So is there a meaningful difference between Stephen Friedman’s actions and Martha Stewart’s? – Ilene
More Fed President Nonsense
Courtesy of Karl Denninger at The Market Ticker
Why isn’t this written about in The United States?
JEKYLL ISLAND, Ga (Reuters) – A waiver granted by Federal Reserve Vice Chairman Donald Kohn that allowed the chairman of the New York Fed’s board of governors to stay in his job had the full backing of the Fed’s Board of governors, including Chairman Ben Bernanke, a Fed official said on Monday.
The controversial waiver allowed Stephen Friedman to stay in his job as chairman of the board of governors of the New York Federal Reserve despite owning shares in Goldman Sachs (GS.N) ,which the Fed began regulating in September.
Let’s be clear: This isn’t about the fact that Friedman owned Goldman stock in September, when the firm became regulated by The Fed.
It is about this:
Friedman and the New York Fed have both said that he had done nothing wrong.
The Friedman waiver was sought shortly after Goldman became a bank holding company. While the Fed was deciding whether or not to grant it, he bought 37,300 Goldman shares on December 17. On January 22, the day after the waiver was granted, he bought 15,300 more Goldman shares.
THAT is the problem.
Further, the waiver is, in my opinion, absolutely improper.
None of these people should be able to own stock in anything financial – period. In fact, none of them should be able to own any financial instrument except through a blind trust.
This is exactly like me sitting on the board of General Electric and then buying stock in a firm that GE decides to acquire – while we’re deliberating whether we should!
In private business this would not only lead to howls of protest it would be very likely to lead to civil and criminal charges!
This sort of conduct is flatly outrageous and must not be allowed to stand. Every single member of the board of governors must be removed – including Kohn and Bernanke.
In fact, I’ll go further: Absolutely every monetary policy body in this country, including every regional Federal Reserve Bank, must operate 100% in the open with every transaction published, every asset loaned against identified in detail and every valuation methodology available to public scrutiny.
Period.
This is NOT over, and from my point of view will not be until I see Mr. Friedman doing this:
Here’s the difference: Martha Stewart was never tried for insider trading. She was tried for obstructing justice by lying to investigators and altering records. But she lied to protect herself from insider trading charges. So the difference is Steve doesn’t have to lie. – Ilene
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