This page has been archived and commenting is disabled.
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.
- 7869 reads
- Printer-friendly version
- Send to friend
- advertisements -


The court will claim, since the FED is a private institution, they are not under the jurisdiction of the freedom of information act.
The truth will come out 1 way or the other
what do you think will happen even if the truth comes out ?
I mean after all the sheeple helped the rally from 666 to 1217 even after the beating they took in 2007-08.
Diddly-squat's gonna happen.
The peasants may yet storm the Bastille
I'm all giddy just thinking about the possibility..
Guillotines Bitchez!
Indeed! The Supreme Court is pretty much a joke at this point.
True, let's see,they kept the energy meeting secret that might have saved a war and said we couldn,t limit corporate donations. I'd say the last branch has sold out with the rest of themns
I'd love it for the truth that the Fed is a private institution that has been granted a monopoly ability to create money/credit to become widespread knowledge. I think it would shatter many people's belief in the system to know the truth. QE is a transfer of free credit in return for an interest bearing security - making the US taxpayer pay interest in return for something created out of thin air. Simply absurd.
Agree 100% tj. The bastards are painting themselves into an ever smaller corner. If that is indeed the rationale used to avoid revealing the details of this question then even the the most unobservant citizen should be able to see that there is nothing federal with the Federal Reserve.
Nah, they're too busy watching [insert "reality" show of choice here].
The Bank of England is supposedly owned by the UK Government. However, the Bank of England is a buyer of the UK government's debt. Why would one agency of the UK government be buying debt, in effect, from itself?
How does the Bank of England differ from the Fed?
Without speaking about the BoE, the Fed is clearly owned by private banks. Google it to read the various sources, obviously taking different tacks.
The 12 regional banks are owned with "non-voting stock" by the member institutions (banks), which entitles the owners (banks) to earn 6% dividends on their stakes.
Therefore, if the Fed creates credit (for free) and then buys UST's, it has 'purchased' an interest bearing security that entitles it to receive interest (taxes paid by citizens) in return for credit/money created for free (adding a couple of digits to a computer account).
If that isn't a scam I don't know what is.
Assume for a moment that the Fed was a Federal entity. It's operating costs would be paid for by the taxpayer. Under the current setup, it's operating costs are paid for by interest payments - made by taxpayers. In either situation, the Fed's operating costs are paid for by the taxpayer.
The Fed is required to turn over to Congress any profit it makes. Much ado about nothing here guys.
The Fed distributes 'profit' left and right in the form of interest payments, front running, and other forms of corrupt inside deals.
What a shock that Richard is a cheer leader/ a shill for the Fed?!? I find myself amazed that you feel compelled to hand out unsolicited advice on re. credibility ... Thanks, but no thanks.
Where does yours come from? Your credibility I mean.
Re. the Fed turning over their 'profit' to congresss, from the Depresion Myths thread
traderjoe #538151
The Fed is " a private institution owned by bankers in order to siphon as much wealth as possible from every other industry?! To create a global Ponzi scheme that charges interest to the entire system and eventually ends up with the ownership of vast swaths of productive assets - after creating money/credit out of thin air? A (for the bankers/owners of the Fed) risk-free proposition? And after capturing vast wealth, being able to capture the political system with various bribes, contributions, lobbying, etc."
Followed by zaknick #538161 giving us his version of that famous Rothschild quote
"I care not who runs the country as long as I control the money".
I think the value of the Fed to the owners of the Fed is greater than you imply Richard.
Noted. My post stands, correct. I made no comment regarding the value of the Fed to the owners of the Fed. I made two points: Operating costs are paid by the taxpayers, and the Fed is required to turn over any profit to Congress. You made mention of my credibility. Are you claiming that these two points are not correct?
The part about the profits is no, not correct, unless you take a naive view of what the profit making potential is. Hopefully we've learned something since 1913.
Are you saying that, in the Congressional language which authorizes the Fed, there is no requirement for the Fed to turn over any profit to Congress? Are you saying that, in the Fed's annual financial report, there is no accounting for the monies turned over to Congress?
It is called quantitative easing and everyone is doing it, while very few understand it, which is why it is called quantitative easing. You are supposed to be confused, their mission is accomplished.
We should return to calling it what it used to be called. Printing Money! But then everyone would understand and the wizard would be exposed.
Click your heals together twice and repeat "there is no place like home" over and over.
Its terminology is designed to obfuscate its simplicity.
