Seems the Banksters lost and Bloomberg won as the Supreme Court refuses to hear the Federal Reserve Appeal on releasing the names of banks who received loans during the financial crisis.
The U.S. Court of Appeals in Manhattan ruled today that the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. The ruling upholds a decision of a lower-court judge, who in August ordered that the information be released.
The Fed had argued that it could withhold the information under an exemption that allows federal agencies to refuse disclosure of “trade secrets and commercial or financial information obtained from a person and privileged or confidential.”
“We are not taking significant credit risk that might end up being absorbed by the taxpayer,” Kohn said in a speech at a conference at Vanderbilt University. “For almost all the loans made by the Federal Reserve, we look first to sound borrowers for repayment and then to underlying collateral.”
Oh, I guess we are suppose to take his word for it. Lending to any financial conglomerate particularly one that is a zombie requires "significant credit risk". But Mr. Kohn says they only lend to "sound borrowers". What is the Fed's definition of "sound borrower"? I am not sure that Citigroup or Bank of America can be considered "sound borrowers" but that just speculation on my part. But is congress asking the right questions of the Fed? Again, what is the definition?
In the continuing saga of "What are they up to now?", comes this story from Huffpo about the Fed pumping foreign currency into the US money supply. In this way, US banks can pay their foreign obligations in foreign currency.
This is a new wrinkle in the regular currency swaps the Fed performs with foreign banks. Until now the Fed has held the foreign currencies on its balance sheet while the foreign banks pass the swapped US dollars to their financial institutions. According to the minutes of the March FOMC meeting, this is just a precautionary move and not indicative of other countries having any trouble meeting their foreign currency obligations.
The minutes also show that the Fed will be increasing their currency swap limits with the Bank of England, European Central Bank, Bank of Japan and Swiss National Bank. Here's what Jamie Galbraith had to say:
A lot of serious people are questioning the Obama economic team. Paul Krugman has accused the administration of dithering. Henry Blodget is not feeling like the ship of state is under control. Willem Buiter feels that the Fed is working at cross purposes to correcting the fundamental problem. And Ralph Nader, perhaps the last principled liberal left in the US, is questioning the sanity of it all.
There was lots of news coming out of Washington today. Both Ben Bernanke and Timothy Geithner agree: more bailouts are coming. That $700 Billion? That was just the downpayment. Congress wasn't pleased.
Representative Ginny Brown-Waite, a Florida Republican, told Geithner that she had “mixed” emotions about his appearance before the committee.
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