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Dear Fed: The Problem is Solvency, Not Liquidity John M. Mason The Federal Reserve, the Bank of England, and the European Central Bank are all keeping interest rates exceedingly low and are continuing to engage in “quantitative easing.” The central banks have claimed that they are caught in a “liquidity trap” and cannot force interest rates to go any lower, especially below zero. Their solution is to continue to force liquidity into the banking system in order to keep the financial system functioning and to encourage commercial banks to start lending again. /snip The classic central bank response to a...

Fiscal Responsibility Has Moved Abroad 1 comment November 05, 2009 John Browne Last week, to the delight of its media cheerleaders, the government announced that economic growth had returned and the recession had ended. But before we start celebrating one quarter of modest growth, we should realize the only force driving this apparent recovery is an enormous increase in government spending. To finance its largesse, the government is now borrowing at a rate that has ordinary citizens and the international community extremely concerned. Leading into the first election season under Obama's reign, this unprecedented government borrowing and spending is creating...

Nov. 4, 2009, 6:53 p.m. EST Fed to markets: Let the bubble blow Commentary: Job losses rule; not commodities, dollar By David Callaway, MarketWatch SAN FRANCISCO (MarketWatch) -- Let the bubble blow. That's the signal the Federal Reserve gave to commodities markets and the stock market Wednesday after keeping interest rates unchanged at historic lows and making no noise about when its policy of easy money will end. That markets fell in the last hour of trading after the Fed decision inspired a brief rally had more to do with concern about Friday's jobless numbers and Washington meddling in the...

This year's conference of the Francophone European Association for Bahá’í Studies (Association francophone européenne des études bahá’íes, AFEEB) on 24 and 25 October 2009 in Luxembourg discussed the future world order and global governance. The programme included a presentation of the concept of a United Nations Parliamentary Assembly (UNPA) by the Chairman of the Committee for a Democratic U.N., Andreas Bummel. Outlining the path towards a directly elected world parliament, Mr Bummel stressed the "spiritual dimension" of the efforts. "The establishment of a UN Parliamentary Assembly would represent a changed consciousness. For the first time in human history such a...

NEW YORK (CNNMoney.com) -- Stocks ended mixed Wednesday, giving up bigger gains after the Federal Reserve kept interest rates unchanged and said it will keep them low for an extended period. The Dow Jones industrial average (INDU) gained 30 points or 0.3%, according to early tallies. The Dow had gained as much as 156 points in the afternoon, but couldn't sustain those gains through the close. The S&P 500 (SPX) gained 1 point, or 0.1%, and the Nasdaq composite (COMP) lost a few points. Stocks rose through the early afternoon as investors welcomed a pair of labor market reports that...

WASHINGTON – Treasury Secretary Timothy Geithner says the economic recovery "could be a little choppy" and it's going to take a while. Geithner told NBC's "Meet the Press" that bringing back jobs and confidence of investors will be the real test of recovery. He declined to say whether the recession is over, saying economist will figure that out years from now.

As I walked home recently from a weekend trip to the grocery store, I passed a total of 13 vacant offices with signs saying "for lease" or "for sale." These spaces ranged from approximately 500 to 5,000 square feet according to their signs, and they are stretched along a main, commercial street in the center of Tucson, AZ. There is also an eight-screen movie theater that sits empty as well. These empty commercial spaces ... are empty now, and have been for quite some time. I found it intriguing that both in the central portion of Tucson and also in...

In what could have been the biggest piece of news today, yet making little headway into the media, the Fed announced that it is adopting a policy statement supporting "prudent commercial real estate loan workouts." And even though in traditional Fed fashion, the statement says a lot but is even more vague, some of the implications from a more nuanced read have very serious adverse implications for commercial real estate. The section: Financial institutions that implement prudent loan workout arrangements after performing comprehensive reviews of borrowers' financial conditions will not be subject to criticism for engaging in these efforts, even...

In 1979, President Jimmy Carter named Paul Volcker to head up the Federal Reserve. As chief of the US central bank, he was instrumental in ultimately slaying the inflationary spiral that was running rampant. To this day, he is one of the most respected voices on the subject of inflation. He was an advisor to the Obama campaign and has position in the current administration. However, some insiders say that Volcker’s voice in the administration is being muted by competing viewpoints. Volcker is respected in part because he was vigilant in maintaining his independence from the political pressures of Congress...

