JPMorgan, Wells Fargo, Citigroup and Fossil Fuel Industry Get Bailed Out Under Fed’s “Main Street” Lending Program

by Pam Martens and Russ Martens
Wall Street on Parade

U.S. Treasury Secretary Steve Mnuchin and Federal Reserve Chairman Jerome Powell have apparently never walked down a Main Street in America. We make that statement because there is a huge disconnect between what’s really located on a typical Main Street and what’s in the bailout program they’ve designed and are calling the Main Street Lending Program (MSLP).

Americans need to sit up and pay attention to what’s going on here because the U.S. Treasury has committed $75 billion of taxpayers’ money to support this program under the illusion that it’s going to mom and pop operations on a typical Main Street in America. That initial $75 billion will be levered up to $750 billion under the Fed’s ability to create money out of thin air, with taxpayers eating the first $75 billion of losses. Once the loans are originated by a lender, they will then be bought up by a Fed-created Special Purpose Vehicle, thus removing bad loans from the balance sheets of banks like JPMorgan Chase, Wells Fargo, Citigroup and the like. The banks will only have to retain 5 percent of the exposure.

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