Hey Fed Boys, We Didn't See What You Did There. But We'd Really Love To.

Tuesday, August 25, 2009 , , , 10 Comments

Ohhhhhh how the tables turn. Don't go celebrating just yet, Zimbabwe Ben, we're coming for dat ass and it won't be pretty.

Court Orders Fed to Disclose Emergency Bank Loans (via Bloomberg):

The Federal Reserve must for the first time identify the companies in its emergency lending programs after losing a Freedom of Information Act lawsuit.

Manhattan Chief U.S. District Judge Loretta Preska ruled against the central bank yesterday, rejecting the argument that loan records aren’t covered by the law because their disclosure would harm borrowers’ competitive positions.

The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under 11 programs, most put in place during the deepest financial crisis since the Great Depression, saying that doing so might set off a run by depositors and unsettle shareholders. Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 on behalf of its Bloomberg News unit.

“The Federal Reserve has to be accountable for the decisions that it makes,” said U.S. Representative Alan Grayson, a Florida Democrat on the House Financial Services Committee, after Preska’s ruling. “It’s one thing to say that the Federal Reserve is an independent institution. It’s another thing to say that it can keep us all in the dark.”

The judge said the central bank “improperly withheld agency records” by “conducting an inadequate search” after Bloomberg News reporters filed a request under the information act. She gave the Fed five days to turn over documents it told the reporters it located, including 231 pages of reports, and said it must look for more at the Federal Reserve Bank of New York, which runs most of the loan programs.

The central bank “essentially speculates on how a borrower might enter a downward spiral of financial instability if its participation in the Federal Reserve lending programs were to be disclosed,” Preska wrote. “Conjecture, without evidence of imminent harm, simply fails to meet the Board’s burden” of proof.

David Skidmore, a Fed spokesman who said the board’s staff was reviewing the 47-page ruling, declined to comment on whether the central bank would appeal to the U.S. Court of Appeals in New York.

I'm shocked that FoIA would even work on the Fed. Here I thought the evil cabal was above that sort of thing?

The U.S. House may vote as soon as next month on a bill to require the Fed to submit to audits by the Government Accountability Office, said Representative Scott Garrett, a New Jersey Republican on the Financial Services Committee.

The judge’s ruling “is strikingly good news,” Garrett said. “This is what the American people have been asking for.”

The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg suit, filed in New York, didn’t seek money damages.
I hate to break this to Bloomberg in case this is news to them but, uh, the Fed isn't exactly a government agency. That's really cute though.

In case you missed my $0.02 on the concept of a "Fed audit", they may be found here. It's laughable at best that we can accomplish anything by cracking open their books. Not to discount Ron Paul's determination but an audit is only as good as the rules upon which it is conducted. Seeing as how the Fed provides its own accounting, there is no way any outside source could conclude anything of value.

Harpoon the fuckers already and put them out of their misery. Or rather, put us out of ours. Thanks!

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


Anonymous said...

I hate to break this to the Junior Deputy Accountant in case this is news to her but, uh, the Federal Reserve Board and the FOMC are exactly government agencies. That's really cute though.

scrat said...

Yeah baby yeah! Spanked by a New York judge, I wouldn't have bet a clad copper on that outcome. What's going on here? This FoIA decision and Congress' (apparent) support of audit are troubling anomalies. Am I gonna hafta change my world-view?


How do you figure? Because the regional banks give up what's left over at the end of the year to the Treasury?

If the Federal Reserve Board and FOMC are government agencies, why do they not follow GASB? The Fed is allegedly "accountable" to Congress and surely you are acquainted with those winners? The Fed tells Congress nothing. "in the interest of price stability" and some other crap about the market gaming the information.

Please point me to where it shows the Fed Board is a governmental agency. If I'm wrong I'd love to know, lest I disseminate false information.


Our boy got another term. Did you wear black today?

don't change your world view just yet. It's about to get interesting ;)


Anonymous said...

If the Federal Reserve is a government organisation, then why wouldn't the shares be held by the US Government?

b. Below is the list of the owners of the 12 Central Banks:
- Rothschild Bank of London
- Rothschild Bank of Berlin
- Lazard Brothers of Paris
- Israel Moses Seif Banks of Italy
- Warburg Bank of Amsterdam
- Warburg Bank of Hamburg
- Lehman Brothers of New York
- Kuhn Loeb Bank of New York
- Goldman, Sachs of New York
- Chase Manhattan Bank of New York
In all, there are about 300 VERY POWERFUL, partly foreign individuals that owns the FED.

sourced here -- (http://whistleblowers.freehosting.net/federal_power.htm)

Please don't confuse me with any other Anonymous types, JR. My dumb ideas are strictly mine and I don't share them with anyone...;)

Anon #2,

You really need a nickname but I could smell the Canuckistan on you as soon as I saw the comment so no worries, your reputation is still safe ;)

Do we also break it to Anon #1 that the regional banks are owned by banking interests in their respective districts? Should we bust out some G. Edward Griffin mp4s or something?

