The U.S. Treasury's $2.4 Trillion Secret

WHO GOT BAILED OUT

John Carney with Maria Bartiromo

Mutual fund companies such as BlackRock, BNY Mellon, T. Rowe Price, Dreyfus, and Legg Mason took advantage of federal assistance, plus large banks that provide money market funds to customers, including JPMorgan, Goldman Sachs, Morgan Stanley and Wells Fargo.

How much were taxpayers compensated?

Despite the enormous size of the guarantees, the Treasury collected only $1.2 billion in fees from the participating funds.  By Wilson’s calculation, most participating funds paid just 0.04 percent, or 4 basis points, for a year’s worth of insurance.

---

Treasury's Secret $2.4 Trillion Mutual Fund Guarantee

By John Carney

Details about a secretive government program to bail out money-market mutual funds are finally coming to light. Acting without any explicit Congressional authority, the U.S. Treasury guaranteed in excess of $2.4 trillion of money market funds after the giant Reserve Primary Fund "broke the buck" following the bankruptcy of Lehman Brothers. The program, which ended on Sept. 18, 2009, seems to have successfully prevented a panicked run by money-market fund investors.

But until now, the Treasury has kept the identities of the funds that received government backing and the amounts guaranteed secret. It was not clear how many funds obtained backing or for how much taxpayers were on the hook during the program's duration.

Linus Wilson, an assistant professor of finance at the University of Louisiana at Lafayette, recently obtained data about the program from the Treasury, through a Freedom of Information Act request.

The data from the Treasury show that taxpayers were backing in excess of $2.4 trillion through the mutual fund program. Hundreds of funds participated in the program, amounting to almost 99 percent of the total money-market mutual fund assets.

Continue reading...

For more on this story:

The Bank Run Excuse For Bailouts...Was Officially Bullshit

Comments

[DailyBail]

The Bank Run Excuse For Bailouts...Was Officially Bullshit

http://dailybail.com/home/the-bank-run-excuse-for-bailoutswas-officially-bullshit.html

Related story

[DailyBail]

Poll: 61% of College-Age Students Want Government to Stay Out of Their Lives

http://cnsnews.com/blog/adam-tragone/poll-61-college-age-students-want-government-stay-out-their-lives

[DailyBail]

Detroit’s emergency manager says the city is bleeding much more red ink than originally thought.

http://detroit.cbslocal.com/2013/05/08/kevyn-orr-detroit-is-in-worse-shape-than-i-thought/

“The situation is severe,” Orr said. “It’s worse that we originally thought. It ain’t good.”

[DailyBail]

Billionaire John Paulson sought bankruptcy court protection for a real estate unit of his hedge fund after executives there were sued for alleged conflicts of interest in the asset sales of five bankrupt resorts.

http://www.bloomberg.com/news/2013-05-09/msr-former-la-quinta-resort-owner-seeks-bankruptcy-in-new-york.html

[DailyBail]

Bangladesh Building Collapse Death Toll Reaches 1,000

http://www.bloomberg.com/news/2013-05-09/fire-at-bangladesh-garment-factory-kills-at-least-7-people.html

[DailyBail]

Heart Patient Risk From iPad2 Found by 14-Year-Old

http://www.bloomberg.com/news/2013-05-09/heart-patient-risk-from-ipad2-found-by-14-year-old.html

Chien is 14, and her study -- which found that Apple's iPad2 can, in some cases, interfere with life-saving heart devices because of the magnets inside -- is based on a science-fair project that didn’t even win her first place.

[DailyBail]

Reed Hastings Is the Man Who Ate the Internet

http://www.businessweek.com/articles/2013-05-09/netflix-reed-hastings-survive-missteps-to-join-silicon-valleys-elite

On a normal weeknight, Netflix accounts for almost a third of all Internet traffic entering North American homes. That’s more than YouTube, Hulu, Amazon.com, HBO Go, iTunes, and BitTorrent combined.

[DailyBail]

Pimco Raises Treasuries Holdings to Highest Level Since 2010

http://www.bloomberg.com/news/2013-05-09/gross-raises-pimco-s-treasuries-holdings-of-highest-since-2010.html

[DailyBail]

Central Banks Keep Easing After 511 Cuts Fail to Spur Economies

http://www.bloomberg.com/news/2013-05-09/central-banks-keep-easing-after-511-cuts-fail-to-spur-economies.html

[DailyBail]

Berkshire Hathaway Inc.’s $1 billion note sale shows that while Chief Executive Officer Warren Buffett may pity investors who’ve stuck with bonds as yields fall to record lows, he’ll sell them as much debt as they want.

http://www.bloomberg.com/news/2013-05-09/berkshire-sells-debt-to-buyers-buffett-pities-corporate-finance.html

[DailyBail]

Tiffany vs. Costco: Which Diamond Ring Is Better?

http://www.businessweek.com/articles/2013-05-06/tiffany-vs-dot-costco-which-diamond-ring-is-better

[DailyBail]

Why Are Baseball Fans Staying Home?

http://www.businessweek.com/articles/2013-05-09/why-are-baseball-fans-staying-home

[DailyBail]

For $300, a Utah Company Can Recover Vanished Snapchats

http://www.businessweek.com/articles/2013-05-09/for-300-utah-company-can-recover-vanished-snapchats#r=rss

[Josie]

And if Treasury couldn't handle the claims, there was always AIG as the insurer of last resort...

DB- as an aside, there was a beautiful segment with Maria Buffoonromo today at 4:15 on her closing bell show. Post it. I call it the Jamie Dimon PR show-funny shite. Is MB doing Dimon? Sure acts like it...

[DailyBail]

JOSIE

Here it is.

http://video.cnbc.com/gallery/?play=1&video=3000167720

I'm just starting to watch

[Josie]

Post that shite with the Rosner piece. Goes well, I think.