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Bloomberg Fires Back At Bernanke's Blustering Rebutall
It appears 'It Is On' as Bloomberg offers its well-reasoned and eloquent response to Mr. Bernanke's 'egregious errors' note to Congress. Without naming names, Bernanke makes a number of points regarding the reporting of the secret bailout terms and profiteering, which we discussed here, and now Bloomberg comes 'Over-The-Top' Stallone-style with a much more fine-toothed refutation of Bernanke's refutation of their reporting. "Bloomberg stands by its reporting" and offers a point-by-point take-down of the Fed-head's perspectives.
Here is Bernanke's letter to Congress:
...and Bloomberg's excellent point-by-point response can be found here, but for a taster, here is Bloomberg's slap in the face of Bernanke's claim that all program details were public:
Bloomberg’s Nov. 28 story about Fed lending reported that the central bank published regular reports on the scope of borrowings from the discount window and other emergency or temporary programs. The loans were described as “secret” because the amounts, names of borrowers, dates and, often, interest rates weren’t disclosed. The stories reported that the Fed’s rationale for keeping the loans secret was to prevent bank runs.
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Are you near the number of cocktails where you take off all your clothes and start misspelling everything?
almost to the point where the whig comes off and we see the PRO SHILL tattoo.
This soup of, " sterilized ", taco sauce, is too smooth. Spicy with chunks in the road. Like my ass-blasting, (ANCESTORS } ARghRRRRRRRrrrr.>
Blistering Blue Barnicles Bernanke! Bloody Burrito Blowout Bloomberg!
The 1% does not eat its own; they are not cannibalistic....
Good response from Bloomberg.
bloomberg's response doesn't seem that bad ass to me, not sure what is so "excellent" about it, has a "you misunderstood us" tone to it
Is this guy an American or is he Muhammed Atta with a shaved head? He seems intent on destroying our country via a collapse of our financial system... along with his cabin boy Geithner and his daddy Blankfein... get rid of this cancerous dweeb!!
I'm really happy to see such an educated discussion. Zerohedge is the leader in the modern enlightenment that is starting in this country.
Someday, instead of being asked if you read the Journal, people will be asking if you read Zerohedge...
Long live truth!
What a pleasant surprise! A media outlet calling out the Federal Reserve for blatant lying. I think hell just froze over.
I take back all those nasty things I said about Bloomburg's "army".
At l(e)ast Bloomburg News is growing a pair! Let's give them a thumbs up and get this party going. We need a thousand MSM articles like that to wake up the sheeple.
Woah, woah! I take back nothing I said about Bloomberg's Army. That's still WAY out of line. I'm just pleasantly surprised to see a piece like this slip by the editors at Bloomberg News.
"Likewise if a bank lends $1,000 for a year at a time, $1,000 a month at a time for a year, and $1,000 a day at a time for year--repaying the loans at the end of each period--the economic result is that borrower has borrowed just a total of $1,000 in each case, and it would be incorrect to say that the borrower has borrowed just a total of $1,000 in each case, and it would be incorrect to say that the borrower would have borrowed $12,000 in the second instance, and $365,000 in the third instance."
wtf? Did MathMan, MDB, and Hobotrader write this for the Bernank?
I won't be surprised at all to see a movement form which starts killing bankers and politicians.
I like a ( gbp/usd) Trade ! SOON.
Bloomberg should seriously run for president. He trumps every republican candidate out there.
As in Bloomberg Crystal? Mr. Meaningful?
fixed.
Tyler, what is going on with Bloomberg? That was an excellent retort to The Bernank BS. It appears they are moving away from main stream crap and talking more about the truth. Do we have a second breath of fresh air out there?
TY
Not everyone at Bloomberg is captured/censored like the MSM. Bloomberg has a fairly decent history of fighting the Fed (and winning!).
On a side note, they have a really cool HQ building in NY. The salt water aquariums are beautiful, the women are hot, and the open environment (no cubicles) is awkward. I think their biggest issues are dealing with legacy systems and the lots of fortran thats still being executed on a daily basis. The Bloomberg terminal backend is insanely complex.
I'm a (non ) backseat guy. Enough said!
Liquidity enhancement fool
I stopped listening to/watching/reading bloompumpberg after the cheer leading ass kissing they gave the fed and congress criminals for their March 2009 shell game fraud. This editorial dog and pony show doesn't shake my low opinion of bb.
