Bloomberg News finally emerged victorious from an absolutely absurd legal battle with, essentially, bank lobbyists, and has published the summary of its review of documents from America’ Big Secret Bank Bailout. It reveals just how much money they all borrowed when they were pretty much all about to go out of business. Here’s the meat of the matter: “Add up guarantees and lending limits, and the Fed had committed $7.77 trillion as of March 2009 to rescuing the financial system, more than half the value of everything produced in the U.S. that year.”
Apart from the absolute madness of the big boys like JP Morgan and Bank of America claiming loudly that they were borrowing from the Fed as a favor, the legal opposition of the Fed to allowing this information to be published is outlandish. The Fed “argued that revealing borrower details would create a stigma” and that “needy institutions would be reluctant to borrow in the next crisis.” 1. Well, you don’t need to worry about stigma, really, since all of the banks went face down to feed at the trough (Morgan Stanley had outstanding debt of $107 billion in one month of 2008!), and 2. The next crisis, you say? Oh boy. The good news is it seems like no one will ever stand for this outrageous stupidity again. Or will they? Stay tuned over the next 18 months!