Fed Defies Transparency Aim in Refusal to Identify Bank Loans

[DogPoundPup]

Source: Bloomberg

The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

``The collateral is not being adequately disclosed, and that's a big problem,'' said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. ``In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin.''

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide

[groovedaddy]

1. Sounds like a "shell game" to me - or 3 card monte - a scam, no less. n.t

[JDPriestly]

35. A shell game is exactly what it is.

The money is put in the banks and international companies and gradually over a period of time transferred to accounts that are not visible on the banks' and company's books. The losses are accounted for off the books so that regulators and the public, possibly even investors, don't see what is going on. Suddenly the losses are revealed. The book value of the banks and of the companies falls precipitously -- and a bail out is necessary. This has been done before. Think S&L crisis. We are being assured that the government will get all its money back. Don't believe it. Not for a minute. Not this time. The money is safely in the pockets of the extraordinarily wealthy.

And the money we are giving to the banks and other companies, that's our political power we are giving away. That's what is being overlooked. It's not just our money that these thieves are stealing. It's our political power. It's our ability to organize and communicate -- because organizing and communicating cost money.

The banks may have given Obama a lot of money, but it is a drop in the bucket compared to what Obama received from those of us not in that sector.

[FarCenter]

42. It is simple -- they are giving out US Treasury bonds and taking in dodgy US consumer debt

No one in the world wants to buy or hold securitized US mortgages, auto loans, student loand, or credit card receivables. Not even when cleverly packaged and gussied up with insurance from AIG, MBIA, etc., and provided with phony bond ratings from S&P, Moodys, etc.

So the price for US consumer debt has tanked.

With the mark to market accounting rules, this means that the banks have to mark their assets down, while their liabilities are unchanged, even though they may not incurr such severe losses in the long run.

To alleviate the situation, the Fed and the Treasury are in effect selling US Treasury Bonds to the investors, who are willing to buy debt backed by the US Governments power to tax. The Fed and the Treasury are also buying up the dodgy US consumer debt.

More recently, investors have also gone on strike against buying US commercial paper, municipal paper, and securitized commercial loans. So the program has had to become larger.

Unless the economoy can be turned around, all debt will have to be laundered through the US Treasury or the Fed to make it attractive to investors.

[Bushies gotta go]

2. dupe

[MsLeopard]

3. Will anyone do anything about this?

Nancy? Harry? Are you going to continue letting BushCo get away with everything they want? I mean, we've kept the powder dry for nearly eight years, and we have the cleanest table on the planet - isn't it time we put an end to the rape of America?

[truedelphi]

4. The situation going on with the banks should be front page news.

But the RW media will keep many details off the front pages until Obama gets in.

[louis-t]

24. At which time he will be blamed for everything.

Count on it.

[MNReformer]

62. Columbia Journalism Review says the media should all file amicus briefs with Bloomberg News.

http://www.cjr.org/the_audit/lets_go_to_court.php?page=all&print=true

[mrJJ]

5. Fed Defies Transparency Aim in Refusal to Disclose

Source: Bloomberg

Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.

``The collateral is not being adequately disclosed, and that's a big problem,'' said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. ``In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin.''

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aatlky_cH.tY&refer=worldwide

[MetaTrope]

6. Uh huh

And remember that $100 billion of that money was earmarked to the Bush White House for "discretionary spending". Who wants to bet that it's not even ending up in American hands?

[SpiralHawk]

7. More, more, more Republicon OCCULTISM

Republicons hide everything from public view, because there is SO MUCH they know is corrupt, amoral, wrong and a ripoff of America.

[RUMMYisFROSTED]

8. Next up: A bailout of the Fed itself.

:crazy:

[Hydra]

9. So how's that bailout working out for us?

Do we feel like we've paid Bush's cronies enough, or should we volunteer more?

[Zhade]

66. Would have been nice if those who were wrong about the failout had listened to we who were right...

...instead of mocking and deriding us.

Again.

[progressoid]

10. Big surprise.

[mbperrin]

11. I hope they get the info and get it out. This whole welfare for

corporate America is one of the worst (if not the worst) ideas ever!