Close all Federal Reserve and Treasury Department offices in NYC!!!
No Goldman, JP Morgan or TBTF/TARP alum allowed in government!!! Lifetime employment bans!!!
No contact of any kind between GoldMorganites and Federal officials!!!
Let's get serious. Obama has zero cred with these pathetic sociopaths in his Administration. No financial blogs are even covering his 'big economic speech' today. With Goldmanites at your side, no one gives a shit what you say. You are ONE WITH THE SCUM Mr. President. And that goes double for Republican scum.
Zero Hedge should start a running tab on how private equity firm's fare once they make investments in publicly traded companies.. last time Sycamore Partners invested in TLB (Talbots) the stock crashed and burned.. will we have a repeat again in a few months...
TLB is at $2.70 in after hours trading after Sycamore Partners, which already owns nearly 10 percent of Talbots outstanding stock, said it would buy the remaining at $3 a share, a substantial premium to the $1.56 a share price at today’s closing bell.
http://www.bostonwealth.net/2011/12/06/look-what-happened-to-tlb-last-ti...
Does ANYONE have any evidence that The Fed did what is claimed? Can you point me to it? Please?
The Fed is unconstitutional and inflationary. These are common knowledge. Find a yearly chart of the $US and a copy of the US Constitution as proof of these. All else is pointless minutia.
“The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them.” –Patrick Henry
Security through obscurity. Whether it be Trillions, CDS's, Fed Balance sheet footnotes (or lack thereof) and/or flash-crashing HFT algorithms it's all concealed mother-fing-shanigans with your productivity.
ha ha, whack a mole
Ben Just showed he needs to be "retired" in any way or form,
MY preference is to put this stupid fuck in a wood chipper feet first..
Just shows you these guys don't "get it" until they show up on "The Daily Show".
"The Honorable Spencer Bachus".
http://www.youtube.com/watch?v=n-uefCvtp24&feature=player_embedded#!
Prince Hints Saudi Arabia May Pursue Nuclear Arms http://www.nytimes.com/2011/12/07/world/middleeast/saudi-arabia-may-seek...Put Bernanke in jail.
libertarian86.blogspot.com
I think BB is realising (like the credit rating companies) that the last of their reputations (if they have any left) now hinge on telling the truth because its now become so painfully obvious to the public.
There is a gathering storm and a gathering mob....both know whose side they want to be on when this thing goes south!!!
I don't think it's painfully obvious to the public. I think they still consider all this shit to be an honest, though failing, effort at economic stimulus. Look at the polls (realclearpolitics.com):
Congressional Job Approval RCP Average Approve 12.3 Disapprove 81.7 Spread -69.4Generic Congressional Vote RCP Average Democrats 42.5Republicans 41.3
Almost everybody agrees that Congress is doing a terrible job, but over 80% still plan to vote Democrats or Republicans into congress. To me, this says that the public doesn't get it yet. Now, when we start to see more of these articles dominating headlines, maybe the tide will turn.
When you can control all of the money and you can select who gets the money and who doesn’t, you can control every industry and every business and all commerce in the United States.
With several strokes of the keyboard, nationwide inventory for a new company like Home Depot or Bed Bath & Beyond or Forever 21 can be created and with a simple refusal another nationwide chain store like Linens ‘n Things can be turned into bankruptcy.
A nationwide network of stores can appear overnight in two steps: 1) an investment banker provides the cash in exchange for substantial portions of the stock and 2) the Federal Reserve Bank provides the cash.
In a Bernanke world, money rules. Those skilled in manipulating it dictate all policy. Monopolists oust small businesses and all competition.
“I care not what puppet is placed on the throne of England to rule the Empire… The man that controls Britain’s money supply controls the British Empire. And I control the money supply.” –Baron Nathan Mayer Rothschild
I'll second that first paragraph J.R. . The autumn is unique. Not like that 09 autumn. I'm getting ready to trade usd/jpy again.
I'm sure you are watching that trade as well. I look forward to speaking with you. Nice posts.
Hi Yen. Sounds good! Thanks.
come on you guys Bernanke reads THIS STUFF and he wants serious feedback about ways to make the Fed more transparent (methinks invisible : idea make them part of the UST) now for ways to make Bernanke invisible? now see you've got me doing it.
