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Fed Chairman Bernanke Needs To Answer Some Questions

The announcement yesterday that President Obama has asked Federal Reserve Chairman Ben Bernanke to serve another four year term is getting tepid coverage in the MSM. That may well be the result of high barometric political pressure around Capitol Hill caused by the ObamaCare debate debacle, the president's recent "recalibration" of deficit estimates (they're going up, surprise, surprise) and the newly found urgency of the Obama Justice Department to appointment a Special Counsel to investigate what the nation already knows about enhanced interrogation.

But a Bernanke nomination for another four year term merits close examination if for no other reason than the economy is not yet removed from the crisis experience that many believe established Bernanke's bona fides. There is one very troubling matter that that the Federal Reserve refuses to address: Who did they lend money to during the meltdown months of late 2008 and early 2009? And, what did the Fed accept as collateral for these unprecedented loans for which they refuse to reveal details? Bloomberg.com has filed a Freedom of Information Act (FOIA) request for details on these transactions that has been consistently rebuffed by the Fed. On Monday a Federal Court ruled the Fed must release this data:

The Federal Reserve must make records about emergency lending to financial institutions public within five days because it failed to convince a judge the documents should be exempt from the Freedom of Information Act.

Manhattan Chief U.S. District Judge Loretta Preska rejected the central bank's argument that the records aren't covered by the law because their disclosure would harm borrowers' competitive positions. The collateral lists "are central to understanding and assessing the government's response to the most cataclysmic financial crisis in America since the Great Depression," according to the lawsuit that led to yesterday's ruling.

Bloomberg makes a good point in their complaint that the public has a right to know this information because they have become "an involuntary investor" in the Fed's actions to the tune of two trillion dollars.


Bloomberg said in the suit U.S. taxpayers need to know the risks behind the central bank's $2 trillion in lending because the public is an "involuntary investor" in the nation's banks.

This is a matter that needs to be thoroughly investigated by Congress if they have the will to do it. The two principle questions to be answered are which financial institutions benefited from the extraordinary borrowings from the Federal Reserve and under what terms did they benefit? Although Congress will be loathe to ask, it would be interesting to know if any of the alleged beneficiaries of these secretive borrowings were among this group?


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Comments (10)

It won't matter much where ... (Below threshold)
JustRuss:

It won't matter much where the money went and what collateral was offered. If it doesn't benefit the Obamination it will not be publicized. Even wagging the dog to get attention away from Healthcare and Cap&Trade I don't think this administration would shoot itself in the foot just to distract...

Or would they? Would they put on a show trial and huge investigation into TARP / Stimulus fraud, risking the loss of face, as long as they can quietly pass ObamaCare under our noses and behind our backs?

I just got a chill...

How dare they demand accoun... (Below threshold)
jim m:

How dare they demand accountability and transparency from the government!

Don't worry about Obamacare. They will pass that through reconciliation so they don't need 60 votes in the Senate and they won't have to debate it at all on the floor.

The one thing Obama has definitely given me: I can someday tell my grandchildren stories about what it was like to live in a democracy.

Hugh, if it turns out to be... (Below threshold)
GarandFan:

Hugh, if it turns out to be true, I'm sure Barry will just explain it all as just one big coincidence. You believe in multiple coincidences don't you? Happens all the time in Chicago. Just ask Barry and Rahm.

Okay, it's gossip, but at l... (Below threshold)
RicardoVerde:

Okay, it's gossip, but at least I tell you that beforehand....

What if it turns out that a lot of this money was really to bail-out foreign banks and institutions? Think what tea parties will be like if people find out that we mortgaged our grandchildren to bail out some Euro banks.

I guess being a failure pay... (Below threshold)
914:

I guess being a failure pays off big in this government...I wonder how many offshore accounts these mother f rs have with our kids cash being used for their disgusting lives.

Makes Me want to puke.

pinayplaymate...Pl... (Below threshold)
JustRuss:

pinayplaymate...

Please clarify, are you quoting the Messiah? If so are you for or against the comment?

or do you just like to make us put you in a category of our own choosing? That can be fun too.

Cheers!

"...because their disclo... (Below threshold)
Oyster:

"...because their disclosure would harm borrowers' competitive positions."

Wouldn't want to hurt their donation sources' ability to keep the campaign coffers full. But it's okay to demonize and actually endanger individual people who worked for these companies. That's different.

-----------------------
pinayplaymate just wants to trick you into clicking on his name and going to his sex site, JustRuss. He doesn't give a flip about any of this.

hello, Please clarify, are ... (Below threshold)
pramod:

hello, Please clarify, are you quoting the Messiah? If so are you for or against the comment?

Spam cleanup Aisles 11, 10,... (Below threshold)
JLawson:

Spam cleanup Aisles 11, 10, 9 and 6. Someone's tossing chunks all over the place!

there seems to be a fair am... (Below threshold)
losangelesgirl:

there seems to be a fair amount of support both for and against Obama's decision to keep Bernanke around... the media are no different here:




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