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The Fed "Used The Vagueness In The Wording Of The Law To Weasel Out Of Fulfilling Their Duty To The American People"
The Fed released a lot of data yesterday.
But as Bloomberg points out, the Fed still held back a lot of information:
The
Federal Reserve withheld details on individual securities pledged as
collateral by recipients of $885 billion in central bank loans, denying
taxpayers a measure of the risks they faced from its emergency aid.***
July’s
Dodd-Frank law required the Fed to disclose the names of borrowers, the
size and interest rates of loans, and “information identifying the
types and amounts of collateral pledged or assets transferred.”
For
three of the Fed’s six emergency facilities, the central bank released
information on groups of collateral it accepted by asset type and
rating, without specifying individual securities. Among them was the
Primary Dealer Credit Facility, created in March 2008 to provide loans
to brokers as Bear Stearns Cos. collapsed.
“This is a half-step,” said former Atlanta Fed research director
Robert Eisenbeis, chief monetary economist at Cumberland Advisors Inc.
in Sarasota, Florida. “If you were going to audit the facilities, then
would this enable you to do an audit? The answer is ‘No,’ you would have
to go in and look at the individual amounts of collateral and how it
was broken down to do that. And that is the spirit of what the
requirements were in Dodd-Frank.”
***
It is “specifically
impossible” to know how much risk taxpayers were taking by looking at
pools of collateral grouped by asset class and rating, said Sylvain
Raynes, a principal at R&R Consulting in New York and co-author of
“Elements of Structured Finance,” published in May by Oxford University
Press.
“I need to know the individual composition because a $2
billion pool can be one asset of $2 billion, which would be very risky,
or 2,000 assets of $1 million each, and that’s not risky at all,” Raynes
said. “The spirit of Dodd-Frank was
not respected, and they used the vagueness in the wording of the law to
weasel out of fulfilling their duty to the American people.”
***
The
central bank also omitted details on individual securities pledged as
collateral under its Term Auction Facility and its Term Securities
Lending Facility, which was announced on March 11, 2008, as the first
program under which the Fed planned to lend to non-bank dealers.
And the Economic Policy Journal notes:
[The
Fed released] no data [concerning Maiden Lane] prior to Sep 30, 2008
(ML was funded in June, 2007). It remains to be seen, then, if
BlackRock was simply stuffing the SOMA.What's the Fed hiding?
Why no purchase and sales numbers for the Maiden Lane transactions?
Why no Maiden Lane data at all for the period June 2007 to September
30, 2008?
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Yet they put in that much money (9 Trillion) and we still have severe problems both here and abroad. It's called the deleveraging of the derivatives market that no amount of money can bail out.
By the amount of money the fed put into the markets, it's obvious that the financial markets were in dire straights. It looks to me like the fed did what it had to do to maintain solvency which, in truth, is fine with me. What I have a problem with are the bonuses....
So we had a huge bubble, inflated values, an opportunity to bring things back to a realistic level and we needed to inject more money to extend and pretend??
This is but the "tip" of the iceberg. If the Fed put $3 trillion into the hands of the middle class, you would have an economy.
Instead the Bernank saved his friends and the bill will be paid over generations by those who did not and will not benefit.
Bonuses all around, gentlemen, bonuses all around.
Oh, and problem not solved either. We'll probably be looking at QE3, QE4, etc. until something breaks. Should have some inflation also...
The Worst of the Financial Crisis Finally Over!!, watch this video "DICK Bove –“Worst of Financial Crisis Finally Over and Sarah Palin Reality TV!!" at (http://youtu.be/SCZ-uFwHvV4).
by Anonymous
HAha awesome video gives me hope that some people in this? country have their heads on their shoulder. People are really losing it.
how can anyone flag this video as junk? fantastic.
Great Post GW - Excellent question - Maiden Lane is a black hole - the Fed needs to be audited & Bernacke impeached - but unfortunately Obama, who I voted for, doesn't have the balls to lead - I regret my vote...
The FED is playing 'just the tip' with us.
yeah, I wanted know how our investment in the Red Roof Inn chain is doing, fess up FED
might be a good time to get a discount on a room. maybe an upgrade?
memo to Blythe, Jaimie:
The code word is Bonzai7. When you get the word, a black helicopter will be on the roof to take you to the nearest Red Roof Inn, our designated staging area. From there you will be flown to a secret destination. Be sure and set off the thermal grenades and arm the secret Building 7 switch located in the tampon dispenser in the antiseptic executive wash room. Make sure you dismiss the attendant dick holders and panty pullers beforehand.
Have a safe journey,
The Benank
What is the FED hiding? <Ahem>...uhhhh, everthing?
The Fed is trying to hide the fact that they are owned and operated by super-villains.
Something that has been obvious for quite some time.
It is time for justice.
Oh yes.....long past due.
I think we need to enter the penalty phase.
Harshly.
Maiden Lane is a black hole
9 TRILLION is alot of money to be throwing around the world
Ah hem... Where do I see it as paid back?!
Call me petty, but it seems much more important to me to point out that "alot" is NOT A WORD, unless it refers to Alot; the town and nagar panchayat in the Ratlam district of Madhya Pradesh, India. Allot IS a word, but that's a different story. And this is so, WAY more important than 9 trillion dollars, for cripes sakes. (Cripes, may not be a word, come to think of it.)
Alot of English majors are poor. And bad traders. Why you pick on me dude?!?