Thus within 18 months of taking office, Obama will likely have appointed five of the seven Fed governors . The central bank is designed to be independent from politics, so a president's best chance of influencing how the Fed will regulate banks or respond to economic changes is through these appointments.
The Federal Reserve acts independently of government, with pretty much only these appointments, each a 14 year term, and confirmation of each governor by the Senate.
Considering we cannot find out which institutions received Federal money or where the $12.82 trillion dollars of Federal Reserve financial commitments are, isn't this making the Democratic aspects of financial regulation even worse?
During the Bush administration we had then Treasury Secretary Hank Paulson, acting as CEO in Chief, strong arming banks and even Congress into passage and use of the TARP. No other ideas were seriously considered and Congress simply handed over the cash with a lot of scare tactic rhetoric.
Funny. I thought I heard the government tell me that all the banks passed the Stress Tests and that the economy was doing Green Shoots.
So then why should this program need to be extended?
The world’s eighth largest economy shrank at a 5.4 percent annualized pace in the first quarter, Statistics Canada said June 1, the most since 1991. Gross domestic product will shrink 3 percent this year, the central bank predicts. That would be the biggest drop since 1933, according to Statistics Canada.
The U.S. economy shrank at a 5.7 percent annual pace in the first quarter.
What is interesting, most reports on Canada is tout stability, banking sound, weathering out the crisis well and in economic recovery.
Son I remember the year and time that our President told us a stimulus package had to be passed. That without the stimulus package everything would collapse, unemployment would go above 8 percent and our economy would collapse. The package was going to create many, many new jobs. Yes son, I remember those days.
But dad, unemployment is almost 10 percent and the stimulus package was passed. Dad, didn't Goldman get a big, bailout and now they are giving almost one thousand new million dollar bonuses. Dad they are saying that another stimulus package is needed and are going to pass it. Dad is borrowing from China good for me. Dad I remember our President said the economy had turned a corner. Dad are Green Shoots sprouting in our back yard?
For those of you who thought that the recent stock market rally was anything more than a counter-trend rally, this should be disturbing.
(Bloomberg) -- Executives at U.S. companies are taking advantage of the biggest stock-market rally in 71 years to sell their shares at the fastest pace since credit markets started to seize up two years ago.
...
“They’re looking to take some money off the table because they think the rally will come to an end,” said Ben Silverman, the Seattle-based research director at InsiderScore. “It’s the most bearish we’ve seen insiders, on a whole, in two years.”
Last September, during the debate over the federal bailout of Wall Street, politicians that supported the bailout used a certain phrase.
"Our time has run out," said Rep. Spencer Bachus, R-Ala., the ranking Republican on the House Financial Services Committee. "We're going make a decision. There are no other choices, no other alternatives."
Recently I saw the same argument made on DKos concerning the deficit spending and bailouts. It seems like common knowledge at this point. If we hadn't bailed out Wall Street then we would headed into a Depression.
The fact of the matter is that this idea, that we had no choice, is wrong on three different levels.
A few months ago, I noticed something that seemed strangely discordant about our "Great Depression 2": consumers were refusing to stay dead, but instead showed signs of - at least partially - rising from the grave.
But a look at truck traffic (which is only posted monthly) and rail traffic (which is updated weekly) showed a continued year-over-year slide.
I took a further look because one very prominent blogger has recently alluded to rail traffic several times, most recently saying it was "horrible" and "13-week moving averages are still moving lower, with no apparent end in sight" So, what's going on? Does rail traffic in particular mean the recession is continuing to plunge deeper into the abyss, or are there signs of some stabilization?
The GAO released their TARP Report: June 2009 Status of Efforts to Address Transparency and Accountability Issues.
Some main points:
$330B "dispersed"
$69.2B repaid by end of month
still buying preferred shares
no disclosure from Treasury/Fed on criteria to purchase shares
no disclosure from Treasury on warrant repurchase
no disclosure on recapitalization on stress test results
"difficulties" in measuring TARP effectiveness
no set of determinate indicators to measure TARP impact
Most interesting is the criteria for those stress tests to determine additional needed capitalization. The unemployment rate, which many of us have shown, is much worst than forecast by the economists' consensus.
The New York Times has a detailed interview & article with Pimco's Bill Gross in Treasury has Bill Gross on Speed Dial. While the article is a nice warm fuzzy on guy pulling himself up with his own bootstraps, outside the box brilliant business acumen etc., some very interesting pieces of information are revealed about Pimco, Bill Gross and the Treasury's PPIP plan.
First is this tidbit:
Last fall, the Federal Reserve Bank of New York, run at the time by Mr. Geithner, hired Pimco — along with BlackRock, Goldman Sachs and Wellington Management — to buy up to $1.25 trillion in mortgage bonds in an effort to keep interest rates from skyrocketing.
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