[bvar22]

12. Would you buy a used car from these people ?

Now we have Your Children's Money too !!!
Hahahahahahahahahahahahaha

[barbtries]

13. refusing to SAY?!

impeach, indict, imprison...at least investigate! jeez this is frustrating.

[gulfcoastliberal]

14. Barney Frank: Fuck transparency & your right to know what they are doing with our $$:

In an interview Nov. 6, House Financial Services Committee Chairman Barney Frank said the Fed's disclosure is sufficient and that the risk the central bank is taking on is appropriate in the current economic climate. Frank said he has discussed the program with Timothy F. Geithner, president and chief executive officer of the Federal Reserve Bank of New York and a possible candidate to succeed Paulson as Treasury secretary.

``I talk to Geithner and he was pretty sure that they're OK,'' said Frank, a Massachusetts Democrat. ``If the risk is that the Fed takes a little bit of a haircut, well that's regrettable.'' Such losses would be acceptable, he said, if the program helps revive the economy.

`Unclog the Market'

Frank said the Fed shouldn't reveal the assets it holds or how it values them because of ``delicacy with respect to pricing.'' He said such disclosure would ``give people clues to what your pricing is and what they might be able to sell us and what your estimates are.'' He wouldn't say why he thought that information would be problematic.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ahdVHk_Ccoeg&refer=home

Frank pimped this plan harder than anyone, what a sleaze. I hope a good primary challenger steps up - Frank cares nothing for the constituents, only for his bankster thugs. Ugh.

[truedelphi]

15. There are a good many reasons why Frank is such a sleaze.

Some of which might make the Spitzer scandal look like a school boy picnic.

[natrat]

37. my god that barney frank is a repulsive scumbag-tar,feather and run him out of town

[AlexDeLarge]

16. And Bernanke

is supposed to hang around for the Obama administration? What the F@#*? Let's just make Joe Lieberman Secretary of Defense.

[De19713]

17. Stop the Thiefs

Why are the Democrats allowing this Bank robbery of our Tax Dollars, At least they need to assign a Special Investigation guard us against these thieves. They are stealing our kids futures as usual, this is out and out Bank Robbery.

[Cronopio]

18. This is *exactly* the move that will make the situation worse.

The central part of the Swedish solution to this problem in '92 was that the government assessed the financial health of each of the major banks and told all of the debt market players which ones were failing an which weren't. The direct capital injection was the means to this goal of market transparency.

It's clear from this move (and others) that Bernanke and Paulson do not have the interests of the economy at heart. They are just trying position themselves and their buddies in the industry to survive financial Armageddon and come out ahead. They're gaming the solution for themselves.

They need to go.

[JDwho]

19. At least there has already been a lawsuit filed...we'll see if anything comes of that;

but what really, really bothers me, is that I have read that Pres. elect Obama will feel compelled by necessity, to keep certain members of the Bush administration. One of these is Ben Bernanke. He (and Sec. Paulson) have promised to comply with demands for transparency. Bernanke is going back on his word and I don't think this is someone remotely fit for an Obama administration.

Isn't the whole point "Change"?

Keeping Bernanke, who has just proven that he is a typical Bushy by lying to the American people, is too close for comfort, IMHO. Obama shouldn't let anyone with characteristics of the disastrous Bu$h administration near our nation's economy.

[LASteve]

20. Shocking! A total surprise!

[peace13]

21. Will it eventually come out that the money was paid to Asian banks

on interest that come due on US loans? I remember reading about this in September. Does this ring a bell with anyone?

[BrklynLiberal]

22. Paulson is out in January...What about Bernanke? This kind of attitude should ensure his

that he be replaced.

[JDwho]

25. It looks like Bernanke is staying, but this latest deception may change Obama's mind.

[kirby]

27. Do you realize Obama cannot 'fire him'?

The Fed Reserve was created as an 'independent' entitity supposedly free from influence. While they 'Governors' of the Fed are Presidentially appointed, the appointment is for 14-years. One Chairman is picked from those Governors every four years. The chair is not up for appointment until 2010.