Year 2001/2002 - http://www.youtube.com/watch?v=VkmEZs_Kcms
hilarious thumbnail for this piece
http://www.reuters.com/article/2009/03/08/us-aig-idUSTRE52624P20090308
By Toni Reinhold
NEW YORK | Sun Mar 8, 2009 8:30am EDT
Who got AIG's bailout billions?
(Reuters) - Where, oh where, did AIG's bailout billions go? That question may reverberate even louder through the halls of government in the week ahead now that a partial list of beneficiaries has been published.
The Wall Street Journal reported on Friday that about $50 billion of more than $173 billion that the U.S. government has poured into American International Group Inc since last fall has been paid to at least two dozen U.S. and foreign financial institutions.
The newspaper reported that some of the banks paid by AIG since the insurer started getting taxpayer funds were: Goldman Sachs Group Inc, Deutsche Bank AG, Merrill Lynch, Societe Generale, Calyon, Barclays Plc, Rabobank, Danske, HSBC, Royal Bank of Scotland, Banco Santander, Morgan Stanley, Wachovia, Bank of America, and Lloyds Banking Group.
Morgan Stanley and Goldman Sachs declined to comment when contacted by Reuters. Bank of America, Calyon, and Wells Fargo, which has absorbed Wachovia, could not be reached for comment.
The U.S. Federal Reserve has refused to publicize a list of AIG's derivative counterparties and what they have been paid since the bailout, riling the U.S. Senate Banking Committee.
Federal Reserve Vice Chairman Donald Kohn testified before that committee on Thursday that revealing names risked jeopardizing AIG's continuing business. Kohn said there were millions of counterparties around the globe, including pension funds and U.S. households.
He said the intention was not to protect AIG or its counterparties, but to prevent the spread of AIG's infection.
The Wall Street Journal, citing a confidential document and people familiar with the matter, reported that Goldman Sachs and Deutsche Bank each got about $6 billion in payments between the middle of September and December last year.
Once the world's largest insurer, AIG has been described by the United States as being too extensively intertwined with the global financial system to be allowed to fail.
The Federal Reserve first rode to AIG's rescue in September with an $85 billion credit line after losses from toxic investments, many of which were mortgage related, and collateral demands from banks, left AIG staring down bankruptcy.
Late last year, the rescue packaged was increased to $150 billion. The bailout was overhauled again a week ago to offer the insurer an additional $30 billion in equity.
AIG was first bailed out shortly after investment bank Lehman Brothers was allowed to fail and brokerage Merrill Lynch sold itself to Bank of America Corp.
Bankruptcy for AIG would have led to complications and losses for financial institutions around the world doing business with the company and policy holders that AIG insured against losses.
Representative Paul Kanjorski told Reuters on Thursday that he had been informed that a large number of AIG's counterparties were European.
"That's why we could not allow AIG to fail as we allowed Lehman to fail, because that would have precipitated the failure of the European banking system," said Kanjorski, a Democrat from Pennsylvania who chairs the House Insurance Subcommittee.
TOXIC ASSETS/TOXIC WASTE
As part of its business, AIG insured counterparties on mortgage-backed securities and other assets. The collapse of the U.S. subprime mortgage market, which triggered a global financial crisis, left the insurer and some of its policy holders facing possible ruin as the value of assets declined.
U.S. regulators failed to recognize how much risk AIG was piling on in credit-default swaps, and by the time they understood, they had no choice but to pour in billions of public dollars, Kohn and other officials told the Senate panel.
Senators were outraged by the lack of details about where the bailout money has gone.
"That we find ourselves in this situation at all is ... quite frankly, sickening," said Senator Christopher Dodd, the Democrat who chairs the committee. "The lack of transparency and accountability in this process has been rather stunning."
Eric Dinallo, superintendent of New York State's Insurance Department, railed on Friday against AIG's failed business model, likening its insuring credit-default swaps as gambling with somebody else's money.
"It's like taking insurance on your neighbor's house and even maybe contributing to blowing it up," he said at a panel sponsored by New York University's Stern School of Business.
U.S. lawmakers have said they are running out of patience with regulators' refusal to identify AIG's counterparties.
On Thursday, Richard Shelby, the top Republican on the banking committee, said: "The Fed and Treasury can be secretive for a while but not forever."
