Karl Denninger

'Fedization': Bear's Rescue Presents a Major Moral Hazard

Well from where I sit this is flatly unlawful.

The Fed has specifically enumerated powers and limitations laid out in The Federal Reserve Act of 1913.

Nowhere do I see the ability to provide what amounts to a bribe (the "backstop", or "no-recourse" loan), nowhere do I see the right to establish fictional persons for the purpose of moving liabilities off balance sheet (the LLC), and on and on and on.

And since Treasury and, if reports are believed, President Bush, signed off on this, they're complicit in a violation of their oaths of office.

Ergo, its time for America to stand up.

financialpetition.org does exactly that. It asks Congress to look into this cluster**** and determine if indeed the Constitution or law was violated and, if so, well, you know what comes next.