If I say 'Their hubris predisposes them to mendacity' a lot of people may not understand it - if I say 'They're arrogant so they lie' a lot more people will understand it.
QE - print money out of thin air and use it to buy Government DEBT or other crap DEBT that no one else wants to touch.
Easy!
DavidC
Watch for the court to walk the tight rope. They will claim no jurisdiction under the freedom of information act since they are "semi-private". In the same decision they will go out of their way to state the FED works under the authority of Congress. Obviously they will do it in legal terms (aka mumbo jumbo) so that no one understands but does nothing to hint the FED is not under gov. control.
Ding Ding Ding
"Semi-private" is that the same as being "semi-pregnant"?
Or semi-taxed, semi-regulated and semi-fucked? Nah, semi-pregnant's uisually been kissed first.
Aye - 100s of pages of esoteric concurrences which boil down to "we're not touching this with a bargepole".
"think it would shatter many people's belief in the system to know the truth."
I think many people that have seen their way of life evaporate and have bill collectors calling day and night already realize it and know the truth.
Banksters = Subhuman Filth.
Of course people who thought they could pretend the little plasic card was a magic source of free money forever have no fault in this story at all, right?
You wanted free money and they gave you the illusion of free money. Now it is worthless and you are shocked to learn the truth.
Debt whores = Subhuman Filty
Whenever a situation is as fucked up as this there's always plenty of blame to chuck around. No need to be quite so binary. I'm not going the 'filth' route as I'm in a reasonable mood, but neither of you mentioned politicians...
In defense of the herd, I want to say that the way the game's set up they're dammed if they do, dammed if they don't.
When the stampede is in full credit-bubble swing, if you don't throw everything down for a ride, you get trampled.
possibly but i think not likely since that would shed light on the fact that this nations money supply is under control of a private for profit bank... a fact that 99.9% of "american idol lands" people do not know....
hell, most of the citizenry still thinks that those debt coupons with presidents on them r real money.....
Dr. No
No shit dude, check out what new restrictions on Freedom the court supports
https://www.washingtonpost.com/wp-dyn/content/article/2010/08/20/AR20100...
Resolution opens door to dialogue about Supreme Court, securityThe closing of the front doors of the Supreme Court building came as so many incremental attacks on public space do: A news release announced a closure date, chiseled in stone, the decision final. It was done with the bland and peremptory confidence of pure authority, power unlimited by any democratic right to redress.
But a strange thing has happened. After weeks of the usual quiet grumbling and ineffectual head shaking, the passive acceptance of the unassailable security regime is being questioned. Late last month, a member of the House of Representatives offered a resolution -- which is probably doomed, and won't do much anyway -- that nonetheless questions the wisdom of a major security grab on public space. It could be the beginning of a new conversation.
On May 3, the court decreed that as of the next day, visitors would no longer be allowed to ascend the 44 marble steps, pass under the grand promise chiseled on the pediment -- Equal Justice Under Law -- and enter through the court's massive, ornamental bronze doors. In one swift, final fiat, the architectural logic of Cass Gilbert's magnificent 1935 neoclassical structure, which dramatizes the open access to justice, had been rescinded.
Two justices dissented. Stephen Breyer (with Ruth Bader Ginsberg also signing) described the grand procession, the careful and artful arrangement of stairs, statues, hall and courtroom that can be experienced only by passing through the doors as Gilbert intended: "Each of these elements does its part to encourage contemplation of the Court's central purpose, the administration of justice to all who seek it."
There were other complaints, too, from academics and jurists, in the media and even from the public. But this kind of dissent doesn't register in a world in which security experts are alone enfranchised to determine security measures, with concern only for safety and indifference to the power of history, culture, aesthetics or architecture.
...
Better that we should leave open access and have Cass Gilbert's magnificent 1935 neoclassical structure blown to smithereens by some idiot.
Do I detect a kneejerk apologist for the "Total Security State" and a defender of all things establishment and status-quo? This, and a number of your other posts, lead me to conclude "yes".
You would prefer that the Cass Gilbert's magnificent 1935 neoclassical structure be blown to smithereens by some idiot? Have you ever seen it in person, to have a real-world understanding of what we are talking about?
I don't think SCOTUS will take the case; but if a stay isn't issued, the whole matter will be moot.
Hmmm...will SCOTUS side with the FED?
Prediction: SCOTUS rules in FED's favor, 5:4
(5 "conservatives" vs 4 "progressives).
They will refuse to review it...
