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he melt up in stocks on no volume was fully expected after the worst possible employment news to come in over 20 years: the market-economy disconnect is now complete, and all stocks are freeriding purely on Bernanke's printing press. At least gold vigilantes are beginning to whisper in Bernanke's ear he can go fornicate himself and his dollar destruction deathwish: let's see what happens when gold melts up ala the S&P to 1,200, 1,300 and maybe 1,500 in a few weeks. Look for some old-fashioned massive panic at the Federal Reserve. The melt up in stocks on no volume was...

Video Jim Rogers, chairman, Rogers Holdings, says that the US is the biggest debtor nation in the world

This morning, Treasury released the quarterly Minutes of the Meeting of the Treasury Borrowing Advisory Committee Of the Securities Industry and Financial Markets Association, which is [A]n advisory committee governed by federal statute that meets quarterly with the Treasury Department. The Borrowing Committee’s membership is comprised of senior representatives from investment funds and banks. The Borrowing Committee presents their observations to the Treasury Department on the overall strength of the U.S. economy as well as providing recommendations on a variety of technical debt management issues. The Securities Industry and Financial Markets Association does not participate in the deliberations of the...

From The Wall Street Examiner comes this: Another anomaly of note is the fact that 10 year Fannie paper is now yielding less than 10 year Treasuries. This is another sign of mass psychosis. Unfortunately, the source of the infection has been Bernanke’s insane policy of piling up risky MBS paper on the Fed’s balance sheet. Wave after weekly wave of Fed buying has created one of the most ridiculous market distortions in history. Unfortunately, the problem it was designed to solve, the housing market collapse, isn’t responding. This is more than ridiculous. It is in fact outrageous. The GSEs...

Video at site. Why is Ben Bernanke being so slow to start talking about raising rates, much less start raising them? Because he has a secret plan that he can't talk about. What's Ben's secret plan? Intentionally keep rates too low for too long, thus encouraging uncomfortably high inflation. Why would Ben want that when he keeps talking about the importance of managing inflation? Two reasons: Faster economic growth, which leads to more jobs, fewer angry constituents, and a Congress that's happier with Ben Bernanke Faster erosion of the real value of our debts. Consumers and the government are drowning...

Rep. Ron Paul (R-TX) yesterday made some troubling comments about his bill, HR 1207, to audit the Fed. According to Paul, the bill, despite having more than 300 sponsors in the House, was eviscerated in committee, and maintains Fed secrecy on all important avenues if investigation. It stands to figure that what's good for the Fed is bad for you and me; slavery is no longer characterized by chains More.. and confinement and skin color- nowadays slavery is accomplished more with taxation, money manipulation, and debt.

On Sunday, CIT filed for bankruptcy, meaning that $2.3 billion in taxpayer money is probably lost. That means that each American threw about $8 down the CIT rat hole. Unfortunately, that could just be the start of losing big bucks on TARP "investments" in troubled financial companies. We took the top ten bailout recipients, from AIG to PNC, and divided the amount Uncle Sam threw at them by the number of Americans (308.84 million and counting). Then we used a highly scientific guess to determine your chances of getting it back. It ain't pretty. Here's How Much Each Bailout Cost...

The drama unfolds slowly at first. First-term (anti-bailout candidate) Democrat Alan Grayson questions Elizabeth Coleman, Inspector General of the Federal Reserve. The issue is oversight of the Fed's balance sheet, and the potential multi-trillion dollar loss that would be borne by you. If watching the clip sends you into an apoplectic seizure as it does to me, then please help. We need millions of Americans to become aware of the Fed and its abuses. Monetization of the national debt is occurring daily (quantitative easing), as Bernanke simply creates credit and purchases Treasuries. And we haven't even begun to discuss the...

The Federal Reserve pumped $1 trillion into the financial system during a year of harried efforts to rescue the economy. Brian Sack's job is to figure out how to get the money back out. Mr. Sack, 39 years old, is an economist who runs the markets group at the Federal Reserve Bank of New York. The group runs the Fed's trading, making it the bridge between the marble corridors of the Federal Reserve in Washington and the bustling trading floors of Wall Street. In normal times, it buys and sells Treasury securities to influence the level of interest rates. During...

Following on previous posts by Janet Tavakoli and Dylan Ratigan, which both reference the need to uncover how and why it is that AIG counterparties received such generous taxpayer funded bailout terms, it is critical to present the letter penned by California Congressman Darrell Issa to New York Fed President Bill Dudley, demanding much more information on the Fed's decision regarding AIG. Issa's quote that "behind closed doors and with no approval from Congress, the FRBNY may have added an additional $13 billion of debt on the backs of taxpayers. These allegations, if true, amount to nothing less than a...

