Matt Taibbi on a Government "Shadow Budget" that benefits Wall Street

who are about to tell you are the most important stories about about our government the you'll ever hear is a story of how our government has a shadow budget that is totally unexplainable to the people is set up to help the richest people in the world and plays with trillions of dollars of our money that sells on believable but it actually is totally true esteem unbelievable is or even two hundred and twenty million dollars in bailout money to the completely unqualified wives on wall street bankers and if they lose the money while you have to keep their losses but if they make a profit they get to keep all of it and if you think that's bad wal-mart qaddafi even gets the play this game on our dine so what is the shadow system was called the federal reserve and what they're doing with your money is absolutely outrageous and with the man who broke this story with us now to tell us more about that's how you do use a contributing editor for rolling stone related latest articles call the real housewives a wall street matt great to have you here thank you for your jacket by metro start with this different form of a bailout that people might not be familiar with what is that they're doing in this version of the bailiff originally the bill as rude used to target and rescue specific institutions like bear stearns and fannie and freddie an edgy and then from there that you know there was the broader fill it up for demand will fill in the fall of two thousand eight the park that was really about rescuing insolvent banks and cleaning up genuinely toxic mortgage-backed securities in getting those out of the system but once wall street's all that public money coming their way they they basically started saying to the fed and into the to the government hey which are like a government guarantee to invest in student loans and credit cards and aircraft loans and commercial mortgages and pretty much everything else you can think of and that's when this whole other galaxy available program started become down the pipe in the middle of names of that people never heard of like that's how often this half in the pick-up and essentially all these programs in their you know accumulatively about in a many trillions of dollars named extended government guarantees and giveaway more less free money to hedge funds and other wall street characters to invest in all these different varieties of securities he got to keep the women's nmr data losses matt anything then outrages me is that in like before in the past and i know the treasury get money from the united states congress ready to have to be approved then eventually or consequences for those votes right now this seems like it end-run around the treasure in around congress can the vent just do that can be just print trillions of dollars and give it to ever they like well uh... that's a complicated question the fed's reno doesn't have a an infinite balaji that does have you know i think cap on how much money you can spend although in a couple of inches in the last couple of years and has had a couple of programs called quantitative easing where they've literally printed new money and just aren't spending it but that's not really what happened here but you're right it is an end-run around congress most people or if i think of the ballots those tarp which was an eight hundred billion dollar program that used treasury money another words taxpayer money and that was very tightly controlled and when they gave out that money came with very estrogen controls in other words you had to reduce the amount of compensation it if you're executives if you took this money but there's other food programs are completely unaccountable violate until very recently word shrouded in complete mystery men were completely out accountable to any elected officials if there are a total of course he eventually get abuse and it seems like there tell of these wall street wise isn't actually example of that tells about their story well what's in the back story this is the you know that all of these transactions were secret up until very recently when there was a bipartisan coalition of uh... civil in congress and including ron paul allen grayson bernie sanders in a attempted to open up the fed's books and while they didn't want to succeed in getting the entire history the fed's books open they did get this two-year period from the end of a seven zero nine women's got to look at all these villa transactions and among these twenty one thousand bela transactions were a number of crazy names in just for the sake of trying to sell this story to my editors answer to try to attract readers to this issue we know we picked up the the craziest analysts and i was christy mac and susan car chisum christy mac is that what it is the wife of john mack who at the time was the c_e_o_ morgan stanley and as far as we can tell there only for the qualification for getting a two hundred twenty million dollar loan from the fed in order to buy student loans and commercial mortgages is that they weren't married to wall street executives so they don't have any previous experience but it doesn't matter 'cause they can't lose tell us about with these non recourse logic is that that's another part of this outrage that you know what if they lose when we have to put up the money i can't believe that how does that work well the way this works is that basically defenses here here's a whole bunch of my name go out and they don't go with god and bio much as securities or whatever it is you can find item mortgages student loans credit card loans whatever it is five you go by the securities you give them to us if they go up in value you take them back if they go down in value we keep it and we have a loss is that's basically the way of non recourse loan works now they had to pay a small premium of less than ten percent on the valuation of the securities so they did have a little bit of skin in the game it they'd they stood to lose a little bit but basically if the if the stuff went up in value they kept everything and if it went down in value date date with the losses were basically almost all ours orion finally madhouse qaddafi involved in all that no uptown aside from all the hedge fund millionaires and millionaires are on this list there are a number of really crazy names use the by the bank of the very development bank of south korea volkswagen toyota and mitsubishi but there's also a company called the arab banking corporation in parental which is a sixty three percent owned uh... entity of the central bank of libya which somehow got a thirty five billion dollar line of credit from the federal reserve through emergency lending programs and nobody can figure out yet exactly what the rationale behind that was but it's definitely on this list of transactions to stop giving away our money this is a crazy eyes matt incredible reporting thanks so much for your is really appreciated thank you