It would appear Enron-haters (including the DOJ) should be eating crow right now because as of today, Andy Fastow has been proven to be the visionary beyond anything we could have predicted in 2000 and 2001. Today, the Fed bought $600 billion government bonds in an effort to stimulate the comatose economy, thereby validating many of the most-criticized transactions that Fastow undertook while at Enron. (Sidebar: it might be valuable to think why the Fed is having to buy such massive bonds. Our last few bond auctions have been dismal failures. Nobody wants our debt – not even China, or largest creditor, or Japan, our second largest creditor. Thus, our own government is forced to step in to supply the “demand” that is missing in the marketplace. This is not good economic policy.)
Fastow is often accused of using Enron stock as a guarantor of LJM’s investments, then generally buying and selling products to himself (dark fiber springs to mind) using LJM to keep bad debt off the books.
If this was illegal or unethical, I ask why the Fed is doing it. The Fed is, obviously, the federal government. This would be the Enron actor. The Treasury is also the Fed. This would be LJM. The Fed is basically buying a worthless product – bonds – on the promise that they will be worth more in the future. Meanwhile, the Treasury gets to say that it has “sold” $600 billion of bonds – it looks excellent on the balance sheet. (Incidentally, they do this all the time. It’s only caught our attention because the amount is enough to make even governments blush.)
Granted, Fastow’s transactions were a little more complicated than that but that’s the gist of them.
To add a piquant twist to all this, consider: Andy Fastow is in prison. The DOJ – also part of the government – put him there. The same government that is playing numbers games and saying hocus pocus, abracadabra, while it steals from us put Andy Fastow in prison for doing something similar on a much smaller scale. Fastow never had the power to cause inflation, or the power to depress job creation, as the Treasury and Fed can.
Why is this kind of fraud okay when the government does it? Who is going to put them in jail?
Andy Fastow was apparently a visionary financier. We owe him an apology.
Cara Ellison should make a citizens arrest on the Fed and the Treasury. Also on the DOJ since they are not going after the other two which is non providing honest services. Since the DOJ is trying to get the law changed back to include honest services so they can defy the Supreme Court and they break the law all the time why don’t you arrest them also?
Finally, why don’t you get others in Gov that did the GM deal. They stole billions from GM creditors to allow them to go public with no real debt so they could sell that back to the public. Why is that not fraud? Why is that not stealing?
Oh they stole from businesses so it does not count. Businesses are evil especially if the try to make a profit. When they make profits then it means they have no rights since they are evil for making profits even if they do pay taxes to fund the law breaking government. Help!!
OK, go get em!!
Careful when you hear about the Fed buying US Bonds – because of minimal reserve requirements – buying $600 million in bonds – actually allows the Fed to print, lend out, give out, 100 times that — all brand new debt signed for by the US taxpayers.