By Pam Martens and Russ Martens: September 10, 2020 ~
This article was updated at 3:40 p.m. today. See Editor’s note below. ~
Every Wall Street bailout program that the Fed has created since September 17 of last year has, according to the Fed, been ostensibly created to somehow help the average American.
According to the Fed’s Term Sheet for the Term Asset-Backed Securities Loan Facility (TALF), it’s going to “help meet the credit needs of consumers and businesses by facilitating the issuance of asset-backed securities.” Not to put too fine a point on it, but asset-backed securities and related derivatives are what blew up Wall Street in 2008, creating the worst economic downturn, at that point, since the Great Depression.
According to the Fed’s TALF transaction data, it has made $2.6 billion in total loans. Forty-six percent of that money, $1.2 billion, went to a company that has 4 employees (outside of clerical workers) according to its filing with the SEC. Much of the Fed’s $1.2 billion was loaned at an interest rate ranging from 0.75 percent to 1.26 percent. The loans are set to expire in three years.
Under the CARES Act passed by Congress, the TALF has received $10 billion in taxpayer support from the U.S. Treasury to eat any losses in this program.
On the most recent transaction data report filed by the Fed for the TALF, it lists the borrower that received the $1.2 billion total as Alta Fundamental Advisers SP LLC-Belstar-Alta Series 1 and 2. It lists the Investment Manager for the borrower as Belstar Management Company LLC. Both Alta Fundamental Advisers and Belstar Management Company LLC have funds that previously registered in the Cayman Islands, according to their SEC filings.
The Fed is only selectively providing transaction level data for its myriad of bailout programs. As we previously noted, the Primary Dealer Credit Facility (PDCF) is one of the first bailout programs created by the Fed and yet it has never provided a drop of information as to who received the billions of dollars in loans under that program.
The Primary Dealer Credit Facility was the most notorious of the Fed programs during the 2007 to 2010 financial crisis. The Fed secretly funneled $8.95 trillion in cumulative, below-market rate loans to the trading units of the biggest Wall Street banks and their foreign derivative counterparties according to an audit belatedly provided to the public in 2011 by the Government Accountability Office (GAO).
The Fed’s hubris from 2007 to 2010 and its multi-year court battle to keep its transactions a secret from the American people make its actions today a critical area in which to demand transparency.
Unfortunately, the Fed’s dealings are being essentially ignored by mainstream media – which is enabling ever more hubris.
Editor’s Note: This article has been updated to provide clarification on the amount of total loans made by the TALF and the percentage it gave to just one entity. The earlier version of this article cited the H.4.1 data from the Fed, which showed a balance of $11 billion for the TALF. That includes part of the $10 billion of taxpayers’ money that is being used as loss absorbing capital and does not reflect total loans made.