Free Republic

Wall Street is an economic extension of the big banks, which are the government-protected segment of a government-created cartel: the national bank system. The government controls entry into this cartel, thus offering above-market rates of return to those who are approved. The primary enforcer of this cartel is the Federal Reserve System. The FED provides the fiat money that in turn provides banks with reserves to lend. It also serves as the lender of last resort -- officially, to the government; operationally, to the banks. This keeps the largest banks from having to face free market competition. We can use...

Ben Bernanke will win confirmation to a second term as head of the central bank. But it won't be pretty. The movement in Congress to rein the Fed in is gaining steam. Federal Reserve Chairman Ben Bernanke has a tough road ahead. Very tough. Bernanke, whose four-year term expires in January, is certain to face a contentious Senate banking panel at his confirmation hearing, set for Dec. 3. He is also defending against the sharpest attack on Federal Reserve powers ever. The latest blow came last week, when a House panel overwhelmingly agreed to tack on to must-pass regulatory reform...

The U.S. dollar weakened broadly Monday, hitting a six-week low against the yen after a Federal Reserve official affirmed expectations U.S. interest rates would stay low for some time. A low Fed funds rate would limit returns on many U.S. investments, prompting investors to diversify out of the currency and seek other, riskier assets with higher yields. St. Louis Federal Reserve President James Bullard said Sunday the Fed should keep alive its mortgage-related assets purchase program beyond a planned end date to help stimulate the economy. "It's a more tentative risk-seeking environment due to mixed flows into year-end central bank...

Since the summer of 2008, the U.S. Treasury and the Fed have initiated a welter of new spending, lending, and subsidizing programs ostensibly aimed at steming the recession that began early in that year and deepened quickly in its last quarter and in the first quarter of 2009. Among the most notable of these programs have been attempts to prop up the real estate market and the residential construction industry, where the Fed’s easy-money policies in the first half of the present decade induced lenders to make millions of mortgage loans to home buyers who would not have qualified for...

And setting us up for a massive stock-market crash, to boot. Where the Wild Things Are is a beloved children's book and now a beautiful movie. But in the investment world there are really scary wild things lurking about in the hidden recesses of the economic landscape. Today we look at one of the unintended consequences of the Federal Reserve's low interest rate policy. For quite some time, I have been arguing that we are faced with no good choices, not just in the US but in the entire "developed" world. I see a low-growth, Muddle Through world over the...

Another Saturday health care vote appears to be in the works, this time in the Senate. While the Senate may be may be taking its cue from the "success" of the House in its' Saturday vote, there are a few differences between the two bills that could push any resolution of the health care debate well into next year. Still conventional wisdom has it that if Reid is able to pull together the 60 votes he needs in this important opening vote, some 2000 page piece of legislation will eventually make its'way to the President's desk. Holdouts can be bought...

A bipartisan effort gaining momentum in the House to require periodic audits of the Federal Reserve is little more than "great PR," one Republican senator stressed Friday. Although Reps. Ron Paul (R-Tx.) and Alan Grayson's (D-Fla.) effort to subject much of the Fed's records, communications and decisions to public scrutiny now has well over 300 supporters in the House, not among them in the Senate is Judd Gregg (R-N.H.), who told CNBC this morning that the amendment was little more than "pandering [to] populism." "For the Congress to get into monetary policy, it's just absolutely inexcusable," he said. "We can't...

Political frustration over the rescue of Wall Street and high unemployment erupted in the House Thursday, with one committee threatening to impose tighter scrutiny on the Federal Reserve and another trading verbal insults with Treasury Secretary Timothy Geithner. The House Financial Services Committee voted, 43-26, to approve a measure sponsored by Texas Republican Ron Paul, vociferously opposed by the Fed, that would direct the congressional Government Accountability Office to expand its audits of the Fed to include decisions about interest rates and lending to individual banks. The Fed says the provision threatens its ability to make monetary policy without political...

Today the house finance committee passed what will surely be a historic amendment 43-26. This a very straight forward amendment, allow the Federal Reserve to be audited without question. One would think that such a simple request should pass without objection, right? After all, why would we want a highly political organization such as the Federal Reserve possibly hide anything from the American Public? Congress created the Fed and Congress can destroy the Fed (technically speaking). Examine who voted to maintain the status quo and against auditing the engine of inflation, credit and virtually every single recession including the Great...

