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Fed Refuses to Disclose Recipients of $2 Trillion in Lending

Friday, December 12, 2008, 8:50 PM

In a foxhole there are no atheists. But well before the praying begins, you find out what people are really made of. Perhaps the big, muscled kid who was unstoppable in basic training goes all to pieces while the skinny guy with the thick glasses saves everyone’s bacon. Or vice versa. The point being that prior to a crisis everything rests on appearances. During a crisis it is actions that matter. That’s when we find out what people, and institutions, are really made of.

Today the Federal Reserve effectively freaked out in the foxhole and declared the spirit of democracy, if not the rule of law, to be disposable conveniences of better times.

In response to a freedom of information act request by Bloomberg News for the names of the institutions receiving public money, the Fed invoked an obscure rule to block the release of this information.

Dec. 12 (Bloomberg) -- The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information.

Trade secrets? A trade secret is something like the formula for Coke. A trade secret is an unpatented business process the release of which would harm the competitive position of the holder. I am really at a complete loss to understand what sort of “trade secrets” might apply to the acquisition of bad debt from poorly managed financial institutions.

If anybody can supply one that might make sense in this situation I am all ears.

The important principle here is that democracy cannot operate under the cover of darkness. If every emergency, no matter how slight, results in the immediate suspension of our right to know, then one might reasonably question whether it is a right at all and whether this is a democracy.

This is not an esoteric debate over some fine point of the law, this is a foundational matter. Either rules and laws matter or they don’t. Either they need to be followed by everybody or they can be ignored by everybody. There is no place in our legal system for each interested party to self-interpret laws in whatever manner fits them best.

If the Fed can unilaterally decide to follow some rules and not others, then why not anybody else? Would it be unreasonable for an individual to decide that their mortgage does not need to be repaid because they suddenly interpret their contract differently and to their benefit? Are they really “speed limits” or are they more like “speed guidelines?”

I am being quite serious here, the rule of law is not something to be trifled with. Either we are a nation of laws or we are not. It is no small point that our rule of law is one of the most essential components of our social contract and which separates us from other countries where I would not willingly choose to live.

The Freedom of Information Act requires federal agencies to make government documents available to the press and the public. The suit, filed in New York, doesn’t seek money damages.

“There has to be something they can tell the public because we have a right to know what they are doing,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press. “It would really be a shame if we have to find this out 10 years from now after some really nasty class-action suit and our financial system has completely collapsed.”

Did you catch those words and phrases? “Requires” and “right to know” are pretty straightforward. Requirements and rights are not really negotiable. They either exist or they don’t.

Predictably, the Fed claimed that this crisis is serious enough to trump our assumed (but rarely tested) right to know.

In its response to Bloomberg’s request, the Fed said the U.S. is facing “an unprecedented crisis” when the “loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.”

But some are starting to catch on and noting that it is really not acceptable that a supposedly public institution is refusing to operate in a manner consistent with their charter.

“If they told us what they held, we would know the potential losses that the government may take and that’s what they don’t want us to know,” said Carlos Mendez, who oversees about $14 billion at New York-based ICP Capital LLC.

Congress is demanding more transparency from the Fed and Treasury on the bailout efforts, most recently during Dec. 10 hearings by the House Financial Services committee when Representative David Scott, a Georgia Democrat, said Americans had “been bamboozled.”

But now that the Fed has decided, unilaterally, to operate under the cover of secrecy I think they should be allowed to do so.

Of course I would also require that their operating charter be revoked and that a parallel currency be stood up so that we the people could decide for ourselves whether the Fed’s arguments for secrecy were worth risking our entire economic future upon.

Said another way, I am willing to let the Fed take all the primary risks it wants but not with my money. Let the Fed either swim or sink depending on how it plays its hand. Taxpayers should not be forced to shoulder whatever these risks are that the Fed feels are too dangerous to even name.

Otherwise people might begin to wonder about that “requirement” to pay back their credit card bills….

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53 Comments

jrf29's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Unbelievable. 

wdstk46's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Maybe I've just become jaded but this doesn't surprise me at all.  It is the way all big governments work and always have.  As the crises gets worse expect the abuses to increase.

apollox's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

I can tell you right now where a very large bulk of the money has been allocated.

