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In Reversal, Fed Now Won't Release Key Doc On Asset-Buying Program
Last week, we looked at the process by which the New York Federal Reserve selected four investment firms to manage its program to purchase $500 billion of mortgage-backed securities, in order to bolster the housing market.
Or at least, we tried to.
A fact sheet on the website of the New York Fed, announcing the details of the program stated that "a competitive request for proposal (RFP) process was employed" to select the four firms -- Blackrock Inc., Goldman Sachs, Wellington Management, and PIMCO. A Fed spokesman declined last week to give TPMmuckraker any information about the value of the contracts or the nature of the firms' successful bids. But he did tell us that he expected to be able to provide us with a copy of the RFP, after it had been inspected by Fed lawyers.
But now things seem to have changed. The spokesman hasn't responded to our followup calls, placed this week, about the RFP. In other words, not only will the Fed not tell us how much its paying the firms to manage our money, it won't even release the document it used to solicit bids for the contract.
As for the firms themselves, they've been just as tight-lipped. As we noted at the time, the first three referred us to the Fed, and PIMCO didn't return our calls at all.
To be clear, there's no evidence that these firms were improperly selected -- though the fact that PIMCO's founder was, as we've reported, loudly calling back in September for the government to launch just such an MBS purchase program does create some interesting optics, at the least.
But don't taxpayers have a right to know some basic details about the process by which these private investment firms -- at least one already the recipient of massive government largesse -- were hired to manage our money? We think so...
Josh
Zachary
Where is Congress on this matter if they are responsible for oversight and how the Americans tax payers funds are being used. The Federal Reserve thumbed its nose at organizations like Bloomberg and their FOIA request. Is there no accountability on behalf of the American people left? Do we as a people continue to tolerate obsfucation and opacity when it comes to spending the people money? This move by Bernanke is total bullshit and while Obama says that there can only be one president at a time, where the hell is the enforcment arm of government? How pathetic is all of this nonsense while millions continue losing their homes while the double speak continues.
January 7, 2009 11:35 AM | Reply | Permalink
"But he (a Fed Spokesman) did tell us (TPM) that he expected to be able to provide us with a copy of the RFP, after it had been inspected by the Fed lawyers."
Does this mean that the RFP has not yet been inspected by Federal Reserve lawyers?
Expect any copy released to be fully redacted.
Remember, the Federal Reserve is privately owned, it is neither "Federal", nor has it any "Reserves".
January 7, 2009 2:20 PM | Reply | Permalink
Zach, you may as well get the FOIA process started now.
Also, have you guys talked to any of the appropriate Congressional staffers on the appropriate oversight committees about this?
I'll also bet our mutual friend Keith Olbermann would be interested in talking to you about this, which might get some other people at NBC asking questions.
January 7, 2009 12:06 PM | Reply | Permalink
Folks, THIS is the major scandal of our times. Powerful private interests are gleefully ripping off U.S. taxpayers, and their children, grandchildren, etc. And anyone asking questions is told to buzz off, never mind, the experts are in charge, it's really complicated, but don't worry it's all for the best. Honest.
Most folks' eyes glaze over after a couple of paragraphs' worth of financial news. SOMEONE in the MSM, blogosphere, somewhere has to be spelling this out to folks, revealing these scams for what they are, in plain language.
I want TPM Muckraker to be one of those voices. Looks like that's going to be the new focus of the site. Good. Also, I highly recommend checking out this blog on a daily basis:
http://theautomaticearth.blogspot.com/
January 7, 2009 12:09 PM | Reply | Permalink
These Wall St crooks and their firms right now seem to be in crunch-time mode. They know too well that the end is near. I'm not saying that the incoming administration is going to solve all the problems and catch all the crooks, but the laissez-faire attitude of the current and outgoing one is an atrocity.
January 7, 2009 12:12 PM | Reply | Permalink
Excellent reporting here at TPM on thie "Bailout" and TARP - which I suspect all revolves around keeping the thieves (bankers) from going belly-up, and/or going to jail - where they belong.
You know something is really wrong with all of this - when they refuse to disclose anything.
