Mark Pittman Smiles After Appeals Court Refuses To Review Fed Attempt To Stop Bailout Disclosure; Supreme Court Now On Deck
It appears that the Fed is heading for its biggest legal confrontation ever. After, as Bloomberg reports, the U.S. appeals court refused to
reconsider a ruling that requires the Federal Reserve Board to
disclose documents identifying financial firms that might have
failed without the largest U.S. government bailout, the one last resort to preserve the secrecy interests of the Clearing House Association which is basically the formal name for all the banks that have received Fed handouts in some form or another over the years, is now the Supreme Court of the United States. And should the SCOTUS go ahead and vote alongside the administration (in this case the Fed), as it did in the Chrysler case, the fallout could well be dramatic as it once again becomes clear that the one entity truly in control of this once-great country is a group of middle aged men, which conducts all of its decision-making in strict secrecy, and whose every decision is predicated upon the perpetuation of the ever more failed Keynesian status quo.
More from Bloomberg:
The U.S. Court of Appeals in New York, in a docket entry dated Aug. 20, denied a May 4 request by the Fed to review its unanimous March 19 decision requiring the agency to release records of the unprecedented $2 trillion U.S. loan program begun primarily after the 2008 collapse of Bear Stearns Cos.
The Fed may still ask the U.S. Supreme Court to reverse the appeals court. The Clearing House Association LLC, an organization of 20 commercial banks that joined the Fed in defense of the lawsuit, has already said it will appeal to the high court.
“The decision is of exceptional importance,” the Fed’s lawyers wrote in a legal brief on May 4 in which they asked the circuit court to reconsider its decision. “The real-world consequence of the panel’s decision will be serious, perhaps irreparable harm to the institutional borrowers whose information will be revealed.”
The ruling upheld a decision of a lower-court judge in Manhattan who in August 2009 ordered that the information be released.
“We are reviewing the decision and considering our options for appeal,” David Skidmore, a Fed spokesman, said.
As for next steps, the SCOTUS is now clearly the last resort for the Fed and the CHA:
The Fed and Clearing House have seven days to ask the circuit court for a stay, which would free them from having to release the 231 loan documents at issue, according to Willkie Farr & Gallagher LLP, Bloomberg’s attorneys in the case. If the court issues the stay, the Fed and the Clearing House have 90 days to petition the Supreme Court to consider their appeal.
If the circuit court doesn’t issue a stay, the Fed would have to release the documents, also called term sheets, the law firm said.
The amount the Fed and the U.S. government lent, spent or guaranteed to stem the recession and rescue the banking system peaked in March 2009 at $12.8 trillion, most of it following the September 2008 bankruptcy of Lehman Brothers Holdings Inc.
The New York Times Co., the Associated Press and Dow Jones & Co., publisher of the Wall Street Journal, are among media companies that have signed up as friends of the court in support of Bloomberg.
As always, we are very glad that our late friend Mark Pittman is once again validated in his last great quest to bring much needed light to the Fed's obscure, secretive market manipulative ways.