I hope you are sitting down.

It has been allocated to European banks, primarily the UK. If taxpayers found out that their tax dollars were going to aid foreign financial institutions, the media would go berserk with the story.

On the BBC website there is a blogger called Robert Peston who I read regularly and his insights are a valuable companion to the CM forum and he, like Chris, points out some uncomfortable truths from a British perspective.

The UK is in a very precarious position at the moment. For those of you who don't know, the city of London accounts for about one third of the UK economy. The UK's biggest commodity in this world is banking and because of its loose regulation, the UK markets are often regarded as the sleaziest of traders in the western world. Even the NYSE are wary of dealing with certain areas of Canary Wharf.

The bottom line is this, it is London's banking and insurance companies that are responsible for Britain's economy. The UK GDP is heavily reliant on paper to keep cash sloshing around as the Brits manufacture very little apart from aerospace technology and other goods which tend to have military uses.

They have sold off the family silverware parcel by parcel for decades.

I could be wrong, but I do think if I had to pick a prime suspect for international under-the-table assistance, the UK is number one on my list.

Napoleon once called Britain 'a nation of shopkeepers'.

Today it is a nation of hairdressers and call center droids.

Doug's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

I seem to recall that when Paulson was before Congress begging for the $700b bailout, he was quite adament about absolute transparency.  Must've changed his mind, again.

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

I ordered 200 CC dvd but I think 2000 should be the starting point. We can do this folks but we need to push hard. In other words; we need to work while it is still daylight for a day of great darkness is settling in!

Ron

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Chris said:  "Either rules and laws matter or they don’t. Either they need to be followed by everybody or they can be ignored by everybody."

Of course, we know well that this is only theory in this country today.  The Bush administration has found a way around, under or over virtually every law in the land.  And to make it worse, they have either kept it secret, or, if known, have gotten away with it - all of it.  

The state of our government is absolutely sickening to me.  We have lost whatever it was that we had, and that for which so many have fought and died.  Is there ANYWAY to get control of this runaway train?   Or, are we completely beaten now, so we just need to sit down in our easy chair, pour ourselves a stiff drink, and wait until big brother actually breaks into our house and either kills us on the spot, or drags us off somewhere to die, or destroys every system that works for the common working person, so we all starve to death?

Am I the only one who is sick to death of how the fat cats are controlling everything?  Is anybody going to do anything about this?  Probably not !  So, I guess we'll all just keep bitching about it.

pinecarr's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

So not right, so "un-American"!!!   It makes me sick to see our country's ideals trampled with such blatant disregard, and the memoriies of people who truly fought for those ideals dishonored.

It sure is convenient that the Gov from Illinois is such a big/distracting news story right now,  pointing people's attention somewhere else.

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Do we know if Bloomberg is going to pursue this legally further?  

 

Nichoman

RedShift's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

RUN. Now.

DurangoKid's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

And this is a surprise?  It's a consortium of PRIVATE banks.  They answer to no one.

bolweevil's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

no run, stand and fight. Canada's real "nice" this time of year, Mexico? nope. Spain? Caribbean? I'll take my chances here.  Spread the word.

joe2baba's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

a nation of shopkeepers indeed.

one of the shops has a red shield hanging out front.

we shipped a bunch of gold there in the 1920's and thirties. i wonder who owns the bank of england ?

joe2baba's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

no ben you are not the only one

T's picture
T
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...
apollox wrote:

I can tell you right now where a very large bulk of the money has been allocated.

I hope you are sitting down.

It has been allocated to European banks, primarily the UK. If taxpayers found out that their tax dollars were going to aid foreign financial institutions, the media would go berserk with the story.

On the BBC website there is a blogger called Robert Peston who I read regularly and his insights are a valuable companion to the CM forum and he, like Chris, points out some uncomfortable truths from a British perspective.

The UK is in a very precarious position at the moment. For those of you who don't know, the city of London accounts for about one third of the UK economy. The UK's biggest commodity in this world is banking and because of its loose regulation, the UK markets are often regarded as the sleaziest of traders in the western world. Even the NYSE are wary of dealing with certain areas of Canary Wharf.

