Lessons from Fed's $3.3 Trillion Loan Data Release

There are two major lessons to learn from the Fed's $3.3 trillion loan data release.

First, market credit analysts actually like to and have the ability to quickly analyze large amount of data.  This should forever put to rest the idea that releasing loan-level performance data for a structured finance security or a bank balance sheet would somehow overwhelm the market.

Second, financial stock prices increased and did not meltdown with the release of the data despite the fact that a significant percentage of the toxic credit and real estate assets are still on the financial institutions' balance sheets.  As this blogger has repeatedly said, in the absence of actual data, market participants will assume the worst case.  The loan level data showed the situation to be bad, but not as bad as feared by the market.

In short, the Fed once again showed that the fear of disclosure is worse than the real thing.