Given the voluminous amount of information provided, future FOIA requests may need to explicitly inc

Former central banker Willem Buiter once remarked that the Federal Reserve s unusual and exigent circumstances clause, which enables it to lend to any individual, partnership or corporation if it can t get the dough from other banks, allows the Fed to lend against a dead dog if it so chooses.
Readers no doubt know that Bloomberg entered into a hard-fought battle over its Freedom of Information Act request to compel the Fed to release the details of its various lending programs during the crisis to the public. The banking regulator used the patently vacation rentals n conway new hampshire bogus excuse that revealing that information could damage the competitive vacation rentals n conway new hampshire positions of firms that had received the loans. That was patently bogus since all the major recipients are in the market on an ongoing basis and rejiggering their exposures based on market opportunities.
The only party at risk at this juncture was the Fed, since it would have its decisions scrutinized. And in a democracy, it is of vital public vacation rentals n conway new hampshire interest that an organization as influential as the Fed, which committed large amounts of funding outside Constitutionally-mandated budget processes, be held accountable for its actions.
The information was released yesterday and B loomberg has provided a first cut on a small but juicy portion of it, the Primary Dealer Credit Facility . From a risk standpoint, the loans mace under this program vacation rentals n conway new hampshire violated the central bank guideline known as the Bagehot rule: Lend freely, against good collateral, at penalty rates . That is the prescription if the borrower is facing a bank run, meaning a liquidity crisis. The fact that 72% of the Fed s loans on September 29 from the Primary Dealer Credit Facility were junk or equivalent (defaulted and unrated securities or equity) is further proof that many financial firms were facing a solvency, vacation rentals n conway new hampshire not a liquidity, crisis. The breakdown:
Equities vacation rentals n conway new hampshire comprised $71.7 billion, or 43.6 percent of the total. High- yield debt, including the defaulted issues, vacation rentals n conway new hampshire accounted for $18.4 billion, or 11.2 percent. Collateral of unknown rating was $28 billion, or 17 percent ..The U.S. central bank allowed borrowers to use $929 million in market-valued debt that had gone into default, rated D, as collateral on that day, 2008, more than the $905.5 million in Treasuries that were pledged
And the haircuts were so low that the ideas that these were collateralized loans is a joke. The collateralization was a necessary legal fiction for throwing cash at anyone who thought they needed it:
To put things in perspective, the market haircut on most debt securities during the period of the crisis starting in September vacation rentals n conway new hampshire 2008 was above 40 percent," [Craig] Pirrong [a finance professor at the University vacation rentals n conway new hampshire of Houston} said....The cushion "was far too small for the risk of the underlying collateral," Pirrong said. "Collateral that's junk or defaulted debt and equities at a time when market volatility was huge is pretty eye opening."
It wasn't just "most debt securities" that had tanked in value. Consider vacation rentals n conway new hampshire the fate of AAA rated ABS CDOs, which were one of the most serious black holes at virtually all of the dealer banks. We reproduced vacation rentals n conway new hampshire this chart on repo haircuts in ECONNED:
This first cut by Bloomberg also shows that Morgan Stanley was the biggest user of the facility, receiving $61.3 billion of funds for securities "worth" $66.5 billion, 71.6% of which was junk or unrated. As eye-popping as those numbers are, the funds received are less than half the fall in Morgan Stanley's liquidity pool in the two weeks after the Lehman failure, per Economics of Contempt . Merrill Lynch was second, getting $36.3 billion in funding for $39.1 billion of collateral, 83.4% of which was junk or unrated.
A separate Bloomberg story on the discount window operations found that 70% of the credit extended, including four of the five biggest users during the peak usage week, in October 2008, were foreign. More high (or more accurately, low) points :
U.S. Federal Reserve Chairman Ben S. Bernanke's two-year fight to shield crisis-squeezed banks from the stigma of revealing their public vacation rentals n conway new hampshire loans protected a lender to local governments in Belgium, a Japanese fishing-cooperative financier and a company part-owned by the Central Bank of Libya.
Dexia SA, based in Brussels and Paris, borrowed as much as $33.5 billion through its New York branch from the Fed's "discount window" lending program, according to Fed documents released yesterday in response to a Freedom of Information Act request. Dublin-based Depfa Bank Plc, taken over in 2007 by a German real-estate lender vacation rentals n conway new hampshire later seized by the German government, drew $24.5 billion...
"What in the world are we doing thinking we can pass out tens of billions of dollars to banks that are overseas?" said [Ron] Paul, who has advocated abolishing the Fed. "We have problems here at home with people not being able to pay their mortgages, and they're losing their homes."