The bottom line is this, it is London's banking and insurance companies that are responsible for Britain's economy. The UK GDP is heavily reliant on paper to keep cash sloshing around as the Brits manufacture very little apart from aerospace technology and other goods which tend to have military uses.

They have sold off the family silverware parcel by parcel for decades.

I could be wrong, but I do think if I had to pick a prime suspect for international under-the-table assistance, the UK is number one on my list.

Napoleon once called Britain 'a nation of shopkeepers'.

Today it is a nation of hairdressers and call center droids.

Here's a balance sheet showing roughly where money are going http://www.federalreserve.gov/releases/h41/Current/

Mike Pilat's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

I wonder what could happen over the Christmas / New Year's Holiday...bad things have happened before (Fed Reserve Act). Congress has been fairly pitiful lately, but I would still rather they get in the way of the executive branch and the banksters. God only knows what can be pulled when the rest of us are at Christmas parties...

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

the freedom of information act requires federal agencies to make government documents public.

see gang there's the rub the fed AINT a government agency. it is a private corporation. look these guys are good . you will never beat them in court. they own the courts. they own the referees they own the ball they own the scorekeeper and they own the newspaper that will write up the story in the morning paper. and if they want a box score there will be a box score.

and i know some of you out there have been drinking the koolaid that the big o has been pushing.

just remember his treas sec is GEITHNER. name ring a bell. they are good very good

now when i was playing basketball in the playgrounds of new york we had a way of dealing with this stuff.

we didnt call the cops.

RedShift's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...
bolweevil wrote:

no run, stand and fight. Canada's real "nice" this time of year, Mexico? nope. Spain? Caribbean? I'll take my chances here. Spread the word.

 

Run, not with your legs, but on your $$.

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Not to nitpick your take, but trade secrets and patents are almost completely different. There is no way you can patent something and keep it a trade secret as well!

Patent: Totally public information that can only be used with permission

Trade secret: Totally secret that is not disclosed. 

"A trade secret is a patented business process" - statement is like saying "public secret"!

 

 

bolweevil's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

roger that RedShift

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

If it make you USA citizens feel any better, the Reserve Bank of Australia (RBA) has also completely trashed its balance sheet since the 'credit crisis' first reared its head. We now have billions (read worthless, marked to market) in Australian Dollar (AUD) denominated bank bills and other 'securities', collateralising the AUD.

The recent devaluation of the AUD was a direct result of this. The RBA offloaded most of its foreign exchange for  the abovementioned securities back in late '07 and early '08 and was unable to support its liability in the recent selloff. There was effectively a run on the central bank.

Now the RBA has, like the Federal Reserve, massively expanded its balance sheet utilising the 'Deposits of overseas institutions' and I believe a good deal of cash fresh off the printing presses. I think the AUD sinks or swims with the USD.

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Look,

Any entity, be it a microorganism, a human, a business, or a government, will fight for its very existence as long as it can an use any means to stay alive.  Our US Government is in just such a fight for existence right now.  It mostly does this by trying to remain legitimate in the eyes of the constituents.  We are at the point that the members that benefit most, the politicians and other government employees, will say anything for as long as we let them get away with it.

Read America's Great Depression by Murray N. Rothbard, available free here for an astounding account of what the highest elected officials will do to try to control the economic, fiscal, and monetary policies of our country.  Most of us have vague notions of what led to the depression and why it dragged out.  Rothbard makes crystal clear points about why's and wherefore's and it all comes down to government intervention.

The most startling news from this book is that we are in a very similar replay of the events that created the depression.  The names and dates and number of zero's have changed, but the story is strikingly similar.  It takes a strong motivation to get through this book, but every few pages or so you will find your mind connecting the dots directly between then and now.

Read the quote about Benjamin Strong on page 157 and see if you don't hear an echo of the Fed saying they can't tell us who is getting bailout money for our own good.  It's damning.

We're in for a long bad experience ahead.  I won't say more.  Read the book.  Comments invited to [email protected]

Cheers!  We're going to need them... 

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Edit:  This post violated the site posting rules and guidelines and was removed by cmartenson.


No personal attacks allowed. 


They diminish both the poster and the site.

Site posting rules & guidelines.

