Posts filed under “Financial Press”

Bloomberg: Release Fed Borrowers’ Names

I expect the Fed to lose their Appeal:

“The Federal Reserve should be forced to identify companies that received loans from the central bank because it can’t demonstrate that borrowers would be harmed by the disclosure, according to lawyers who won a Freedom of Information Act lawsuit.

Total lending by the Fed, which last year began extending credit directly to companies that aren’t banks for the first time since it was created in 1913, was $2.12 trillion on Sept. 30.

Details about the borrowers and their collateral are “central to understanding and assessing the government’s response to the most cataclysmic financial crisis in America since the Great Depression,” attorneys for Bloomberg said in the suit.

The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg suit didn’t seek money damages.”

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Source:
Fed Should Release Borrowers’ Names, Bloomberg Says
Mark Pittman
Bloomberg, Oct. 5 2009

http://www.bloomberg.com/apps/news?pid=20601109&sid=aPXkf9Z0xZ4A

Category: Bailouts, Federal Reserve, Financial Press, Legal

Monday Afternoon Reading

A rather interesting and eclectic set of readings: • Inside the Crisis:Larry Summers and the White House economic team (New Yorker) • The elusive leverage ratio (Rolfe-Winkler) • Gold Is Still a Lousy Investment (WSJ) • A Look Inside the Regulatory Kitchen (Matt Taibbi) • Unemployment Becoming Leading Indicator for Pimco’s New Normal (Bloomberg) •…Read More

Category: Financial Press

Afternoon Readings

Some interesting columns worth killing a few trees for: • If Hugo Chavez Is Selling Dollars, Maybe You Should Be Buying (Barron’s) • AIG Said to Dismiss McKinsey as Benmosche Seeks to Cut Fees (Bloomberg) I have a thesis that McKinsey is the root of all evil . . . • Moody’s secretive nature described…Read More

Category: Financial Press

Comcast/NBC Deal Looks to be Real

As noted last night, Comcast is discussing a majority NBC purchase from GE: • Comcast-GE Talks Heighten Intrigue Over Fate of NBCU Its good to have low friends in high places — especially lawyers! (Thanks, David!)

Category: Financial Press, M&A

Sources: Comcast in Talks to Buy NBC

The late breaking news doesn’t seem to stop these days: “Comcast, the nation’s leading provider of cable, entertainment and communications products and services, is in talks to buy the entertainment giant NBC-Universal from General Electric, according to knowledgeable individuals. Deal points were hammered out at a meeting among bankers for both sides in New York…Read More

Category: Financial Press, M&A

Afternoon Reading List

Items of note worth reading: • Best Quarter Since ’98 for Dow (WSJ) And the Dow only had to get cut in half to make it happen! • Should Volcker be Fired? (Brown Brothers Harriman) • Greenspan Sees Growth Slowing as Stocks ‘Flatten Out’ (Bloomberg) Greenie Bearish? I am tempted to say this is a…Read More

Category: Financial Press, Markets

Tuesday Links

Some interesting reading for a sleepy Tuesday afternoon: • As Subprime Lending Crisis Unfolded, Watchdog Fed Didn’t Bother Barking (WaPo) • How Bank of America Used Merrill Losses to Bully the Government (Law.com) • FDIC Proposes Banks Prepay Deposit Fees Through 2012 (Bloomberg) • A risky revival (FT) • Earnings Revisions at a Two Year…Read More

Category: Financial Press

Why Does Bloomberg Keep Getting the FDIC Story WRONG?

Barry emailed me this AM to ask about the commentary last week by Jonathan Weil of Bloomberg News regarding the FDIC:

FDIC Is Broke, Taxpayers at Risk, Bair Muses: Jonathan Weil

http://www.bloomberg.com/apps/news?pid=20601039&sid=aEKc7Yh8ogXw

The thrust of the piece is that “FDIC’s insurance fund is going broke, and Sheila Bair is wondering aloud about how to replenish it. This means one thing for taxpayers: Watch your wallets.”

This makes for sensational and salacious copy. Unfortunately, the entire thesis of the article is wrong.

I have gotten used to the media butchering stories about the FDIC’s deposit insurance fund, but this piece from a writer an intelligent  and thoughtful as Weil demands rebuke.  As Barry said to me, we all expect Bloomberg to get stories right.  When they miss something as basic as this, it makes both of us scratch our heads.

Let’s first look at the lead of the comment quoted above. Last week, in an open blast to the media taking Bloomberg to task, I said the following:

“Repeat after me: The FDIC does not run out of cash.  The FDIC does not run out of cash. FDIC can confiscate all of the net assets and earnings of all FDIC insured banks. That is trillions in total liquidity.  FDIC can borrow from Treasury, the Fed and even from FDIC insured banks. They can also issue notes.”

I then reminded Weil et al that the BANKING INDUSTRY pays for not only the operations of the FDIC, but for the deposit insurance fund (“DIF”) as well. So Weil’s comment that taxpayers should reach for their wallets is just scare mongering.

I continued to spank Weil: “Our worst case loss to the FDIC fund is $300-400bn THROUGH THE CYCLE. Where is the problem? It is in your minds and the minds of your editors. If you can’t get your collective minds at Bloomberg News around the nuances of federal finance and the workings of the FDIC, THEN STOP WRITING ABOUT IT.”

Read More

Category: Credit, Financial Press, Regulation

The Death of the Newspaper

Category: Financial Press, Think Tank

Friday Reading

Some afternoon reading for a lazy Friday: • King Says British Banks Got Within Hours of Collapse (Bloomberg) “Two of our major banks which had had difficulty in obtaining funding could raise money only for one week then only for one day, and then on that Monday and Tuesday it was not possible even for…Read More

Category: Financial Press