Bloomberg wants to know and so do we.

"The Board's arguments are based on
wispy speculation, lack evidentiary support and
are contradicted by economic theory," said
Thomas Golden and Jared Cohen, lawyers with New
York-based Willkie Farr & Gallagher LLP, in a
motion asking the judge to require disclosure.

"These government actions, which have been
shrouded in secrecy, are at the heart of
Bloomberg's FOIA requests," the
attorneys said.

Members of Congress also have demanded more
information than President Barack Obama and
former President George W. Bush have disclosed
on the bailout of the U.S. financial industry.
Congress approved $700 billion to bolster banks,
whose losses on mortgage securities and home
loans contributed to the recession.

And the FED has been resolutely silent on this point.

'Within Their Discretion'

"We've all got a stake in how the
government is managing this program," said
Lucy Dalglish, executive director of the
Arlington, Virginia-based Reporters Committee
for Freedom of the Press. "The information
is definitely something that is within their
discretion to disclose."

Fed officials are considering steps to provide
the public with more information about emergency
programs, people familiar with the matter said
April 14. The Federal Reserve, consisting of
seven governors in Washington and 12 regional
banks, was established in 1913 and charged by
Congress with ensuring low inflation, maximum
employment and a stable financial system.

Of course we all know how well that's worked out in the
last 96 years. And now they are afraid if they let people know,
they might panic ?? I heard that the so called stress tests were
going just fine.

I think they don;t want people to know because it they did, or
rather congress did - then congress might come down on these
banks and bankers with hob nailed boots. Which they should.


C

It seems that the expected outcome to the TARP rescue plan
has not been as expected.  Which of course was expected.

Bank lending to consumers and businesses for many
types of loans fell in February despite the
billions of dollars in government support the banks
received.

The Treasury Department said Wednesday its latest
monthly survey of lending activities at the
nation's biggest banks showed nine reported
increases and 12 posted declines. The median, or
midpoint, for lending activity dipped 2.2% in
February.

While the median level of activity in mortgage
lending rose 35.4% and home equity lines of credit
grew 17.7%, lending to businesses for commercial
and industrial loans plunged 47%.

I find it hard to believe that Geithner and the others at the treasury
and FED could have been so naive, gullible or just plain stupid
enough to think that their plan would turn out any other way. That
the banks would not simply take the money and run.

Apparently these people have spent far too much time living in
in a "cave" or some isolated island and not enough time on the
street.


C

And Thom Hartmann explains this very well.

"Debt" is not money. Instead, it's a charge against
future money. But even though it's a charge against
future money, it can still be spent as if it was
today's money - except that it must be repaid with
interest. And therefore debt must have some sort of
a balanced relationship to the total size of the
economy - albeit the future economy - for it not to
be destabilizing.

In other words, if over the next twenty years (the
term of a typical and healthy mortgage) the economy
is expected to grow by X percent or X number of
dollars, then the total amount of twenty-year debts
that can be issued should be limited to X. But if
it's greater than X, then when the future arrives
there won't be enough circulating money to repay
the debt, because the economy (and the money
supply) won't have grown as great as the debt
repayment demand. The only two options are for debt
holders to default (bankruptcies, foreclosures,
etc. - Depression), or for the government to
suddenly increase the supply of money (inflation).

The same is true of one-year debt (credit cards),
four- or five-year debt (car loans, typically), and
all other forms of debt. In aggregate, if the
amount of debt is allowed to grow faster than the
economy will grow over the term of the debt, when
the debt is due there will be a problem, and if
it's grown hugely, a disaster.

This is what we're experiencing right now. Over the
past three decades - largely since Reagan - debt
(both private and public/government) has expanded
much more rapidly than the economy has grown. "Now"
was "the future" when the debt was issued, but the
economy hasn't grown to the point where there are
enough dollars (in reality, enough value - goods
and services) to repay that debt. Thus we are
experiencing a "wringing out" of that debt -
bankruptcies and foreclosures - relative to the
current wealth of the economy.

This is the most critical thing to see clearly -
without adhering to this simple concept, a
government or central bank will always either
create boom/bust cycles (depressions/recessions) or
inflation. Without regulating debt, a government
will be taken hostage and an economy destroyed by
for-profit institutions that are able to create
debt without regulation (banks).

Absolutely. If nothing else comes out of the current economic mess,
strict banking regulations that can be expanded to incorporate any
future shenanigans on the part of bankers need to be enacted and
the sooner the better. And with sever consequences...like hard jail
time.

C

Or rather an old one that needs to be brought back.

The bankers had Lincoln's government over a
barrel, just as Wall Street has Congress in its
vice-like grip today. The North needed money to
fund a war, and the bankers were willing to
lend it only under circumstances that amounted
to extortion, involving staggering interest
rates of 24 to 36 percent. Lincoln saw that
this would bankrupt the North and asked a
trusted colleague to research the matter and
find a solution. In what may be the best piece
of advice ever given to a sitting President,
Colonel Dick Taylor of Illinois reported back
that the Union had the power under the
Constitution to solve its financing problem by
printing its money as a sovereign government.
Taylor said:

    "Just get Congress to pass a bill
authorizing the printing of full legal tender
treasury notes ... and pay your soldiers with
them and go ahead and win your war with them
also. If you make them full legal tender ...
they will have the full sanction of the
government and be just as good as any money; as
Congress is given that express right by the
Constitution."


The Greenbacks actually were just as good as
the bankers' banknotes. Both were created on a
printing press, but the banknotes had the
veneer of legitimacy because they were "backed"
by gold. The catch was that this backing was
based on "fractional reserves," meaning the
bankers held only a small fraction of the gold
necessary to support all the loans represented
by their banknotes. The "fractional reserve"
ruse is still used today to create the
impression that bankers are lending something
other than mere debt created with accounting
entries on their books. 1

Lincoln took Col. Taylor's advice and funded
the war by printing paper notes backed by the
credit of the government. These legal-tender
U.S. Notes or "Greenbacks" represented receipts
for labor and goods delivered to the United
States. They were paid to soldiers and
suppliers and were tradeable for goods and
services of a value equivalent to their service
to the community. The Greenbacks aided the
Union not only in winning the war but in
funding a period of unprecedented economic
expansion. Lincoln's government created the
greatest industrial giant the world had yet
seen. The steel industry was launched, a
continental railroad system was created, a new
era of farm machinery and cheap tools was
promoted, free higher education was
established, government support was provided to
all branches of science, the Bureau of Mines
was organized, and labor productivity was
increased by 50 to 75 percent. The Greenback
was not the only currency used to fund these
achievements; but they could not have been
accomplished without it, and they could not
have been accomplished on money borrowed at the
usurious rates the bankers were attempting to
extort from the North.

This isn't the first time I have read this idea. Sam Smith has an
article that refers to the same thing. The banks would hate it,
too bad. Sounds like a good idea to me.

C

Oh please, please. And take Mississippi and South Carolina with you.


C