Fed's Court-Ordered Transparency Shows Americans `Have a Right to Know' A Supreme Court order that forces unprecedented disclosures from the Federal Reserve ended a two- year legal battle that helped shape the public’s perceptions of the U.S. central bank. The high court yesterday let stand a lower-court ruling compelling the Fed to reveal the names of banks that borrowed money at the so-called discount window during the credit crisis. The records were requested by Bloomberg LP, the parent company of Bloomberg News. Fed Chairman Ben S. The financial crisis, which began in August 2007 and peaked after the bankruptcy of Lehman Brothers Holdings Inc. in September 2008, focused the public’s attention on the Fed and its $3.5 trillion effort to rescue the banking system, said U.S. “People wanted to know more about what the Fed was doing,” said Paul, a Texas Republican. While Congress required the Fed in December to reveal details of assistance it provided through various emergency programs during the crisis, discount window loans were exempt. Ben S. Ben S. Close
I WANT TO COME BACK AS THE FEDERAL RESERVE. YOU CAN INTIMIDATE EVERYBODY. James Carville once said: “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.” Carville was very close to getting this right. “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. I’ve spent a great deal of time trying to debunk the idea that bond markets will one day revolt and cause the Fed to raise rates which will appear like bond vigilante justice. To illustrate this point I ran a few correlations across the yield curve in the USA. What’s interesting in this data is that the bond market is taking its cues almost entirely from the Fed. What’s more interesting is that there appears to be no worry of solvency in this data. 1) The US government should absolutely not be allowed to default.
Audit Of The Federal Reserve Reveals $16 Trillion In Secret Bailouts Audit Of The Federal Reserve Reveals $16 Trillion In Secret Bailouts By Unelected.org 24 July, 2011Unelected.org Click on the image for a larger picture The first ever GAO(Government Accountability Office) audit of the Federal Reserve was carried out in the past few months due to the Ron Paul, Alan Grayson Amendment to the Dodd-Frank bill, which passed last year. Jim DeMint, a Republican Senator, and Bernie Sanders, an independent Senator, led the charge for a Federal Reserve audit in the Senate, but watered down the original language of the house bill(HR1207), so that a complete audit would not be carried out. What was revealed in the audit was startling: $16,000,000,000,000.00 had been secretly given out to US banks and corporations and foreign banks everywhere from France to Scotland. To place $16 trillion into perspective, remember that GDP of the United States is only $14.12 trillion. Comments are not moderated.
Federal Reserve made $9 trillion in emergency loans - Dec. 1, 2010 Top recipients of overnight loans made by the Federal Reserve under special program that ran from March 2008 through May 2009.By Chris Isidore, senior writerDecember 1, 2010: 6:05 PM ET NEW YORK (CNNMoney.com) -- The Federal Reserve made $9 trillion in overnight loans to major banks and Wall Street firms during the financial crisis, according to newly revealed data released Wednesday. The loans were made through a special loan program set up by the Fed in the wake of the Bear Stearns collapse in March 2008 to keep the nation's bond markets trading normally. The amount of cash being pumped out to the financial giants was not previously disclosed. Still, the total amount was a surprise, even to some who had followed the Fed's rescue efforts closely. "That's a real number, even for the Fed," said FusionIQ's Barry Ritholtz, author of the book "Bailout Nation." "It makes it very clear this was a very serious, very unusual situation," he said. Sen. Share this
The Fed As A Reverse Robin Hood | zero hedge In today's edition of Bloomberg Brief, the firm's economist Richard Yamarone looks at one of the more unpleasant consequences of Federal monetary policy: the increasing schism in wealth distribution between the wealthiest percentile and everyone else. While the Fed's third mandate is by now all too clear: push the Russell 2000 to the highest possible level, one can now suggest that the 4th mandate is one that would make Robin Hood spin in his grave: "To the extent that Federal Reserve policy is driving equity prices higher, it is also likely widening the gap between the haves and the have-nots....The disparity between the net worth of those on the top rung of the income ladder and those on lower rungs has been growing. According to the latest data from the Federal Reserve’s Survey of Consumer Finances, the total wealth of the top 10 percent income bracket is larger in 2009 than it was in 1995. Those further down have on average barely made any gains.
Supreme Court Gives Fed 5 Days to Release Emergency Bank Loan Details; An Important Step in the Right Direction In a rare victory for common sense, the Supreme Court has rejected appeals by banks and the Fed that disclosure of the emergency loans by the Fed to various banks in 2008 were "trade secretes". The court gave the Fed 5 days to release the information. Please consider Fed Must Release Loan Data as High Court Rejects Appeal The Federal Reserve will disclose details of emergency loans it made to banks in 2008, after the U.S. Supreme Court rejected an industry appeal that aimed to shield the records from public view. Information-Wise, a Big Yawn The argument that information represents "trade secrets" is of course preposterous, as is the idea that "disclosure that might dissuade banks from accepting emergency loans in the future". We will know soon enough, but I expect the information to be a big yawn. Important Step in the Right Direction Whatever excitement there is, will last all of a day. Five Steps to Eliminate the Fed The first step is a full disclosure of what happened.