(Writing Toni Reinhold; Additional reporting by Juan Lagorio in New York; Editing by Clive McKeef)
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William Greider
The AIG Bailout Scandal
William Greider
August 6, 2010
http://www.thenation.com/article/153929/aig-bailout-scandal?page=0,1
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" This time, the entire system was at risk, so virtually everyone was vulnerable. Geithner expected the biggest banks to package a substantial bridge loan that would give AIG the time to sell assets and raise capital, an orderly resolution. After all, AIG was an insurance corporation, not a bank. The Fed had no direct regulatory authority over it. Geithner had gotten an early glimpse of AIG’s troubles in the summer, when its CEO approached him and asked for access to the Fed’s discount window, the place banks go for short-term liquidity loans. Geithner turned him down, but learned how deeply Wall Street and Europe’s leading banks were entwined in AIG’s troubles.
The problem was derivatives. During the housing bubble, AIG had reaped a fortune selling derivative contracts based on mortgage-backed securities—hedging devices that made investors feel safe holding these assets. When the bubble burst and housing securities plummeted in value, AIG’s derivatives became its instrument of self-destruction. The counterparties, as per their contract, demanded immediate payment to cover their losses—more and more capital, as housing prices continued to fall. Goldman Sachs, almost alone among big banks, had bet right on the housing bubble. Now it was aggressively collecting on its bet.
The bankers’ committee assembled at the Fed worked all day and into the night, joined by AIG, the New York State insurance regulators, with investment bank Morgan Stanley acting as Treasury’s new adviser. The group drafted a “term sheet” that toted up AIG’s exposure. It would need as much as $75 billion, they estimated.
In Washington, Treasury Secretary Henry Paulson kept his distance, while fighting other bonfires. Paulson assured reporters the meeting under way at the New York Fed had nothing to do with a government bailout for AIG. “What’s going on in New York is a private-sector effort,” Paulson said.
Sometime after midnight, the bankers called to say, sorry, they were not interested. There would be no private-sector rescue. According to Thomas Baxter, general counsel at the New York Fed, notification came on Tuesday morning, not from the principal executives of Goldman and JPMorgan but from a bankruptcy lawyer, Marshall Huebner, advising JPMorgan on AIG’s problems. The New York Fed immediately hired him as its own lawyer and proceeded to do what the bankers had refused to do—bail out AIG.
JPMorgan and Goldman offered no public explanation for rejecting Geithner’s proposal. The public wasn’t ever told the banks were asked to do their part. Nor did Federal Reserve officials argue with the decision or try to apply persuasive pressures. It did not put the squeeze on to convince the bankers they must accept some kind of sacrifice in the interest of sharing the pain. Nor did Geithner threaten to pursue an alternative strategy that could have forced the banks to negotiate the terms. This was considered out of the question, though the central bank has employed all these tools on past occasions.
In a subsequent hearing, Damon Silvers, the AFL-CIO policy director who is a member of Warren’s oversight panel, asked Baxter, “When you’re pulling together the private sector to solve a problem that they’ve created of the type that AIG represented, is it typical to accept no for an answer?” Baxter fudged. “Well, I started out by saying there was nothing typical about the crisis,” he replied. He talked in circles and never answered the question.
If the bankers refused to participate, the Fed had to move fast to stanch the bleeding. AIG faced another downgrade from credit rating agencies (the same agencies that had given triple-A blessings to mortgage securities). The Fed adopted the bankers’ “term sheet” as its operating guide and swiftly created a revolving credit fund of $85 billion.
Late on Tuesday, the central bank lent $12 billion to AIG. The next day, it lent another $12 billion. This was only the beginning. The AIG operation became a gigantic spigot for circuitously distributing public money to private banking interests. As the New York Fed pumped more money into AIG, the insurance giant pumped it right out the door to satisfy the demands from counterparties like Goldman Sachs. Having helped scuttle the private rescue, Goldman collected $13 billion from this backdoor public assistance. The Fed did not stop AIG’s hemorrhage. It began financing it, with no questions asked.
The Fed has always insisted this financial daisy chain was not designed to pump more capital into the leading banks. “This was not about the banks,” a senior vice president of the New York Fed told the New York Times. If not, then why did the Federal Reserve work so hard to keep their names secret? Fed lawyers labored for months to prevent disclosure of the beneficiaries. Ranking Federal Reserve governors coldly rejected as “inappropriate” the repeated Congressional demands to know the names. If it wasn’t about helping those banks, why did the Fed not pause to reconsider its initial decision and develop a less costly approach? It became instead the paymaster for AIG’s failed derivative contracts—conducting business as usual in the midst of national emergency.
