The Fed Responds To Zero Hedge: Here Are Some Follow Up Questions
Over the weekend, we gave the Dallas Fed a chance to respond to a Zero Hedge story corroborated by at least two independent sources, in which we reported that Federal Reserve members had met with bank lenders with distressed loan exposure to the US oil and gas sector and, after parsing through the complete bank books, had advised banks to i) not urge creditor counterparties into default, ii) urge asset sales instead, and iii) ultimately suspend mark to market in various instances.
Moments ago the Dallas Fed, whose president since September 2015 is Robert Steven Kaplan, a former Goldman Sachs career banker who after 22 years at the bank rose to the rank of vice chairman of its investment bank group - an odd background for a regional Fed president - took the time away from its holiday schedule to respond to Zero Hedge.
This is what it said.
No truth to this @zerohedge story. The Dallas Fed does not issue such guidance to banks. https://t.co/rmE3Zul3PM
— Dallas Fed (@DallasFed) January 18, 2016
We thank the Dallas Fad for their prompt attention to this important matter. After all, as one of our sources commented, "If revolvers are not being marked anymore, then it's basically early days of subprime when mbs payback schedules started to fall behind." Surely there is nothing that can grab the public's attention more than a rerun of the mortgage crisis, especially if confirmed by the highest institution.
As such we understand the Dallas Fed's desire to avoid a public reaction and preserve semantic neutrality by refuting "such guidance."
That said, we fully stand by our story, and now that we have engaged the Dallas Fed we would like to ask several very important follow up questions, to probe deeper into a matter that is of significant public interest as well as to clear up any potential confusion as to just what "guidance" the Fed is referring to.
- Has the Dallas Fed, or any other members and individuals of the Federal Reserve System, met with U.S. bank and other lender management teams in recent weeks/months and if so what was the purpose of such meetings?
- Has the Dallas Fed, or any other members and individuals of the Federal Reserve System, requested that banks and other lenders present their internal energy loan books and loan marks for Fed inspection in recent weeks/months?
- Has the Dallas Fed, or any other members and individuals of the Federal Reserve System, discussed options facing financial lenders, and other creditors, who have distressed credit exposure including but not limited to:
- avoiding defaults on distressed debtor counterparties?
- encouraging asset sales for distressed debtor counterparties?
- advising banks to avoid the proper marking of loan exposure to market?
- advising banks to mark loan exposure to a model framework, one created either by the creditors themselves or one presented by members of the Federal Reserve network?
- avoiding the presentation of public filings with loan exposure marked to market values of counterparty debt?
- Was the Dallas Fed, or any other members and individuals of the Federal Reserve System, consulted before the January 15, 2016 Citigroup Q4 earnings call during which the bank refused to disclose to the public the full extent of its reserves related to its oil and gas loan exposure, as quoted from CFO John Gerspach:
"while we are taking what we believe to be the appropriate reserves for that, I'm just not prepared to give you a specific number right now as far as the amount of reserves that we have on that particular book of business. That's just not something that we've traditionally done in the past."
- Furthermore, if the Dallas Fed, or any other members and individuals of the Federal Reserve system, were not consulted when Citigroup made the decision to withhold such relevant information on potential energy loan losses, does the Federal Reserve System believe that Citigroup is in compliance with its public disclosure requirements by withholding such information from its shareholders and the public?
- If the Dallas Fed does not issue "such" guidance to banks, then what precisely guidance does the Dallas Fed issue to banks?
Since the Fed is an entity tasked with serving the public, and since it took the opportunity to reply in broad terms to our previous article, we are confident that Mr. Kaplan and his subordinates will promptly address these follow up concerns.
Finally, in light of this official refutation by the Dallas Fed, we are confident that disclosing the Fed's internal meeting schedules is something the Fed will not object to, and we hereby request that Mr. Kaplan disclose all of his personal meetings with members of the U.S. and international financial system since coming to office, both through this article, and through a FOIA request we are submitting concurrently.
(129 votes)
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Trust the Fed, trust me...
Whoever denied it, supplied it.
Fuck the FED!!
RIPS
There's a saying that you "never comment to people below your level." ZH is more significant than the mainstream wants to admit.
Mark to market... how quaint and retro.
“the Fed is an entity tasked with serving the public”
Is that anything like “wrestling is a sport”?
Fuck you, Fed Reserve! You're monetary communists!
The Dallas Fed's denial IS the confirmation.
At least now we know the Fed reads Zero Hedge.
The Fed will respond to ZH questions as follows:
"It was my understanding there would be no math."
I didn't have sex with such a woman.
WAY TO GO TYLERS!!! WAY TO FLIPPIN' GO!!! YOU RULE!!!
+infinity
Me thinks he doth protest too much...
The first rule of FIGHT CLUB is:
"You DO NOT talk about FIGHT CLUB"
The 2nd rule of FIGHT CLUB is:
FUCK THE FED!!!
So now that we know for sure the Fed is reading ZH, here it goes: FUCK YOU BEN BERNANKE!!! FUCK YOU GREENSPAN!!!FUCK YOU BEN BERNANKE!!! FUCK YOU GREENSPAN!!!FUCK YOU BEN BERNANKE!!! FUCK YOU GREENSPAN!!!FUCK YOU BEN BERNANKE!!! FUCK YOU GREENSPAN!!!
