Obama Seeks Remake of Fed's Powers: WSJ

[peaceandlove]

Obama Seeks Remake of Fed's Powers: WSJ

Jun 14, 2009, 10:29 p.m. EST

By MarketWatch
LOS ANGELES (MarketWatch) -- President Barack Obama is expected Wednesday to propose a sweeping reorganization of financial-market supervision, including remaking the powers of the Federal Reserve, The Wall Street Journal said in a report on their Web site dated Monday.

The report, which cited people involved in the process, said Obama would call for allowing the Fed to oversee the biggest financial players and to give the government the power to unwind and break up systemically important companies.

Continues: http://www.campaignforliberty.com/wire.php?view=5870



COMMENT from Campaign for Liberty member:

Yep, give the Fed more power per Corollary #2 of Mish's Fed Uncertainty Principle:


Corollary Number One:
The Fed has no idea where interest rates should be. Only a free market does. The Fed will be disingenuous about what it knows (nothing of use) and doesn't know (much more than it wants to admit), particularly in times of economic stress.

Corollary Number Two:
The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

Corollary Number Three:
Don't expect the Fed to learn from past mistakes. Instead, expect the Fed to repeat them with bigger and bigger doses of exactly what created the initial problem.

Corollary Number Four:
The Fed simply does not care whether its actions are illegal or not. The Fed is operating under the principle that it's easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com



THURSDAY: Watch Bernanke

Karl Denninger Commentary
Tuesday, June 16. 2009

In light of what I said before about drains of liquidity....



The salmon-colored day is the one to pay attention to.

It is always dangerous to assume that an expiring block of paper will not be rolled. It usually is. But - if it is not, in this case, roughly $100 billion in cash will come out of the "sloshing cash" in the banking system.

Of late it has been unusual for there to be visible OMO. Note that the table's first three columns are zeros - this is the result of The Fed's "unusual" policies, and is why my usual FedWatch has produced no information via this route for months, unlike the September 24th Ticker.

(TIOs can usually be ignored as they rarely have any impact on the overall condition of system liquidity.)

But the TAF maturation, if it does not roll, is a big deal.

What's T+3? Monday/Tuesday after options expiration, a nasty time for a liquidity drain to show up. If that drain does happen on Thursday you can expect to see it in the market some time within the next week, probably Monday or Tuesday, and it won't be pretty.

File this one in the "teach a man to fish" department; you can find this data, any time you'd like it, at http://www.gmtfo.com/reporeader/OMOps.aspx

Now you know how to read one of the tools that I use to watch Ben and his Merry Men - the tool that, in fact, caught him in September of 2008.

UPDATE 9:04 AM: The Fed has just announced an intent to award $48B in TAF paper, implying that about half of the $100 billion will roll and the rest drain. Again you cannot be sure until the day passes, and sometimes until the next day, but this is what it looks like.

SOURCE: http://market-ticker.denninger.net/a...-Bernanke.html

[peaceandlove]

Federal Reserve to Gain Power Under Plan

Targets dangers to economy

By Patrice Hill (Contact) | Tuesday, June 16, 2009
The Washington Times

The Federal Reserve, already arguably the most powerful agency in the U.S. government, will get sweeping new authority to regulate any company whose failure could endanger the U.S. economy and markets under the Obama administration's regulatory overhaul plan.

The final plan due to be released on Wednesday -- which originally aimed to streamline and consolidate banking and securities regulation in one or two agencies -- now is expected to sidestep most jurisdictional disputes and simply impose across the board standards to be applied by all financial regulators, according to administration and industry sources.

SOURCE and COMMENTS: http://www.campaignforliberty.com/wire.php?view=5880

[Northern Boy]

Geez Barack while your at it give them the power to do your job and then you can resign and go play golf with Michael jordan . How did this guy get elected

[peaceandlove]

Obama's Regulatory Plan Strengthens Federal Reserve

Posted by Matt Hawes on 06/17/09 6:20 PM

Earlier today, President Obama unveiled his regulatory reform plan, which deals with the economic crisis by creating more rules, regulations, and government agencies to spend money we don't have to implement them. The Federal Reserve, currently taking hits from all sides, receives a substantial increase in powers.

According to The Wall Street Journal's summary of the 85 page plan (which can be read in its entirety here), the proposal includes the following:

Continues: http://www.campaignforliberty.com/blog.php?view=20147

Despite all the promises of change that were so easy to make during the primary season, the Obama administration is practicing business as usual. Like previous administrations, its ideas involve centralizing power among a few under the guise of "streamlining" the process. Instead of achieving accountability, this plan will further empower those who led us to this point.