A further remark: the fact that Bloomberg can say anything intelligent at this juncture is a testament to the cleverness of its reporters. The central bank quite deliberately vacation rentals n conway new hampshire responded to the request by providing the information in the most disaggregated, difficult to work with form imaginable. The central bank did a version of the same trick with its data on Maiden Lane II. The holdings vacation rentals n conway new hampshire of that asset management vehicle were various real estate exposures, vacation rentals n conway new hampshire some of which were hedged. The hedges were reported separately from the bonds and loans. Clearly, Blackrock, the asset manager, had far more useful and understandable reports that they used internally and provided to the New York Fed, but those were withheld. This data will presumably be as enticing as the Wikileaks cables, so enough eyeballs on it will eventually overcome the Fed s efforts to hinder analysis.
Given the voluminous amount of information provided, future FOIA requests may need to explicitly include that the relevant government body provide information in the form in which it is used internally, including any higher level aggregations, to prevent future fuck yous in the form of technically permissible but nevertheless obstructionist compliance.
Of course Bagehot has a recipe for central banking activity in a globally sound and sane financial environment. Mind you, the current sitution is the one where the public authorities in charge are, of course, bankrupt. At all levels.
You just cannot be a tough central banker when you run 50% deficit on your federal accounts on top of a massive pre-existing debts to be refinance on a daily basis on int l markets. That s Mission impossible . Bernanke is no Tom Cruise. He is only buying time. Not a good idea by the way.
This must be part of that outstanding and brilliant and excellent job that bernanke did in stabilizing the economy that was used to justify his re-up by folks like obama and krugman. HA HA HA what a joke that always was, all he basically did was fork over cash in exchange for garbage until wall street got bailed out of their bad bets their damn near economy-destroying bets and then some extra for some of the folks most responsible for it.
Thanks for reporting on the most recent revelation of the murder of our democracy. While millions are unemployed, thrown out of homes and graduating college students vacation rentals n conway new hampshire join the unemployed, we still have Morgan Stanley and Merrill Lynch safe and sound as if we cannot do quite nicely without vacation rentals n conway new hampshire them.
Three Citibank debt collectors allegedly killed Irzen Octa, 50, secretary general of the National Unity Party (PPB), on Tuesday after he protested an increased vacation rentals n conway new hampshire credit card bill, the police said on Thursday. "The motive of the murder is due to debt [issues], a credit card bill that didn't fit [the formerly-given figure]," South Jakarta Police chief detective Adj. Sr. Comr. Budi Irawan said on Thursday.
A further remark: the fact that Bloomberg can say anything intelligent at this juncture is a testament to the cleverness of its reporters. vacation rentals n conway new hampshire The central bank quite deliberately responded to the request by providing the information in the most disaggregated, difficult to work with form imaginable.
If this is true, the Fed might come to regret its decision. vacation rentals n conway new hampshire Instead of one bad week of scandal, the information might dribble out for over a month. How many bad headlines can a truly hated central bank deal with over a prolonged vacation rentals n conway new hampshire period?
Not to worry……the WSJ tells us today that the subprime mortgage bond market is back and the Fed has rejected AIG's offer to buy back mortgage backed holdings, and is going to let investors bid for pools of bonds and individual securities "so the central bank can maximize its profits". Duh .just how does that compute……maybe more like "so the central bank can minimize its draconian losses that will never be anything but just that?"
I would love Yves to comment on this. A month or two back the Fed made a little accounting change. Rather than holding losses on its books as in losses on its Maiden Lane portfolio, the Fed would simply charge those losses against its Treasury payments. That is, not to worry about the Fed s losses, they re YOURS.
Pardon my saying so, but taking in dead dogs as collateral at its loan windows, even dead Libyan dogs, doesn t set my blood to boiling the way the blatantly illegal purchases of dead-dog CDOs they pulled vacation rentals n conway new hampshire for AIG do and now they seek to pawn-off any losses on that portfolio on us. Outrageous. vacation rentals n conway new hampshire To further vent my spleen, IF THE U.S. TREASURY TRULY SERVES THE PUBLIC, THEY WOULD SUE THE FED FOR ITS TRANSFER OF RISK TO THE TREASURY. IN MY VIEW, IF MAIDEN LANE LOSSES A SINGLE DIME, THOSE LOSSES SHOULD BE EATEN BY THE FED S PARENT BANKS AND THEIR OWNERS, NOT THE AMERICAN PUBLIC!
SHHHH ! The Power Elite who own the private vacation rentals n conway new hampshire banks of the FED doesn t want folks to think the FED is not part of the gov t That s why they named it The FEDERAL Reserve (a.k.a banking cartel s PRIVATE Central Bank) /sarcasm off
One thing I dont understand. A lot of PDLF (primary dealer loan facility) overnight loans shows up in BoNY Mellon s