Like I said, I would love to hear otherwise but at least TO ME, the evidence appears to point to the Fed as a seedy, quasi governmental body which gets all the privileges of government (unlimited spending, reckless behavior) without the responsibility (no accountability, not even to its supposed keeper, Congress) so if that view is incorrect, I would like to correct it ASAP.

Even the Fed itself doesn't know its own story:

Today our legislated form is still largely private, but our functions are increasingly public. This conflict between form and function is never far from the surface. Sampling judicial opinions, we find one federal court case saying: "[F]ederal reserve banks ... are plainly and predominantly fiscal arms of the federal government. Their interests seem indistinguishable from those of the sovereign. ..." Within five years, we find a different federal court saying: "... Congress intended the regional Reserve Banks to be non-governmental entities, separate and distinct from the United States, entities owned by the commercial banks in the respective regions and designed to function essentially for private purposes. ... The Reserve Banks were not designed to be primarily arms or instrumentalities of the government." (My point here is that these two facially contrary viewpoints can both be right, because one focuses on function and the other focuses on design.) More recently, when Justice Blackmun in a footnote refused to rule out the possibility that the St. Louis Reserve bank might for some purposes be an actual department of the federal government, Justice Scalia said, "It is ... impossible to respond to such random argumentation. ..."

(ex Richmond Fed counsel McAfee on "Historical Perspectives on Form and Function" http://www.minneapolisfed.org/publications_papers/pub_display.cfm?id=3320)

Do you think there might be reasoning behind that?


Maybe my TFH is simply strapped on too tight.

The world may *never* know.

W.C. Varones said...

I hate to break this to Anonymous #1, but, uh, Federal agencies don't say to Congress, "screw you, we don't have to tell you where the trillions went," as Zimbabwe Ben so eloquently did.

True, the charade of Fed "independence" died long ago, certainly by the time Bernanke and Hank Paulson were running around joined at the hip like goddamned Siamese twin circus freaks, borrowing and printing trillions to bail out bad Wall Street banks at the expense of future generations.

And true, Fed/Treasury is like a snake eating its own tail, printing money at the Fed to buy newly issued Treasury debt to fund continuing bailouts and unprecedented deficit spending.

I suspect the Chinese and others will wake up to the scam pretty soon and stop buying our worthless debt, but for now the Fed is still not technically a government agency.

scrat said...

I'm glad the Benjamin got another term, JDA. I like a central banker who sweats and stammers under pressure. It makes me wonder, though - Is the Fed being set up for the big smackdown?
*adjusts shiny hat*
Ya know, that could work out quite nicely for the PTB. Given the ironic possibility that an audit could be the thing that finally craters the entire banking system.

Anonymous said...

If Jr. Deputy Accountant wants to write sensibly about the Bloomberg decision, she should probably read further than just page 2. Pages 3 and 4, for example, say this: While together the Board and the FRBs comprise the Federal Reserve System, they have independent mandates and responsibilities. The Board is a federal agency tasked with, inter alia, supervising or regulating the operations of the FRBs, reviewing and approving changes to interests rates charged by the FRBs and overseeing loans among and by the FRBs. Id. At 4; see also 12 U.S.C. § 248. An additional component of the Federal Reserve System is the Federal Open Market Committee (“FOMC”), a separate governmental agency that shares offices with the Board. See 12 U.S.C. § 263. … The FRBs , on the other hand, are semi-autonomous institutions with private funding and independent corporate structures.1

Anon #1,

Yes I know this. What is your point? Because the regional banks are private (hence .org emails, right, buddy?) and the Board *masquerades* as a governmental agency it still doesn't prove your point.

Page 2, 3 and 4 of what? The Bloomberg decision?

Did you see this? http://www.reuters.com/article/ousiv/idUSTRE57R5BE20090828


anyway, as WC Varones so astutely pointed out to all of us, were the Board entirely governmental, it would be unacceptable for Zimbabwe Ben to tell Congress to kiss his ass when they ask who got the bailout bazillions. Does the USDA have that sort of luxury? What about the EPA? FDIC? Anyone? Name me one federal acronym that has that sort of pull and I will gladly agree with you. Until then, I stick by my original statement.

Also, if the Fed is a government agency, why do we pay them interest on our own money?

Why do banking interests hold private stock in them? I don't see JP Morgan with stock in the Treasury but I *do* see them owning pieces of the Fed - how much remains a mystery, much like the rest of it.

Just pointing out the obvious. I appreciate the input though, maybe we should keep this argument going ;)


p.s., anon #1, you may not know me well enough to know this yet but if ANYONE understands the way the Federal Reserve System functions, it is me. I am intimately acquainted with how it works, and often take slack for my views on the regional banks, specifically the ones that I hold a certain fondness for (Richmond, Dallas, Philly) because the nature of the System leads to the misunderstanding that the Board and regionals are one in the same. Why does that misconception endure?

just because I have been to an End the Fed rally or two does not mean I subscribe blindly to the Ron Paul mantra. Entiende?