Friday, December 12, 2008

Fed Lent $2 Trillion+. To WHOM?

Bloomberg intends to find out.

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.

You might be surprised to learn that the Fed told Bloomberg to put it where the sun doesn't shine...

The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests

'Trade secrets', my ass. What the Fed doesn't want to tell you is what Jim Rodgers opined yesterday: the Banks are walking bankrupts--just like GM and Chrysler.

"Governments are making mistakes. They’re saying to all the banks, you don’t have to tell us your situation. You can continue to use your balance sheet that is phony…. All these guys are bankrupt, they’re still worrying about their bonuses, they’re still trying to pay their dividends, and the whole system is weakened.”

And the Fed doesn't want another short-selling frenzy...

HT: Breitbart, The Big Picture

2 comments:

steveegg said...

More important than the "whom" is the "what did the Fed get in return". We do, by and large, know who participated; we don't know how deep the participants got into our pockets, or what the Fed got for its $2 trillion.

I note that a majority of that $2 trillion went out after the Fed started taking non-AAA collateral. Of course, the ratings don't mean all that much because of the inflation of the ratings.

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