Thursday, December 11, 2008
The Fed is refusing to disclose the recipients of $2 trillion dollars in loans, even after Bloomberg sued under the Freedom of Information Act to get the information.
As Bloomberg writes:
“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.”***
“Americans don’t want to get blindsided anymore,” Mendez said in an interview. “They don’t want it sugarcoated or whitewashed. They want the complete truth. The truth is we can’t take all the pain right now.”
The Bloomberg lawsuit said that 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.”
In response, the Fed argued that the trade-secret [law] could be expanded to include potential harm to any of the central bank’s customers . . . .
Trade secret law?
Trade secret law protects things like valuable business methods. What's the banks' secret business method here - making stupid decisions, going bankrupt and then becoming the recipient of socialist government handouts?
What's next? Will the government argue that it can't disclose the details of its torture program because it needs to protect the trade secrets of the companies that make the electro-shock machines and the waterboarding platforms?