Wednesday, November 12, 2008

Federal Reserve Refusing to Disclose Specifics on Where $2 Trillion in Taxpayer Dollars Went!

Bloomberg News has requested that the Federal Reserve disclose where $2 trillion in taxpayer funds have been dispersed. These disbursements are actually "emergency loans" to financial institutions. The Fed has refused to disclose.

Two trillion is a lot of money. To put that into perspective one might ask what is the total value of all publicly traded companies in the U.S.. Using my good friend Wiki, I found that if you multiply the Wilshire 5000 index (DWC) by one billion you get the approximate value of our U.S. stock market, $9.009 trillion. Well, this $2 trillion equals about 22.2 percent of total U.S. stock market value. This percentage is significantly higher if you only apply the $2 trillion across all publicly traded financial institutions.

Bloomberg News has requested details of the Fed lending under the U.S. Freedom of Information Act (FOIA) and filed a federal lawsuit Nov 7th seeking to force disclosure. Under FOIA, our government has 20 days to disclose and may elect a ten day extension. I don't know when the initial FOIA filing occured, but i'll assume that it was on Nov 7th also. Thus, one might expect the FOIA release to occur on or about 7 Dec if the Fed waits till the last moment.

Fox Business has also filed for details of the emergency loans.

So much for market transparency, at least in the short term. Keep your eyes and ears peeled for news on this subject. Once news hits, the companies receiving these emergency loans and the collateral they tendered will be scrutinized by Wall Street.

This information can't be kept secret forever. I would think that bits of the info may start surfacing in quarterly and annual financial reports.

The full Bloomberg News story is here.

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