With most Americans outraged over the behavior of the Federal Reserve and the part it has played in the bailouts of huge institutions in the financial and automotive industries, Ron Paul introduced H.R. 1207, which would have required a full audit of the Federal Reserve and its activities, which crosses international lines. According to Rep. Ron Paul, R-Texas, the House Financial Service Committee’s panel on domestic monetary policy, Rep. Mel Watt, D-N.C., essentially stripped the bill of just about everything that would have required transparency, and pretty much is now worthless as to its original purpose of letting the American...

<p>The Treasury has been announcing record debt auctions, and yet we see little in the form of increasing interest rates to attract buyers to these securities that are still somehow gobbled up. The Fed's balance sheet, of late, doesn't seem to account for it, as any buying they are doing seems to be sterilized. Are the Chinese so insane that they are buying up anything the Treasury throws up in the air? It appears not.</p>

A much clearer picture is developing of what went on during the middle of the financial crisis, when AIG was bailed out by the government and Goldman Sachs ended up receiving 100 cents on the dollar from AIG on various instruments. The clearer picture is the result of Janet Tavakoli's provocative article, Goldman’s Lies of Omission. In the article, she claims that GS CFO David Viniar lied when he said GS's exposure to AIG would be insignificant. A anonymous Goldman apologist who writes at Economics of Contempt responded to Tavakoli's article, calling the article part of a, "ridiculous conspiracy about...

There has been lots of speculation on why Representative Mel Watt has done his best to make sure that the Audit the Fed bill will be gutted, and why the Congressman is willing to promote the same irresponsible and unaccountable bubble-inflating behavior that got us to the current Fed-sponsored, bubble-reflation attempt, which is practically guaranteed to end much worse than just a few Goldman competitor banks imploding here and there. Here are some attempts at reconstrcuting Representative Watt's motivations courtesy of Robert Wenzel at EconomicPolicyJournal.com. It should make all questions as to why Fed transparency is not Mr. Watt's friend,...

Rep. Ron Paul, R-Texas, has complained that the bill he sponsored calling for an audit of the Federal Reserve has been "gutted" by congressional committee, pointing specifically to a legislator whose campaign coffers have been boosted by the banking industry. As WND reported, Paul sponsored H.R. 1207, a bill requiring the Federal Reserve – an organization that's independent from the U.S. government but nonetheless oversees U.S. monetary policy – be opened to oversight by Congress. The plan compiled over 300 co-sponsors in the House before being sent to committee. But in a telephone interview with a Bloomberg reporter, Paul said...

Rep. Ron Paul, R-Texas, has complained that the bill he sponsored calling for an audit of the Federal Reserve has been "gutted" by congressional committee, pointing specifically to a legislator whose campaign coffers have been boosted by the banking industry.

Now that the Obama administration is attempting to take a victory lap on the U.S. economic recovery, claiming the $787-billion stimulus passed earlier this year was what did the trick, despite a cost of $160,000 per 'stimulus' job, as ABC's Jake Tapper pointed out, it has come at the cost of the U.S. dollar. Since then, the stock market has rebounded nicely. The Dow Jones Industrial Average (DJIA) is off a March low of 6,547 points, even topping the 10,000-mark recently. But what has caused this nearly 50-percent jump? According to CNBC's Larry Kudlow - loose monetary policy by the...

As I walked home recently from a weekend trip to the grocery store, I passed a total of 13 vacant offices with signs saying "for lease" or "for sale." These spaces ranged from approximately 500 to 5,000 square feet according to their signs, and they are stretched along a main, commercial street in the center of Tucson, AZ. There is also an eight-screen movie theater that sits empty as well. These empty commercial spaces ... are empty now, and have been for quite some time. I found it intriguing that both in the central portion of Tucson and also in...

In what could have been the biggest piece of news today, yet making little headway into the media, the Fed announced that it is adopting a policy statement supporting "prudent commercial real estate loan workouts." And even though in traditional Fed fashion, the statement says a lot but is even more vague, some of the implications from a more nuanced read have very serious adverse implications for commercial real estate. The section: Financial institutions that implement prudent loan workout arrangements after performing comprehensive reviews of borrowers' financial conditions will not be subject to criticism for engaging in these efforts, even...

