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Wed December 7, 2011
Fed, Bloomberg Trade Jabs Over Recent Stories
We've reported on the stories Bloomberg has released about the Federal Reserve. We also noted the story that is under the microscope currently in which Bloomberg said that over the course of less than two years, the Federal Reserve had guaranteed about $7.77 trillion in order to rescue the financial system and that it did not disclose the specifics of some loans to Congress.
Yesterday, the Federal Reserve responded with what The New York Times called an "unusual attack" saying the reporting from Bloomberg "contained a variety of egregious errors and mistakes."
The gist of it is that "Bloomberg stands by its reporting." They go on to defend their reporting point-by-point. A few of the highlights:
-- Bloomberg says they referred to the loans as "secret" because the Fed revealed the broad outlines but not specifics to the public and to Congress.
-- Bloomberg defended its methodology in tallying up how much the Fed lent. It said it did not double-count lending when it said Fed lending peaked at $1.2 trillion. Bloomberg also stuck to its assertion that the Fed committed $7.77 trillion to rescue banks. That number adds up if you include what the Fed "lent, spent or committed" to rescue the banks, Bloomberg says.
-- The Fed asserts that its lending has netted taxpayers "over $125 billion in excess earnings." Bloomberg says it did not mention that number, but quoted the Fed saying the government did not lose money.