 

 

 

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

To make it easy for all of you I have copied the letter I wrote to my represenatives so you can send it on to yours.  (And not to be picky, but this isn't democracy.  We are a republic that is rapidly becoming a dictatorship with Ben as our fearless leader.  Didn't Castro have a beard too?)

Dear __________,

It is clearly apparent that the Fed is continuing to withhold and hide information regarding the use of the $700B TARP funds, to say nothing of the other Trillions of dollars of taxpayer money they have committed.  They have cited "trade secrets" as a reason for not issuing them under the Freedom of Information Act. 

The records should be subpoenaed by congress and if not delivered promptly the Chairman of the Fed should be held in Contempt of Congress and the Federal Reserve Act should be immediately abolished and the Fed disbanded.

As your constituent I am asking, no, demanding that these records be promptly released to the public.

Sincerely,

___________________

 

 

Dragline's picture
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

That is the next step once you get a letter denying your FOIA request.  Bloomberg would have to file its appeal of the denial with the U.S. District Court for the District of Columbia.  A federal judge would rule on whether the denial of the request was legitimate.  Unfortunately, this type of litigation usually takes time.

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

I hope we don't read that these moron's got bonuses themselves!

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

   

I am still trying to get a copy of the TARP legislation or some credible link where I can download it.   I have made 3 requests from representatives but they just send some info on their stance but nothing else.  Does anyone know where I can get it or is it a trade secret too?

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

I'm no accountant. But have worked in an accounting office before and this looks very much like a cost accounting budget.

 However, I would still need some assistance to understand what is printed here.

 Can you summarize this balance sheet for me?

 Updated:

I have looked again at that balance and I guess it makes me look like a Brit basher. The only firm that has any sort of connection to London is Maiden Lane as they effect the LIBOR and that is tenuous.

Another is AIG, but that is a well-known international group of course.

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

As a Brit who is well disposed towards the American (non-political - except Ron Paul) people I worry a lot at the woy American is heading.

I am reminded of the old Roman saying: "Quem deus vult perdere, dementat prius" which, roughly translated, reads "Whom the gods would destroy, they first make mad".

The American politicians are destroying the American people. Their empire streatches to around 750 bases in 130 different countries, and they are creating a mess of debts that the ordinary American citizen is going to have to deal with at the expense of seeing their children succeed.

And, apart from all the bases, it is exactly the same in England

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Thanks cwixom for the sample letter, which I am sending to my senators and congressman.  I will also sent a letter to the editor of my loca newspaper.

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

ampers: you're absolutely right.

 And to add insult to injury, our (American) government can now wiretap and search us without warrant, arrest and detain us without charge, and imprison and torture us while labeling us "enemy combatants." There is something fundamentally flawed with this mentality. I understand the spy cams in public places are running rampant in Britain now??? That will probably be implemented here soon, if it hasn't already been done covertly. 

Those who believe Obama is going to undo all of this just don't get it. It's unfortunate that many believe Obama stands for civil liberties and limited military action. I hope it's because by some fluke they haven't heard of Ron Paul. Anyone who has heard the man speak can at least acknowledge that he has an intelligence and an understanding about him that is utterly absent from the impassioned, emotional rhetoric of many of the statists.

 The parallels between the fall of the Roman Empire and the peak (and fall??) of the American Empire are disturbingly plentiful.

Mike

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

We do dumb things like consume way too much, but as Chris noted the rule of law in this country is what makes this place better than others to live in.  Bypassing the rules is almost always the downfall of an individual or organization or even a whole country.

I've been involved with a lot of smaller scale public works projects supported by local, state, and federal funds, and the oversight to makes sure taxpayer money is spent properly is usually open, thorough, and honest in my experience.  First there has to be an engineered feasibility study.  Then, during construction,  every bit of work is reviewed by the owner, the engineer, and a funding agency representive before the contractor is paid a penny.     

 This is is sharp contrast to what the Fed seems to be doing now.   Where's the independent oversight?

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

@ joe jackson

"I am still trying to get a copy of the TARP legislation"

wasn't that up on http://wikileaks.org/ ?

 OP:  This is appalling, these happenings are blow after blow to the "open society model" that the US is supposed to be a beacon of.

