There was lots of news coming out of Washington today. Both Ben Bernanke and Timothy Geithner agree: more bailouts are coming. That $700 Billion? That was just the downpayment. Congress wasn't pleased.
Representative Ginny Brown-Waite, a Florida Republican, told Geithner that she had “mixed” emotions about his appearance before the committee.
“Every time a statement is issued by you, the stock market plummets,” she said. “I am sure that is not something you feel good about.”
Getting lost in all the rhetoric was an interesting little tidbit.
The Federal Reserve and U.S. Treasury eliminated executive-compensation limits for companies that bundle loans accepted under a new $1 trillion program, indicating the rules may have hampered efforts to start the plan.
The rules won’t apply to the Term Asset-Backed Securities Loan Facility out of “desire to encourage market participants to stimulate credit formation and utilize the facility,” the New York Fed said in a document on its Web site today. The government separately said it will expand the TALF to support vehicle-fleet leases and loans for business, construction and farm equipment.
Well isn't that nice. Wall Street CEO's that drove their companies into the ground can still get taxpayer-funded multi-million dollar salaries.
Isn't that why we all pay taxes?
But that isn't what caught my eye. The most interesting part was half-way down the article.
The Treasury and Fed also today reiterated that they will seek legislation to give the Fed “additional tools” to manage its balance sheet. The effort stems from concern that taking on longer-term assets will make it more difficult for the central bank to raise interest rates once the economy recovers.
Possible legislation may allow the Fed to issue its own debt or let the Treasury issue bills for Fed use that are exempt from the federal debt ceiling, JPMorgan Chase & Co. economist Michael Feroli said.
Uh, excuse me? Debt that is exempt from the debt ceiling? Then what is the point of a budget? Fed issuing its own debt? Exactly what is the purpose of the Fed again? And what has that to do with raising interest rates?
This is looking more and more like an end-around on Congress.