The Federal Reserve Is out of Control

Here are three lists of the holdings in Maiden Lane I, Maiden Lane II, and Maiden Lane III. In total, the lists span over 160 pages.

The information was released on March 31, 2010. Contrary to what the Federal Reserve said, the world did not come to an end. After all, why would it? This sort of information is extremely complicated, and sorting it out will require a substantial amount of time.

To give you an idea of what these vehicles hold (i.e., Maiden Lane I, II, and III), the Wall Street Journal has reported that “one loan controlled by the government is $12.75 million in financing Bear provided to the owner of the 167-room Radisson Hotel in Jacksonville, Fla. The hotel is owned by a venture controlled by Philadelphia real-estate investment company AMC Delancey Group Inc.”

Feel free to browse the lists yourselves. As a heads-up, the information that is easiest to understand (and arguably, most interesting) is in Maiden Lane I.

For example, consider the following borrowing entities for commercial real estate loans:

  • Hotel Maatschappij Schiphol, which is a hotel somewhere in Europe
  • Craigendarroch LTD, which is also a hotel somewhere in Europe
  • Hotel Corporation of Europe
  • Middle East Hotels LLC 

Am I the only one that is perplexed as to why the Federal Reserve owns these loans? Honestly, I am not surprised. To be fair, these loans were issued before the Federal Reserve purchased them (as far as I can tell); however, that does not change the fact that they should have never purchased them in the first place.

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