Thank you, Emma. It's good to see your voice back here!

A friend of mine sent me this information

Calculating the National Debt can be done on several different levels…you will get a number from $11Trillion to upwards of $70Trillion.

IF we used basic accounting principles, it would be $50Trillion+ (do you include your mortgage as a liability on your balance sheet? We have taken in trillions of dollars in social security payments and spent them…the social security fund is BROKE. We use the $300B from social security to supplement our everyday budget. Another example is the war, we don’t include payments to disabled veterans, care for them, replacing weapons, etc. when we calculate the cost. Joseph Stiglitz (nobel prize winning economists, calculated the cost of the Iraq war at $3T)

Back to basics (simple calculation)….let’s use $11T ($12T with bailouts/stimulus) as our base. You MUST add Fannie/Freddie debt ($5.2T) to it….Government backed debt (see below).

Although not included in the figures reported by the government, the U.S. government has moved to more explicitly support the soundness of obligations of Freddie Mac and Fannie Mae, starting in July via the Housing and Economic Recovery Act of 2008, and the September 7, 2008 Federal Housing Finance Agency (FHFA) conservatorship of both government sponsored enterprises (GSEs). The on- or off-balance sheet obligations of those two independent GSEs is just over $5 trillion.[28] The government accounts for these corporations as if they are unconnected to its balance sheet. The U.S. Treasury contracted at the inception of the conservatorship to receive US$ 1 billion dollars in senior preferred shares, and a warrant for 79.9% of the common shares from each GSE, as a fee to fund, as needed, up to US$ 100 billion total for each GSE (in exchange for more senior preferred stock), in order to maintain solvency and adequate capital ratios at the GSEs, thereby supporting all senior (normal) liabilities, subordinated indebtedness, and guarantees of the two firms. Some observers see this as an effective nationalization of the companies that ultimately places taxpayers at risk for all their liabilities[29] The net exposure to taxpayers is difficult to determine at the time of the takeover and depends on several factors, such as declines in housing prices and losses on mortgage assets in the future.[30] Over 98 percent of Fannie's loans were paying timely during 2008.[31] Both Fannie and Freddie had positive net worth as of the date of the takeover, meaning the value of their assets exceeded their liabilities.[32][33] The Congressional Budget Office has recommended incorporating the assets and liabilities of the two companies into the federal budget due to the degree of government control over the entities.[34] The 5-year credit default swap spread for U.S. treasuries had risen to 18 basis points per annum as of 9 September 2008 as a result of market perception regarding the increased debt load of the government.[34]

Thanks. It bothered me that I couldn't figure out what's going on. It bothers me more that Bloomberg can't.

Thanks for the info. Everything is even worse since your friend sent it to you. For example, from Reuters today:

"Five-year Treasury CDS grew to 43.5 basis points versus 43.0 basis points late Friday, it said."

I like the notion simply ending intervention in Iraq will more than adequately fund whatever expenditures are needed to fix the economy, I think its silly though.

:)

Thanks for posting. My understanding of the current economic debacle is that the crisis arose in large part due to a lack of transparency on the credit default swaps being marketed on Wall Street. How do you evaluate the risk in a financial product without knowing what its components are? So this appears to be more of the same. Truly voodoo economics. In truth I have more confidence in Ayizan, Goddess of the marketplace, than in these guys. Can someone explain to me how having the financial transactions of the the Fed performed in a windowless room on a cloudy, moonlit night improves anyones confidence that these actions are to be endorsed by anyone other than the recipients? If Paulson and Bernanke don't know what's happening, as I suspect is the case, I wish they would admit it and begin making offerings to Ayizan.

Yet the Obama team is not calling for widespread public disclosure either, and I think this is a telling point. Why?

Probably because Obama's economic team is headed by the President of the FRB-NY and on the FRB Board of Governors. In other words, he is one of the defendants in Bloomberg's suit.

If you knew that your bank was bailed out, would you pull your money out?

My bank has taken TARP funds. It was disconcerting to see their name on the list but they have also recently taken over deposits of a couple of failed banks at the request of the FDIC. Not sure what to make of the mixed signals.

It's fair to ask for an accounting; but the information should be given to those who need to know and can keep it in confidence - the stakes are truly high here. I mean key congressional leaders and key governors (OH, MI, CA, FL, AZ, etc) should be given a full accounting - especially finance/banking committee members.[Emphasis added]

No, no, no, no. The last thing I want in a President or Senator or Representative is to be treated like a child or an idiot. Remember this promise from Obama? It is the basis of my support for Obama.

I am reminded every single day that I am not a perfect man. I will not be a perfect president. But I can promise you this: I will always tell you what I think and where I stand. I will always be honest with you about the challenges we face. I will listen to you when we disagree and most importantly I will open the doors of government and ask you to be involved in your own democracy again. -Barack Obama

Beyond the need for transparency in government, financial markets need useful and reliable information to function. Bloomberg made a fortune providing it. I really doubt they would have initiated a lawsuit against the FRB just for the general news value of the information.