Fed Should Keep Emergency Lending Secret – Banks Vow Supreme Court Appeal

April 14, 2010 by · Leave a Comment
Filed under: Opinion 

This was an interesting article about the lawsuit Bloomberg LP filed against the Federal Reserve about the $2 trillion on secret loans they gave and to this day have not given any details.   As I have written here before, I believe this information should be public record and if the loans caused a run on some banks, it would be for good reason because they were insolvent at the time and should of been shut down and their assets sold off the the banks that were not in the same position.

Just as Walter Bagehot wrote in his seminal work “Lombard Street, workings of the London Money Market”,  bad  money will always chase away good money.  And bad banking practices will always chase away good  banking practices because the bad banks will provide the cheapest credit / money on the most favorable terms so there is not incentive for a borrower to go the more prudent bank that has higher standard.

This is why it is so important to make sure bad banks always go out of business and the prudent banks rise to the top to set the standard for all banking.

NOTE *IMPORTANT PLEASE READ*: Here is the most interesting part of the article and if you were not paying attention or you did not read into what they were saying and more important “not saying“.

Quote:  “The central bank contends that 231 pages of daily reports summarizing lending activity, which were prepared by the Federal Reserve Bank of New York for the Fed Board of Governors in Washington, aren’t covered by the FOIA (Freedom of Information Act). The statute obliges federal agencies to make government documents available to the press and the public.

Here is plan English the Federal Reserve is asserting they ARE NOT a Government Agency but actually a Private Banking Cartel (definition of cartel) that has a mandate from the U.S. government since 1913 to issue the U.S. Dollar as the sole Lender Tender.

BIG QUESTION?: Do we want to have a private institution have the ability with no oversight be able to have the monopoly to issue our dollar and to be able to help out their banking buddies with any amount of assistance they deemed necessary?  Please think about this for a bit before you answer.

If you have any question or want me to back up these claims, I am happy to provide many official references.   Please comment below, I am approving any comment, positive and negative.  Please back-up any claims so we can have a real discussion.  Slander will not be tolerated.

Bloomberg – The biggest U.S. commercial banks will take their fight against disclosure of Federal Reserve lending in 2008 to the Supreme Court if necessary, the top lawyer for an industry-owned group said.

Continued legal appeals will delay or block the first public look at details of the central bank’s $2 trillion in emergency lending during the 2008 financial crisis. The Clearing House Association LLC, a group that includes Bank of America Corp. and JPMorgan Chase & Co., joined the Fed in defense of a lawsuit brought by Bloomberg LP, the parent company of Bloomberg News, seeking release of records related to four Fed lending programs.

The U.S. Court of Appeals in Manhattan ruled March 19 that the central bank must release the documents. A three-judge panel of the appellate court rejected the Fed’s argument that disclosure would stigmatize borrowers and discourage banks from seeking emergency help.

Source

Federal Reserve Must Disclose Bank Bailout Records According to Appeals Judge

March 22, 2010 by · Leave a Comment
Filed under: Legal News 

This is good news no matter what material effects is has on the banks.  The federal reserve being our agent to issue our currency has an obligation to the America citizen first and foremost over any to the banks they serve as the lender of last resort.  If they have the prerogative to issue any amount of our currency to bailout out any bank for any reason they deem necessary then de-facto our freedom has been subverted a tiny bit.

We founded this country on religious, political and economic freedom and having the ability to know where our money goes is “key” to that freedom.  At the end of the day, what we are going to learn is that some major banks made some major bets and they had to go hat in hand to the Fed to stay solvent.  If the markets deems that as a lost of confidence in their prudence and make a run on the bank to put it out of business, SO BE IT.  That is our market system working and it will show notice to other banks that if they are not prudent they can share the same fate.

Bloomberg – The Federal Reserve Board must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said.

Read more

Federal Reserve Argues For Less Transparency in Secret Bailout Loans in FOIA Lawsuit

September 10, 2009 by · Leave a Comment
Filed under: Legal News 

Looks like Fox News is getting into the fray with the Freedom of Information Act lawsuit (regarding the $2 trillion+ in secret bank loans and swap agreements)that has been brought as well by Bloomberg LP.  The more I read these press releases the more this start to feel like subtle thuggery on the part of the Federal Reserve.  This is not a baseless statement, here is a quote from this Reuters press release:

Reuters Quote: (Press Release Link)

“The Fed argued in both cases that disclosure could cause “competitive and reputational harm” to participants, potentially triggering bank runs and hurting the economy if information or rumors were allowed to spread.”

Guess what, if you took “secret” loans from the central bank then there is good reason for the public to be concerned about the banks solvency.  Now they are blatantly saying that the information is so bad that it will cause a run in the bank.  First they were saying (link here) “negative rumors” and now it has been upgraded to “information or rumors“.  So it is clear that our taxpayer money is now supporting “zombie banks” that are only in existence because of our central banks ability to make these secret loans and not make them go to the discount window like normal.  We are doing this while we let local and regional banks fail and in my opinion they do more for local communities than these national banks because they know more about their local area they operate in.

I urge my readers to please call their local representatives and bring up this heavy-handed scare tactics that the Federal Reserve is using to prevent this information from seeing the light of day.  Information like this has to come to the public sphere, the Federal Issues our money so we have a “right” to know where they decide to give our money too even if they feel its in our “best interest”.  We need representatives of our people, not a nanny deciding when something is too harmful for our own good.

Let us evaluate this type of information or we are not truly free in my honest opinion.

Federal Reserve Loses Bloomberg FOIA Lawsuit, Sensitive Disclosures Forthcoming

August 26, 2009 by · 1 Comment
Filed under: Legal News 

This was sent in from one of our readers and we have been following this in the past when Bloomberg filed their Freedom of Information Act request last year.  This is big and sobering news, I think we will be very surprised when we finally know who and in what amounts, entities got the unprecedented $2 trillion dollars in emergency loans.  Here is a link to the actual opinion from the District Court Judge Loretta Presk.  I am glad that she saw it correctly that if they are using taxpayer money then is should be public knowledge who gets it and for what.  No longer can we allow these bad actors to chase out the good ones.  Sunshine must be let in.e

Quote From Site:

This is in relation to a lawsuit filed by Bloomberg LP against the Federal Reserve on November 7, 2008, in Southern District of New York (08-09595), in which Bloomberg sought material loan and collateral data in relation to emergency loans released by the Fed, and which were previously claimed to be non-FOIAble.

This is a large blow against the Fed and specifically against organizations using FOIA loopholes from providing critical information, particularly in cases involving trillions of taxpayer dollars bailing out huge, systematically and politically embedded financial organizations (which lately is pretty much all of them).

Click Here to Continue Reading

Update: Fed refuses to disclose recipients of $2 trillion in emergency loans

December 12, 2008 by · Leave a Comment
Filed under: Legal News 

Interesting that the Federal Reserve said that it was a trade secret on who got that money.  Here is the following definition of “Trade Secret” according to Wiki : 

A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers.  I am not sure if our tax dollars should be loaned to anyone as a secret through an semi-private organization that has the backing of our governement.  I believe what they do not want us to know is that we have sent money to bail out foreign speculators.  

News:

The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

Read more

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