Friday, December 12, 2008

Hands and Cookie Jars

Bloomberg is reporting some interesting news in a piece entitled Fed Refuses to Disclose Recipients of $2 Trillion :

The Federal Reserve refused a request by Bloomberg News to disclose the recipients of more than $2 trillion of emergency loans from U.S. taxpayers and the assets the central bank is accepting as collateral.

Bloomberg filed suit Nov. 7 under the U.S. Freedom of Information Act requesting details about the terms of 11 Fed lending programs, most created during the deepest financial crisis since the Great Depression.

The Fed responded Dec. 8, saying it’s allowed to withhold internal memos as well as information about trade secrets and commercial information. The institution confirmed that a records search found 231 pages of documents pertaining to some of the requests.

“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, a senior managing director at New York-based ICP Capital LLC, which oversees $22 billion in assets.

If I were the Fed, I wouldn't want us to know the real deal either. A big part of the economy is a con game. By that, I mean a confidence game, where our confidence in the system is the essential ingredient for the entire thing to work.

If you have a minute, go listen to Wizards of Money for some thought food.