From economist Ed Yardeni:
In the United States, the Fed is rapidly becoming the true bank of America. The Fed has responded to the credit crisis by creating a bunch of lending facilities to provide liquidity on a term basis to commercial and investment banks. They came too late for Bear Stearns, and they chose not to save Lehman. But the Fed had no problem approving requests for bank charters by Goldman Sachs and Morgan Stanley in record time over the weekend two weeks ago. Now the Fed is working on a new facility to fund commercial paper. Earlier this year, when the Fed started to exchange its Treasury security holdings for the doggy assets of the banks, I suggested that we rename it “Feddie.” Now, I think a more descriptive name is the Third Bank of the United States. The First Bank of the United States was a bank chartered by Congress on February 25, 1791. The charter was for 20 years. The bank was created to handle the financial needs and requirements of the federal government. Previously, the 13 individual colonies had their own banks, currencies, and financial institutions and policies. The Second Bank of the United States was a bank chartered in 1816, five years after the expiration of the first one. It was founded out of a desperation to stabilize the currency by the administration of US President James Madison. President Andrew Jackson had a famous dispute with the bank’s president, Nicholas Biddle. It lost its federal charter in 1836, and ceased operations in 1841. The Third Bank is working 24/7 to provide all the credit that the economy needs to avert a depression and revive growth.
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