As you read this, your dollars are being spent. Your dollars are being put to lend $2 trillion to unnamed, faceless financial institutions that ponied up God-knows-what as collateral to get it — and your dollars are on the line for the mortgage assets of Bear Stearns, too. If that’s not enough, your dollars are also now on the line for a just-announced SIV that will be buying up
multi-sector worthless CDOs in the latest — but mark my words, not the last — effort to keep AIG afloat and the CDS market alive. Which makes the lawsuit Bloomberg is bringing against the Federal Reserve one that every single one of us should be rooting for:
The Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral. Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn’t require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return. “The collateral is not being adequately disclosed, and that’s a big problem,” said Dan Fuss, vice chairman of Boston- based Loomis Sayles & Co., where he co-manages $17 billion in bonds. “In a liquid market, this wouldn’t matter, but we’re not. The market is very nervous and very thin.” Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act and filed a federal lawsuit Nov. 7 seeking to force disclosure.
So much for transparency and helping markets recover, and all of the other bull**** that was used to sell this steaming pile of a bailout to the American public — and to Congress. This is freedom-of-the-press sort of stuff, dear HW readers, the reason news was invented. These are your dollars. They’re my dollars, dollars that HousingWire has paid into the system to have this media outlet up here and running for you to read. And we all should know what Paulson et al. is doing with our money, shouldn’t we?