The idea of secret banking cabals that control the country and global economy are a given among conspiracy theorists who stockpile ammo, bottled water and peanut butter. Wednesday’s hearing described a secretive group deploying billions of dollars to favored banks, operating with little oversight by the public or elected officials.
We’re talking about the Federal Reserve Bank of New York, whose role as the most influential part of the federal-reserve system — apart from the matter of AIG’s bailout — deserves further congressional scrutiny.
Treasury Secretary Timothy Geithner was head of the New York Fed at the time of the AIG moves. The hearing before the House Committee on Oversight and Government Reform also focused on what many in Congress believe was the New York Fed’s subsequent attempt to cover up buyout details and who benefited.
By pursuing this line of inquiry, the hearing revealed some of the inner workings of the New York Fed and the outsized role it plays in banking. This insight is especially valuable given that the New York Fed is a quasi-governmental institution that isn’t subject to citizen intrusions such as freedom of information requests, unlike the Federal Reserve.
This impenetrability comes in handy since the bank is the preferred vehicle for many of the Fed’s bailout programs. It’s as though the New York Fed was a black-ops outfit for the nation’s central bank.
As Representative Marcy Kaptur told Geithner at the hearing: “A lot of people think that the president of the New York Fed works for the U.S. government. But in fact you work for the private banks that elected you.”
Let’s take Geithner at his word that a failure to resolve the insurer’s default swaps would have led to financial Armageddon. Given the stakes, you might think Geithner would have coordinated actions with then-Treasury Secretary Henry Paulson. Yet Paulson testified that he wasn’t in the loop.
“I had no involvement at all, in the payment to the counterparties, no involvement whatsoever,” Paulson said.
Fed Chairman Bernanke also wasn’t involved. In a written response to questions from Representative Darrell Issa, Bernanke said he “was not directly involved in the
Darrell Issa, the ranking Republican on the House Oversight Committee (which is the committee that has the lead on all this AIG stuff) sent an angry letter to his counterpart Congressman Edolphus Towns, complaining about intransigence and footdragging at the New York Fed.
The essence here is that the New York Fed should be in contempt of Congressional subpoena for not having given forth enough documents related to AIG
Of course we must include the NY Fed and The Federal Reserve generally, which apparently believes it is either above the law or has a "special exemption," as evidenced here:
Jan. 7 (Bloomberg) — The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer’s payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.
Remember, this was when Geithner was the head of the NY Fed. Remember too that President Obama promised us that his administration would operate entirely "above board" and "in the sunshine."
This, of course, is why he later nominated (and The Senate approved) a man who intentionally concealed what AIG had done – and what The Fed had covered up.
I suppose this is the sort of thing we should have expected to discover, given that our President-elect (at the time) did indeed nominate an admitted tax cheat to be the nation’s chief tax collector!
“It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information,” said Issa, a California Republican. Taxpayers “deserve full and complete disclosure under our nation’s securities laws, not the withholding of politically inconvenient information.” President Barack Obama selected Geithner as Treasury secretary, a post he took last year.
It is not just Taxpayers who deserve disclosure.
Stockholders not only deserve disclosure, they have a LEGAL RIGHT to it!
AIG’s Dec. 24, 2008, filing was challenged privately by the U.S. Securities and Exchange Commission, which polices the adequacy of disclosures by publicly traded firms. The agency said in a letter to then-CEO Edward Liddy six days later that AIG should provide a Schedule A, which lists collateral postings for the swaps and names the bank counterparties that purchased them from the company. The Schedule A was disclosed about five months later in a filing.
Five months later. By which time the damage to those who were harmed was…
The release of the Special Inspector General of the TARP’s (SIGTARP) report on the Federal Reserve’s bailout of AIG’s counterparties to the tune of 100 cents on the dollar has triggered some debate among commentators. It seems clear that the Fed had the leverage to negotiate a better deal on behalf of the taxpayers, but utterly failed to do so. But just how horrendous was the Fed’s failure? - Ilene
"No matter how many times you save the world, it always manages to get back in jeopardy again. Sometimes I just want it to stay saved, you know? For a little bit? I feel like the maid: ‘I just cleaned up this mess! Can we keep it clean for … for ten minutes?!’"
