The Real Housewives of Wall Street 

Why is the Federal Reserve forking over $220 million in
bailout money to the wives of two Morgan Stanley bigwigs?

By Matt Taibbi
Rolling Stone
April 16, 2011

http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

America has two national budgets, one official, one
unofficial. The official budget is public record and hotly
debated: Money comes in as taxes and goes out as jet
fighters, DEA agents, wheat subsidies and Medicare, plus
pensions and bennies for that great untamed socialist menace
called a unionized public-sector workforce that Republicans
are always complaining about. According to popular legend,
we're broke and in so much debt that 40 years from now our
granddaughters will still be hooking on weekends to pay the
medical bills of this year's retirees from the IRS, the SEC
and the Department of Energy.

Most Americans know about that budget. What they don't know
is that there is another budget of roughly equal heft,
traditionally maintained in complete secrecy. After the
financial crash of 2008, it grew to monstrous dimensions, as
the government attempted to unfreeze the credit markets by
handing out trillions to banks and hedge funds. And thanks to
a whole galaxy of obscure, acronym-laden bailout programs, it
eventually rivaled the "official" budget in size - a huge
roaring river of cash flowing out of the Federal Reserve to
destinations neither chosen by the president nor reviewed by
Congress, but instead handed out by fiat by unelected Fed
officials using a seemingly nonsensical and apparently
unknowable methodology.

Now, following an act of Congress that has forced the Fed to
open its books from the bailout era, this unofficial budget
is for the first time becoming at least partially a matter of
public record. Staffers in the Senate and the House, whose
queries about Fed spending have been rebuffed for nearly a
century, are now poring over 21,000 transactions and
discovering a host of outrages and lunacies in the "other"
budget. It is as though someone sat down and made a list of
every individual on earth who actually did not need emergency
financial assistance from the United States government, and
then handed them the keys to the public treasure. The Fed
sent billions in bailout aid to banks in places like Mexico,
Bahrain and Bavaria, billions more to a spate of Japanese car
companies, more than $2 trillion in loans each to Citigroup
and Morgan Stanley, and billions more to a string of lesser
millionaires and billionaires with Cayman Islands addresses.
"Our jaws are literally dropping as we're reading this," says
Warren Gunnels, an aide to Sen. Bernie Sanders of Vermont.
"Every one of these transactions is outrageous."

But if you want to get a true sense of what the "shadow
budget" is all about, all you have to do is look closely at
the taxpayer money handed over to a single company that goes
by a seemingly innocuous name: Waterfall TALF Opportunity. At
first glance, Waterfall's haul doesn't seem all that huge -
just nine loans totaling some $220 million, made through a
Fed bailout program. That doesn't seem like a whole lot,
considering that Goldman Sachs alone received roughly $800
billion in loans from the Fed. But upon closer inspection,
Waterfall TALF Opportunity boasts a couple of interesting
names among its chief investors: Christy Mack and Susan
Karches.


To read more, go to 

http://www.rollingstone.com/politics/news/the-real-housewives-of-wall-street-look-whos-cashing-in-on-the-bailout-20110411

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