 Glenn Beck got this from one of his economic "deep throats" who knows the way the world works This was on today's show  Fresh from Glenn Beck show a very good explanation of economic affairsUnder Jimmy Carter the money supply was jacked up 13% to stimulate the economyStagflation set in so Paul Volcker tightened up the money supply by jacking up rates to 20%So 20% cured 13%This time around the money supply has been increased by 130%The Fed is loaning banks and Wall Street money at essentially 0% interestThe Vast majority of this money is retained and not lent out...

Recently, Zero Hedge presented a snapshot analysis of the various securities that made up the triparty repo agreement involving JPM, Lehman and the Fed. We uncovered numerous bankrupt companies' equities that were being pledged as collateral for what ultimately was taxpayer exposure. To our surprise, this discovery is not an exception... (snip) On two occasions last year: on March 16, 2008, and subsequently on September 14, 2008, the Federal Reserve first established what is known as the Primary Dealer Credit Facility (PDCF), and subsequently amended it, so that the Fed, in becoming the lender of last resort, would allow any...

The biggest decision of the economic recovery will be made in the next six months, and Barack Obama will have almost nothing to do with it. Forget the debate over TARP, and never mind the questions about a second stimulus. This decision is about when to pull out $1 trillion that’s propping up the U.S. banking system. And it will be Federal Reserve Chairman Ben Bernanke and his Fed colleagues who make the call

Congress put American taxpayers on the hook for $700 billion last year when it approved the massive bailout to paper over the imprudent lending decisions of nine Wall Street giants: Bank of America, Citigroup, Wells Fargo, JP Morgan Chase, Goldman Sachs, Morgan Stanley, Merrill Lynch, State Street and the Bank of NY Mellon. The bailout was essential to save the nation from a complete economic meltdown. Or so insisted President George W. Bush, Treasury Secretary Hank Paulson, Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi. One year later, however, a little-noted report by the U.S. Government Accountability Office...

Yesterday, the White House pay czar, Ken Feinberg, did his round of interviews to explain the massive cuts in executive pay for bailed out firms. The Washington pay czar who's ordered steep pay cuts for executives at bailed-out firms could have practically unlimited power to regulate compensation at any company that gets federal funding, lawyers say -- even if his legal authority is sketchy. The move raises questions about whether the mandate will be limited to the seven firms Kenneth Feinberg is currently targeting -- and whether it could trickle down to smaller companies. "He has a lot of authority...

The Federal Reserve may end up taking no losses on the emergency programs it put in place to fight the crisis, New York Fed president William Dudley said on Thursday, a view that was shared by Fed vice chairman Donald Kohn. "The Fed may ultimately avoid any losses on any of the programs," Dudley said in brief opening remarks before moderating a panel at the Boston Fed's annual conference. Dudley said the emergency facilities were shrinking naturally. "Things have gone pretty well," he said of the exit of some of the liquidity facilities. Fed vice chair Donald Kohn mirrored that...

The Math Manifests Itself in the Charts… Sorry, but the American capital system is dead. Not dying, dead… sorry, it’s all over, the only part of it left is watching the show land on the rocks. How did it get that way? Did you view FRONTLINE: The Warning? Bad math that was created and supported by fraud and deception in the shadow banking world. That world is still being hidden and supported today in an attempt to breathe never ending life into an impossible math situation. It was allowed to happen because those creating the false money were, and are,...

WAL-MART DROPS, eBAY FALLS LATE Wal-Mart Stores shares lost ground, ending down 2.1 per cent at $US50.63, after the world's largest retailer said it would slash prices as it readies for what is likely to be a tough holiday shopping season. The S&P consumer discretionaries index declined 1.5 per cent. After the bell, eBay Inc, the global e-commerce site, forecast fourth-quarter profit and revenue at the low end of analysts' estimates, quashing investors' hopes for a substantial turnaround at its main marketplaces division during the crucial holiday season. In extended-hours trading, shares of eBay fell 5 per cent to $US23.75....

Washington D.C. October 20, 2009 -Today, Senators Jeff Merkley (D-OR) and Bob Corker (R-TN) introduced the Federal Reserve Accountability Act, an attempted compromise on the issue of transparency for America's secretive central bank. The bill would permit an audit of the Fed's actions in the Troubled Asset Relief Program (TARP) and similar high profile bailouts, but would not allow Congress to review the Fed's inflation of the money supply or the its agreements with foreign central banks. Legislation that would bring a full audit of the Fed, Congressman Ron Paul's H.R. 1207 and its Senate companion S. 604, has gained...

