America's Next TARP Model

  • Aired:  12/01/11
  •  | Views: 301,733

A Bloomberg report reveals that the U.S. government loaned banks $7.7 trillion in secret bailout funds at no interest and then borrowed the money back at interest. (7:53)

>> Jon: WELCOME TO THE DAILY

SHOW.

MY NAME IS JON STEWART.

WE HAVE A GOOD ONE TWOUR

TONIGHT.

JOINING ME TONIGHT GREAT BOB

COSTAS TALKING A LITTLE BIT

OF SMACK ABOUT BRIAN WILLIAM,

MAYBE.

I DON'T KNOW WHAT IS GOING

TO HAPPEN.

KIDDING CAN OF COURSE.

LET'S BEGIN WITH A NEW

SEGMENT.

WE BASE IT ON THE FACT THAT

NO ONE HAS YET BEEN HELD

ACCOUNTABLE FOR THE 2008

FINANCIAL CRISIS, IT'S A NEW

SEGMENT WE CALL HOW THE

[BLEEP] IS IT THAT MARTHA

STEWART WENT TO JAIL?

(LAUGHTER)

ALL RIGHT, LET'S GET INTO

IT.

WE ALL REMEMBER THE INFAMOUS

BANK BAILOUT, TARP, TROUBLED

ASSET RELIEF PROGRAM AND BY

ASSETS I MEAN LIABILITIES

AND BY TROUBLED I MEAN

WORTHLESS.

IT WAS AN ENORMOUS WALL

STREET BAILOUT THAT

EVERYBODY AGREED WE HAD TO

DO AND SHOULDN'T DO IT.

>> REMEMBER TARP, REMEMBER

THE BAILOUTS, MAIN STREET

DIDN'T GET BAILED OUT BUT

THE RICH GUYS ON WALL STREET

DID.

>> $700 BILLION THROWN

TOGETHER OVER A WEEKEND.

>> $780 WORTH OF TARP.

>> TARPS WITH A BAILOUT FUND

THAT NEVER SHOULD HAVE

HAPPENED.

>> TARP IS THE MOST HATED

PIECE OF LEGISLATION IN

RECENT AMERICAN HISTORY.

>> Jon: OH!

ALL, ALL OF AMERICA, EVEN

MORE HATED THAN THE

MANDATORY SASPARILLA ENEMA

ACT OF 1908.

(LAUGHTER)

THE SECRET INGREDIENT,

SASPARILLA.

(LAUGHTER)

LOOK, $700 BILLION WAS HOW

MUCH THE SYSTEM NEEDED TO

AVOID COLLAPSE.

AND HERE'S THE THING ABOUT

THAT $700 BILLION, THE

PUBLIC KNEW ABOUT T BUT YOU

KNOW THERE WAS THIS OTHER

SLIGHT MORE SECRETIVE

PROGRAM THROUGH WHICH THE

FEDERAL RESERVE FUNNELED

MONEY NOT BANKS.

I WONDER IF THERE IS ANY WAY

WE COULD GET A DOLLAR AMOUNT

ON THAT PROGRAM.

AND WHILE WE RECEIVE THAT

INFORMATION, I'M JUST GOING

TO SIT HERE, CALMLY HOLDING

THIS PENCIL TWIX MY FINGERS

LIKE SO.

>> FOR THE FIRST TIME WE

HAVE DATA NOW ON HOW MUCH

MONEY THE U.S. FEDERAL

RESERVE, THE CENTRAL BANK,

DOLLED OUT TO U.S. BANKS AND

THE NUMBER, TOTAL SUPPORT

$7.7 TRILLION U.S. DOLLARS.

(LAUGHTER)

>> Jon: I KNOW THIS DIDN'T

SEEM LIKE MUCH BUT I AM AN

OLDER MAN.

(LAUGHTER)

AND THIS IS, THAT CRACK YOU

HEARD WAS ACTUALLY MY THUMBS.

THAT'S WHAT HAPPENS WHEN

YOUR BONE DENSITY IS LESS

THAN A PENCIL.

ALL RIGHT, $7.7 TRILLION

DOLLARS, THAT'S TARP, THE

WORST PROGRAM IN U.S.

HISTORY TIMES 11.

IT'S HARD TO VISUALIZE SO

WITH MOST THINGS I TURN TO

STAR WARS.

THAT'S TARP, THAT'S TARP,

THAT IS TARP.

HERE'S THIS OTHER [BLEEP]

PROGRAM.

(LAUGHTER)

1 TRILLION, 2 TRILLION, 4

TRILLION, THERE'S THE

CAFETERIA, 6 TRILLION-- 7.7

TRILLION.

(APPLAUSE)

BY THE WAY, THE NUMBERS I

WAS SAYING WAS JUST HOW MUCH

WE HAVE TO PAY LUCAS FOR

THAT CLIP.

SO THANK YOU TO BLOOMBERG

NEWS FOR FINDING THAT OUT.

NOW WE KNOW WE ULTIMATELY

SENT THE BANKS $7.7 TRILLION.

THAT'S MORE THAN HALF OF THE

COUNTRY'S ENTIRE GROSS

DOMESTIC PRODUCT.