News Responds to Bernanke Criticism of U.S. Bank-Rescue Coverage Federal Reserve Chairman Ben S. Bernanke said in a letter to four senior lawmakers yesterday that recent news articles about the central bank’s emergency lending programs contained “egregious errors.” While Bernanke’s letter and an accompanying four-page staff memo posted on the Fed’s website didn’t mention any news organizations by name, Bloomberg News has published a series of articles this year examining the bailout. “Bloomberg stands by its reporting,” said Matthew Winkler, editor-in-chief of Bloomberg News, who responded to the criticisms today on “Surveillance Midday” with Tom Keene. Here is a point-by-point response by Bloomberg News to the Fed staff memo. From Fed memo: “These articles have made repeated claims that the Federal Reserve conducted ‘secret’ lending that was not disclosed either to the public or the Congress. From Fed memo: “The Federal Reserve took great care to ensure that Congress was well-informed of the magnitude and manner of its lending.”
Smackdown of the day: Bloomberg vs the Fed Historically, it was hard for institutions to reply in any effective manner to press reports which they thought were full of egregious errors and mistakes. They could complain to various editors, and maybe even get a short response on the letters page, but they rarely got the opportunity to reply in their own words and at the length they thought the reply deserved. The web, of course, has changed all that, and ISDA’s media.comment blog is a great example of a criticized institution taking matters into its own hands. The Federal Reserve, on the other hand? In a six-page letter today addressed to the Senate Banking Committee, Ben Bernanke lashes out at “a series of articles–one just last week–concerning the Federal Reserve’s emergency lending activities”. Nowhere in those six pages is a single article actually identified. Bloomberg did not let the opportunity go to waste. Which is not to say that the Fed is being completely disingenuous here. And this, too, is misleading:
More on those secret Federal Reserve loans to banks The claim that the Federal Reserve extended trillions of dollars in secret loans to banks continues to be spread. Here at Econbrowser we will continue to try to correct some of the misunderstanding that is out there. Consider for example this item from the Levy Institute blog written by University of Missouri Professor L. Randall Wray, which begins: It literally took an act of Congress plus a Freedom of Information Act lawsuit by Bloomberg to get [Bernanke] to finally release much of the information surrounding the Fed’s actions. This is a common misunderstanding. Another key fact that seems to be underappreciated by those passing along these numbers is that the vast bulk of this $7.77 trillion figure was never lent at all. The $7.77 trillion also includes $1 trillion for the Fed’s purchases of mortgage-backed securities. The $7.77 trillion also includes $600 B for outright purchases of Fannie and Freddie debt (which turned out to be only $169 B), and another $300 B for Treasury debt.
Fed Once-Secret Loan Crisis Data Compiled by Bloomberg Released to Public Bloomberg News today released spreadsheets showing daily borrowing totals for 407 banks and companies that tapped Federal Reserve emergency programs during the 2007 to 2009 financial crisis. It’s the first time such data have been publicly available in this form. To download a zip file of the spreadsheets, go to The spreadsheets can also be downloaded from here. The day-by-day, bank-by-bank numbers, culled from about 50,000 transactions the U.S. central bank made through seven facilities, formed the basis of a series of Bloomberg News articles this year about the largest financial bailout in history. “Scholars can now examine the data and continue the analysis of the Fed’s crisis management,” said Allan H. Bloomberg News obtained information about the discount window and ST OMO through the Freedom of Information Act. Additional Data The Fed later supplied additional data to fill in gaps in its initial response. Penalty Rates ‘Generally Low’
V – Les années Obama : la politique de la FED entre QE1 et QE3 | Economie et crise aux USA Nouveau site ouvert : Nous continuons notre examen des comptes publics et de la politique monétaire par un bilan d’ensemble de l’action de la FED. Depuis 2008, La FED a en effet eu un rôle de plus en plus marqué dans toute une série d’opérations souvent analysées sur ce blog. Reconstituer l’action de la FED, c’est se donner le moyen de mieux comprendre le rôle qu’elle a joué et joue encore dans la gestion de la crise financière, le soutien à l’immobilier et à la dette du Trésor dont elle peut influencer les émissions autant que les taux d’intérêt. La décision du 13 septembre 2012 de la FED de reprendre des achats de RMBS ne peut être compris que dans le cadre d l’historique de son action depuis le début de la crise. Ce sont les amortissements de la dette des agences et des RMBS détenue par la FED, augmentés de 40 Md de $ par mois qui devraient financer cette opération. Pour procéder à cette analyse d’ensemble, nous avons décidé d’adopter le plan suivant.