I was wondering how long it would take before the threats really started to show up in earnest.. Kansas City Fed president Thomas Hoenig is circulating a book titled “The Balance of Power: The Political Fight for an Independent Central Bank.” Charles Plosser of Philadelphia said on Sept. 29, “we must preserve” the Fed’s structure. Must? That implies that there is an "or else" in there somewhere... let's see.... can I find an "or else"? U.S. stocks, bonds and the dollar would collapse if investors perceive Congress violating the independence of the policy-setting Federal Open Market Committee, said Former Fed...

The Obama administration's new proposal for tackling financial risk in the U.S. economy, unveiled just two days ago, came under attack on Thursday from Congress and regulators, with questions raised about its funding and scope. U.S. Treasury Secretary Timothy Geithner scrambled in a congressional hearing to defend the plan against critics who said it would give too much power to regulators and enshrine government bailouts for troubled financial firms in law. Released by the Treasury Department and Democratic Representative Barney Frank on Tuesday, the plan is an bold attempt to make sure the Bush administration's confused handling of last year's...

The Federal Reserve Banking System has been around almost one hundred years. It has never been audited. The Fed answers to no one. The Fed has loaned over twelve trillion dollars of taxpayer money, our money. To whom? Only the Fed knows. Recently the chairman of the Fed, Ben Bernanke, was called before Congress and when asked who received loans and bailout money, he told Congress it was none of their business.

Even as Tim Geithner was boldly lying today on national TV, claiming that he abhors the concept of too big to fail, and condemns moral hazard, behind everybody's back he, together with the entire Obama administration, was trying to pass a law that would shift TBTF from a temporary program into officially canonized law. This is a scandal that has gotten little recognition in most of the MSM: in essence it guarantees that the massive mega banks like Goldman Sachs, BofA, and JPM will take on so much disproportionate risk the next time around (and with a moral-hazard encouraging Federal...

Selling U.S. debt was a bit harder than expected today. Today's treasury auction came in a bit below expectations, with the 7-year yield hitting 3.14% after initial expectations of 3.11%. The bid to ask, which is the total value tendered over the total accepted, as shown below, came to 2.65. This was lower than the average of the last four auctions.

The Federal Reserve could order a financial institution to sell a risky division or stop dangerous trading activity if the central bank determined there was a threat to the US financial system, under a draft law released on Tuesday. The bill drawn up by the Treasury and the House financial services committee sets up a "Council of Regulators" charged with snuffing out systemic risks and gives the government and the Fed sweeping powers over financial companies at home and overseas. The bill does not address how this "Council of Regulators" will attain supreme wisdom to rule on markets. Nor does...

It is by now well known that the banks on the other side of credit default swaps sold by AIG got paid out at par when the government bailed out the insurance giant. But what isn't as well known is that by deciding to pay AIG's counter-party in full, the Federal Reserve was reversing months of work AIG executives had done to convince the banks to take a haircut on their positions Bloomberg reports that the documents were similar to those drafted by AIG, except for one crucial detail. Part of a sentence in the document was crossed out. It...

B has an interesting story up on the AIG derivative "payoff" mess I've repeatedly written about: Beginning late in the week of Nov. 3, the New York Fed, led by President Timothy Geithner, took over negotiations with the banks from AIG, together with the Treasury Department and Chairman Ben S. Bernanke’s Federal Reserve. Geithner’s team circulated a draft term sheet outlining how the New York Fed wanted to deal with the swaps -- insurance-like contracts that backed soured collateralized-debt obligations. .... Part of a sentence in the document was crossed out. It contained a blank space that was intended to...

Janet Tavakoli is the president of Tavakoli Structured Finance, a Chicago-based firm that provides consulting to financial institutions and institutional investors, among those who have sought her opinion on derivatives, Warren Buffett. In an email to me, Janet writes: It is a strong statement to say that a CFO lied to the public, and in my opinion, David Vinear, Goldman Sach’s CFO lied about Goldman’s exposure to AIG while the AIG bailout was in progress in September 2008. Viniar spoke about risk management, but that is a separate issue from whether or not Goldman Sachs would have money at risk...

 Glenn Beck got this from one of his economic "deep throats" who knows the way the world works This was on today's show  Fresh from Glenn Beck show a very good explanation of economic affairsUnder Jimmy Carter the money supply was jacked up 13% to stimulate the economyStagflation set in so Paul Volcker tightened up the money supply by jacking up rates to 20%So 20% cured 13%This time around the money supply has been increased by 130%The Fed is loaning banks and Wall Street money at essentially 0% interestThe Vast majority of this money is retained and not lent out...

