Yesterday, we reported that the Federal Reserve was participating in an effort by the biggest central banks in the world to assure liquidity to big european banks who were on the brink of suffering a credit meltdown similar to what occurred here in 2008.

It's a hair on fire move by the central banks to stave off disaster - at least for a little while. And the commitment is open ended, meaning that the Fed and other CB's will do whatever necessary to keep the banks afloat.

You would think such a significant commitment by the US central bank would necessitate some kind of press release or statement from Chairman Bernanke.

Think again:

Look at the post yesterday from the BoE, "Additional US dollar liquidity-providing operations over year-end". At the end of that press release, there is a link to the statement of every other central bank participating in the liquidity measure... except the Fed. In fact, I was looking for the Fed statement yesterday and didn't find it. And that's when I went to the BoE and saw they linked out to the other CB statements (sans Fed).

I think this is curious messaging because the US Treasury Secretary Timothy Geithner is over in Europe right now banging the table about the need for a Euro TARP. Cullen Roche calls it a Euro TALF. Whatever you call it, its a bailout; the original TALF sure was. Is this why the Fed went all radio silent?

I think that's it exactly. The last post I wrote on The European Bank Bailout talks a lot about how unpopular these bailouts are; and since this is effectively a backdoor bank bailout, it makes sense that Ben Bernanke would want to keep mum, "to keep his powder dry" for QE3 as one of my friends e-mailed.

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But the Fed's lack of commentary demonstrates that the other banks are just a cover. First, the Fed feels politically constrained due to its own machinations in the past and the likelihood it will engage in a muscular easing policy if and when the US economy double dips. It does not want to come under attack for this Euro bank activity. Second, dollar swap lines are already in place and have been extended. This policy didn't have to be announced this way. It was only to calm markets and buy time.

I hate to interrupt Mr. Bernanke's plans for printing more money to throw after all that other money he's printed to get the economy rolling again, but when is he going to let us know that he has committed the US to a course of action that may involve a bailout that would make TARP look like a tea party?

Just wondering...