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

I you missed Glenn Greenwald (Salon) interview on Bill Moyers Journal, you can view it here.

http://www.pbs.org/moyers/journal/12122008/watch.html 

Ties in with Chris' recent comment about whether we're a nation of laws, and either everybody abides by them, or nobody does.  Outstanding! 

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

While the following comments and links may get you down, you may find it helpful knowing that more people will have more time for this (

 ) in the near future, and you may want to listen to it as you read the comments below...

-------------------------------------------------------------------------------------------------- 

Chris said:

"The important principle here is that democracy cannot operate under the cover of darkness. If every emergency, no matter how slight, results in the immediate suspension of our right to know, then one might reasonably question whether it is a right at all and whether this is a democracy."

Like Kennedy before(The President and the Press: Address before the American Newspaper ... )

"Even today, there is little value in ensuring the survival of our nation if our traditions do not survive with it..."

It seems we are no longer protecting what we thought we were protecting... "Democracy?" You keep using that word. I do not think it means what you think it means...(

)

------------------------------------------------------------------------------------------------------

Chris said:
"Either we are a nation of laws or we are not. It is no small point that our rule of law is one of the most essential components of our social contract and which separates us from other countries where I would not willingly choose to live."

Like Hernando De Soto (http://en.wikipedia.org/wiki/Hernando_de_Soto_(economist)) before(http://fora.tv/2008/10/20/Naomi_Klein_and_Joseph_Stiglitz_on_Economic_Power):

"It isn't your fundamentals in economics that have collapsed. It isn't that you lack the amount of money. It isn't that you lack the technology. It isn't that you lack the entrepreneurial spirit. It isn't that you lack all those things that Sam Huntington said you have up north that we don't down south.
It is essentially that your legal system that creates trust among one another has collapsed... All of the sudden you started creating the banana republic world..."

------------------------------------------------------------------------------------------------------

Ampers said: "I am reminded of the old Roman saying: 'Quem deus vult perdere, dementat prius' which, roughly translated, reads, Whom the gods would destroy, they first make mad."

How mad? How soon? What level of destruction? According to Gerald Celente (http://en.wikipedia.org/wiki/Gerald_Celente ), very, weeks, and total!

(part 1 of 4)

This is going to be a show to watch from a distant shore...

 Updated:

This is disturbing: http://www.telegraph.co.uk/news/picturegalleries/worldnews/3725083/Shocking-pictures-of-a-policeman-on-fire-after-a-petrol-bomb-was-thrown-at-him-in-Greece.html

Greek Riots: The Veneer of Civilization is Very Thin Indeed

Will Americans resort to such barbarism?

 


 

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Emma Coleman Johnson (Georgetown Law) talked about the bailout on Moyers Journal last night:

Worth seeing.  Replay here:   http://www.pbs.org/moyers/journal/12122008/watch2.html 

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

you dont really want to know ........but  bush is having a fire sale on anything with one btu on it

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

we are not a nation that functions under the rule of law ............that is a naive notion foisted on the unsuspecting sheeple.

the reality is we are a nation that functions under  the law of rules..............subtle but important distinction.

it is easily understood if you remember "he who has the gold makes the rules"

if you wish to dispute these events i suggest you consider the police force at their disposal recently well trained in counter insurgency in an urban environment.....................surge anyone

welcome to the shock doctrine nation ....................get used to it or leave

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Actually I’m a little surprised at the outrage about the Fed not disclosing to whom they loaned the money.  I believe that the Crash Course details the fact that the Federal Reserve is a private corporation.  As such it is not subject to the Freedom of Information Act – otherwise we all could find out the secret formula for coke. 

 

I think it would be more useful to use this event to help people understand that monetary policy and the money supply is under the control of a private corporation.  That would be a useful discussion. 

 

Outrage in these times is rapidly loosing its utility.  Clarity is a much more potent human experience.

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sofistek
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...
cybernytrix wrote:

Not to nitpick your take, but trade secrets and patents are almost completely different. There is no way you can patent something and keep it a trade secret as well!

Patent: Totally public information that can only be used with permission

Trade secret: Totally secret that is not disclosed. 

"A trade secret is a patented business process" - statement is like saying "public secret"!