Last week a new bill was introduced in the Senate to audit the Federal Reserve. Some backers of my bill HR1207 and the existing Senate companion bill S.604 were a little miffed at this, but depending on how you think about it, this new legislation poses no great threat to our efforts. With the economy in shambles, people are looking for answers - not just because of lost savings on Wall Street, but because of lost houses on Main Street. Because of the many problems we face, the Federal Reserve and its powers over the economy have come under scrutiny....

Last week a new bill was introduced in the Senate to audit the Federal Reserve. Some backers of my bill HR1207 and the existing Senate companion bill S.604 were a little miffed at this, but depending on how you think about it, this new legislation poses no great threat to our efforts. With the economy in shambles, people are looking for answers - not just because of lost savings on Wall Street, but because of lost houses on Main Street. Because of the many problems we face, the Federal Reserve and its powers over the economy have come under scrutiny....

Serious plotting gets located this weekend in Armonk, NY where the Symposium on Building the Financial System of the 21st Century: An Agenda for Japan and the United (Pdf) takes place. The name of the symposium tells you enough about what is going on here. They really don't even try to hide anymore what they are up to. It is hosted by the Harvard Law School Program on International Financial Systems. On Saturday evening, Deputy Treasury Secretary Neal Wolin will speak. In addition to the Treasury, the Fed had a representative, as

The Federal Reserve may end up taking no losses on the emergency programs it put in place to fight the crisis, New York Fed president William Dudley said on Thursday, a view that was shared by Fed vice chairman Donald Kohn. "The Fed may ultimately avoid any losses on any of the programs," Dudley said in brief opening remarks before moderating a panel at the Boston Fed's annual conference. Dudley said the emergency facilities were shrinking naturally. "Things have gone pretty well," he said of the exit of some of the liquidity facilities. Fed vice chair Donald Kohn mirrored that...

Gee, who could have seen this coming? On Monday the Federal Reserve held a major reverse repo test, as was announced by the NY Fed and by Zero Hedge. We have subsequently received several unconfirmed reports that the conducted test has been a disaster (we have calls into the Federal Reserve to confirm or deny this, we are eagerly awaiting their reply). How do you do a reverse repo when there's no cash to tender? Bottom line: JP Morgan/Chase appears to have only $21 billion in actual cash. Their "Cash" position as stated on Yahoo Finance and other places includes...

Courtesy of the Fed's own disastrous policy of flooding the market with trillions of cheap credit over the past several decades, the resulting massive one-sided trade of buying dollar denominated securities, funded with inappropriately duration matched products, resulted in a funding gap of up to $6.5 trillion dollars by foreign Central Banks. When the wheels came off the financial system last fall, the Fed had to step in and bail out all foreign Central Banks. From the BIS: "In providing US dollars on a global scale, the Federal Reserve effectively engaged in international lending of last resort...What pushed the system...

It’s a good day to go cross border shopping as our Canadian Loonie is buying more in the US. The Loonie is almost on par withe the US dollar. Fueled by high oil prices and a declining US dollar the high loonie hurts employment in Canada. “Canadian Prime Minister Stephen Harper said yesterday in remarks to reporters in Toronto that he shares Bank of Canada Governor Mark Carney’sconcern that gains in the country’s currency could slow recovery. Carney said in a speech on June 4 that a persistently strong Canadian dollar would “work against” positive factors such as improved trade.”...

Good video at site. This morning on CNBC, a good discussion between Richard Bernstein and Dennis Gartman on the challenge facing the Fed. Neither think a rate hike is coming anytime soon, with Bernstein noting razor thin yields on 3-month treasuries as evidence. Gartman is more ominous, noting that the Fed was created and can be "destroyed" be Congressional edict, and thus has no reason to get cute about asserting its independent (raising rates) when politicians don't want them to.

While it appears that Barclays will soon have to part with $5 billion (or more) to satisfy the increasingly loud chorus of people who claim the bank managed to literally steal Lehman's assets in those torrid days after the Lehman collapse, we use this opportunity to pore through a goldmine of just unsealed documentation to present some rare glimpses into the Federal Reserve's garbage laden balance sheet.

<p>On Tuesday, March 11th, 2008, somebody — nobody knows who — made one of the craziest bets Wall Street has ever seen. The mystery figure spent $1.7 million on a series of options, gambling that shares in the venerable investment bank Bear Stearns would lose more than half their value in nine days or less. It was madness — "like buying 1.7 million lottery tickets," according to one financial analyst.</p>

It is a cliché that if we do not study the past we are condemned to repeat it. Almost equally certain, however, is that if there are lessons to be learned from an historical episode, the political class will draw all the wrong ones — and often deliberately so. Far from viewing the past as a potential source of wisdom and insight, political regimes have a habit of employing history as an ideological weapon, to be distorted and manipulated in the service of present-day ambitions. That’s what Winston Churchill meant when he described the history of the Soviet Union as...

