Sheila Bair and the black marker

October 2, 2009

The other day I wrote a column about a series of meetings FDIC Chairwoman Sheila Bair had this summer with Citi Chairman Dick Parsons. The column was based on entries in Bair’s datebook, a copy of which the FDIC turned over to me in response to a FOIA request.

But here’s the thing, the FDIC actually tried to keep some of those meetings between Bair and Parsons secret–along with a number of other meetings the FDIC chairwoman had this summer. The FDIC said it needed to redact some of the entries to protect the agency’s work with the banks it regulates. The agency did this by using a simple black marker to cover over the names of some people.

The trouble is the black marker was a dud–and the names of the people Bair met with on those days were clearly visible. That’s a good thing because it would have made it much harder for me to do my story.

Did someone at the FDIC screw up? It certainly seems that way. But the public is all the better for it.

I didn’t point out this market malfunction in the column. I figured people would notice it once they started digging through the 92-page datebook, which was posted along with the column.

The loyal readers of Zerohedge, which blogged on my column, were the first to spot the FDIC’s goof and they are having a field day with this mistake.


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Hi again,

With your indulgence I’d like to direct your attention to this delightful comedy-of-errors post by one of our commenters (note the *year* in the URL). nomes-warned-on-moral-hazard/comment-pag e-1/#comment-20913

I’d also like to point out that CDARS must be adding a big moral hazard bonus to the other risks that FDIC is dealing with. A quick search the other day suggested that I may be the only one who’s mentioned the two things in the same breath. This seems so obvious to me that I’m astonished nobody else has picked it up. Please put me right on this one if there’s a flaw in my thinking. I’ll sleep a lot better knowing that the registry hasn’t become a single-point-of-failure risk for the whole house of cards.

The main concern all depositors should be concerned about
is the amount of money that is in the fund that is paid by banks to cover depoitors. There is no doubt that the
big hit is right around the corner. The Toxic paper still
has not been dealt with and the borrowing power of the
FED is non existant. TARP FAILED. All of the reasons that
were given for the Emergency Bailouts were not completed.
And now the time is here.

Posted by Clyde Preston | Report as abusive