Saturday, December 13th, 2008 at 5:52 AM
We’ve Been ‘Bamboozled’
from Bloomberg.com
http://www.bloomberg.com/apps/news?pid=20601109&sid=aGvwttDayiiM&refer=home
By Mark Pittman
Dec. 12 (Bloomberg) — 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.
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.
“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.
The Fed stepped into a rescue role that was the original purpose of the Treasury’s $700 billion Troubled Asset Relief Program. The central bank loans don’t have the oversight safeguards that Congress imposed upon the TARP.
Total Fed lending exceeded $2 trillion for the first time Nov. 6. It rose by 138 percent, or $1.23 trillion, in the 12 weeks since Sept. 14, when central bank governors relaxed collateral standards to accept securities that weren’t rated AAA.
‘Been Bamboozled’
Congress is demanding more transparency from the Fed and Treasury on bailout, most recently during Dec. 10 hearings by the House Financial Services committee when Representative David Scott, a Georgia Democrat, said Americans had “been bamboozled.”
In response to Bloomberg’s request, the Fed said the U.S. is facing “an unprecedented crisis” in which “loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.”
“There has to be something they can tell the public because we have a right to know what they are doing,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press.
“It would really be a shame if we have to find this out 10 years from now after some really nasty class-action suit and our financial system has completely collapsed,” she said.
Posted on Saturday, December 13th, 2008 at 5:52 AM in Unbelieveable | 10 Comments » | 
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Don’t cry for me Argentina…
No Such Reality | December 13th, 2008 at 7:49 amThere is nothing federal about the federal reserve. It’s a round table of representitves elected by banks in a certain areas of the country to represent those banks interests.
shadash | December 13th, 2008 at 10:15 amNot to mention it’s unconstitutional… Before Wilson fucked everything up anyway. Methinks we’re about to see even more massive damage to the dollar. If there was enough transparency for the general populace to understand what was going on I think we’d be seeing European style riots.
Bamboozled? Try robbed and then raped.
Genius | December 13th, 2008 at 11:33 amBamboozled? Try robbed and then raped.
Got gold & silver?
They will rob you of your dollars. Get 20% of your liquid assets into something tangible as a safeguard.
And as the depressionary spiral continues downward, today’s buyers will have to walk away when their houses lose 20-50% of their current value. Credit Suisse was forecasting 8 Million additional foreclosures by 2012. Obviously this isn’t going to happen overnight, so it’s difficult for people to recognize, but you need to open your eyes and protect yourselves and your families.
Bamboozled? Bigtime!
Mike | December 13th, 2008 at 1:39 pm“European style riots”? Are those better than Iranian style riots? (or LA style riots?)
Smithers | December 13th, 2008 at 2:33 pmThis is just like all the Haliburton contracts, we’ll never know where the money really ended up not even the government. It’s just the sheer amount of money – could any of us really account for billions of dollars in transactions? That’s why the government shouldn’t be trusted with this magnitude of money on a whim.
We’re going to see more Financial Dictatorships like this in the 21st century.
BDiego | December 13th, 2008 at 3:48 pmThe FED is NOT part of the US government, it’s a private group of very powerful, greedy bankers. Their main goal is to control the world through a one world currency and a one world bank… we’re getting closer and closer to that everyday.
I have a feeling 50% of the money went to foreign banks as a payoff to keep them from dumping their US debt. If that happened the US would surely go into a depression. Heck, that will probably happen anyway.
Congress sold the US people down the river. They are finally realizing they got tricked, but it’s too late now.
Paulson and Bernanke should be hanged.
JAP | December 14th, 2008 at 5:17 amI got destroyed in gold earlier this year, my gold funds are down more than anything else I currently hold, so I don’t really buy the gold argument at this time. There was a swing in the other direction last week, so who knows. This whole debacle showed me how little I know about the instruments of investment. I sincerely hope the rest of you fared better than me.
As far as the rioting I alluded to, I doubt we’ll see it here in the US, but check out what has been happening in Greece and France as of late. Think LA style riots on a greater scale, and I really hope we don’t witness anything like that again.
I hate conspiracy freaks, but I’m about to construct a tinfoil hat and stream the Alex Jones show. It’s getting absurd.
Genius | December 14th, 2008 at 2:55 pmActually, we’re getting farther away from one world currency every year. The yen and euro have gained as reserve currencies over the dollar, although the dollar still has the majority of market share.
The problem isn’t having one world bank, what we’re getting is most of the central banks in the world copying the worst ideas of the others. Borrow from the future to pay for the excesses of today, reward failure and punish success. The exceptions to this are a number of private institutions, the ones that never got into the magic money of this last decade.
BDiego | December 14th, 2008 at 4:52 pmGold suffered a major bubble due to the bandwagoning effect. The same way that houses used to be a very sound purchase, but once people saw it as an *investment* and jumped on the bandwagon you had a bubble. Gold used to be valued on fundamentals (and resist inflation/deflation), but once people saw it more as an *investment* and jumped on the bandwagon you had a bubble.
People are selling gold because like every other asset it was way overvalued – i.e. people had been pricing it based on what they thought it might be worth extrapolating into the future not what it was worth today. The same way people will price slow growth stocks at 35 P/E ratios because they’re extrapolating the price (not the fundamentals). Once you start extrapolating the price (what people are paying for something) rather than value, you need to get out of that market because that is a classic bubble.
In the housing market, this happened when people were *pricing in appreciation* more than they were pricing in value (the utility of a house and its substitution of rent). With many houses fallen 50%, it’s clear that at least half the value of many houses were based purely on speculation and the premium of appreciation. The day I can buy a house for what it’s worth is the day I buy one to live in.
BDiego | December 14th, 2008 at 5:04 pm