curran, “Citigroup Leads Stocks Down Despite the Bailout,” Wall Street Journal , October 4, 2008, http://online.wsj.com/article/SB122304344267402263.html.
113 Wachovia Corporation, Proposed Merger, Proxy Statement—Prospectus, November 21, 2008, p. 8, https://www.wachovia.com/file/WB_WF_Proxy_Statement_Prospectus.pdf
114 Scannell, Enrich, and Fitzpatrick, “Steel’s TV Remarks on Wachovia Probed.”
Chapter 5. We Already Have a Bad Bank: It’s Called the Federal Reserve
1 Cyrus S. Eaton, “Financial Democracy,” The University of Chicago Law Review 8, no. 2 (February 1941): 196.
2 Nomi Prins and Krisztina Ugrin, “Bailout Tally,” June 2009, http://www.nomiprins.com/bailout.html.
3 Board of Governors of the Federal Reserve System, “Federal Reserve Will Offer $20 Billion in 35 Day Credit through Its Term Auction Facility on December 20, 2007,” press release, December 19, 2007, http://www.federalreserve.gov/newsevents/press/monetary/20071219b.htm.
4 William Poole, “The Role of Federal Reserve Banks in the Federal Reserve System,” Federal Reserve Bank of St. Louis, March 30, 2006, p. 2, http://stlouisfed.us/news/speeches/2006/PDF/03_30.pdf.
5 Board of Governors of the Federal Reserve System, H.4.1 Factors Affecting Reserve Balances, Federal Reserve Statistical Release, December 20, 2007, http://www.federalreserve.gov/releases/h41/20071220.
6 William Greider, “Fixing the Fed,” The Nation, March 11, 2009, p. 2, http://www.thenation.com/doc/20090330/greider/2.
7 Board of Governors of the Federal Reserve System, “Federal Reserve and Other Central Banks Announce Measures Designed to Address Elevated Pressures in Short-Term Funding Markets,” press release, December 12, 2007, http://federalreserve.gov/newsevents/press/monetary/20071212a.htm.
8 Board of Governors of the Federal Reserve System, “Federal Reserve Announces Results of Auction of $20 Billion in 28 day Credit Held on December 17, 2007,” press release, December 19, 2007, http://federalreserve.gov/newsevents/press/monetary/20071219c.htm; Board of Governors of the Federal Reserve System, “Federal Reserve Announces Results of Auction of $20 Billion in 35-day Credit Held on December 20, 2007,” press release, December 21, 2007, http://federalreserve.gov/newsevents/press/monetary/20071221a.htm.
9 Alternative Investment Management Association, “AIMA’s Roadmap to Hedge Funds,” November 2008, pp. 29, 117.
10 Board of Governors of the Federal Reserve System, “Federal Reserve and Other Central Banks Announce Specific Measures Designed to Address Liquidity Pressures in Funding Markets,” press release, March 11, 2008, http://federalreserve.gov/newsevents/press/monetary/20080311a.htm.
11 Federal Reserve Bank of New York, “Summary of Terms and Conditions Regarding the JPMorgan Chase Facility,” press release, March 24, 2008, http://www.ny.frb.org/newsevents/news/markets/2008/rp080324b.html.
12 Federal Reserve Bank of New York, Actions by the New York Fed in Response to Liquidity Pressures in Financial Markets, Testimony, April 3, 2008, http://www.newyorkfed.org/newsevents/speeches/2008/gei080403.html.
13 Ibid.
14 Frontline, “Timeline: Inside the Meltdown,” PBS, February 17, 2009, http://www.pbs.org/wgbh/pages/frontline/meltdown/cron.
15 Federal Reserve Bank of New York, “Statement on Financing Arangement of the JPMorgan Chase Facility,” press release March 24, 2008, http://www.newyorkfed.org/newsevents/news/markets/2008/rp080324b.html; Federal Reserve Bank of New York, Actions by the New York Fed in Response to Liquidity Pressures in Financial Markets, Testimony, April 3, 2008.
16 Federal Reserve Bank of New York, “Federal Reserve Announces Establishment of Primary Dealer Credit Facility,” press release, March 16, 2008, http://www.newyorkfed.org/newsevents/news/markets/2008/rp080316.html.
17 Federal Reserve Bank of New York, Understanding the Recent Changes to Federal Reserve Liquidity Provision, May 2008, http://www.newyorkfed.org/markets/Understanding_Fed_Lending.html.
18 Board of Governors of the Federal Reserve System, “Federal Reserve Announces Two Initiatives Designed to Bolster Market Liquidity and Promote Orderly Market Functioning,” press release, March 16, 2008, http://www.federalreserve.gov/newsevents/press/monetary/20080316a.htm; Zubin Jelveh, “Odd Numbers,” Portfolio , May 28, 2008, http://www.portfolio.com/views/blogs/odd-numbers/2008/05/28/should-the-fed-lend-to-investment-banks.