They'll hear it. If SCOTUS doesn't hear the case the court of appeal decision stands, and the citizens win one.
The article implys a stay needs to be issued before the SCOTUS can consider hearing the case. I'm not a lawyer so I might be making some false assumptions. Did I read that right? What are the odds of a stay being issued by the court?
Remand the case back to Snookie, Pauly D, Angelina, The Situation and Vinny. The guidos and guidettes'll take careudah probphlem.
See this shit's going on while the rest of AmeriKa is watching shit like Jersey SHore. Which started 5 minutes ago.... gotta run..
At best 5 "conservatives" + 1 "Kagan" vs 3 "progressives".Most likely outcome is 9 "fascists" vs 0 "citizens"
I believe Kagan, as Obama's solicitor general, provided the Fed with their current legal battle plan.
well said, Kagan has always been an establishment sellout
Bingo!
Clarence Thomas will never vote for the secrecy position, you can take that to the bank.
Yes if CT will not vote against Monsanto, do you think he will vote on this one ?
Yes if CT will not vote against Monsanto, do you think he will vote on this one ?
how could this fed operate w/o concealment. its their mainstay
Let's get down to brass tacks so to speak. The openness that the FED fears, that DC fears is not which banks in the consortium got what. That's been mostly put together by the likes of the Tylers so to speak.
But guys and dolls, use your imagination for just a second. Say that there is Powers that Be, Movers and Shakers, politically well connected. And there is money to be moved from entity A to entity B, for whatever purpose. (Use your imagination! Squeeze Hard! Make that Grunt!)
What better facility to have at your disposal, than a bank, a central bank with a national wire transfer system, with correspondents, governmental and institutional world wide....
And one that is not audited. Forget the FOMC decisions, the OMO operations. I'm talkin' about moving moolah. Big time Money! As a governmental agency, who, where and under what circumstances is anybody gonna challenge a wire transfer originated by you? Ain't gonna happen.
What better system than something like that to have at one's disposal. You all know the drill. For example, US aid money to the nation of Buttblow, Africa somehow winds up in a private account at MonsieurSneakiePete Privat Bank, Geneva. How'd it get there? A central bank made a wire transfer or handled such in some way. By Definition, that's How It Works.
So, why, by extension, would "ours" be any different. Nobody watches the moneyhandlers! Let alone watching the watchers of the money handlers. There is NO Outside Independent Review.
Mr. Durden's tongue pierced his cheek on those prose.
As always: Fed is ex-US. Owned by foreign interests. Not subject to US law. Illusion....
The very fact that the US taxpayer has to BEG and then SUE to see where their money went and what, if any, collateral was provided is fucking pathetic.
OK, as the local ZH bookie, let's see if I can get some action on this question. Remember, I don't care what your position is, just that I use the spread to even out the betting so I can make a risk free vig. So the first order of business is to set the line.
I say it's 2 to 1 in favor of the SCOTUS siding with the thieves, liars and (government supported) banksters. On the other side, the chumps.....er......the suckers.....um........the average citizens are basically betting that SCOTUS will refuse to support big money, corruption and self interest on the part of the money class and favor the loser in nearly every round of "she loves me, she loves me not".
On second thought, let's put the line at 3 to 1.
Step right up folks and place your bets. Either lose your money gambling or lose it to thievery. At least if you bet you can indulge in the illusion you have some control over the matter. And who knows, you might just win.......not.
She loves me, she loves me not. She loves me, she loves me not. Damn. Lost again.
SCOTUS will refuse to review...Which bet is that?
Impossible. That would mean that the lower court's decision to turn over the documents would stand. They will review it.
If that happens, I'll return your money.....maybe. I trained at Enron. :>)
What about the Congress passing law prohibiting it prior to SCOTUS review. That sure would be a snappy conclusion to it.
That's called the end run. And it's a viable and probable end run if they become desperate.
After all, why publicly sully the esteemed reputation of the SCOTUS (sarcasm) when Congress, who's already know as "bought and paid for dogs", can simply change the law. Won't hurt their reputation any more than it already is.
I just got off the phone with a client who's been with me for 19 years and who has always been a strong believer in government bonds. He was just asking me the dreaded "what if" questions. 10 years ago it would never have entered his mind that there could possibly be a "what if" about his Gvt bonds. Impossible.
Now he's thinking it's possible.
He, sir is not alone. For to answer the same question with my clients, along side that of expropriation of gold, I have considered the same as it pertains to my own accounts. New World.