[BrklynLiberal]

32. damn.

[JDwho]

34. Well, crap. Guess we're stuck w/ him for a year. ty

[Dangerously Amused]

23. Still raping the treasury.

Sweet Jesus, these people will not stop until they have squeezed every last cent out of the people's trust and handed it over to themselves, their families and friends. This is nothing short of "legal" looting.

[Skink]

31. Never let a crisis go to waste.

[MNReformer]

68. The bailout is unconstitutional.

What is happening is that the Bush administration is engineering a massive raid on the Federal treasury to pay off the people within the financial industry who have been operating the housing scam because the politicians told them to do it. This is hush money. The people in the financial institutions who are getting the money will be passing it on to the big banks that leveraged their criminal lending practices. The giant sucking sound you hear is almost a trillion dollars of future taxpayer earnings going into the vaults of the nations's biggest banks, such as Citibank, Bank of American, and--the pet bank of the Rockefeller family--J.P. Morgan Chase. Much will also go into the vaults of foreign investors such as the Bank of China.

And it is the end of America.

http://www.opednews.com/articles/Does-the-Bailout-Bill-Mark-by-Richard-C-Cook-081001-554.html

[The Hope Mobile]

26. If they can't disclose then they better not ask for more.

[paparush]

28. No One Coulda Predicted that We'd Rob the American Taxpayer Blind - Now watch this drive..

[eowyn_of_rohan]

29. Aren't there ANY grounds for arresting ANY of these crooks?

:(

[yy4me]

30. In the past years, I thought Barney Frank was a voice for the

people, what happened, Barney??? Something holding you back? I thought you were on our side of this mess. Hmmmmm!

[depakid]

33. As long as there's full accountability down the line, this may well be a good idea for the present

In the current climate, the last thing the country (or the world) needs is another set of runs on the banks- both by depositors and other instutions.

A major rationale behind the rescue plan(s) is to create conditions of confidence in the financial industry while the mountains of bad debt are sorted out as rationally and responsibly as possible. Setting up one institution or another as a mark is not going to produce those results.

[natrat]

38. do you realize how retarded that sounds? unaccountability for money now but maybe later

[depakid]

39. You miss the point entirely

Deal with the crisis NOW -and deal with those who may have gamed the system once the crisis has somewhat subsised. I still have some modicum of confidence that Obama will set the Justice Department and federal regulatory agencies on a sharply different couse that we've seen in 28 years.

I also think that people are hopping mad enough that Congress will also be under immense presure to act responsibly.

There are records of who's getting what- and how its being used. And competent forensic accountants are frightering things to see in action.

In the meantime, unlike some, I'd prefer we not burn our houses down just to roast a few fat cats inside.

[moodforaday]

45. It's you who's missing the point, sorry.

If the money is being embezzled, moved to overseas shell accounts, then the money is NOT HELPING fight the crisis. The money is not going where it should be. It's not filling the liquidity hole.

It's like when you send food supplies to a draught-stricken country, but all (or almot all) of the food is seized by the local dictator's thugs and sold on the black market. No matter how much food you drop, you're not helping the hungry population, you're only helping fill the coffers of the elite who are responsible for the crisis in the first place.

Once again: if there is no transparent accounting, you can be certain that much/most of the money is not used the way it was intended. If it were, there would be no problem with keeping it transparent.

[Zhade]

67. FFS -- you still can't admit you were wrong about the failout???

NT!

[KakistocracyHater]

36. trying to bankrupt democratic representative nations

all at the same time. It seems to be working, unfortunately.

[Name removed]

40. Deleted message

Message removed by moderator. Click here to review the message board rules.

[truedelphi]

43. Ya know the old saying about shutting the barn door after the animals

HAve gone - this is more insidious.

Much more.

We are leaving the barn door open, with the cattle rustlers in place, and sending more cattle in.

So when we go to get our Social Security in another ten years (or sooner or later), it will be gone.

[eowyn_of_rohan]

46. this is too depressing

I have to hope Obama has some method to this madness .

