Court: Fed Must Make Loan Info Public
“When an unprecedented amount of taxpayer dollars were lent to financial institutions in unprecedented ways and the Federal Reserve refused to make public any of the details of its extraordinary lending, Bloomberg News asked the court why U.S. citizens don’t have the right to know”
-Matthew Winkler, the editor-in-chief of Bloomberg News.
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I would have been surprised if it went the opposite way.
“Federal Reserve must make records about emergency lending to financial institutions public within five days because it failed to convince a judge the documents should be exempt from the Freedom of Information Act.
Manhattan Chief U.S. District Judge Loretta Preska rejected the central bank’s argument that the records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions. The collateral lists “are central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression,” according to the lawsuit that led to yesterday’s ruling.
The Fed has refused to name the borrowers, the amounts of loans or the assets put up as collateral under 11 programs, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued Nov. 7 on behalf of its Bloomberg News unit.”
The only way this has been historically been allowed is when it imoacts National Security . . .
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Source:
Fed Must Release Reports on Emergency Bank Loans, Judge Says
Mark Pittman and Karen Gullo
Bloomberg, Aug. 25 2009
http://www.bloombergs.com/apps/news?pid=20601087&sid=afi7TJiJFys0
August 25th, 2009 at 7:36 am
I hope this will KILL THE FED. Their banking system is the evil root of all the ails the USA and the world today.
~~~
BR: Really? I think there are much bigger issues…
August 25th, 2009 at 7:42 am
I demand the the gold bugs tell me where they got their gold, where was it mined, and who mined it.
Gold, and the desire for gold is the root of all evil in the USA and the world and beyond… out in the ionosphere where the cosmic rays can pass through, undetected, undeterred …save those special chapeaus from Reynolds.
August 25th, 2009 at 7:58 am
This is all you need to know
“The Fed has refused to name the borrowers, the amounts of loans or the assets put up as collateral under 11 programs, saying that doing so might set off a run by depositors and unsettle shareholders.”
But hey, now the Fed has a few days to doctor the reports anyways
August 25th, 2009 at 8:15 am
I’m…shocked…(pinches self)
August 25th, 2009 at 8:28 am
Back in March of last year I officially requested the same information, I was denied. I’m glad to see that Bloomberg had the fortitude (i.e., money and legal team) to get this information! It will reveal the smoke and mirrors crap this jackshift group has been playing! Constant talk of transparency while everything gets censored for our “own good.” Frustrating… and yet I see Ben got another term. What a hero!!!
August 25th, 2009 at 8:30 am
Wow, I’m stunned that the court is making Fed do that. Agree to Cohen though, the information will be fabricated..
August 25th, 2009 at 9:01 am
BR: Really? I think there are much bigger issues…
reply:
—————
In a large sense, you are correct. The Fed did a lot of good things at a bad time.
On the other hand, it’s secrecy has turned it into a possible black box slush fund. GWB has proven that laws can be interpreted in many ways. Creative interpretations plus unlimited funds can make the Fed into a tool of political expedience. We don’t know. The Fed can print unlimited excuses as to why it requires secrecy.
Jump starting the markets to repair them from the naked short onslaught was commendable. But today it looks like an I-Banks friends program. Plus it’s just killing the price of oil, which is killng the recovery.
It’s both a solution and a part of the problem.
August 25th, 2009 at 9:12 am
I don’t question the independance of the FED, but I question the black veil over their activities lately which seem to have spiralled out of control.
If I am to believe Chris Martenson, it is time to put a stop to the Ponzi scheme.
http://www.chrismartenson.com/martensoninsider/martenson-insider-fed-pomo-activity-and-stock-market
August 25th, 2009 at 9:16 am
hi dead hobo,
“The Fed did a lot of good things at a bad time.”
Other than causing the problem and then offering the same medicine as a solution, thereby setting up a bigger mess down the road, what are you thinking about here? Increasing the income wealth disparity in our nation at the primary expense of the poor, elderly and those on fixed incomes?
August 25th, 2009 at 9:19 am
i wonder if the Fed will appeal and get a friendly judge to overturn? also- assuming that does not happen- i wonder if the info will be leaked a bit at a time before full disclosure- to gauge market reaction- and to lessen the severity of a big “bombshell” hitting at one time-
it will be interesting to see who and what is involved in these lending schemes- what the Fed is holding as collateral- what banks are literally defunct if not propped up by the Fed-
this is the biggest banking swindle of all time- connected banksters literally stealing trillions from the American people for generations-
i can only hope that the american people prevail and the bankers lose- hasn’t been turning out that way so far
August 25th, 2009 at 9:24 am
jr Says:
August 25th, 2009 at 9:16 am
Other than causing the problem and then offering the same medicine as a solution, thereby setting up a bigger mess down the road, what are you thinking about here?
reply:
————
They stopped the free fall. Beyond that, we agree on a lot of things.