THE US government has $52 billion stashed away that hasn't yet been spent! Quick, call President Obama's bookkeepers. How'd they miss this? A year ago, that amount would have caused at least a wow, or maybe even a holy cow. And my first sentence above would have deserved the exclamation point I jokingly put at the end of it. But these days, when it costs $787 billion to put a TARP over bad bank assets, an astounding $700 billion just to attempt an economic rescue and $3 billion simply to lure people into new car showrooms, that $52 billion is...

William K. Black - professor of economics and the senior regulator during the S & L crisis - says that that the government's entire strategy now - as during the S&L crisis - is to cover up how bad things are ("the entire strategy is to keep people from getting the facts").Indeed, as I have previously documented, 7 out of the 8 giant, money center banks went bankrupt in the 1980's during the "Latin American Crisis", and the government's response was to cover up their insolvency. Black also says: There has been no honest examination of the crisis because it...

Dispute of Paulson, Bernanke testimony Court documents show that federal regulators were told about billions of dollars in bonuses awarded to Merrill Lynch executives during the company's takeover by Bank of America - contradicting statements to Congress by Federal Reserve Chairman Ben S. Bernanke and former Treasury Secretary Henry M. Paulson Jr. The Securities Exchange Commission (SEC), in a brief filed in ongoing litigation with Bank of America Corp., said the bank informed the Treasury Department and the Federal Reserve of the Merrill Lynch bonuses as early as Dec. 17 - weeks before the government approved a $20 billion bailout...

With everyone lately focused on China's foreign reserve position, analysts have forgotten that America also has an International Reserve account consisting of foreign currency positions, as well as gold reserves and equivalents. And while the total combined holdings as of the most recently reported period are a joke compared to China's $2+ trillion, the most recent number of $133.6 billion does raise red flags, particularly when one traces this number's level throughout the year. By purchasing $40 billion in SDRs virtually overnight, what the Fed has done is to increase the value of the entire basket pro-rata, while in the...

With everyone lately focused on China's foreign reserve position, analysts have forgotten that America also has an International Reserve account consisting of foreign currency positions, as well as gold reserves and equivalents. And while the total combined holdings as of the most recently reported period are a joke compared to China's $2+ trillion, the most recent number of $133.6 billion does raise red flags, particularly when one traces this number's level throughout the year. We present a graphic representation of the US International Reserve Position over the past year:

In the Eye of the Commercial Real-Estate Hurricane The Federal Reserve is worried that banks are slow to recognize commercial real-estate losses and is warning that the financial system may be headed for a new wave of painful write downs. Wait a minute. The last time Deal Journal checked with some analysts about the big banks’ real estate exposure they said the situation was improving. Here is Barclays’ takeaway from its banking conference last month. “Following commentary from our financial services conference, we believe commercial real estate prices may have bottomed for the time being, resulting in no meaningful markdown”...

Sometimes You Just Gotta Say WTF? I said enough last night ( I feel like I have a post post hangover). WTF - Zero Hedge - The Fed's 30 Minute Agency Monetization Window. "These shell games are getting tiresome. A half an hour turnaround time between issuance and buyback? Really Ben?". Zero Hedge is the WTF center of the universe. WTF - Mish - Can We Really Trust The Leading Economic Indicators? "I would agree that a slip back into recession in the 4th quarter is unlikely, assuming of course it is even possible. Bear in mind, we have not...

The calendars, obtained by the AP under the Freedom of Information Act, offer a behind-the-scenes glimpse at the continued influence of three companies — Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc. — whose executives can reach the nation's most powerful economic official on the phone, sometimes several times a day. What the calendars show, however, is that only a select few can call the treasury secretary.

The Federal Reserve is now faced with a challenge that is akin to threading a needle by throwing a spool of thread across a football field. It is attempting to keep loose money and quantitative easing policies in place long enough not to stymie the nascent recovery while pulling them back in time to avoid massive inflation. It's a Hail Mary pass with an impossibly small target while facing a blitz. In today's Wall Street Journal, Nouriel Roubini and Ian Bremmer lay out a series of policy prescriptions for how they think the Fed might be able to avoid creating...

