Friday, January 8, 2010

Dear NYC Federal Reserve

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Just because you deleted it, doesn't mean it disappeared...

via the New York Times:
Starting in November 2008, the Federal Reserve Bank of New York under Timothy Geithner began urging American International Group, the huge insurer that the government had bailed out, to limit disclosure on payments made to banks at the height of the financial crisis, e-mail messages obtained by DealBook show.

The e-mail exchange between the bailed-out insurance giant and its regulator portray a strange reversal of roles, with A.I.G. staff arguing for the disclosure of certain details on payments for credit-default swaps to major banks, only to be discouraged by officials at, or representing, the Federal Reserve.

In a draft of one regulatory filing, A.I.G. stated that it had paid banks — including Goldman Sachs Group, Merrill Lynch, Société Générale and Deutsche Bank — the full value of C.D.O.’s, or collateralized debt obligations, that they had bought from the company. In the response to that draft from the law firm Davis Polk and Wardwell, which represented the New York Fed, that crucial sentence was crossed out, and did not appear in the final version filed on Dec. 24, 2008.

This is what we're talking about when we say there's a lack of transparency in our government. Guys, the recession has been long and sad. While analysts are saying we'll be out before we know it, I've read enough econ books to know that whatever 'prosperity' they're talking about won't hit the common folk until a year or two after. That said, I thought it was a great move for Obama to start placing more strict regulation on the financial markets after the crash. But where will the lies end?? From dropping interest rates every week to bailing out big businesses while people were losing their homes, you, reserve have left the people out to dry. Now that we know how full of shit you are, it's funny that this story came out.

When people imagine big business and financial deception, they usually imagine a bunch of 'The Man'-looking white men in a fancy board room, making decisions and sending secretive e-mails. I had no clue that was REALLY the case. If you were to sit down and only skim through those e-mails, they would seem routine (I suppose that's the point). The language they used sounded like they weren't even dealing with money. I suppose that's what happens when you're rich and powerful. As long as the system is in order, it doesn't matter what happens to the little people. Fed, don't get it twisted. Withholding information is the same thing as lying, especially when the information would have made your actions that much more detrimental to the country. Now that AIG's been bailed out and STILL has nothing to show for it, it's just ironic that our economy still isn't bouncing back like you guys 'planned'...

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