I think you misread it (or else Chris has edited it, since this comment). The article says: " A trade secret is an unpatented business process".

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cmartenson
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Good catch...

Thanks cybernytrix.

This is the second time in as many weeks that I have left off a negative modifier that completely changed the thrust of what I was saying.

Thanks for bringing it to my attention - it is fixed.

 

 

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grl
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

For those who are interested, below are links to Bloomberg's complaint (and amended complaint) and the Fed's Answer. Btw, paragraph one in the answer states:

“To the extent a response is required, defendant admits that the Board of Governors of the Federal Reserve System (the "Board") is an agency of the United States government.”

Here are the links:

 

Complaint:

http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2008cv09595/335178/1/0.pdf

 

Amended Complaint:

http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2008cv09595/335178/4/0.pdf

 

Answer:

http://docs.justia.com/cases/federal/district-courts/new-york/nysdce/1:2008cv09595/335178/5/0.pdf

 

 

 

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krogoth
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Fed Res to Treasury, Treasury is government

Fed to Treasury, Treasury is government-

If anybody loans money to the Treasury, the Treasury IS Government, and subject to the freedom of information act. I am pretty sure Paulson is a government employee, and he is the primary in charge of allocating TARP to whoever, so this is a legal point.

This is made evident by Chris Dodd-

Secretary Paulson's original proposal contains a sweeping provision that utterly strips the courts of any power to review his decisions. Section 8 of the Paulson proposal reads: "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

The alternative bailout bill, APPROVED by Congress and sponsored by Democratic Sen. Chris Dodd of Connecticut, has a very different clause. The Dodd proposal reads: "Any determination by the Secretary with regard to any particular troubled asset pursuant to this Act … shall not be set aside unless such determination is found to be arbitrary, capricious, an abuse of discretion, or not in accordance with the law." In other words, the Treasury secretary's determinations can be challenged on legal grounds. The Dodd version goes on to recite that "the terms of a residential mortgage loan that is part of any purchase by the Secretary under this Act shall remain subject to all claims and defenses that would otherwise apply notwithstanding the exercise of authority by the Secretary or Corporation under this Act."

So does this not qualify for abuse of discretion or not in accordance with the law? How can you take money that is unchecked and practically gone with no reporting to Congress or no Congressional panel approved to for oversight and also possibly divert funds to the Auto Bailout?

This has to fall under the freedom of information act unless Bernanke did the allocation all on his own without Paulson involved whatsoever.

 

 

 

 

 

 

 

 

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krogoth
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Potent Clarity, I love that! I want some "Potent Clarity"
bsharon wrote:

Actually I’m a little surprised at the outrage about the Fed not disclosing to whom they loaned the money.  I believe that the Crash Course details the fact that the Federal Reserve is a private corporation.  As such it is not subject to the Freedom of Information Act – otherwise we all could find out the secret formula for coke. 

 

I think it would be more useful to use this event to help people understand that monetary policy and the money supply is under the control of a private corporation.  That would be a useful discussion. 

 

Outrage in these times is rapidly loosing its utility.  Clarity is a much more potent human experience.

So what is the Treasury? Owned by GE? Don't they have accountability? Don't they fall under the Freedom of Information Act? Is Paulson in charge of a government organization and not a private company? This is your first post so I am not going to be too hard on you, but do you really think this is outrage? That's a little bit harsh a word for this. I think it's more like disgust that Congress is not doing it's job.

As for your request to have more understanding of monetary policy and money supply under control of a private corporation as a useful discussion, I can see you have not read the forums on here at all practically because it's been covered on this forum to the point of nausea, so I suggest you spend some time actually reading posts on here before making this kind of statement.

And if your looking for your potent clarity, the United States Government is the last place I would look to find it. Potent clarity or truth is an almost impossible to find in this society and the world. The most you will get is varied opinions, outright lies or distortions of the truth, or possible truths being argued from all sides of which cannot be proven or discredited fully. This is the world we all live in.  

