http://mobile.bloomberg.com/news/2011-12 -11/no-one-says-who-took-586-billion-in- fed-swaps-done-in-anonymity.html

http://www.nytimes.com/2008/07/11/busine ss/11fannie.html?_r=1&oref=slogin

http://money.cnn.com/2008/07/10/news/com panies/fannie_freddie/index.htm

Guess it helps when fabricating scandals to have no integrity and be pathological liars and to be in an industry where that is perfectly acceptable.

1) The Fed was someone who was guaranteed to be able to lend. A bank could scramble around to shave off some interest and take the risk it didn’t raise all the cash in time or it could pay a penalty rate and guarantee it.

2) The bank could have to raise some emergency cash as clients pulled their accounts and they could get it there and then from the Fed vs telling their clients to hold on in a febrile atmosphere.

3) The choice might be between doing a fire sale and paying a penalty rate for a short time.

You must come from the same brain trust that thinks no one would ever lend at a negative rate, which happened at this time too. After all by your logic, you could get a better rate in cash.

>”normal rates” does NOT mean “greater than current market rates”

If they charged greater than current market rates they would clearly never have lent out any money. The fact that they EVER gave a loan at .01% indicates that the rates were way below market.

Also, it’s pretty obvious which article Bernanke was talking about…there’s no reason to be coy if one wants to have an honest discussion. Similarly, defending misleading statements with “technically, I never said that” doesn’t exactly constitute “winning” an argument. Sounds more like what politicians do….not journalists.

I read through a fair number of “comments” sections on media websites…and it’s pretty obvious that MANY people have very little understanding of any of the Fed activities under discussion. There was a LOT of obvious misunderstanding throughout the “blogosphere” of what the Fed had done during the crisis….most of which seems to be a result of that particular Bloomberg article. Whether intentional or not, the article assisted in widespread misunderstanding…and, as a result, provided fuel to the flames of “Fed-hating” on the internet for no apparent reason (other than the usual sensationalism aimed at bringing in more “eyeballs” to the Bloomberg website). I find it entirely appropriate that the Fed take the opportunity to point out errors in their reporting…regardless as to how its message was disseminated or whether the author here could conveniently “copy and paste” the document. It might seem like a quaint notion to political columnists, but some of us in the public still expect (or at least hope) to find relatively accurate and unbiased reporting and analysis from respected news organizations.

Weirdly, no one ever seems to worry about Frannie and the creditors there that were actually bailed out.

Oh, and taking the PDF to text took all of ten seconds with Adobe. How do you not know this?

I have only ever read two posts of his. The other one was were he compared John Paulson’s sidekick telling the investment committee at ACA Capital Management about a short position, which happened to also include the exact same people who ran ACA Financial Guaranty Corp, to telling the toilet cleaner. He is, by all accounts, a smart knowledgeable person so one can only assume he knows the analogies he is giving are false.

And of course, nothing he says is relevent to what the Fed has said vs what Bloomberg and the tossers who repeated their “analysis” have claimed.

“The fact of the matter is, as the Fed points out in its letter, that the Fed set the interest rates on the lending at a penalty over normal market rates”

NORMAL MARKET RATES??? Why should there be normal market rates….or rather, why weren’t there “normal market rates?”
Do people really mean “unlimited liquidity at very low interest rates are normal?”

It seems to me the FED and FED defenders are in an untenable position. The market solution is not allowed – FAILURE and bankruptcy….because these institutions are TOO BIG TO FAIL, so we have the ridiculous specticle of Goldman Sachs awarding its biggest bonuses ever after the financial collapse.
The CEO’s and CFO’s, as well as the board of every bank that “needed” a bailout could have been a condition of the bailout…..But OH NOES – we can’t interfere in the market!!!! And where in the world did the idea that everybody had to get a bailout cause it would “stigmatize” the banks who really needed a bailout?
If this a school lunch program????

There is simply no way that the “journalists” involved at Bloomberg are unaware that what they are saying is factually incorrect and have continued to do so in what you consider to be a “clever” – aka dishonest for the rest of us – response. The reason they have continued to do so is because – like most of the people in their field – they have no integrity and they know that lying sells more than honesty would.

Weird for someone who is on his high horse about banker behaviour – aka picking a handful of people, finding the worst possible interpretation and generalising to everyone – that lying from journalists gets a pass.

BTW, Felix reveals himself (and his support staff) to be rather technically underdeveloped by writing, “And the whole thing is available only as one of those PDFs-from-a-copy-machine, which makes it impossible to copy-and-paste or to search.” Doesn’t he know how to deal with this in, e.g., Adobe Acrobat Pro? Click on ‘Tools,’ then ‘Recognize Text,’ then ‘In this File,’ and wait for what you want. This is not a ‘smackdown,’ but isn’t it odd that this self-vaunted practitioner of the new digital media is uninformed about such a simple matter?