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 MSM is trying to spin the 110,000 sign ups in November as a fantastic result. When a “free” new entitlement is announced and rolled out in this country, they would normally be knocking down the doors to sign up. Anyone who really wants Obamacare has already signed up. The first two months should generate the biggest numbers. When you have only achieved 5% of your goal after two months, you’ve failed miserably. Obamacare is a disaster before it even gets off the ground and...
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Oil prices are heading higher on the chart with the cash West Texas Intermediate (WTI) crude rallying back toward the $100.00 level after threatening to test $90.00.
Steady economic signs in the United States, China, and Japan -- the three largest economies in the world -- along with some muted growth in the eurozone and Europe are adding some spark to the oil futures.... But hold on; doesn't the buying seem somewhat premature? I'd say so, as I believe oil prices may have limited upside unless something dramatic surfaces in the Middle East that impacts OPEC oil.
The Organization of the Petroleum Exporting Countries (OPEC) has also come out and said it would maintain its current daily production quota and n...
Unless a farm bill passes by the end of the year, the crop subsidy program will revert to 1949 policies and the government would be required to stockpile milk until it reached $37.20 per hundred pounds. The current price is about $19.00.
Why our legislators would write ridiculous laws like this is totally beyond me, but they did.
The House wants to pass an extension to resolve the issues, but the Senate says no. So here we sit wondering if the price of milk is going to double.
Bloomberg reports Extension of Farm Subsidies Rebuffed by Senate Democrats An extension of U.S. agriculture subsidies to late January was rebuffed yesterday by Senate Democrats, who said they won’t pass any House plan for ...
SHANGHAI, China, Dec. 11, 2013 (GLOBE NEWSWIRE) -- JA Solar Holdings Co., Ltd. (Nasdaq: JASO) ("JA Solar" or the "Company"), one of the world's largest manufacturers of high-performance solar power products, today announced changes to its management team, effective January 1, 2014.
Mr. Herman Zhao has been appointed the Company's new chief financial officer ("CFO"). Mr. Min Cao, the Company's current CFO, will assume the role of chief strategy officer upon Mr. Zhao's appointment.
Concurrently, Mr. Jian Xie, the Company's current chief operating officer ("COO"), will assume broader leadership at the Company as its president, and current chief technology officer Mr. Yong Liu will become the Company's COO.
Investors lost their enthusiasm on Tuesday as the December 13 budget deadline approached with more dysfunction on Capitol Hill.
The S&P 500 Index retreated from Monday’s record high on Tuesday, as investors watched another budget battle unfold in Washington, with the clock ticking down to the December 13 deadline. Although this latest battle appears less toxic than the previous episodes, investors obviously remained skeptical as the major stock indices fell into the red.
The Dow Jones Industrial Average (NYSEARCA:DIA) lost 52 points to finish Tuesday’s trading session at 15,973 for a 0.33 percent decline. The S&P 500 (NYSEARCA:SPY) fell 0.32 percent to close at 1,802....
IEP – Icahn Enterprises L.P. – Shares in Icahn Enterprises fell 10% to $133.67 on Tuesday morning after the company yesterday announced the sale of 2,000,000 depositary units. Shares in IEP yesterday rose to an all-time high of $149.77.
The sizable move in the price of the underlying sparked heavier than usual options activity on the stock today, with overall volume approaching 5,000 contracts as of 11:20 a.m. EST versus average daily options volume of around 1,400 contracts. The largest increase in open interest in IEP options overnight was in the Dec $145...
Today, with very little market moving news, the S&P 500 closed at 1808.4, yet another new closing daily high. The index did touch the 1811 area on at least three distinctly different time slots creating a new resistance level. But after last week’s bevy of positive economic surprises, the sharp gain of 1.1% on Friday, leaving the index just a tiny point away from its ninth consecutive up week, we can’t be too quick to suggest today was a topping rally. For one thing, volume was quite low as traders seemed to be trying to sort out the odds on the earliest date of Fed tapering. Estimates range from this month to March and even later. But it’s going to happen…so why so much emphasis on when? Perhaps protection of end-of-the-year profits in so many fund managers portfolios? ...
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This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.
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These rallies are becoming familiar. In early July we saw a streak of 12 of 13 sessions in a row up, early September 11 of 12, and mid October 11 of 13 (current streak). It is a bit uncanny the similarities and how the escalator goes straight up in vertical ascent as we see indexes come out of mini corrections during QE. So we are about at the same stage where the last two began to tire, so it will be interesting if this is similar or if the current consensus of the market that there is nothing to worry about until next year as the Fed and D.C. are both off the table and this 3% annual growth rate in earnings we are now seeing in the S...
Welcome to the fouth update of the IRA Virtual Portfolio. First I am going to summarize the current state of the Portfolio then I will get into all the activity we had during September expiration.
Profit and Loss – Net of closed positions the portfolio is up a total of $769
Market Commentary – Last expiration I said, "I would like to put a total of $20,000 to work by the end of SEP expiration. If the VIX pops up to around 20 I plan to put about $50,000 total to work." The market didn't quite reach the goal but I did manage to deploy $15,000 of buying power. I still feel the market is too high and expect a correction during October. If the vix pops up to around 20 I still plan to put about $50,000 to work. If a correction doesn't happen I still plan to have a total of $25,000 in buying power put to work by October expiration. Now on to the act...
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Come and get it! Read all about it! Biotechs, biotechs and more biotechs to buy buy buy for your portfolio! To date, almost 30 biotech companies have hit the market. Most of the time, there are fewer than 10-12!
For the last five years, biotechs have had issues obtaining offer prices above expectations. In 2013, that trend looks to be broken. According to BiotechNow, the offer prices are 4% above expectations! In addition, biotechs are going public with little more than a wing and a prayer (pre-clinical or Phase 1 data only). Really? What this means is that the drug or technology looks good in mice, rats, or dogs, etc, but there is no smidgen of evidence that it will work in humans. That's what is called an appitite for RISK!
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