I have been searching for updates on Bloomberg’s lawsuit seeking disclosure of collateral held by the Fed in exchange for a trillion plus in loans. Kudo’s to Bloomberg’s Mark Pittman for his coverage and efforts to bring accountability to the bailout process.
Here is a copy of the initial filing.
My prediction?
The markets seizing up reflects markets working. Market’s will not trade when there is insufficient information to price accurately, when rules are not being respected and where fraud is present.
Fed Refuses to Disclose Recipients of $2 Trillion
Now that market participants understand that there is significant fraud, including collateral fraud, in the asset backed and related derivative markets, no one wants to trade. They can’t trade. Who knows how much anything is worth? And who can trust anyone to certify anything? They can’t. All they can do is to get the US Treasury and the Fed to promise it does not matter. Government guarantees price and performance when fundamental economics can not.
That means that the Fed will not permit full disclosure. Given what I have personally seen of the federal court process when the owners of the Federal Reserve Banks want to keep collateral fraud under wraps, the law does not matter — in cases like this, there is no law, That said, no amount of money and effort will be spared in the effort to achieve the appearance of the rule of law. So the spin will be interesting to watch.
Keep us posted if you see updates on this one.