Thursday, October 22, 2009
Deep in the heart of Oklahoma oil country, the United States Federal Reserve Banks owns...a...shopping mall. Unfortunately, its pretty well dormant. Except, that is, for the oil pump slowly grinding away in the parking lot (albeit one that the Fed does not own because it doesn't own the shopping mall's mineral rights--a somewhat curious concept in the first place: "shopping mall mineral rights").
A $29 billion trail from the Federal Reserve's bailout of Wall Street investment bank Bear Stearns ends in a partially deserted shopping center on a bleak spot on the south side of Oklahoma City. The Fed now owns the Crossroads Mall, a sprawling shopping complex at the junction of Interstate highways 244 and 35, complete with an oil well pumping crude in the parking lot -- except the Fed does not own the mineral rights.
Isn't the irony thick...the U.S. taxpayers, through our backing of the Fed, now essentially own a dead mall.
The Fed finds itself in the unusual situation of being an Oklahoma City landlord after it lent JPMorgan Chase $29 billion to buy Bear Stearns last year. That money was secured by a portfolio of Bear assets. Crossroads Mall is the only bricks and mortar acquired through bailout. The remaining billions are tied up in invisible securities spread across hundreds, if not thousands, of properties. It is hard to be precise because the Fed has not published specifics on what it now owns. The only reason that Crossroads Mall has surfaced is that it went into foreclosure in April.