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Denninger Reports: US Appeals Court Refuses to Reconsider Fed’s Request to Keep Documents Secret

23 Aug

Fed Loses (Again), Expected To Appeal

from The Market Ticker by Karl Denninger

Gee, you mean that really is a government function and the FOIA really does apply?

Aug. 23 (Bloomberg) — A U.S. appeals court refused to reconsider a ruling that requires the Federal Reserve Board to disclose documents identifying financial firms that might have failed without the largest U.S. government bailout.

Of course you have to expect they’ll go to the SCOTUS for a final attempt, and ask for a stay, which (assuming they appeal) they will almost-certainly get.

But the options for the thieves guild, er, Clearing House Association (the organization that represents large commercial banks like BOA, Citi, etc) are running short.  Beyond the Supreme Court there’s only contempt and compliance left.

The Fed argued in the case, which was brought by Bloomberg LP, the parent of Bloomberg News, that disclosure of the documents threatens to stigmatize borrowers and cause them “severe and irreparable competitive injury,” discouraging banks in distress from seeking help. The appeals court panel rejected that argument.

The court is exactly right.

Once you stick your hand out and threaten the end of the world unless the government intervenes, which is exactly what these banks did in 2008, you have no more room for “secrecy” or “comity.”

You’ve come hat-in-hand and literally told the government (and its surrogates) that if they don’t provide help you will fail, and in doing so you will destroy the nation’s economy.

That was the gist of the argument they ran.

The courts have held, correctly in my opinion, that one cannot at the same time demand secrecy and a government bailout.

Let’s hope the Supreme’s also see it this way – that the people’s money is what’s in play here, and it does not belong to The Fed, or to Treasury – it belongs to the American public, and we have every right to know how it is being used.

 

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