[skyrimirre]

Peace and Love, Forgive me but can you put into your own words then what June 18 will be like? Are you saying that this will not slip under the radar and more rounds of suicides are likely this summer as there were last fall when things started rollercoastering as far as the stock market ?

Thanks, Sky

[lemon_sky88]

He was elected just like the rest of them lol. They have an adjenda. This gives them ( the dark, those aginst the light, endulgent in there ways) the oprotunity for first strike so to speak. They have been moving covertlly into the position for well over a hundred years now. Undetected to the light which concerns itself with system and wellbeing. like a wolf pack picking the weak or stragaling, they have position'd themselvs in a spot where they have power. (which is why were trying to wake up rather than already being awake) My imediate gut feeling says they own any one who has ran for president under both demecratic and republican tickets. I remain positive so dont give me the negativity lecture. I for one am just not at all surprised with this outcome. we need to keep exposing everything and cudos for that. How can they take something is not federal (the reserve) and give it such control? as far as regulating the big comerical threats as they put it. I think such thing gose aginst capitolism as a whole and why they created the idea of monopoly. remember microsoft? nothing adds up these days which means it will come creashing down.

[peaceandlove]

Skyrimmre, Here is Karl's BLOG today and perhaps, his better explanation will help.

Oh my goodness, I hope we don't have more suicides...

Wouldn't it be nice (not a pun since Karl is from Nice, Florida) if everyone opened their eyes all at once and realized there are many more of us then there are of them?

We need more awake people to take action! Call your Senators on S-604 or Congressmen on HR-1207 and stop it in its tracks. It won't go away on its own.

SEE LIST AND PHONE NUMBERS OF SENATORS AND CONGRESSMEN HERE: POST #70 http://projectavalon.net/forum/showt...t=11766&page=3



PaL



Thursday Comes: FedWatch

Karl Denninger
Thursday, June 18. 2009

I told 'ya to watch Bernanke on Thursday. Here are the final results; as expected, he did roll some (but nowhere near all) of the expiring TAF.



That's a net $53 billion drain in system liquidity, on top of the $~70ish billion drained by TARP repayments.

Given the extraordinary "program" support of The Fed, this isn't as dramatic as what happened last September, but look folks, the record is what it is.

This is twice that I have caught meaningful "corners" in the equity market, all by watching intentional liquidity moves by central banks.

(As a refresh, here's my Thursday call from last week) http://market-ticker.denninger.net/a...ts-Beware.html

So far the maximum move down has been 5% since the Thursday call. That's fairly significant, and given the further drain for today, I doubt its over.

The previous "catch" was on the cusp of a 30% decline.

Those of you who think that there's something "tinfoil" about these sorts of manipulations need to consider that this is all done right in the open, if you know where to look.

There is no attempt to hide anything and no conspiracy - simply a conflict of interests (The Fed wants a 4% mortgage rate but can't have it while throwing liquidity into the system, as both fear of hyperinflation and "risk appetite" drive bond yields the wrong way) and as such there is a forced choice - it is not possible to support both markets at once.

You can either play "loose money/green shoots" and accept that mortgage rates will go into the 7s (at least) or you can play "tightwad" and drive down mortgage rates through a fear trade into Treasuries, but in the process stock prices will get hammered.

Clearly in September the "game" got away from Ben; this time they have (so far) managed to keep things (somewhat) under control. There is of course no assurance that it will remain under control, and in fact there is every reason to believe it won't, given that this exercise with liquidity is somewhat like herding cats - if you're trying to shoot at a specific result you're unlikely to succeed, especially if the intended attempt is to "nuance" outcomes (e.g. "let's drive down bonds and its ok if stocks decline a little bit.")

SOURCE: http://market-ticker.denninger.net/a...-FedWatch.html


Here's a good video by Karl:

Illiquid Assets

"Illiquid Assets" are not an act of the markets, nor are they an accident. They are in fact created by GOVERNMENT INTERFERENCE in the marketplace.

In 10 minutes you'll "get it" - why the government - not the markets - has led to the credit freeze. Why the market cannot clear. And why it is in fact explicitly the things that the government has done and is doing that has led us to have a "credit crunch", where assets that normally would trade won't.

VIDEO (8:43):

CATHERINE AUSTIN FITTS' BLOG:

Money & Markets ~ Charts 6.18.09
Catherine and The Solari Report, June 18, 2009 at 9:06 am

http://solari.com/blog/?p=3232