MOTU ARE A MORAL HAZARD

You may recall that in 2008, the Bear Stearns CEO said that his company was OK but 4 days later it went belly up. Well, other CEOs are just as dishonest (h/t Digby)

Secret Fed Loans Gave Banks Undisclosed $13B
By Bob Ivry, Bradley Keoun and Phil Kuntz - Nov 27, 2011 5:01 PM MT
Bloomberg Markets Magazine

Bankers didn’t mention that they took tens of billions of dollars in emergency loans at the same time they were assuring investors their firms were healthy.

On Nov. 26, 2008, then-Bank of America (BAC) Corp. Chief Executive Officer Kenneth D. Lewis wrote to shareholders that he headed “one of the strongest and most stable major banks in the world.” He didn’t say that his Charlotte, North Carolina-based firm owed the central bank $86 billion that day.

JPMorgan Chase & Co. CEO Jamie Dimon told shareholders in a March 26, 2010, letter that his bank used the Fed’s Term Auction Facility “at the request of the Federal Reserve to help motivate others to use the system.” He didn’t say that the New York-based bank’s total TAF borrowings were almost twice its cash holdings or that its peak borrowing of $48 billion on Feb. 26, 2009, came more than a year after the program’s creation.