IT'S MORE THAN TWICE THE

ANNUAL BUDGET OF THE ENTIRE

FEDERAL GOVERNMENT,

OBVIOUSLY NOT COUNTING THAT

7.7 TRILLION EXPENDITURE.

WHERE DID THEY COME UP WITH

THE MONEY?

>> THE FEDERAL RESERVE

CREATED OUT OF THIN AIR AND

LOANED AT BELOW MARKET RATES

7.7 TRILLION DOLLARS.

>> Jon: HUH?

WHAT?

BELOW-- HOW FAR BELOW MARKET

ARE WE TALKING HERE AND

WHILE YOU ANSWER, I WILL-- EVER

SO GENTLY HOLD THIS LUMP OF

COAL.

>> THEY LENT OUT TRILLIONS

OF DOLLARS AT AN INTEREST

RATE OF 0.01%.

>> Jon: MOTHER [BLEEP]!

0.01%!

CHIRBS PLAUS

(CHEERS AND APPLAUSE)

>> Jon: I'VE GOT NEWS FOR

YOU, 0.01%, THAT'S NOT BELOW

MARKET, THAT'S FREE.

WHERE DOES ONE GO TO GET ONE

OF THESE FREE LOANS YOU

SPEAK OF.

>> THEY PUMPED $7 TRILLION

IN INTO THE FINANCIAL SYSTEM

THROUGH SOMETHING CALLED A

DISCOUNT WINDOW.

>> Jon: OH, A DISCOUNT

WINDOW.

WHERE THEY JUST HAND OUT

INTEREST FREE MONEY.

QUICK QUESTION WHERE IS THIS

WINDOW?

BECAUSE WHEN GI TO THE BANK

FOR SOME REASON I HAVE TO

USE THE INEXPLICABLE FEE

WINDOW.

(LAUGHTER)

WHAT WAS WALL STREET DOING

WITH THIS 7.7 GAJILLION IN 0

INTEREST THIN AIR TAXPAYER

MONEY.

AND TO ENSURE THAT I DON'T

GET UP SET ABOUT THE

INFORMATION I'M ABOUT TO

HEAR, I'M GOING TO TAKE MY

BIGGEST THERAPEUTIC STEP YET

AND SEE HOW-- I'M JUST GOING

TO, WHILE I HEAR THIS

INFORMATION, I'M JUST GOING

HOLD PROFESSOR BUTTERSCOTCH

HERE AND-- YEAH, YEAH.

PROFESSOR BUTTERSCOTCH, HE

CALMS ME SO I WILL HOLD HIM

WHILE I HEAR IT.

>> IF YOU ARE A BANK YOU CAN

BORROW MONEY FOR FREE FROM

THE FED AT 0 AND REINVEST IT

IN TREASURY AND PAY 3%.

>> THE BANKS PROBABLY

PROFITED ABOUT $13 BILLION.

>> Jon: MOTHER [BLEEP]!

NO!

OH, OH, OH.

PROFESSOR BUTTERSCOTCH, WHAT

I HAVE DONE?

PROFESSOR BUTTERSCOTCH, AND

HE WAS JUST ABOUT TO GET

TENURE.

(LAUGHTER)

>> Jon: AN ACTUAL PROFESSOR.

SO LET'S REITERATE WHAT IS

GOING ON HERE.

BASICALLY THE GOVERNMENT WAS

LENDING BANKS MONEY AT NO

INTEREST, AND THEN BORROWING

IT BACK FROM THE BANKS AT

INTEREST.

OUR GOVERNMENT IS THE

WORLD'S DUMBEST LOAN SHARK.

(LAUGHTER)

THE GOVERNMENT WAS SELLING

DOLLAR BILLS TO THE BANKS

FOR 97 CENTS.

AND THE BANKS HAD THE BALLS

TO BONUS THEIR EMPLOYEES FOR

BEING SMART ENOUGH TO GO,

OKAY.

SO BANKS, A PERPETUAL MONEY

MACHINE.

TO BE FAIR, ACCORDING TO

FURTHER BLOOMBERG RESEARCH,

THE INTEREST BANKS EARNED

DURING THAT TREASURY DEAL

WHILE THEY WERE GETTING FREE

LOANS FROM THE FED ONLY

ACCOUNTED FOR ABOUT 10 OF

THE 13 BILLION IN BAILOUT

RELATED PROFITS.

I WILL TELL YOU WHAT, THANK

GOD AT LEAST THE FED TOLD

CONGRESS ABOUT THE SIZE OF

THIS SCHEME, THE 7.7

TRILLION SO, IT COULD

ADDRESS THE REAL SCOPE OF

OUR SYSTEMIC FINANCIAL

PROBLEMS WITH THE DODD FRANK

FINANCIAL REFORM LAW.

>> IT ALSO KEPT THIS

INFORMATION SECRET FROM

TREASURY DURING THE TIME

THAT THEY WERE CREATING TARP,

AND THEY KEPT IT SECRET FROM

CONGRESS WHEN CONGRESS WAS

DOING THE DODD FRANK

FINANCIAL REFORM LAW.

>> Jon: AND THAT CONCLUDES

THIS INSTALLMENT OF, HOW THE

[BLEEP] IS IT THAT MARTHA

STEWART WENT TO JAIL?

WE'LL BE RIGHT BACK.

Loading...