Fed Denies Secret Loans

The Fed and the Wall Street Journal have both taken issue with Bloomberg's article Secret Fed Loans Gave Banks $13 Billion Undisclosed to Congress

In response to the above article, the Fed went on a publicity campaign, lashing back at Bloomberg and others (but did not mention anyone by explicit name) in this Memo to Congress.

Bloomberg Stands By Its Reporting

Bloomberg pounced on the Fed with a point-by-point rebuttal Bloomberg News Responds to Bernanke Criticism of U.S. Bank-Rescue Coverage which should have ended the debate.

Essentially, Bloomberg stands by its numbers and the way it reported them, not necessarily the way others reported them, including my own headline, Banks Make $13 Billion on $7.7 Trillion in Secret Fed Loans; SEC Stands by Does Nothing

The only thing inaccurate in my post was the title. This title would be technically accurate "Banks Make $13 Billion on $7.7 Trillion in Secret Fed Loans and Pledges; SEC Stands by Does Nothing". However, to be perfectly fair, pledges far exceeded actual loans.

At any rate, Bloomberg's response should have ended the issue right then and there but for some inexplicable reason David Wessel at the Wall Street Journal felt the need to chime in with Separating Fact From Fiction on the Fed's Loans

Wessel essentially did a Fed Suck-Up in his piece, which is of course what one might expect from this line in his article: Full disclosure: My 2009 book, "In Fed We Trust," recounted the Fed's handling of the crisis favorably.

Fed's "Mealy-Mouthed" Memo

Felix Salmon hands the round to Bloomberg in Smackdown of the day: Bloomberg vs the Fed

Mike Shedlock

Mike Shedlock is a registered investment advisor representative for Sitka Pacific Capital Management.