"Today, I was listening to the Glenn Beck program and heard about Rep. Paul Kanjorski’s comments on the financial crisis that took place on September 15th, 2008. According to Mr. Kanjorski: “On Thursday [September 15] , at roughly 11 AM The Federal Reserve noticed a tremendous draw down of money market accounts in the USA to the tune of $550 Billion dollars in a matter of an hour or two. Money was being removed electronically. The treasury tried to help with $150 Billion, but could not stem the tide. It was an electronic run on the banks The treasury intervened...

All of it begs the question not only whether you or I will have two nickels to rub together, or two gold eagles, or a bundle of six month US Treasury bills, or a zillion shares of Apple, or a gainful vocation, or a roof over our heads, or a hot meal at the end of the day, or a safe place to sleep, or a country we can recognize. I’ve done my share of forecasting, with some episodes of notably bad timing. I don’t do it for grandstanding effect but to provide some basis for knowing what to do...

Sept. 28 (Bloomberg) -- European Central Bank President Jean-Claude Trichet said it is “extremely important” to have a strong U.S. dollar.

Warning - Funny but VERY, VERY gratuitous use of the "F" word. Some vulgar body movements as well. (R-rated!) Please do not view this video if crude or vulgar language or images offend you.

The visits had a ritual quality. Three times a year, a coalition of Chicago community groups met with the Federal Reserve and other banking regulators to warn about the growing prevalence of abusive mortgage lending. They began to present research in 1999 showing that large banking companies including Wells Fargo and Citigroup had created subprime businesses wholly focused on making loans at high interest rates, largely in the black and Hispanic neighborhoods to the south and west of downtown Chicago. The groups pleaded for regulators to act. The evidence eventually led Illinois to file suit against Wells Fargo in July...

Federal Reserve Chairman Ben Bernanke has declared that the recession is over. Addison Wiggin, executive publisher of Agora Financial, isn’t buying it. In an interview with Dan Mangru of Newsmax TV, Wiggin said that the recent economic data, such as GDP and retail sales, don’t tell the whole picture. “It’s fictitious growth. It’s government stimulus making its way through the economy. But we don’t see any real recovery at the moment.” Watch the Exclusive Interview with Newsmax TV's Dan Mangru — Click Here Now! Although the administration has spent more than $19 trillion dollars on bailouts, Wiggin still says that...

The Federal Reserve, under pressure from Congress to be more transparent,is "giving serious consideration" to releasing the names of firms that receive loans from the central bank, a top Fed official said Friday. At a House hearing,Fed General Counsel Scott Alvarez struck a conciliatory tone when a top lawmaker indicated that he wanted more information revealed about the Fed's loans. Rep. Barney Frank(D., Mass.),chairman of the House Financial Services Committee,said the central bank's loans and securities transactions should be disclosed, with a lag to avoid a short-term influence on financial markets. He said he wanted to include a provision to...

But the question of what the Federal Reserve is doing with trillions of taxpayer dollars makes the ACORN scandal look like peanuts. For the first time, a hearing is being held on Rep. Ron Paul's Federal Reserve Transparency Act of 2009 (H.R. 1207) by the House Committee on Financial Services. Grass-roots pressure has been credited with forcing the hearing into what has happened to trillions of dollars supposedly spent by the Federal Reserve on the stabilization of the financial system.

<p>Legislation giving U.S. government investigators broader authority to audit the Federal Reserve could erode confidence in the central bank’s independence and ability to conduct monetary policy, a top Fed official will tell lawmakers Friday.</p> <p>Fed General Counsel Scott Alvarez, in testimony prepared for a Friday hearing, said legislation in the U.S. House of Representatives giving the Government Accountability Office greater leeway to examine the central bank could have a detrimental effect.</p>

House lawmakers want to pry open the books of the famously secretive Federal Reserve with legislation that would subject the central bank to a sweeping congressional audit. The effort is overwhelmingly bipartisan. Hardline conservatives and liberal Democrats have banded together in their criticism of the Fed as a major power broker in the financial system that doesn't answer to Congress. Friday's debate comes as lawmakers consider a proposal by President Barack Obama that would give the Fed new powers to prevent another economic crisis. "Nobody in my district thinks that the Fed has done such a wonderful job of running...

U.S. Rep. Alan Grayson, the self-styled progressive Democrat from Orlando, would seem to have little in common with U.S. Rep. Ron Paul, a libertarian Republican from Texas who ran for president last year. But they both share a deep-seated mistrust of government secrecy in general and the Federal Reserve in particular. Grayson was elected to Congress last year just as the Fed was parceling out the better part of $700 billion to U.S. and foreign banks considered at risk of failure, as part of the Bush (and Obama) administration's response to a worldwide financial crisis. And even as he began...