This process continued for nearly two months and swelled to horrendous proportions before the Federal Reserve finally figured out a way to turn off the spigot. In November, it arranged a complex swap, known as “Maiden Lane,” in which the government paid off counterparties, acquired the remaining derivative contracts and extinguished them. The bankers again collected roughly full value on assets that were then selling in financial markets for less than 50 cents on the dollar.
The Fed claimed victory for the public, but in reality the game was already lost, despite the generous public financing. AIG was facing another downgrade, and everyone understood this one would probably be fatal—triggering the bankruptcy the Fed had tried to avoid. After the bankers had gotten the money, they graciously agreed to settle.
Back in September, when the Federal Reserve hired JPMorgan’s lawyer as its own, there was no public outcry because the public didn’t know about it. Marshall Huebner of the law firm Davis Polk & Wardwell was an expert in corporate bankruptcy and would help the Fed get up to speed quickly. The arrangement was not illegal and not unethical, given the precious distinctions the legal profession makes on ethics. JPMorgan gave its lawyer consent to switch sides, though Huebner’s firm continued to represent the Morgan bank (Davis Polk graciously gave the Fed a 10 percent discount of Huebner’s $1,000-an-hour billing rate). The Federal Reserve limited his advice to AIG matters. Huebner later also became Treasury’s lawyer when it added TARP funds to AIG, though the Fed and Treasury do not have identical interests.
What was troublesome about swapping lawyers? There was a “third client” in this matter—the American public—who faced huge exposure to losses but didn’t have its own lawyer in the room. The central bank, with its high sense of rectitude, would insist it represents the public interest. The Congressional Oversight Panel did not buy that.
The government, the Warren report said, “put the efforts to organize a private AIG rescue in the hands of only two banks, JPMorgan Chase and Goldman Sachs, institutions that had severe conflicts of interest as they would have been among the largest beneficiaries of taxpayer rescue.”
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Greenberg’s AIG Bailout Suits Pursue Unique Theories
By David Voreacos - Dec 1, 2011 7:05 PM ET .
http://www.bloomberg.com/news/2011-12-01/greenberg-s-audacious-aig-bailo...
Maurice "Hank" Greenberg, former chairman and chief executive officer of American International Group Inc. Photographer: Scott Eells/Bloomberg
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Maurice R. Greenberg, the former American International Group Inc. (AIG) chief executive officer, seeks to break new ground in lawsuits challenging the U.S. takeover of the insurer in a bailout that reached $182 billion.
Greenberg’s Starr International Co. sued the government Nov. 21, calling the public assumption of 80 percent of stock in the insurer in 2008 an unconstitutional “taking” of property that requires $25 billion in compensation.
“The rescue of AIG distorted the marketplace by transforming highly risky derivative bets into fully guaranteed payment obligations,” the COP explained. “The result was that the government backed up the entire derivatives market, as if these trades deserved the same taxpayer backstop as savings deposits and checking accounts.”
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http://www.thenation.com/article/153929/aig-bailout-scandal?page=0,2
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treason !
end the fed.
TREASON!
Exactly, and I believe execution is the customary punishment, if not life in prison.
wouldn't the world just be so much better if we could just get rid of the pesky poor? All they do is whinge and whine about how they can't get loans. And then when they do get loans, and fail to pay the borrowed money back, they whinge and whine about how the evil bankers shouldn't have lent it to them in the first place. I say send them all out to China where they can work 14 hrs a day for $5, building a highway to a town in which nobody lives. I think we should just chop off their goolies...
http://www.youtube.com/watch?v=04clpd7h0b0
the programs were so tansparent bloomberg had to file a freedom of infolrmation request law suit which the fed fought and it had to be included in dodd frank.
I've got an idea, if he wants to make the fed more trrasparent, when he testifies in front of congress, etc. have him hooked up to a lie detector. in fact do it every time he speaks about policy in public!!!!
crab cake: if you do go to war with these fuc##s ..if you make it to trial I would vote "NOT GUILTY" as I hope many of US would.