Tuesday, 25 August 2009 01:00

I have a feeling a lot of Reggie's opinion will soon be "re-vindicated"

What are the chances you will find many of the subjects of my rants and raves embedded in the reports below?

From 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 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.

‘Involuntary Investor’

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.

Last modified on Tuesday, 25 August 2009 01:00

105 comments

  • Comment Link nhsadika Wednesday, 26 August 2009 07:23 posted by nhsadika

    Obviously the Fed is going to be thinking of some more over the top method to "fix" CRE, home prices, and bank balance sheets into 2010. I just read that UI is costing them $1 billion/day (described as "riot insurance").

    Any speculation on what the next intervention might be?

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  • Comment Link Reggie Middleton Wednesday, 26 August 2009 04:40 posted by Reggie Middleton

    in the pipeline

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  • Comment Link Rumi Tuesday, 25 August 2009 22:21 posted by Rumi

    BTW, Reggie, do you have any more new research coming?

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  • Comment Link Rumi Tuesday, 25 August 2009 22:20 posted by Rumi

    In all honesty, I don't think it will matter soon. The banks have mostly already raised all the equity they'll get, and I don't think the markets will stay at this level when volume start increasing. Just a guess, though.

    What're the odds that the Fed will appeal?

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  • Comment Link shaunsnoll Tuesday, 25 August 2009 18:35 posted by shaunsnoll

    you looked into MAC lately? holy garbagio rally!

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