Former Federal Reserve chairman Alan Greenspan and Paul Volcker wrote the House Financial Services Committee earliy this month that they opposed a provision, backed by Rep. Ron Paul (R., Texas) that would expand the congressional Government Accountability Office’s audits of the Fed. The committee, ignoring the pleas from the two, endorsed the provision Thursday. Greenspan and Volcker, in a letter sent to the committee’s chairman and ranking Republicans, warned that the provision threatened the ability of the Fed to foster price stability independent of political interference.

This one is definitely worth a read folks. It appears that Representative Cummings, along with a half-dozen other Representatives, have had enough of The Fed's games. They are now calling for a FULL CONGRESSIONAL REVIEW of THE ENTIRE FEDERAL RESERVE SYSTEM, including A FULL PUBLIC AUDIT. GET ON THE PHONE NOW TO YOUR REP AND RAISE HELL. MOMENTUM ON THIS IS BUILDING, AND IT IS UP TO **US** TO MAKE A DIFFERENCE. To this I say: It's about damn time. (click for larger images)

HONG KONG/SINGAPORE (Reuters) - Federal Reserve officials on Thursday downplayed the consequences of the falling U.S. dollar, underscoring that deflation is still a threat, especially with commercial real estate prices falling. Dallas Fed President Richard Fisher said in an interview with Market News International that the weakening dollar, which hit a 15-month low against major currencies on Monday, is only one of the factors the Fed watches when setting policy. "You pay attention to this," Fisher said in reply to a question about the effects of a weaker dollar. "On the other hand, in terms of its inflationary input, unless...

In case anyone needed another big move in gold prices to confirm the coming currency crisis, there is was Monday with gold at $1,140 (and even a few dollars higher in after- hours trading). Oil prices, which have doubled since lows at the end of 2008, inched ahead Monday as well, while the dollar continued its slide. For the ancient Greeks it was the three fates that spun the destiny of life, measuring and finally cutting it short. Now, highlighted by events of the past few days, the unmistakable hands of reserve currency, monetary, and fiscal fates can be seen...

In the old days the Federal Reserve never cared about asset bubbles, aside from a Fed chairman like Alan Greenspan warning about "irrational exuberance", not much was done to stop asset bubbles until there was growing price inflation. Then the battle would be joined to fight the inflation with tighter monetary policy, a byproduct was a busting of the asset bubbles. Somehow, of late, talk has turned to the Fed responding to asset bubbles as part of their role. The Fed seems to have realized that they have enough problems to deal with besides taking on asset bubble busting as...

The full SIGTARP report on AIG and its counterparty payments has been released. It contains all you need to know about the NYFED's bailout of Goldman Sachs. We are currently going through the report, and will post our findings as we have them. Key timeline events: AIG's collateral postings: Total taxpayer subsidies: (FOR SOME REASON THIS GRAPH WON'T SHOW UP SO AT SITE) Historical and current AIG CDS exposure: THIS ONE WON'T SHOW UP EITHER SO SEE AT SITE And the most critical conclusion presented by Neil Barofsky: The SIGTARP blasts the Fed's ongoing desire to keep everything hidden and...

ntral banks will be net buyers of gold this year as they diversify away from the U.S. dollar, marking a reversal of a decades-old trend, global commodities investment fund BlackRock said on Monday in comments that helped drive bullion to fresh record highs. Investment in gold by central banks has picked up recently, with India buying 200 metric tons from the International Monetary Fund, and Taiwan's central bank is studying whether to raise the amount of gold in its forex reserves, with China and South Korea also debating the issue. BlackRock is one of the world's largest fund managers, boasting...

The U.S. central bank is monitoring the declining value of the dollar closely as part of its commitment to both jobs growth and price stability, Federal Reserve Chairman Ben Bernanke said Monday. AP In a rare commentary on the value of the dollar, Bernanke drew a link between its current weakness and inflation risks. Bernanke also said that regulatory reform has to address the too-big-to-fail issue, and it must be possible for financial firms to fail without dragging the broader system with them. Instead, systemically important banks should be closely supervised and there should be an alternative to government bailouts....

