This first post is for piezoe. The fed is not transparent.... and you can see it states its regional banks do not have to respond to FOIA requests (because they are private) I would add that is where the money is created. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aS89AaGjOplw Fed Shrouding $2 Trillion in Bank Loans in ‘Secrecy,’ Suit Says By Mark Pittman - April 16, 2009 11:07 EDT April 16 (Bloomberg) -- U.S. taxpayers need to know the risks behind the Federal Reserve’s $2 trillion in lending to financial institutions because the public is now an “involuntary investor” in the nation’s banks, according to a court filing by Bloomberg LP. The Fed refuses to name the borrowers, the amounts of loans or assets banks put up as collateral under 11 programs, arguing that doing so might set off a run by depositors and unsettle shareholders. Bloomberg, the New York-based company majority-owned by Mayor Michael Bloomberg, sued Nov. 7 under the Freedom of Information Act on behalf of its Bloomberg News unit. It made the new filing yesterday. “The Board’s arguments are based on wispy speculation, lack evidentiary support and are contradicted by economic theory,” said Thomas Golden and Jared Cohen, lawyers with New York-based Willkie Farr & Gallagher LLP, in a motion asking the judge to require disclosure. “These government actions, which have been shrouded in secrecy, are at the heart of Bloomberg’s FOIA requests,” the attorneys said. Members of Congress also have demanded more information than President Barack Obama and former President George W. Bush have disclosed on the bailout of the U.S. financial industry. Congress approved $700 billion to bolster banks, whose losses on mortgage securities and home loans contributed to the recession. ‘Within Their Discretion’ “We’ve all got a stake in how the government is managing this program,” said Lucy Dalglish, executive director of the Arlington, Virginia-based Reporters Committee for Freedom of the Press. “The information is definitely something that is within their discretion to disclose.” Fed officials are considering steps to provide the public with more information about emergency programs, people familiar with the matter said April 14. The Federal Reserve, consisting of seven governors in Washington and 12 regional banks, was established in 1913 and charged by Congress with ensuring low inflation, maximum employment and a stable financial system. The largest U.S. banks have tapped more than $125 billion in government aid under the Troubled Asset Relief Program in the past seven months. Bank stocks rose following the announcement of capital injections. Bank of America Corp. and Sterling Financial Corp. have voluntarily disclosed borrowing from the Fed, Bloomberg said in the suit. The Fed began expanding its lending programs in August 2007 with the Term Discount Window program. The central bank’s loans don’t have oversight requirements or compensation limits that Congress imposed upon the TARP. $2.09 Trillion Assets, including loans and securities, on the Fed balance sheet totaled $2.09 trillion as of April 9. The Fed Board of Governors contends that it is separate from member institutions, including the Federal Reserve Bank of New York, which runs most of the lending programs. Most documents relevant to the Bloomberg suit are at the New York Fed, which isn’t subject to FOIA law, according to the central bank. The Board of Governors has 231 pages of documents, to which it is denying access under an exemption for trade secrets. “The Board cannot seriously maintain that the NY Fed does not perform governmental functions and control information of interest to the public,” Bloomberg said in yesterday’s motion. Banks oppose any release of information because that might signal weakness and spur short-selling or a run by depositors, the Fed argued in its March 4 response. The release of the information “can fuel market speculation and rumors,” including a drop in stock price and a run on the bank, the Fed said. ‘Speculative Injuries’ Bloomberg replied yesterday that “these speculative injuries relate only to the reactions of customers, shareholders and other members of the public, not to competitors’ use of the borrowers’ proprietary information to their advantage,” the exception to disclosure under the FOIA law. The Fed’s lending is “a strictly temporary measure to create expansionary support in the economy,” Fed Chairman Ben S. Bernanke said April 14 in response to questions at Morehouse College in Atlanta. The Fed has “been working very hard to increase our transparency” on lending and operations, Bernanke said. The central bank’s Web site contains “a huge amount of information” on how the lending programs work, he said. On Feb. 23, the Fed began disclosing a breakdown by broad categories for collateral pledged by banks and bond dealers after Congress