Big News: Supreme Court tells Fed to release secret bailout loan details

March 21, 2011 by · Leave a Comment
Filed under: Legal News 

Over two years and finally some good news and in my opinion the right choice on this case.  If you have read any of my previous postings about the secret Federal Reserve (NY Fed) loans to banks (domestic & foreign).   The Federal Reserve tried to maintain that is was better to keep these secret to basically prop up the banking sector than to tell the truth and let us decide (with our deposits), which banks should succeed and who should fail.  THAT IS HOW A MARKET SYSTEM WORKS and that is suppose to be a cornerstone in America (at least I was taught that in public schools).

I will continue to reiterate the point that if we do not punish the reckless banks and prosecute any criminal activity, we will have another financial crisis sooner than later and it will be much worst because they know as long as its bug enough, the taxpayer will be here to bail them out.   Not in my country is what I say.

The Supreme Court not only denied the banks appeal but they did not even have comment, just do it.   On the other side, this could have serious consequences for the short term but it will be good for the long term.   I believe this release of information could be the needle that breaks the recoveries back.   Heed those words, you have been warned.

NY Times: The high court, without comment, refused to hear an appeal from an association of bankers trying to keep the information from becoming public.

The Fox News Network, which is owned by the News Corporation, and Bloomberg L.P., the parent company of Bloomberg News, had sued separately for details about Fed loans that commercial banks and Wall Street firms received and the collateral they put up. Other news agencies, including The Associated Press, filed briefs with the appellate court in their support.

The United States Court of Appeals for the Second Circuit in New York had said that such information was not automatically exempt from requests under the Freedom of Information Act.

But the Fed had argued that if it identified banks that drew emergency loans, it could cause a run on those institutions, undermine the loan programs and potentially hurt the economy. The Fed acts as lender of last resort for banks that cannot get money from private sources.

The Obama administration had asked the high court not to hear the appeal. But the Clearing House Association, which represents some of the nation’s largest banks, wanted the high court to review the decision.


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