Freedom of Information Act

And so the final curtain falls on the myth of what was supposed to be, in its own words, the "most transparent administration" in history. As it turns out, the big Friday story of Bloomberg journalists snooping on clients was just amateur hour compared to what the AP was about to serve. In fact, the Watergate affair may soon appear like a walk in the park compared to the First Amendment shitstorm that is about to be unleashed following the just reported news that the US Department of Justice had "secretly obtained two months of telephone records of reporters and editors for The Associated Press in what the news cooperative's top executive called a "massive and unprecedented intrusion" into how news organizations gather the news." First amendment? Freedom of speech and press? Surely not when it comes to the Nobel-peace prize winning President and those who dare to expose his secret ways. And what's worst, is that the AP breach has all the makings of a spiteful hack driven by personal vengeance against one of America's premier news outlets.

A panel of bankers warned the Fed in February that their extreme monetary policy is forcing institutions to "accept greater credit-risk" than "makes sense" and student debt and farmland prices are in a bubble. We first started to explain the bubble in student debt over two years ago and since then the bubble has become larger (and the underlying structure much more fragile as delinquencies soar). Farmland rose in price over 16% last year (according to the Chicago Fed) and has surged 8% per annum over the past decade. Credit risk is now at levels associated with the CDO-driven liquidity excess of 2006. "Further accommodation is not warranted," the minutes of this meeting show - uncovered by Bloomberg via the FOIA. The comments should cause Bernanke and his merry men to pause for breath but of course it is likely what he wanted all along. "Growth in student debt... has parallels to the housing crisis," and "agricultural land prices are veering further from what makes sense," are just two of the bankers' comments, adding that this "will ultimately result in higher loan losses," which is odd since every bank is adjusting down its loan-loss-reserves and juicing earnings.

But "We Can’t Afford to Irritate the Saudis" By Actually Looking Into Who Backed 9/11 ...  "Especially with Oil Prices Going Up Now"

The idea of IRS agents poking through your email account might sound at the very least creepy, and maybe unconstitutional. But the IRS does have a legal leg to stand on: the Electronic Communications Privacy Act of 1986 allows government agencies to in many cases obtain emails older than 180 days without a warrant. In 1986 they decided this?  Who used email in 1986? That’s why an internal 2009 IRS document claimed that “the government may obtain the contents of electronic communication that has been in storage for more than 180 days” without a warrant. Another 2009 file, the IRS Criminal Tax Division’s “Search Warrant Handbook,” showed that the division’s general counsel believed “the Fourth Amendment does not protect communications held in electronic storage, such as email messages stored on a server, because internet users do not have a reasonable expectation of privacy.”

When two weeks ago we exposed the heretofore secret location of JPM's London gold vault (located under the firm's massive L-shaped office complex at 60 Victoria Embankment) we thought: what about New York? After all, while London is the legacy financial capital of the "old world", it is in New York that the biggest private wealth of the past century is concentrated, and it is also in New York where the bulk of the hard assets backing the public money of the world's sovereigns are located, some 80 feet below ground level in the fifth sub-basement of the New York Fed, resting on the bedrock of Manhattan. That the topic of the gold "held'' by the New York Fed - historically considered the gold vault with the largest concentration of gold bars in the world - has become rather sensitive, in the aftermath of the Bundesbank's request to repatriate it (surely, but very, very slowly), is an understatement. Yet in the aftermath of some of the revelations presented here, we believe quite a few other countries will follow in Germany's footsteps for one very simple reason: suddenly the question of whether their gold is located at 33 Liberty, or just adjacent to it, in what we have learned is the de facto largest private gold vault in the world, located across the street 90 feet below 1 Chase Manhattan Plaza, doesn't appear to have a clear answer.

How Many Constitutional Freedoms Do We Still Have?