Can anyone else see BB eventually on a witness stand and proclaim "You want the truth, you can't handle the truth!!!"
Unfortunatly, it will be in a verbous, confusing, and ambigous tone. Much less dramatic than Col. Jessep.
Indeed. BB will study Alan's "Fedspeak" all night like he is cramming for the big exam.
Sweet, this should be amusing either way. I expect the Fed to be protected but can't wait to see what legal theory is made up to protect them.
Moral hazard?
This statment alone is quite incriminating, and makes me want to know the full details. This could expose the truth that the Fed is at the behest of only the bankers, and no other. I hope that the SCOTUS does deny hearing the case or rule in against the Feds. In reality I know they will hear the case, and rule in favor of the Feds.
Agreed. The premise of contention is itself, incriminating.
Nails, TD, nails. ZH at its finest.
does Bernanke and other governors have security details?
inquiring minds would like to know......
No matter which way it goes, it will do wonders to build confidence in the system.. ha
...and in other news...Hindenburg Omen creator takes his own advice and bails out of the market.
http://blogs.wsj.com/marketbeat/2010/08/23/yes-folks-hindenburg-omen-tri...
Is that creator or crater?
Is there any point to all this legal wrangling? We all know that most banks, bailed out or not, were/are undercapitalized and would have gone bankrupt without bailout money and M2M accounting changes. The release of the documents won't shed any new light on things. What it might do is make the Fed more careful in it's operations but they're going to continue to protect the banking industry at all costs. I mean, let's face it, the Fed IS the banking industry.
If banks know that their activity at the Fed might be made public, they will stop making use of the Fed. Without making use of the Fed, they might fail. Intentional suicide, you might say. If this happens to enough banks, it might scare the public into making a run on the banks. In this day of wireless transfers, that run could happen over a few hours, rather than over days or weeks. That is a legitimate concern. Unfortunately, the system put in place to address that concern has turned out to be one that allows irresponsible banks to hide from the public. Congress really needs to address the issue and implement a more-balanced system - one that will address the legitimate fear of bank runs, but that will also allow irresponsible behavior to become visible. Such change by Congress is not likely to happen. Better that we should limit the activities banks can engage in - to reduce the opportunity for engaging in irresponsible behavior.
FDIC does a fair job of limiting bank runs. At all of the smaller failed banks (114 or so this year), none of the checking or savings depositers lost their money.
Understood. But the blurb I posted above is the standard reason given for why the Fed needs it's blanket of secrecy. Ignoring the issue of irresponsible banks, it is a reasonable argument that I think the SCOTUS will honor.
That won't happen because the very irresponsible behaviour we want ferreted out is what the Fed and the government promoted in the first place, and still want. The inflationary credit expansion scam (featuring QE, fractional reserve lending, arbitrarily-valued dollars) is what gave us our unsustainable growth, and the neo-Keynesians want to reflate a bubble that already has a huge hole in it.
How can the economy be 'stimulated' when the banks (and the Fed) are exposed as rotten to the core? Never mind that the economy can no longer be stimulated even with the current opacity.
More destruction is coming, one way or the other.
I don't get it, so the consequences may be bad because investors will find out how bad those isntutions were? In other words they are trying to hide from investors how bad their ivestments are. How cute....
They'll appeal it to the Supreme Court solely as an attempt to prevent future compliance. Supreme Court decision could go either way.
They ALL would have failed. This is just basic math, not rocket science...........
I really hope that, come this fall, they smack that ass!
“The real-world consequence of the panel’s decision will be serious, perhaps irreparable harm to the institutional borrowers whose information will be revealed.”
So this means our market is full of companies filing earnings reports that are more or less bogus except for the mountains of cash given to them by the Fed and hidden on the books to cover their asses?? Why would anyone question why the average investor has lost faith in the market and pulling their money out.
The interest rate rises as the risk of the investment increases. The interest rate falls as the risk of the investment falls. Fundamental maxim of finance. What does risk look like?? What does large risk look like?? Risk means a chance of failure. What do you think depositors would do if they were allowed to stare such chance of failure in the face, day after day. They would probably never deposit their money into a financial institution. So the risk is hidden from the depositors. That was ok during the time that prudent banks took prudent risks.
This is not rocket science either.
They would probably never deposit their money into a financial institution. So the risk is hidden from the depositors....so the ruse continues. Hiding risk is what got us in this mess to begin with.
