The New York Fed, Pumping Out More than $9 Trillion in Bailouts Since September, Gets Market Advice from Giant Hedge Funds
Since the Fed’s inception in 1913, the statutory role of the Federal Reserve has been to serve as lender of last resort to commercial banks – so that those commercial banks could help the overall economy by making sound business and consumer loans. The statutory role of the Fed has never been to be a lender of last resort to the trading houses on Wall Street or hedge funds. But beginning with the 2007 to 2010 financial crisis, the New York Fed has simply arbitrarily decided to provide an unlimited money spigot to Wall Street’s trading houses whenever they are at risk of blowing themselves up as a result of their own hubris.
To say that Congress has been negligent in reining in this abuse barely captures the reckless irresponsibility of what the New York Fed has been allowed to continue to do with barely a whimper from Congress or mainstream media.