The indefatigable blogger and soon-to-be-published author is really showing the strain of commenting from the front lines of the global financial crisis, as she has done, admirably, from the very beginning. Today, she lit into Neil Barofsky’s SIGTARP post mortem on the New York Fed’s disbursement of billions of taxpayer dollars to cancel credit default swaps written by the pathetic boobs at AIG. AIG sold those swaps, you may remember, under the cheerfully naive assumption that, as long as you hold a AAA credit rating and employ a bunch of overpaid financial engineers in a fancy office on Curzon Street, you can write as many naked puts on as much toxic crap as you like with no consequences. Much as I would be delighted to learn otherwise, I believe we may safely consider that presumption to be dead, buried, decayed, mixed into topsoil, and completely absorbed into the Earth’s mantle via tectonic subduction by now.
In the meantime, however, the rest of us continue to live with the consequences of AIG’s tomfoolery, and Ms Smith remains understandably upset about this state of affairs. So much so, in fact, I think she rather unfairly pans Mr. Baroksky’s report as unacceptably timid and mealy-mouthed. I read her to say she would rather have the report blast the Fed’s mishandling of the AIG crisis in no uncertain terms, not sugarcoat its…
The S&P 500 rallied at the open and hit its 0.49% intraday high about 30 minutes into the session. It then slowly sold off to a narrow trading range after the lunch hour and then sold off to its 0.20% closing gain in the close vicinity of its intraday low. The mixed spurt of economic news at 10 AM, strong New Home Sales and weak Richmond Fed Manufacturing didn't seem to be much of a factor in today's trade. The general view among the pundits is that the market mavens (who aren't on vacation) are awaiting the Friday flavor of Fed Chair Yellen's spee...
Vince Foster was a mentor to Hillary when they worked together at the Rose Law Firm in Little Rock, Arkansas. When Bill was confirmed as the 42nd President of the United States on January 20, 1993, Foster took a role as his Deputy White House Counsel. 6 months later, to the day, Foster was found dead in Fort Marcy Park, along the Potomac River, of a apparent "suicide" resulting from a gun shot from a .38 caliber revolver.
Like a lot of things surrounding the Clintons, Foster's "suicide" has always been shrouded in mystery. A few ...
By The Foundation for Economic Education. Originally published at ValueWalk.
Before Celebrating Gawker’s Demise, Consider This
Forget for a moment the question about whether celebrity sex tapes are “newsworthy.” The real question is whether we want juries determining what is, and what is not “newsworthy.”
In March, a Florida jury awarded Hulk Hogan a plum $140 million in his suit against Gawker.com (Bollea v Gawker). Hogan argued that Gawker’s publication of a sex tape was an invasion of privacy, having no “news” value.
Last fall, financial advisors Anthony and Dina Isola came into our firm to talk shop one afternoon. We were blown away by their passion for saving the retirement portfolios of their clients, many of whom are teachers and professors who are inundated almost daily with bad product pitches at their schools.
Within a few weeks, we were talking about hiring them. It’s one of the best decisions we’ve made ...
Crude and Natural Gas have stunk it up for the past few years, been a great place to avoid. Could both be creating multi-year trend reversal patterns? CLICK ON CHART TO ENLARGE Crude and Natty are both correlating the past few years and both are near tests of resistance that could send a message that […]Requires Premium Membership - log in or see subscription options
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Epizyme was founded in 2007, and trying to create drugs to treat patient's cancer by focusing on genetically-linked differences between normal and cancer cells. Cancer areas of focus include leukemia, Non-Hodgkin's lymphoma and breast cancer. One of the Epizme cofounders, H. Robert Horvitz, won the Nobel Prize in Medicine in 2002 for "discoveries concerning genetic regulation of organ development and programmed cell death."
Before discussing the drug targets of Epizyme, understanding epigenetics is crucial to comprehend the company's goals.
Genetic components are the DNA sequences that are 'inherited.' Some of these genes are stronger than others in their expression (e.g., eye color). Yet, some genes turn on or off due to external factors (environmental), and it is und...
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Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts. After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.) Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.
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