Robert Oak's blog

Alan Grayson amendment to restrict Federal Reserve on Foreign Currency Swaps

Update: This amendment passed by voice vote.

Frankly, I just don't understand foreign currency swaps. It's above my pay grade.

Yet, we have an amendment, by Rep. Alan Grayson and Ron Paul, to restrict the Federal Reserve on issuing foreign currency swaps.

The amendment restricts the Federal Reserve by requiring five Federal Reserve members of the board of Governors approve as well as the U.S. Treasury Secretary.

The Bank of International Settlements, Switzerland, has written a paper on the U.S. dollar shortage and the international policy response, from what happened by the fall of 2008. Below is a graph of the sudden increased foreign currency swaps issued by the Federal Reserve:

currency FX swaps fed
Src: Zero Hedge, click on image to enlarge

 

SIGTARP on AIG

SIGTARP as released a new study report on AIG. The report found that the AIG 100% CDS payout was a grave mistake.

Guess whose mistake it was? Then New York Fed President Timothy Geithner.

For some background on this payouts, read The Real Screw Job: AIG used as a Funnel of U.S. Taxpayer money.

Here's the money quote from the SIGTARP report, right in the summary:

  1. The original terms of federal assistance to AIG, including the high interest rate it adopted from the private bank’s initial term sheet, inadequately addressed AIG’s long term liquidity concerns, thus requiring further Government support.

Bernanke, the Dollar and Commodities

Ben Bernanke has come out with a now, now, there, there on the falling dollar:

The Federal Reserve is monitoring currency markets “closely” and will conduct policy in a way that will “help ensure that the dollar is strong”, Ben Bernanke said on Monday in rare comments on the US currency.

The Fed chairman also indicated that the US central bank would not ignore the impact of rising commodity prices when evaluating the outlook for inflation. He said he would not rule out using interest rates to combat new asset price bubbles, even though he did not see obvious mispricing in the US at this stage.

Hmmmm, no obvious mispricing. Does that include the oil speculative bubble of 2008?

Meanwhile Gold is through the roof, in part due to the dollar decoupling.

 

kitco gold

Sunday Morning Comics - Goldman Sachs is the New Religion Edition

Sponsored by China - Why not? Everything else is.
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies!

 

.tqn.com/d/politicalhumor/1/0/P/1/3/obama-asia-trip.jpg" alt="Obama visits U.S. economy in China" width="525" />
Src: Mike Keefe

 

Friday Movie Night - Risky Business

hot buttered popcorn It's Friday Night! Party Time!   Time to relax, put your feet up on the couch, lay back, and watch some detailed videos on economic policy!

 

Tonight's Friday Movie Night is a little different and why it's being posted early. Senator Bryon Dorgan has come alive and getting involved in financial reform. This is great news for Dorgan predicted derivatives were a very serious problem 15 years ago (take that Taleb & Roubini!). First, below is Dorgan's call to action. Next is a talk on derivatives and financial reform by Dorgan. Finally is Senator Bernie Sander''s Too Big to Exist bill which breaks up the systemically risky institutions.

Considering we have financial lobbyists writing the House derivatives bill (exceptional piece by William Greider) and a complex maze of financial reform (where we are still digging through to find the loopholes exemptions), we call your attention to a refreshing breeze blowing down from common sense North Dakota.

Senator Bryon Dorgan is requesting you get involved in demanding common sense financial regulatory reform and reinstate Glass-Steagall (separate out FDIC insured banks from investment banks).

Senator Chris Dodd & Financial Reform

Senator Chris Dodd has introduced a massive bill on financial regulation reform. It is over 1100 pages and attached to this post. Below is a reprint from the summary of the major regulation bodies structure overhaul:

The Financial Institutions Regulatory Administration

  • Independent: Headed by an independent chairman appointed by the President and confirmed by the Senate, a Vice Chairman experienced in state banking regulation, and a board including the chairmen of the FDIC and the Federal Reserve and two other independent members. It will be funded primarily
    by assessments on the industry.

Must Read Posts - Sometimes you just can't say it better for November 10, 2009

On The Economic Populist you might have noticed the middle column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.

Sometimes though, one cannot say it better but miss those who did.

Must Read #1

Paul Krugman busts a serious myth that free flows of capital are successful in Finance mythbusting, third world edition.

Must Read #2

Yves Smith asks Do Businesses Hate Their Workers?

New COP Report - Guarantees Created Significant Moral Hazard

On Friday you were probably bowled over by the unemployment rate. So astounded, we missed this major report release by COP, the Congressional Oversight Panel on TARP.

The Report, Guarantees and Contingent Payments in TARP and Related Programs is another damning condemnation on corporate socialism to the point of moral hazard. Yet, at the same time, the report says taxpayers will likely profit from the huge TARP gamble. Well, well, if the government is turning the world into a glorified casino with U.S. taxpayer money, all the while guaranteeing the bonuses profits of large banks, at least it looks like we won't take the loss.

Must Read Posts - Sometimes you just can't say it better for November 8, 2009

On The Economic Populist you might have noticed the middle column. We try to list other sites and blogs who have exceptional insight and writing on what is happening in the U.S. economy.

Sometimes though, one cannot say it better but miss those who did.

Must Read #1

Paul Krugman hits it out the park to prove Reaganomics did not do this nation, especially the middle class, a lot of good. Read Reagan! Reagan! Reagan! I must also borrow Krugman's graph on the history of tariffs in the U.S.

U.S. Tariffs

Sunday Morning Comics - Where's the Beef Edition

Sponsored by the taxpayer funded jobs program - Loot luggers wanted for executive bonuses, graft, greed and corruption payola hauling. Must be able to lift two tons. No sticky fingers need apply.
Cup O' Joe

 

Good Morning! Rise and Shine! Get that Cup O' Joe...
break out the O.J....hang out with the pooch...time to check out the Funnies!

 

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