Fed May Cause Next Crisis, Hong Kong’s Tsang Suggests (Update2)

Rep. Ron Paul (R-Texas) has a bill with 300 sponsors that won’t pass, which is very unfortunate, but revealing. Let me suggest a variation that might pass, and would be extremely valuable: Let’s begin with a complete audit of all bailout programs initiated by the Federal Reserve Board, the Federal Deposit Insurance Corporation and other relevant agencies. This audit would be all-inclusive, from top to bottom. It would include zero- to low-interest loans and financing facilities. It would include federal purchases of any form of financial instrument that was initiated in response to the financial crisis. It would include all...

Even if he wants to tighten, David Rosenberg reminds us of the one reason why Ben Bernanke might find that impossible. The reason — there is a wave of mortgage refinancings coming in the housing market for one, and not only that, but in the commercial space, there are 2.7 trillion of debt coming due through 2011 and another 1.5 trillion of leveraged loans. In other words, the default rate is going to rise even further and the Fed tightening policy would only aggravate that situation. In other words, the Fed is simply immobile for at least the next two...

All we need is for The Fed to encourage and promote the dollar carry trade, and we can pump the stock market to the moon - even though unemployment continues to skyrocket and consumer confidence, a leading indicator of consumer spending and activity, was in the tank this morning. You need no further proof that the stock market has exactly nothing to do with the consumer or the broader economy - that it has become nothing more or less than a raw casino that responds to one and only one thing - the Federal Reserve and Federal Government's encouragement of...

Investors and political analysts should keep a sharp eye on the congressional assault on Federal Reserve independence. This is a transparent effort by members of Congress to use the financial-reregulation bills as a means of applying political leverage to stop the Fed from any 2010 midterm-election-year exit strategies that might raise the federal funds target rate, stop the purchases of mortgage-backed bonds, and drain cash from the economy. The Chris Dodd bill unveiled this week spells it all out. The White House would appoint the chairmen of the regional Federal Reserve banks (New York, Dallas, Richmond, etc.), subject to confirmation...

For two and a half years The Market Ticker has pointed out the foibles of The Fed and other claims of "help" for the economy - when the prescription for "help" is just an extension of the same failed policies that created the mess in the first place. But now we are starting to see this show up in the so-called "mainstream media", with the latest being The Wall Street Journal: It takes similar reasoning to reconcile the elation felt across America every time the stock market rises—partially replenishing personal investment portfolios and 401(k) retirement plans—with the uneasy feeling that...

NYT's Edmund Andrews has a curious piece out on Ben Bernanke and the Fed, which, I'm guessing was mostly supplied by Barney Frank. Since, Frank comes off as the hero in the piece. (Well, hero in the sense of power manipulator)Andrews writes: ...when [Bernanke] sat down shortly after 8 a.m. on Oct. 1 at the Rayburn House Office Building for coffee and muffins with Representative Barney Frank, the rumpled and wisecracking chairman of the House Financial Services Committee, he took in some blunt advice. Voters had become suspicious and unnerved by the Fed because of its trillion-dollar efforts to bail...

Now there’s a real decoupling. Friday’s unemployment figures came out in America. They showed that 8.2 million Americans have lost their job since the GFC began in 2007. The official unemployment rate (the one that under-measures actual unemployment) is at 10.2% and growing. Stocks rallied on this news. Employment is said to be a lagging indicator. Economists tell you it’s the last thing to recover from a recession. Businesses don’t begin hiring until after they are sure the worm has turned in the economy. But right now, there is a pretty big decoupling between the stock market’s verdict on the...

The chairman of the Senate Banking Committee on Tuesday unveiled a sweeping regulatory reform bill that would strip the Federal Reserve of nearly all of its power to oversee banks, setting up a possible clash with the Obama administration, which has argued for the central bank to play a pivotal role in addressing financial threats.

Unemployment, now in the double digits, may remain "high" for several years and dampen economy recovery from a brutal recession, a regional central bank official warned on Nov. 10. The U.S. has experienced jobless recoveries following the previous two recessions in 1991 and 2001, when job creation remained weak for several years following the business cycle trough. "In both cases, output growth was less robust than in the typical recovery and, unfortunately, things seem to be shaping up similarly this time around," said Janet Yellen, president of the Federal Reserve Bank of San Francisco. Unemployment jumped to double digits in...

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: