Wednesday, August 19, 2015

INSANE Bloomberg Breaks Embargo

The Federal Reserve July monetary policy meeting minutes were scheduled for release at 2 p.m Eastern Time, today. At 1:47 p.m., the Fed put out a statement saying that the embargo on the minutes had been broken.

The minutes are extremely sensitive information as traders often react to details of the minutes, and considering that the Fed is close to increasing rates, the minutes are even more significant.

But Bloomberg blasted this headline out before the embargo expired: MOST FED OFFICIALS IN JULY SAW CONDITIONS FOR RATE RISE NEARING. It appears that the embargo was broken at aprox. 1:35 p.m.

Bloomberg has since issued this statement:
In the process of preparing embargoed material we inadvertently sent a headline ahead of the embargo,
What is really stunning about this is that the Fed is providing the data to Bloomberg in advance. This type of information is extremely valuable to have in advance and I am sure there is more than one hedge fund manager or bond trader who wouldn't think twice about paying for this information, to get it even two minutes in advance.

In 2013, I wrote:
I am aware of a money manager, back in the old days, who paid a reporter to show up at the headquarters of the Bureau of Labor Statistics in Washington D.C. and grab the employment report before it was published across the wires. Back then, the BLS would release a hard copy of the number to reporters 15 to 30 minutes before it was to be officially released.  LOL, the report would have stamped on it "Embargo, not to be released until x time."  But the reporter on the payroll of the money manager, as soon as he had his copy, would run across  the street in front of the BLS headquarters to Union Station, grab a payphone and call the numbers into the money manager on Wall Street who was waiting for the call so he could put on bond trades ahead of the number being publicly released.
I am also aware, way back when, of a hedge fund-type operator, who would occasionally be tipped off minutes before news came across the Dow Jones wire, of takeover etc.. I'm not sure, who his source was and it didn't happen often, but when it did, it was valuable information that you could trade for serious $$$.
As far as I know, the BLS now locks all reporters in a room when a sensitive release is about to be issued to them until the embargo time has passed, not allowing them to go to the bathroom or even have their cell phones with them. It is simply stunning to me that the Fed provides advance copies of its releases, in this day and age, in advance, to any news media organization.


UPDATE: How The Bureau of Labor Statistics Releases Sensitive Data vs. The Federal Reserve

UPDATE 2: Top Bloomberg Editor Gone After Federal Reserve Embargo Break


  1. “””””What is really stunning about this is that the Fed is providing the data to Bloomberg in advance”””

    This is not surprising at all, that is what the Fed is all about, giving special treatment to special people. Insider news agencies get early information, so do big banks.

    Remember during the 2008 meltdown, the FED admitted it was in daily and even more often talks with their big bank buddies. What do you think was being talked about, where to have lunch, no, the FED was passing information about what FED/Treasury policies were going to be. Information that was not given to the public.

    The same with the primary job of the FED, bailing out the big banks with 0% loans. Do you or I get to go to the FED and get handed a billion dollars at 0% interest, once again no.

  2. One of the great theatrical devices employed to hide the Fed's manipulative favoritism and ultimate responsibility for periodic financial crises is to isolate, in the minds of the public, a particularly odious financial criminal or criminals that is either responsible for some of or representative of the type of activity that leads to a crises that occur every 7-8 years. In 87, blame for the crash was placed on insider trading, Boresky, Milken, and money manager portfolio insurance schemes. Many books were written enforcing this theme. In 01, blame for the crash was focused on 9/11, of course, but also the control frauds at Enron, Worldcom, and Tyco, as well as the associated personalities of Skilling, Ebbers, and Kozlowski. Who could forget Kozlowski's $10k umbrella stand? In 08, you had Bear, Lehman, subprime mortgages and Bernie Madoff. In each case, the mind of the general public was focused on a few bad apple private actors and the Fed was never implicated. If anyone did raise an issue with the Fed, blame was deflected back to market actors or the excuse was that they were simply caught unawares.

    I hope when the next financial crisis occurs (it has been 7 years) stories like this get revisited and reviewed very closely. The Fed being at the root of manipulative favoritism combined with economy destroying policies has to be exposed for all to see.

  3. How did Bloomberg get RICH????? By CHEATING and INSIDER TRADING

    1. No doubt he's as connected as you can get. However, the main source of his wealth is from his company that sells "Bloomberg computer terminals" to every single financial services company. They are news wire aggegators, electronic communications systems, and trading platforms for various asset classes. You basically can't work on Wall Street without one. Subscriptions run in the $10k and up annually range each. They can also be paid for by brokerages via trading commissions in an arcane legal arrangement with market participants called a soft dollar arrangement.