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joe2baba
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

bill

i have to apologize for my good friend krogoth. he has been a little stressed lately .

he hasnt been getting his shipments of seeds from the states  as the taiwanese customes officials cant understand why he doesnt like homegrown in taiwan uh food that is.

they apparently  been holding up his meds as well.. he gets a little testy when the supply of meds is sporadic.

and to top it all off his homeland is experiencing a tremendous lack of security. you see in case you have not noticed there is this raid on the u.s. treasury going on . and it would seem that the folks responsible are the ones in charge of stopping the raid are the ones doing the raiding. oh it is all so confusing i dont know if that is clear or not. but from krogoths point of view it would seem a little odd that  since they are taking our money we should at least know where it is going, not that it would stop the raid or that any one might suffer the consequences of such a dastardly act( i love that word dastardly..kinda rhymes with another of my favorote words).

i certainly think it useful that we have a discussion of who owns our monetary system. i think however the point krogoth was trying to make without typing in all caps is that we have been having that discussion trying to reach a state of clarity here for months. i think we have now reached that state of clarity since you have pointed out that our monetary system is owned by a private corporation.

i think some of us and i cant speak for my good friend krogoth are running a high level of outrage and are doing everything we can to maintain an even strain. because if we dont some of us will go out and get a gun and blow some banker or congressman away.

i hope that is clear.

oh and welcome to the discussion

grl's picture
grl
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Can someone please help me out here...
I have read on this site and elsewhere that the Fed is a private corporation. However the Bloomberg Complaint against the Fed alleges that the Board of Governors of the Federal Reserve System is a government agency (paragraph one) to which the Fed admits in the Answer:

“To the extent a response is required, defendant admits that the Board of Governors of the Federal Reserve System (the "Board") is an agency of the United States government.”

Can someone please clarify? Is the Board of Governors separate from the Fed Reserve Bank, is the Board a governmental agency, but the Reserve Bank not?

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kwwilson
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

Lisa G. : Yes, I think you have pretty much got it close to the truth, inasmuch as the truth might exist in these times.

Joe2baba : I laughed at your commentary on Krogoth's postings, and I certainly hope that was how you meant it.  I do agree that many of us are unusually stressed at this point in the development of our world and lives, and it is tolerance from ALL sides that can help mitigate this.

Krogoth: I actually find your comments in what I would suspect is a state of exasperation to be quite truthful, if a little blunt.  I just think that the blunt part sometimes prevents people from seeing what a teddy bear you really are.  Cool

I really hope that I offend no one, and I do not intend to sidetrack this thread, I just see tensions running high when almost everyone is making valid points or contributions.

And yes, were I American I would be seriously considering the founding fathers' rationale for the right to bear arms.  Unfortunately, here in Canada our apathetic english population never actually had any soveriegn rights, especially not to arms.  Our French compatriots are quietly leading the coup already underway in the parliment, so they are no help.  Put simply, although men may be revolutionaries, one man is likely to wind up a martyr at best.  Sealed

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kwwilson
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

duplicate post removed.

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Mike Pilat
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

I have found repeated postings on this site from people in other countries that seem somewhat envious of the 2nd Amendment to the U.S. Constitution. I wonder if Barack Obama understands that the 2nd Amendment and the freedom it stands for is actually a point of strength in our Republic and a beacon of hope for many of our international friends.

As I see it (and I don't wish to paint too bleak a picture for those that are gun-deprived), it would be difficult for any disarmed nation to credibly repel an authoritarian regime. It is true that our 2nd Amendment is constantly under attack in America and it is true that the military has much greater weapons. But I think for the first time since the civil war, our government might have to contend with the fact that there are limits to how much they can get away with and still maintain peace at home.

 

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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

“loss in confidence in and between financial institutions can occur with lightning speed and devastating effects.”

Of course, and nothing would shake the world's confidence more than laying bare the fact that the Fed does not know what it is doing.  They can't show us what they are doing, because it would show us that they don't know what they are doing.  Well, that's the nice version.

The more cynical version is that showing us what they are doing might very well land people in prison for essentially "looting" the US economy.

Still, the very fact that there are at least these two visions of reality underscores the need for transparency.  This is the very reason for the FIA, to lay bare before the people the actions of the people's government and, in doing so, eliminate the need for the pitchforks and torches (or, at least, class action lawsuits).

Brian

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AndyB
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Re: Fed Refuses to Disclose Recipients of $2 Trillion in ...

 RUN. Now.

  

Where to? 

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