Lawyers for Bank of America's Merrill Lynch division are trying to muzzle a financial blogger who has published excerpts of economic reports which are honest and critical of the Obama administration, and its rosy forecasts about the global economy.
The U.S. government, through the Troubled Asset Relief Program (TARP), is now a major shareholder in Band of America.
According to an exclusive report on the financial blog The Big Money by journalist Paul Smalera, the online site Zero Hedge has published six posts in which it has cited a report by former Merrill Lynch chief economist David Rosenberg.
The reports were mostly bearish takes on the U.S. economy, and were written by a blogger who goes by the pseudonym of Tyler Durden.
Attorneys for Merrill Lynch sent cease-and-desist letters — known informally as takedown letters — claiming that Durden's copy violated the copyrights of Merrill Lynch.
The letters were written under the statutory authority of the Digital Millennium Copyright Act (DCMA), which, written in the late 1990s, empowered owners of intellectual property, mostly record and movie companies, to go after alleged copyright violators without a court order.
Most interestingly, Smalera of The Big Money notes, financial journalists routinely write reports which have excepts from investment bank reports, even proprietary reports, and generally this is encouraged by the industry.
"As a journalist, I've never had any trouble getting the contents of a report for a story I was working on. Indeed, press officials at banks have often seemed pleased or at least placated by the attribution that comes with citing their reports in a story," writes Smalera.
There is a back story worth noting here, regarding the Merrill Lynch reports by Rosenberg.
These bearish, even cynical reports issued from his desk have been serving as a rallying point for financial bloggers who don't believe that the economy is recovering as fast as the mainstream media, and the Obama administration, wish.
"I would imagine that they would not be too happy with this kind of stuff floating around, especially the fact that he got more bearish towards the end of his tenure," Durden told The Big Money.
Rosenberg's reports are famous for snarky comments: "We don't really share the view that the recovery, if and when it comes, will be sustained. We understand the historical record that even in the face of monumental fiscal and monetary easing, it takes a good four years for the economy to work through the aftershocks of a collapse in credit and asset values. While most economists are now waving the pom-poms, we find very few market makers who share their enthusiasm."
Another Rosenberg report quoted by Zero Hedge said: "There is no doubt that the economy is no longer in free-fall, but it is hardly stabilizing, even if the data have improved from deeply negative trends at the turn of the year. There are pundits claiming that because initial jobless claims have managed to come off their recent highs, the end of the recession is in sight. That is a fairy tale, in our opinion."
Rosenberg was the first of the major investment bank economists to call this current downturn a recession, according to a report on Bloomberg News.
Since the U.S. government owns shares in Bank of America as a result of TARP funding, the specter of government interference in free speech is being raised once again.
A new book by economic historian Burton Folsom, Jr., called “New Deal or Real Deal: How FDR's Economic Legacy Has Damaged America,” reports that President Roosevelt used the Federal Communications Commission to silence critics of the New Deal, by denying radio stations who reported adverse stories on him their license renewals.
"What we can’t survive is the Obama administration’s attempt to silence their critics and dismantle the First Amendment and its guarantee of freedom of speech," writes Herb Denenberg, former Pennsylvania Insurance Commissioner and Utilities Commissioner, in the The Philadelphia Bulletin.
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