Don't believe anything until it's been officially denied.
Here's a question: How many of the banks that make up the Fed are jewish owned?
Just an innocent question....
It was my understanding there would be no truth
I hereby nominate SheepRevolution to become the next LongSoupLine...
Zerohedge 6 points (plus extra 2)
Khazarian Mafia 0
“…Robert Steven Kaplan, a former Goldman Sachs career banker…an odd background for a regional Fed president…”
Correction: his background would have been odd for a Fed President if he had never worked at Government Sachs.
Corruption: it’s what’s for breakfast
-- Barry Soetero
LOL- an odd attempt at misdirection. The Fed is so inundated with GS people at this point that they have make light of it-
"Shh- nobody say anything, the sheep will never make this connection on their own....."
Dammit- Tyler is gonna get droned with Spicoli now, gonna be a messy Tuesday.....
Kudos, Tyler!
Gasoline($0.46 / Gallon): http://www.cnbc.com/2016/01/18/gas-wars-a-gallon-is-just-46-cents-here.html
Water($0.88 / Gallon): http://www.walmart.com/ip/Great-Value-Distilled-Water-1-Gal/10315382
Fuckin A ZH.
Fuck you CNN
dey lyen
If we hear of a nailgun accident over the next few days we'll know who leaked the info... just saying..
none
Hey Fischer, fuuuuuuuuuuck yooooooooou.
"When it becomes serious, you have to lie."
Jean-Claude Junker
Must be getting serious.
The FED responds through Twitter
That has got to calm markets
"Special Operations"
why its always ignored that most fed members are jews not only the chairmans
no one officially talks about that
"It's complicated."
For financial information to be USEFUL it must also be:
"Relevant: Relevance requires financial information to be relevant to the decision making needs of the users.
Materiality requires accountants and auditors to focus on financial information which is expected to affect the decisions of the users.
Faithful representation requires the financial information to be true and fair and free from misstatement.
Comparability requires the financial information to be comparable across periods and across companies.
Verifiability requires the information to communicate the underlying economics of the company's business.
Timeliness requires disclosure of financial information not to be excessively delayed.
Understandability requires the financial information to be understandable by users with reasonable knowledge of business and economic activities."
But we are in the 21st century. Who needs reliable and relevant accounting these days, amirite?
.....was that a +1 parsecs infinity, or, a +12 parsecs infinity.
It's all relative, Relativity Theory in theory, you know.
;) & :) X-
This just means Tyler put one in the 10 ring.
yet again!
The statement was a denial of Guidance. That was true of course, they never issued Guidance telling Banks what to do.
Deniability requires nothing exists in written or electronic form in the form of Guidance. Conversations where we suggest you take this action vs. this action is a completely different issue.
That was true of course, they never issued Guidance telling Banks what to do.
You must mean that they are out of control.
You must mean that they have no credibility.
As the Central Bank the responsibility of the FED is to issue guidance in order that economic stability is maintained. That is supposedly their mission.
From Investopedia...
http://www.investopedia.com/terms/f/forward-guidance.asp
Forward guidance is a key tool of the Federal Reserve in the United States. Other central banks, such as the Bank of England, the European Central Bank and the Bank of Japan, use it as well.
Read more: Forward Guidance Definition | Investopedia http://www.investopedia.com/terms/f/forward-guidance.asp#ixzz3xd4ekAbF
Follow us: Investopedia on Facebook
Haven't you ever heard the adage,"Don't fight the Fed."?
And yet you are telling me that the denial of Guidance is TRUE because they never issued Guidance telling Banks what to do?
For what reason are you attempting to convince me of that...when that is so far from the truth that it is not funny?
I do not see any satire in your statement. I fail to grasp any humor.
"I didn't have sex with a woman."
-some president or other
This shouldn't be a surprise. We know for a fact Draghi reads ZH. I would assume all CB heads visit ZH once or so a day.
Draghi reads? That's news to me... See? Yet ANOTHER reason I come to ZH to learn new things each day!
Yeah he let that go in 2013 in a Q&A.
M. Draghi is a reader, for a while I wondered if Ghordo was Draghi, but then Ghordo made German/Dutch speaker English mistakes and not Italian ones.
I missed that tidbit, how did he disclose that?
"Plan Z": when TD asked in mid 2013/4 on what the ECB would do should Grexit spread to the rest of the PIGS.
At the time everyone assumed the whole sour loan issue was contained and Cypress was the only black swan in a recovering Eurozone. Draghi later admitted should things get bad enough that deflation becomes a market risk he would enter the market with QE, Plan "Z". ECB is still operating under Plan Z to this day and expected to double up on QE measures before 2020.
Along with the NSA
The fun game of watching those guys watch these guys watching some other guys watch some other guys. Keep them off the streets and in a cube pen somewhere wasting their lives. Can't have all those inventive minds runing around fixing things. Stuff might start to actually work then banks wouldn't be needed.
Who do you think DDOS'ed ZeroHedge just this last year?
Hells bells, the fact that they responded with any comment is confirmation.
Be careful Tylers.