This is the best synopsis I’ve seen so far of what went on behind the scenes to “save” the economy after TARP and it will rattle your cage. Start with the fact that the Federal Reserve now apparently has carte blanche check writing ability and made $1.2 TRILLION in secret loans backed by taxpayers to big Wall Street firms that it got permission from no one to make. Then try to process what happened to the money.

While we were being told the 10 largest financial institutions had borrowed about $160 billion from the Treasury Department, we weren’t being told that the same firms were also borrowing $ 669 billion in emergency funds from the Fed. Those borrowers included Morgan Stanley ($ 107 billion), Citicorp. ($99.5 billion) and Bank of America ($ 91.4 billion).

Several big American financial institutions who were trumpeting their liquidity at the time of the crisis (we’ll let you dig their names out yourself, rather than call them liars in print), were, in fact, relying on secret federal borrowings to keep afloat and avoid insolvency. At times, and in some instances, the Fed money provided all of an institution’s available cash …

The total amount lent to the private banking sector by the federal government, Bloomberg notes, was about the same as the current amount of 6.5 million delinquent or foreclosed mortgages. Those borrowers haven’t gotten any meaningful government help …

And the true shocker:

… what sustained the viability of America’s financial system during the Crash of ’08 was a total lack of transparency as to how the liquidity was being funded. Several of our ten largest financial institutions (as well as several in Europe) were illiquid for extended periods of time and would have failed, but for the secret, low interest government loans.