BIG CREEK, Ky. (AP) -- Authorities said a U.S. Census worker died by asphyxiation but were releasing few other details about the mysterious case nearly two weeks after Bill Sparkman's body - with the word "fed" scrawled on the chest - was found hanging from a tree near a family cemetery secluded by Appalachian forest. The word appeared to have been written with a felt-tip pen, Clay County Coroner Jim Trosper said Friday.

Editor's Note: After many long years of working to shed light on the ultra-secretive Federal Reserve, Ron Paul's "Audit the Fed" bill is finally getting a hearing on Friday, 09-25-09. In that spirit, we present to you this speech he made in 2007 on the dangers of Federal Reserve policy, and the institution itself... please read, comment, and share.

The U.S. Federal Reserve is studying the idea of borrowing from money market mutual funds as part of eventual steps to withdraw stimulus, the Financial Times reported on Thursday. The Fed would borrow from the funds via reverse repurchase agreements involving some of the huge portfolio of mortgage-backed securities and U.S. Treasuries that it acquired as it fought the financial crisis, the newspaper reported, without citing any sources.

MANCHESTER, Ky. – When Bill Sparkman told retired trooper Gilbert Acciardo that he was going door-to-door collecting census data in rural Kentucky, the former cop drawing on years of experience warned: "Be careful." The 51-year-old Sparkman was found hanged from a tree near a Kentucky cemetery and had the word "fed" scrawled on his chest, a law enforcement official said Wednesday, and the FBI is investigating whether he was a victim of anti-government sentiment. "Even though he was with the Census Bureau, sometimes people can view someone with any government agency as 'the government.' I just was afraid that he...

WASHINGTON (AP) -- A U.S. Census worker found hanged from a tree near a Kentucky cemetery had the word "fed" scrawled on his chest, a law enforcement official said Wednesday, and the FBI is investigating whether he was a victim of anti-government sentiment

The Fed released its minutes a few hours ago. These are the most predictable minutes that I can remember. To no one's surprise the Fed kept the Fed Funds Rate at its current levels. Also to no one's surprise, the Fed analyzed the current state of the economy as bottoming out and steadying. Information received since the Federal Open Market Committee met in August suggests that economic activity has picked up following its severe downturn. Conditions in financial markets have improved further, and activity in the housing sector has increased. Household spending seems to be stabilizing, but remains constrained by...

For a speech that some on the left stupidly maintained was an elaborate “prank,” it sure does seem to have been treated pretty seriously by those who were there (seriously enough, in fact, to inspire two Palin-haters to walk out in a huff). Alas, the event was closed to the press so this tiny clip of her burnishing her “Main Street” credentials ahead of 2012 is the best I can do, but the Journal got hold of the entire vid somehow and published some of the choicer excerpts. She touches on “death panels,” of course, but for my money this...

Markets were up across the board yesterday. The Dow was up .52%, the S&P 500 was up .66%, and the NASDAQ was up .39%. All three represent highs for 2009. Futures are pointing up this morning though futures are up marginally. All are up less than half a percent. The big news of the day is almost certainly going to come this morning when the minutes of the FOMC meeting are announced. It's universally expected that rates will stay the same however the markets are likely to hang on every word that Fed Chairman Ben Bernanke says along with the...

WASHINGTON -- Consensus is building in the Senate for legislation that would significantly weaken the Federal Reserve by stripping its power to oversee banks and hand that job to a single federal bank regulator. The proposal by Senate Banking Committee Chairman Christopher Dodd to merge federal prudential oversight into a single regulator differs from a plan by President Barack Obama. But it's gaining traction among Dodd's colleagues who think the Fed didn't do enough to prevent the current market crisis. "If you look at the record here of the failure of the regulatory bodies, all roads seem to lead to...

The US Federal Reserve is contemplating a surprise move that could effectively make it the "bonus tzar" for more than 5,000 banks.

Federal Reserve Bank continues working with the Mexican government to make it easier for illegal aliens to export US money. The Fed is currently devising several programs that will extend banking services to illegal aliens, and most of this money transfer scheme was created under the radar with few—if any—political figures are discussing the subject.

Glenn Beck just tweeted this - view the video!