William K. Black - professor of economics and the senior regulator during the S & L crisis - says that that the government's entire strategy now - as during the S&L crisis - is to cover up how bad things are ("the entire strategy is to keep people from getting the facts").Indeed, as I have previously documented, 7 out of the 8 giant, money center banks went bankrupt in the 1980's during the "Latin American Crisis", and the government's response was to cover up their insolvency. Black also says: There has been no honest examination of the crisis because it...

{snip} Currently, dollars account for about 62 percent of the currency reserve at central banks -- the lowest on record, said the International Monetary Fund. Bernanke could go down in economic history as the man who killed the greenback on the operating table. After printing up trillions of new dollars and new bonds to stimulate the US economy, the Federal Reserve chief is now boxed into a corner battling two separate monsters that could devour the economy -- ravenous inflation on one hand, and a perilous recession on the other. "He's in a crisis worse than the meltdown ever was,"...

Dispute of Paulson, Bernanke testimony Court documents show that federal regulators were told about billions of dollars in bonuses awarded to Merrill Lynch executives during the company's takeover by Bank of America - contradicting statements to Congress by Federal Reserve Chairman Ben S. Bernanke and former Treasury Secretary Henry M. Paulson Jr. The Securities Exchange Commission (SEC), in a brief filed in ongoing litigation with Bank of America Corp., said the bank informed the Treasury Department and the Federal Reserve of the Merrill Lynch bonuses as early as Dec. 17 - weeks before the government approved a $20 billion bailout...

With everyone lately focused on China's foreign reserve position, analysts have forgotten that America also has an International Reserve account consisting of foreign currency positions, as well as gold reserves and equivalents. And while the total combined holdings as of the most recently reported period are a joke compared to China's $2+ trillion, the most recent number of $133.6 billion does raise red flags, particularly when one traces this number's level throughout the year. By purchasing $40 billion in SDRs virtually overnight, what the Fed has done is to increase the value of the entire basket pro-rata, while in the...

I ran across this graph at CampaignForLiberty.com which I think every American should view. A picture is worth a thousand words and this one illustrates what the Federal Reserve System, aided and abetted by the Federal Government's deficit spending policies, have caused. There is good reason why this country has undergone another economic tsunami which will lead to eventual economic suicide. The only one way to prevent this from happening is to recognize the event that caused it and then attempt to reverse it. In 1913 the 16th Amendment to the Constitution abrogating the original words "no capitation, or other...

The dollar staged a modest rebound on Friday after comments from Federal Chairman Bernanke led to speculation that the US might make an early exit from unconventional monetary policy. Bernanke said on Thursday that the Fed had the apparatus and the ability to recover the cash and loans to the financial system over the past year, signalling that it had its exit strategy worked out. BUT the Fed balance sheet and money supply hasn't grown since the first quarter of '09. So, Bernanke is likely blowing smoke here for the financially clueless who have never read the M2 data repoted...

Where would we be without the Fed and its printing press? There's been a lot of debate about the appetite of foreign investors of our debt -- Treasury auctions continue to be strong, even as noises emanate from overseas about wanting to dump the dollar . But here's a stark fact, via the Council on Foreign Relations: Only the Fed is buying agency debt. Foreign buyers, who once consumed it voraciously, have been net sellers so far this year.

Am only posting part because of video at site showing tax cheat tim lying! Much has been said on Zero Hedge about the Fed's monetization of Treasuries, usually via the NY Fed's POMO activities, which on occasion buys back Treasuries as promptly as 5 days after any one given auction. Yet we were dumbfounded by this piece of information, presented to us by Jim Bianco, which demonstrates that the Fed's monetization of Agencies is far more blatant than anything even encountred in Treasuries. Below is the 10:00 am announcement of a new $5 billion auction of 2 Year Fannie Agencies:

So says famed economic analyst, Nouriel Roubini, The Federal Reserve is running the risk of creating another bubble, and needs an exit strategy from its credit easing policy, says former Clinton White House economist Nouriel Roubini. The sharp increase in the stock market and commodities, and narrowing of credit spreads since March, are partly due to a wall of global liquidity chasing assets and already causing asset inflation, Roubini writes in The Wall Street Journal.