[lovuian]

41. 2 trillion and we don't know where and who it going to????

it makes me wonder what the hell is going on

[lonestarnot]

44. Well we know the watcher is a thieving sneak, so why be bothered with the knowing re the banks.

[Name removed]

47. Deleted message

Message removed by moderator. Click here to review the message board rules.

[marias23]

48. Federal Reserve Secretly Gave out Two TRILLION in Loans

Source: Bloomberg News

Nov. 10 (Bloomberg) -- The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral.
Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return.
``The collateral is not being adequately disclosed, and that's a big problem,'' said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. ``In a liquid market, this wouldn't matter, but we're not. The market is very nervous and very thin.''
Bloomberg News has requested details of the Fed lending under the U.S.Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.



Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aOngFPgq7r3M&refer=home

---

Why isn't this front page news?

[FreeStateDemocrat]

49. People are more concerned about Palin's wardrobe.

[midnight]

53. Yep... But not a word about this giveaway.

[kimmerspixelated]

50. Think what that kind of money would do

for each and every family struggling right now! THIEVES!!!! Follow the money! Thieves! How do these assholes sleep at night???!!

[SpiralHawk]

51. republicon occultism runs rampant

to America's everlasting detriment

[snappyturtle]

52. Finally, the news is out. Thanks for posting. K&R nt

[Turbineguy]

54. Fine.

We can wait until January 21 to find out who got what from whom.

[robertpaulsen]

55. K & R for Bloomberg paying attention to the man behind the curtain!

:kick:

[petgoat]

56. It's not news for the same reason Bloomberg's story about the 160 profs against the bailout wasn't.

http://www.bloomberg.com/apps/news?pid=20601103&sid=aNhbZSQz2Vws&refer=us


Clearly the news media feel no obligation to provide the information
necessary so that public opinion can have a place in decision-making.

As I recall, that was the goal in the sixties, an open society where
an informed citizenry kept its representatives honest. Now the media
seem quite comfortable with the notion that decisions should be made
for us, and it's none of our business until after the fact.

Why, we're supposed to be grateful that they give us little titbits like
the story about Paulson on his knees before Pelosi!

[JJ]

57. Maybe We The People can foreclose on the banks

[Eyerish]

58. I freaking knew this would happen....

I'd love to see what all the Bailout Proponents think of this little gem:


"In an interview Nov. 6, House Financial Services Committee Chairman Barney Frank said the Fed's disclosure is sufficient and that the risk the central bank is taking on is appropriate in the current economic climate.

`Unclog the Market'

Frank said the Fed shouldn't reveal the assets it holds or how it values them because of ``delicacy with respect to pricing.'' He said such disclosure would ``give people clues to what your pricing is and what they might be able to sell us and what your estimates are.'' He wouldn't say why he thought that information would be problematic."



Fuck You Barney Frank.


There will NEVER be transparency no matter what people think. After 8 years we should know Gov't is corrupt no matter what side they are on.

[Renew Deal]

59. Obama's going to find more skeletons than we can ever imagine.

This has scandal written all over it. I bet the collateral is terrible, the loanees are fragile and partly foreign, and there will be money spent on Bush's friends (surprise, surprise). It's going to be ugly.

[Joe Chi Minh]

60. He'll just have to claw it back. And some. Personal assets shouldn't be sacred.

Not of those villains.

[MNReformer]

61. Fannie Mae, Freddie Mac and AIG are all under investigation.

http://www.usatoday.com/money/economy/housing/2008-09-29-fannie-freddie_N.htm

This slipped under the radar screen 9/29/08 while everyone was in Palinmania.

[MNReformer]

63. Neel Kashari, Bailout Czar, dodges Q&A after industry meeting keynote

http://www.nypost.com/seven/11112008/business/answers__please__138094.htm

[surrealAmerican]

64. I guess we have no choice then but to assume ...

... the funds have been embezzled by Ben Bernanke. Can we arrest him for this?

[Zhade]

65. "Thank God It Passed!"

Well, we tried to warn people...

[Supersedeas]

69. cronyism down to the final tick of Bushler's clock