demanded more transparency. The added disclosure doesn’t identify specific banks or collateral they posted. $12.8 Trillion Government loans, spending or guarantees to rescue the U.S. financial system total more than $12.8 trillion since the international credit crisis began in August 2007, according to data compiled by Bloomberg as of March 31. The total includes about $2 trillion on the Fed’s balance sheet. The Freedom of Information Act obliges federal agencies to make government documents available to the press and public. The Bloomberg lawsuit, filed in New York, doesn’t seek money damages. The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net. To contact the editor responsible for this story: William Glasgall at wglasgall@bloomberg.net
What does the FED say.... its amazingly clear for FED speak.. a. "organized similarly to private corporations" b. "Reserve Banks issue shares of stock to member banks" c. non profit...(but remember they creating trillions for the accounts of members) just about everything else is a red herring. its privately owned with share holders. notice how they put parenthesis around "owned" to throw the weak minded off the scent and then create an interesting sentence by saying it is not a private profit making institution. that is technically correct because by its definition it is a -- private non profit institution. http://www.federalreserve.gov/faqs/about_14986.htm Who owns the Federal Reserve? The Federal Reserve System fulfills its public mission as an independent entity within government. It is not "owned" by anyone and is not a private, profit-making institution. As the nation's central bank, the Federal Reserve derives its authority from the Congress of the United States. It is considered an independent central bank because its monetary policy decisions do not have to be approved by the President or anyone else in the executive or legislative branches of government, it does not receive funding appropriated by the Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by the Congress, which often reviews the Federal Reserve's activities and can alter its responsibilities by statute. Therefore, the Federal Reserve can be more accurately described as "independent within the government" rather than "independent of government." The 12 regional Federal Reserve Banks, which were established by the Congress as the operating arms of the nation's central banking system, are organized similarly to private corporations--possibly leading to some confusion about "ownership." For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year. Related Information
Lewis v. United States, 680 F.2d 1239 (1982) ... Each Federal Reserve Bank is a separate corporation owned by commercial banks in its region. The stockholding commercial banks elect two thirds of each Bank’s nine member board of directors. The remaining three directors are appointed by the Federal Reserve Board. The Federal Reserve Board regulates the Reserve Banks, but direct supervision and control of each Bank is exercised by its board of directors. 12 U.S.C. Sect. 301. The directors enact by-laws regulating the manner of conducting general Bank business, 12 U.S.C. Sect. 341, and appoint officers to implement and supervise daily Bank activities. These activites include collecting and clearing checks, making advances to private and commercial entities, holding reserves for member banks, discounting the notes of member banks, and buying and selling securities on the open market. See 12 U.S.C. Sub-Sect. 341-361. Each Bank is statutorily empowered to conduct these activites without day to day direction from the federal government. Thus, for example, the interest rates on advances to member banks, individuals, partnerships, and corporations are set by each Reserve Bank and their decisions regarding the purchase and sale of securities are likewise independently made.
there is so much more out there.... but lets just establish its a privately owned institution. then we will establish it creates money at will. they we can wonder if there is a better way or not.
Are there really people that don't understand that the FED is privately owned and not part of the Federal Government? Your checking, savings accounts - safe deposit boxes and their contents are collateral for the bank. In case of default please contact the FDIC..... When the bank borrows from the Fed, now who has dibs on that collateral? http://m.seekingalpha.com/article/1306931
piezoe argues the FED is not privately owned and he argues it is transparent. I think he also argued it does not create money at will. Which is why I started this thread... to see what his real arguments are.
He has no real arguments. He'll call you a fringe blogger, evade the tough questions, post about how Bernanke is a hero and he has Yellen pictures all over his house and that will be that.