August 25th, 2009 at 9:28 am
Venn data,
Have you read Miller Tabak’s Peter Boockvar? Barry features Boockvar’s marco notes (usually a couple a day) in the Think Tank session, and he is a huge gold fan. There’s lots of good stuff to be learned from Peter, here’s him on gold from a month ago – http://tiny.cc/xz69m.
August 25th, 2009 at 9:47 am
The Fed will appeal thats a foregone conclusion and if they lose maybe they’ll provide coded or edited information…or maybe they’ll claim the information is provided in private correspondence that doesn’t really belong to the Fed.
This could stink worse than the info about AIG being a cash conduit to GS and other fortunate ones.
August 25th, 2009 at 9:54 am
The whole concept of representative democracy rests on the principle that we get to know what the representatives do. But what about “Fed independence”? Truly an oxymoron, the Fed is not independent of anything. It doesn’t create value. It just moves it around and queers up the accounting for it in the process. Those little chits and pixels called dollars it creates out of thin air are really claims on the sweat of our labors. We have a right, nay even a duty, to know. Otherwise, it is simply taxation without representation. This is the best news I’ve seen in a long time. Good going, Bloomberg News.
August 25th, 2009 at 10:05 am
The appeal will not lose. Call me a ubercynic but on some grounds like national security being threatened if they release this info, not a chance of any single clause ever reaching the public. This info is too threatening to the financial oligarchy and they’re not about to start playing fair by the rules now, letting many of the dirty little secrets out.
August 25th, 2009 at 10:07 am
U.S. Raises Estimate for 10-Year Deficit to $9 Trillion
The Obama administration, citing an economic downturn that
has been deeper than it had first thought, raised its
estimate on Tuesday of the government’s deficit over the next
decade to $9 trillion from $7.1 trillion.
A trillion here, a trillion there, after a while it adds up to real money. So realistically we have a trillion dollar deficit every year for the forseeable future? Thank god the recession is ending, now we can move on to the depression!
August 25th, 2009 at 10:17 am
Just a few trillion. Yup, and sometime, somewhere, some sharp nut in the main stream press is going to wonder where all this money is going to come from and then reflect publicly on the consequences. I wait for that day as it’ll be a sign that humanity is starting it’s next evolutionary leap.
August 25th, 2009 at 10:29 am
@Curmudgeon
Now it just depends to what level this info release will be diluted/censored
August 25th, 2009 at 10:30 am
[...] are posts on the Big Picture and Zero Hedge blogs today on the subject of Bloomberg winning a court case against the Fed on [...]
August 25th, 2009 at 10:31 am
The Fed will do what it does best…….lie.
August 25th, 2009 at 10:42 am
this took a little steam out of the market-
“The US economy will shrink far more than expected this year and will rebound much more slowly than forecast after that, according to a bleak new assessment by the White House Budget Office.”
this is all like a slow motion train wreck- the Fed is at the epicenter of a massive deception of the American people-
all these bulls will be much like the ‘32 bulls who kept doubling down- all the way down- this country is in a trap from which we cannot extricate ourselves-
how do we get out from under? that is the question- sheer default?
August 25th, 2009 at 10:48 am
@ahab
but then they can juice the numbers and have better than expected results. Sounds like they’ve been studying AAPL’s approach to guidance.
August 25th, 2009 at 10:48 am
I believe they have 10 days to appeal under the Fed. Rules of Civ. Proc. The basis for the appeal will be either abuse of (judicial) discretion, or that the court’s finding was clearly erroneous. Most appeals fail. The fact that they did not bring a national security based defense at the trial level means (I think) that they cannot now rely on that at the appellate level.
The question is what the court ruled the Fed had to provide, and whether the Fed can redact or selectively exclude certain information. It is possible they would be in contempt if they did not provide a full disclosure. Doctoring the data would expose them to claims of fraud at the very least…but who knows what will happen.
August 25th, 2009 at 10:48 am
how do we get out from under? that is the question- sheer default?
I believe we’ll use hyperinflation rather than formal default or currency devaluation, pay back the Chinese etc with Zimbabwe dollars. Crunch time is when our creditors stop staring at the headlights and stop buying treasuires.
BBs reappointment is a sign that the Fed stoping their purchases in Oct is complete eyewash.
August 25th, 2009 at 11:09 am
Ben said he wanted a transparent Fed. This ruling and Ron Paul’s HR 1207 will pull the curtain back from the wizard.
http://theburningplatform.com/economy/the-federal-reserve-must-die-1
August 25th, 2009 at 11:15 am
@Vilgrad:
The more you spam that, the less I want to read it.
August 25th, 2009 at 1:18 pm
It appears that no one or no agency is accountable in D.C., including the FED. They have 5 days to “fix” their release which will create more questions (that won’t be answered) than will. Just the fact that the U.S. taxpayers, whose money was used, were prevented from accessing this info and that it took a suit by a news agency to get the FEDs “watered down” version, is sufficient to imply that the FED must go!!