Courtesy of Pam Martens
New York Stock Exchange Floor
Most Americans believe that the unprecedented Fed bailouts of Wall Street didn’t begin until December of 2007, on the cusp of Wall Street’s financial collapse in 2008. That’s wrong. The Fed’s first massive bailout of Wall Street started on 9/11.
By the closing bell on September 10, 2001, the day before the attacks, the Nasdaq stock market was already in the midst of a full-scale implosion, having lost 66 percent of its market value and wiping out $4 trillion of wealth.
The Wall Street mega banks were in the cross-hairs at the time of then New York State Attorney General Eliot Spitzer for bringing to market Initial Public Offerings of companies that the banks’ own research analysts were internally calling “crap” and “dogs” while the same banks issued buy recommendations on the “dogs” to the unknowing public. One internal email from Jack Grubman, an analyst at Salomon Smith Barney, captured the brazenness of the deception: “Most of our banking clients are going to zero and you know I wanted to downgrade them months ago but got huge pushback from banking.”
The Congressional Research Service indicates that the Fed funneled “$100 billion per day” over a three-day period beginning on 9/11 to Wall Street firms. The consolidated annual reports of the Federal Reserve Banks show that the Fed’s balance sheet grew from $609.9 billion at the end of 2000 to $654.9 billion at the end of 2001 to $730.9 billion at the end of 2002 and $771.5 billion as of December 31, 2003.
According to a report by the St. Louis Fed, these are the numerous ways that the Fed rescued Wall Street following 9/11:
…