I would maintain contact with Elizabeth Warren - who might be able to get some info out of the Fed - through her oversight board - hopefully.
Great Job!!
January 7, 2009 12:53 PM | Reply | Permalink
If the Federal Reserve chief serves at the pleasure of the President, I sincerely hope that Barrrack's first order of business is to fire Bernanke. In fact as a new president possibly looking for a photo op, I'd kick the piece of shit down the stairs of the Fed itself and then place a lock on its doors, never to open again or be given the ability to fleece the American taxpayer. Enough of this. The Constitution never called for a central bank but a US Treasury with dollars backed by gold and silver. Presidents such as Jefferson, Jackson, Lincoln as well as Kennedy knew this. If there isn't a quid pro quo between government and the MSM, this story should be front page news and not buried on the back pages if you can even find it there.
January 7, 2009 1:42 PM | Reply | Permalink
One other aside. If we have given the banks billions in baliout funds in tax payer money, haven't we already begun the process of nationalizing the banks? Get it over with and make the take over complete. The share holders in the privately held Federal Reserve banks can take their lumps like the rest of us and then can find some other outlet to buy stock in and make a killing, but not at our expense.
January 7, 2009 1:46 PM | Reply | Permalink
Nationalizing US Banks? No way. The bailout is simply giving money to those crooks who caused this crisis in the first place. The have to be laughing all the way to their banks.
In simple language: When an individual, corporation, or government gets into financial trouble, the solution is to reduce spending, increase income, or do both. These bailouts and "economic stimulus packages" are doing just the opposite and can only make matters worse.
The current philosophy of bankers and economists is that debt creates wealth. This is not true, but both the Republicans and now the Democrats are buying into this bogus assumption. It is just a massive ponzi scheme on a global level. When it crashes from its own weight, look out.
January 7, 2009 2:34 PM | Reply | Permalink
And now another industry seeks a federal bailout...
http://politicalticker.blogs.cnn.com/2009/01/07/porn-industry-seeks-federal-bailout/#more-34724
January 7, 2009 3:20 PM | Reply | Permalink
How I learned To Hate Larry Summers
The Financial Times has a positive article about Larry Summers this morning. The bottom line is he is credited with the government intervening in the Peso crisis of 94 to avoid a financial calamity.
I discovered Larry Summers theory on defeating Gibson’s paradox. (In an nutshell the theory is if government could suppress the price of Gold then it could lower interest rates and print as many $’s as so desired). I can appreciate that fact that Larry Summers core belief is he is smarter than the markets and can fool it with government intervention. I think Larry Summers strong dollar II will turn out to be a disaster, possibly here and now. During strong dollar 1 in the 90’s, Americans and the rest of the world had confidence in the U.S. financial system; the belief that Free Market Capitalism is the best economic system discovered by man was at the core of this belief. Liars can get away with lies when they have credibility. Once this credibility has been lost no one will ever believe the lie again. Credibility in Wall Street and Washington is no longer at the level of the 90’s; too many people know and do not trust government intervention. Larry Summers, Timothy Geithner, Ben Bernanke and the rest of Wall Street are now selling President elect Obama a theory that we can monetize the greatest creation in debt in American history without causing inflation. Without trust this policy is doomed. As investors look at the facts and realize that a 0-2% rate of return on Treasuries is absurd, money will seek better returns. As people lose confidence in the $ they will seek safety. They will quietly begin protecting themselves as they realize this is just one more lie from another administration who believes in deceiving the markets to protect Wall Street. The 15 year social experiment in fooling the markets will blow. As this happens I expect Larry Summers scam based on Gibson’s Paradox will blow; a currency crisis is the logical result of this failure. The charts are saying the $U.S. and U.S. Treasury market are beginning to fail. The strong $ policy has stocks, bonds and the $ rising with Gold and commodities falling. It looks like this is changing. The bottom line is the suppression in Gold, the elevation in Treasury Bonds and the elevation in the $U.S. will all reverse if I am right. It is now a game of musical chairs. Who will be left standing? The question is when? The charts will hold the answer.
January 7, 2009 6:16 PM | Reply | Permalink