You give your money to the bank, the bank loans it out on a risky project. The interest earned gives a profit to the bank and the depositor. Small risk, small return. Larger return, larger risk. It has always been this way. That is the whole point of banks. But most depositors don't really understand this. They just think their money is in the bank instead of under their mattress. Banks have always hidden risks. Hiding the risk is not what got us into this mess in the first place. Taking irresponsible risks, and engaging in activities other than core banking business is what got us into this mess.
"The bizarre headline of the weekend was Sweden filing rape charges against WikiLeaks Founder Julian Assange. This sounded very much like a subversive attempt to discredit and to silence him, and sure enough charges were dropped within a day. The American Administration and military, of course, hate what he’s doing and thus it’s not difficult to imagine that our own morons are playing games with yet another vocal critic’s life. It’s tough having transparency forced upon you when you’re a bad actor. The seeds of discontent are growing as are the games being played to keep the “weeds” out of their very fertile power and control garden…
"As Assange found out, the controller’s tentacles run long and deep…they consider the world their little garden." (To emphasize his point, Nate makes available The Beatles’ rendition of Octopus’s Garden.) – Nathan Martin, Nathan’s Economic Edge
http://economicedge.blogspot.com/
Is this even newsworthy, save for the cynical value? Since the the government, of all three branches, is now the bastard child of a massive orgy between the Fed and the TBTF's, should this come as any surprise whatsoever? Hahaha, there's only one logical conclusion to the entire affair...
http://www.encyclopediadramatica.com/File:Burgerkingrape.jpg
The real question seems to be if the SCOTUS will uphold the unitary executive in its position that sealed national security executive orders that have not been reviewed by the full congress after their first full year are lawful. If the SCOTUS decides narrowly then it will follow the lower courts and avoid the issue entirely either by refusing the case or through narrow review. This seems unlikely in the face of the pressure the administration, fed and the CHA will bring to bear. Perhaps we will find out of the US is now, in essence, a constitutional monarchy or not.
Miss you Mark !!
no lie lives forever
Screen Some Rot
Updated S&P500 chart:
http://stockmarket618.wordpress.com
Well, after the conservative side of the Supreme Court decided that corporations are 'individuals' guess how they will vote on this baby.
P.S. not just knocking the Neocons here. Considering that Goldman Sachs was Obama's biggest contributor we already know who he is blowing.
Well, after the conservative side of the Supreme Court decided that corporations are 'individuals' guess how they will vote on this baby.
P.S. not just knocking the Neocons here. Considering that Goldman Sachs was Obama's biggest contributor we already know who he is blowing.
As a 'by the way' could you imagine the founding fathers if somebody had tried to tell them that someday a corporation would be an 'individual' in the eyes of the courts and goobermint?
That would be a BIG "W........T......F....?"
I seem to recall some "idiot", a long time ago, saying something like..."Live Free or Die."
Oh well, just mutterings of some malcontent I suppose.
A quick read through all the comments; not one mention of fraud?
Imagine the level of tolerance and reasonableness that enabled the slavery in America's history...then and now.
The term sheets will be released but not before the SCOTUS changes its name to the SUPCUS (Supreme People's Court of the US, following PRC's example). The oligarchs rule the country, own the government and appoint the highest ranking bureaucrats who run its key institutions. Sure they will allow the sheeple to try to appeal (via Bloomberg, one of their's, by the way), write blogs, organize tea parties, but there ends the democracy. But do not despair, you will read about the terms sheets 5 years later, from wikileaks, when all the banks would have merged into something else.
RE Fed audit, financial transparency and regulation in general...
This is waht David Brin (Hugo, Nebula Award winner, physicist and author of the the book 'Transparency') says about the issue:
"it will be good for society if the powers of surveillance are shared with the citizenry, allowing sousveillance or viewing from below, enabling the public to watch the watchers. According to Brin, this only continues the same trend promoted by Adam Smith, John Locke, the US Constitutionalists and the western enlightenment, who held that any elite (whether commercial, governmental, or aristocratic) should experience constraints upon its power. And there is no power-equalizer greater than knowledge."
Interestingly his book "Earth" has as a background element, admittedly a bit fanciful, that assumes an "Helvetian War" around 2015... where via the web it all starts coming out who and where all the money is...
And this all ends in an actual 'invasion of Switzerland' but an outraged population...
Thanks for such a great post and the review, I am totally impressed! Keep stuff like this coming!...
cheap site hosting
windows web hosting
windows vps hosting
windows vps