This can’t be good. Despite Congress’s insistence on transparency, the Fed is refusing to reveal the recipients of $2 trillion dollars in loans. As the holders of “the note,” this is akin to you or I getting a mortgage based on a blank application.
http://www.bloomberg.com/apps/…
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.
The Fed made the loans under terms of 11 programs, eight of them created in the past 15 months, in the midst of the biggest financial crisis since the Great Depression.
“It’s your money; it’s not the Fed’s money,” said billionaire Ted Forstmann, senior partner of Forstmann Little & Co. in New York. “Of course there should be transparency.”
I hope Congress and President-Elect Obama are paying attention to this. It’s bad enough we had to bail out the big banks, insurance companies and now automakers; it’s adding insult to injury to reward bad behavior by keeping this information from the public. We deserve to know which companies we’re “investing in.”
It makes a difference, both to me, and in reality, whether the cloak of secrecy was intended to:
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p>1. Prevent runs on banks ’cause if you knew it was YOUR bank getting bailed out, you might yank funds causing the “bailout” to be in vain, and a depression-type scenario.
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p>2. Hide that an istitution, such as Lehman Brothers, where a CEO collected $482,000,000 over 8 years had its snout in the trough and its hand in my pocket. That figure came from reputable sources, by the way. I cannot imagine any basis for that level of compensation other than greed and corruption – so much so as to make Sen. Diane Wilkerson look like either a girl scout or an apple seller on the corner. Especially for a guy who ran his firm into bankruptcy and is leaving with all that loot for his “brilliant performance” as a con man.
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p>Just two questions, for starters. Bet you brilliant readers can come up with more.
One of the keys to this collapse is the loss of credability in the market many on Wall Street we are now realizing sold paper as little more then Insurance on Mortgage bundled bonds and these were done over and over again some appear to be on the same original investment notes.
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p>As a result no one believes that what anyone is selling or saying is truthful. Burned once…. and no one is willing to be burned twice. so transperancy is critical to helping to restart the engine also critical is knowing who has money to lend. If your trying to reestablish a line of credit to meet pay role in order to keep your small company/corp going knowing who has money to lend is critical. Instead what you have is Ben’s and Hank’s friends who they quietly gave money to going to their friends and saying here is your line of credit back don’t say anything or you may find it pulled back. So if your not connected your out in the cold no matter how successful you may be or may become if the market would just work as it was suppose to.
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p>It is now an inside players game with 250 BILLION in treasury authorized money Plus another 600 BILLION from the fed all ultimately from you and I.
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p>If it smells like a scame you better believe it’s a scam
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p>As Usual Just my Opinion
The Federal Reserve is a separate entity from Congress. I’m not sure the criticism is exactly on the mark. True, it might be better if the Fed were more transparent, and that is worth a discussion, but its opacity on this and other matters has been consistent for decades. My point is this is not a new kind of behavior for the Fed, for better or worse.
Martians? Maybe we should ask the little green men who’s getting the bailout loans/gifts.
This is a new deal; Bernanke stated that the Fed would comply with Congressional demands for transparency in return for passing the bailout. Evidently, the Fed is focusing on the “spare” in “transparency”…in that they seek to “spare” the Wall Street gluttons from any embarrassment while we, the note holders, go begging for information. No less than the Bloomberg News, not exactly a liberal mouthpiece or an anti-business tabloid, is suing for the information.
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p>Call me silly, I think the note-holders deserve to know which financial “institutions” we’re keeping afloat, since we, our children and our grandchildren will be paying for this mess.
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The Fed has been a closed shop so to speak. Yet it’s revenue comes from basicly you and me most of the money it recieves is from transaction that are pased through their system for every bank in the US and the country. Banks pay these fees based on the fees and money they make on our transactions and deposits. These cushions they accumulate are to protect us from a 1929 scenario of going down to the local bank and finding out they have no money to give.
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p>so in an indirect way the money they would use to protect our interests they are using under regulations from the 1930’s (all Legal) that have never been used and are funding them from their fees. A cost I am sure will be passed onto us sooner then later.
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p>This does not excuse Paulsons doe from having the light of day flashed on it or the terms of the agreements disclosed. Did you miss the news Item showing the cash reserves that the Wall Street Banks were holding to Pay Bonuses to the top tier of execs?
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p>Here is the Proof!
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p>http://oversight.house.gov/doc…
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p>I can not see how the cloak of secrecy works in any logical process to help assure people that the ways of Greed and Fraud are changing and that the blood letting and house cleaning is moving forward. I believe the evidence thus far clearly points to a set of facts that those responsible have had their hands slapped and then been given more money to play with. I would dare anyone to show me any evidence to the contrary. Mortgage rates are up credit cards are up in the 30% for some and local banks are still dry as a bone.
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p>As Usual Just my Opinions