Governments Move to Destroy Online Anonymity ... Google Helps

Little-Known Secrets to Boosting Mood …

Yesterday we broke the news of what is prima facie evidence, sourced by none other than the Federal Reserve's official August 16, 2007 conference call transcript, that then-NY Fed president and FOMC Vice Chairman Tim Geithner leaked material, non-public, and very much market moving information (the "Geithner Leak") to at least one banker, in this case then Bank of America CEO Ken Leiws, in advance of a formal Fed announcement - an act explicitly prohibited by virtually every capital markets law (and reading thereof). It was refreshing to see that at least several other mainstream outlets, including Reuters, The Hill and the NYT, carried this story which is far more significant than Season 1 of Lance Armstrong's produced theatrical confession and rating bonanza. What, however, the mainstream media has not touched upon, yet, is just how profound the market response to the Geithner Leak was, and by implication, how much money those who were aware of what the Fed was about to do, made. Perhaps, it should because as we show below, the implications were staggering. But perhaps what is even more relevant, is why the Fed's previously disclosed details of Mr. Geithner's daily actions at the time, have exactly no mention of any of this.

Presenting Dave Collum's now ubiquitous and all-encompassing annual review of markets and much, much more. From Baptists, Bankers, and Bootleggers to Capitalism, Corporate Debt, Government Corruption, and the Constitution, Dave provides a one-stop-shop summary of everything relevant this year (and how it will affect next year and beyond).

New Fed minutes reveal powerful CEO voted to make William Dudley president of FRBNY and grant him conflicts waivers for investments in CEO's own company.

The Electronic Frontier Foundation (EFF) is one of the most important organizations we have in America today.  While most of the country lays fast asleep to the dangers of the encroaching surveillance state, the EFF is always vigilantly at work on the front lines.  In their latest article, they show that military drones are already flying all over these United States and, using information received from a FOIA lawsuit they provide important details on what is flying and where.  You may be shocked at some of their conclusions.

Three years ago, a hard fought landmark FOIA lawsuit was won by the great Bloomberg reports, the late Mark Pittman, in which the Fed was forced to disclose a plethora of previously secret bailout information, which in turn spurred the movement to "audit the Fed" and include a variety of largely watered down provisions in the Frank-Dodd bill. This victory came despite extensive objections by the Fed and the threat that the case may even escalate to the highly politicized Supreme Court, which lately has demonstrated conclusively that not only is justice not blind, but goes to the highest ideological bidder. Moments ago, Europe just learned that when it comes to secrecy of its supreme monetary leaders, in this case all originating from Goldman Sachs and defending data highly sensitive to the same Goldman Sachs, the European central bank's secrecy is not only matched by that of the Fed, but even more engrained in the "judicial" system of the Eurozone, after the European Union General Court in Luxembourg just announced that the European Central Bank will be allowed to refuse access to secret files showing how Greece used derivatives to hide its debt. Why? Simple: recall that it was Goldman Sachs who was the primary "advisor" on a decade worth of FX swaps-related deals which allowed Greece to outright lie about both its fiscal deficit and its total debt levels, and that it was a Goldman alum who became head of the same Greek debt office just before the country imploded. And certainly the ECB was involved and knew very all about the Greek behind the scenes shennanigans. And who happens to be head of the ECB? Why yet another former Goldman worker, of course. Mario Draghi.

The irony of Monster Beverage's absolute 'Baumgartnering' cannot be lost on many in the market as news of incident reports released by the FDA show five people 'may' have died in recent years after drinking the energy drink. While the NYTimes notes that these reports do not prove a link between Monster Energy and the deaths or health problems, it would appear by the 18% plunge in the stock price that investors are not second-guessing. The company states it is "unaware of any fatality anywhere that has been caused by its drinks" but we suspect, just as NYC is now under the cosh of 16oz coke limits, soon enough we will see Caffeine Caps and Taurine Tariffs subjected on our un-Darwinian selves. In the meantime, may we humbly suggest the makes of the sugary energy drink undertake the (potentially job-saving or creating) manufacture of a giant catapult in an effort to be the first rubber-band-powered manned satellite launch in order to draw attention to the more important capabilities of people who drink Monster.

While Government Pretends America Values Freedom of the Press, Real Journalists Are Treated As Terrorists