Bloomberg Investigation Confirms 2010 NWCUA Report on Stimulus Lending

This week’s revelation by Bloomberg that the Federal Reserve secretly loaned more than $1.2 trillion in taxpayer dollars to banks and other companies came as little surprise to Northwest Credit Union Association (NWCUA) CEO John Annaloro. He was discussing the massive amount of peripheral lending and other “stimulus” that would be needed in addition to the $700 billion in the Troubled Asset Relief Program (TARP) as far back as 2008, when the nation was deep in the clutches of recession.

In September 2008, during the Washington Credit Union League Annual Business Meeting, then-president and CEO Annaloro cited information that outlined why the total cost of cleaning up the bank industry would reach far beyond $1 trillion and include asset swaps, money creation and lending, in addition to TARP.

A year ago, in September 2010, Annaloro updated his report and estimated that total borrowing would exceed $3.6 trillion. At its peak, monthly borrowing for all banks reached $493.2 billion. Peak borrowing for credit unions was $11.7 billion.

“We reassessed the 2008 report after examining information from the Bank of England, along with research and white papers from other sources,” Annaloro said. “The analysis we provided one year ago was spot on.”

And as Annaloro successfully forecast, much of the bailout effort was focused on non-banks and companies outside the United States. According to Bloomberg, industries that received the loans ranged from automakers and governments to insurance companies and retailers in 27 different countries, including China, Venezuela and others.

Bloomberg’s report and interactive graph shows more than 21,000 loans were made to a variety of businesses. The names were secret until the report was made public this week.

Sampling: who got what?

  • Free State of Bavaria – $2.4 B
  • Arab Banking Corp. – $5.7 B
  • ING – $8.6 B
  • AIG – $16.2 B
  • McDonald’s – $109 M

Who got the biggest loan?

  • Morgan Stanley – $107.3 B
  • Citi Group – $99.5 B
  • Bank of America – $91.4 B
  • RBS – $84.5 B
  • State Street Corp – $77.8 B
  • Goldman Sachs – $69 B    
  • JP Morgan Chase – $68.6 B

 

What will Annaloro forecast for 2012? Find out during the Northwest Credit Union Association’s Convention and Annual Business Meeting September 20-22 at the Hotel Murano in Tacoma.

Posted in NWCUA.