19 Federal Reserve Bank of New York, Primary Dealer Credit Facility: Frequently Asked Questions, February 3, 2009, http://www.newyorkfed.org/markets/pdcf_faq.html.
20 The Federal Reserve Bank Discount Window and Payment System Website, http://www.frbdiscountwindow.org.
21 “JP Morgan Quintuples Bid to Seal Bear Deal,” Wall Street Journal, March 25, 2008.
22 Kush Media, “History of US Economic Recessions,” n.d, http://recession.org/history.
23 “Cayne Pockets $61.3 Million for Bear Stock,” Wall Street Journal, March 28, 2008.
24 Ibid.
25 Federal Reserve Bank of New York, Actions by the New York Fed in Response to Liquidity Pressures in Financial Markets, Testimony, April 3, 2008.
26 Ibid.
27 RealtyTrac, “Foreclosure Activity Increases 81 Percent in 2008,” press release, January 15, 2009, http://www.realtytrac.com/ContentManagement/pressrelease.aspx?ChannelID=9&ItemID=5681.
28 National Association of Realtors, Statistical Data, 2009, http://www.realtor.org/wps/wcm/connect/b56fe8804d277ee29517f526a9949436/REL0901SF.pdf?MOD=AJPERES&CACHEID=b56fe8804d277ee29517f526a9949436.
29 U.S. Census Bureau, “New Residential Sales in December 2008,” joint press release, January 29, 2009, p. 1, http://www.census.gov/const/newressales_200812.pdf.
30 “Moving Forward Helps Those in Foreclosure . . . ,” CNN Newsroom, July 26, 2008, http://transcripts.cnn.com/TRANSCRIPTS/0807/26/cnr.06.html.
31 GovTrack, H.R. 3221: Housing and Economic Recovery Act of 2008, n.d., http://www.govtrack.us/congress/bill.xpd?bill=h110-3221.
32 Roger Runningen, “Bush Signs Measure for Homeowners, Fannie, Freddie (Update 2),” Bloomberg, July 30, 2009, http://www.bloomberg.com/apps/news?pid=20601103&sid=am2yQYThqmxQ&refer=us.
33 Patrice Hill, “McCain Adviser Talks of ‘Mental Recession,’ ” Washington Times, July 9, 2008, http://www.washingtontimes.com/news/2008/jul/09/mccain-adviseraddresses-mental-recession/.
34 “Phil Gramm,” New York Times, n.d., http://topics.nytimes.com/top/reference/timestopics/people/g/phil_gramm/index.html.
35 Hill, “McCain Adviser Talks of ‘Mental Recession.’”
36 “Phil Gramm Steps Down after ‘Whiners’ Comment,” CNN, July 18, 2008, http://www.cnn.com/2008/POLITICS/07/18/gramm.resignation/index.html.
37 U.S. Department of the Treasury, “Remarks by U.S. Treasury Secretary Henry M. Paulson, Jr. on the U.S., the World Economy and Markets before the Chatham House,” press release: HP-1064, July 2, 2008, http://www.ustreas.gov/press/releases/hp1064.htm.
38 U.S. Department of the Treasury, “Oral Statement by Secretary Henry M. Paulson, Jr. on Regulatory Reform before House Committee on Financial Services,” press release: HP 1074, July 10, 2008, http://www.treas.gov/press/releases/hp1074.htm.
39 U.S. Department of the Treasury, “Remarks by Secretary Henry M. Paulson, Jr. on U.S. Housing Market before FDIC’s Forum on Mortgage Lending to Low and Moderate Income Households,” press release: HP-1070, July 8, 2008, http://www.treas.gov/press/releases/hp1070.htm.
40 Board of Governors of the Federal Reserve System, Chairman Ben S. Bernanke at the Federal Deposit Insurance Corporation’s Forum on Mortgage Lending for Low and Moderate Income Households, Arlington, Virginia, Speech, July 8, 2008, http://www.federalreserve.gov/newsevents/speech/bernanke20080708a.htm.
41 Board of Governors of the Federal Reserve System, Chairman Ben S. Bernanke at the Greater Austin Chamber of Commerce, Austin, Texas, Speech, December 1, 2008
, http://www.federalreserve.gov/newsevents/speech/bernanke20081201a.htm.
42 Board of Governors of the Federal Reserve System, “Federal Reserve and Other Central Banks Announce Further Measures to Address Elevated Pressures in Funding Markets,” press release, September 18, 2008, http://federalreserve.gov/newsev-ents/press/monetary/20080918a.htm; Joint Economic Committee, Financial Meltdown and Policy Response, Research Report #110 25, September 2008, p. 6-7; Board of Governors of the Federal Reserve System, “Federal Reserve and Other Central Banks Announce Further Coordinated Actions to Expand Significantly the Capacity to Provide U.S. Dollar Liquidity,” press release, September 29, 2008, http://federalreserve.gov/newsevents/press/monetary/20080929a.htm.
