Monday, May 11, 2009

Fox Guarding the Hen House

WASHINGTON (AP) — The White House told industry officials on Friday that it is leaning toward recommending that the Federal Reserve become the supercop for "too big to fail" companies capable of causing another financial meltdown.

After substituting Bernanke for Paulson, one immediately understands who owns this country.

Any Questions?

To understand what kind of entity the Fed is, click here.

Knowing how this country manages its money is of paramount importance but there's a problem, 99.9% of the people in America don't know and for good reason, We were never taught.

Where ignorance is bliss, / ‘Tis folly to be wise.’” - Thomas Gray:


Addendum:

This week, the government released the results of the stress tests performed on the nation’s 19 largest banks. According to the report, Bank of America’s $34 billion hole was the largest. The Wall Street Journal reports, however, that the Fed Reserve initially estimated Bank of America’s figure at more than $50 billion. Over the last few weeks, a number of banks successfully lobbied the Fed to make the stress tests less stressful:

The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation’s biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.

In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits."

Fed Head, Ben Bernankie

So much for Change, eh?

Just had to link to Slate with their piece called Fed Dread.

to whit...

A quasi-independent, public-private body, the New York Fed is the first among equals of the 12 regional Fed branches. Unlike the Washington Federal Reserve Board of Governors, or the other regional fed branches, the N.Y. Fed is active in the markets virtually every day, changing the critical interest rates that determine the liquidity of the markets and the profitability of banks. And, like the other regional branches, it has boundless power to examine, at will, the books of virtually any banking institution and require that wide-ranging actions be taken—from raising capital to stopping lending—to ensure the stability and soundness of the bank. Over the past year, the New York Fed has been responsible for committing trillions of dollars of taxpayer money to resuscitate the coffers of the banks it oversees.

And this from Robert Scheer & Truthdig...

When N.Y. Fed Chairman Stephen Friedman bought stock in the company that he once headed, and where he still serves as a director, he was already in violation of Federal Reserve policy and was hoping for a waiver to permit him to hold his existing multi-million-dollar stock stash and to remain on the Goldman board. The waiver was requested last October by Timothy Geithner, then the president of the N.Y. Fed and now Treasury secretary. Yet, without having received that waiver, Friedman went ahead in December and purchased 37,300 additional shares. With shares he added in January, after the waiver was granted, he ended up with 98,600 shares in Goldman Sachs, worth a total of $13,330,720 at the close of trading on Tuesday.

Friedman was in violation of the Fed’s policy because, thanks in part to the urging of Geithner and the N.Y. Fed, Goldman Sachs was allowed to become a bank holding company, making it eligible for government bailout funds (an option that Geithner had denied to Goldman rival Lehman Brothers)


Guess who ran this beast prior to Obama becoming president.

Same as it ever was - Talking Heads


Post a Comment