Bernanke Says Fed Does Not Engage In Stock Market Or "Individual Stock" Manipulation

Zero Hedge ^ | 12 June 2010 | Tyler Durdan

[combat_boots]

Some Loose Ends On FX Swaps..n a response letter sent to Alan Grayson, the Fed chairman has the following brief retort to the question of whether "the Federal Reserve- alone or in concert with the Treasury Department or any part of the government- ever taken any action with the purpose or effect of supporting the stock market or an individual stock": "The Federal Reserve has not intervened to support the stock market or an individual stock." Shocking. And we are confident that the fine people at Liberty 33 just sit all day, twiddling their thumbs now that the Fed is no longer in the MBS and UST monetization business. Furthermore, anyone who reads anything into the fact that the FRBNY is continuously ramping up its hiring of traders, both credit and equity, as posted in assorted public venues, is simply paranoid and does not understand that this is only due to Brian Sack's fascination in being surrounded by 400 traders daily. On the other hand, at this point pretty much everyone is aware of the sad state of FRBNY intervention, whether it is in the FX market or the gold market, and indirectly via the discount window and the repo system, in which banks purchase bonds at auction, using discount window or other zero cost capital, only to repo it back, and to use the proceeds to bid up stocks. Maybe Mr. Grayson can ask the Chairman whether the Fed is actively endorsing primary dealers to bid up risky assets to create the impression that since the market is ramping higher (on no volume, mind you, but who cares) that the economy is doing so as well (we will shortly have something to say that refutes this thesis, compliments of none other than Goldman Sachs).

[combat_boots]

All cynicism aside, Grayson at least still continues to ask the right questions: among these are 1) How does the fed plan on dealing with the $1.7 trillion in MBS on the Fed's balance sheet; 2) Why Greenspan and Bernanke were so wrong in keeping the FF rate for so long, and how does the Chairman plan to reconcile the same bubble creation that blew up the economy last time ZIRP was around, with the deflationary threat to the economy, 3) Why does the Fed think a Tobin tax is bad (and, incidentally, why does the Fed even have an opinion on tax policy), 4) Why is the Fed failing at pushing unemployment lower even with ZIRP and QE, 5) How the Fed is lobbying on behalf of its, and Wall Street's interest, 6) How much gold should the US government own, and many others.

[KoRn]

“Subprime is contained”.....

[Raycpa]

The Federal Reserve has not intervened to support the stock market or an individual stock.

So it wasn't the entire market and it wasn't just one stock.

[TruthInThoughtWordAndDeed]

Of course not silly, today is Saturday. /s

[Shermy]

“So it wasn’t the entire market and it wasn’t just one stock.”

Good read.

They are speaking deceptively.

[PGalt]

Thanks for posting and thanks to Tyler Durden at zerohedge. Great back and forth about the f-stick Grayson in the commentary.

[coloradan]

Furthermore, the futures market isn’t the stock market. Even stock index futures isn’t the stock market. There are lots of ways to parse the sentence, even if he isn’t lying. (Which isn’t a given.)

[rolling_stone]

The Federal Reserve has not intervened to support the stock market or an individual stock.

haha that's funny now ask them if they intervened to create the panic and crash..by drying up funds...so they could scare people into the bailouts and stimulus..they lie they should be in jail.

[Ghost of Philip Marlowe]

But don’t you see how contradictory and therefore irrelevant Grayson is?

He attacks “socialist banking” yet backs every other form of socialism out there.

He hates the free markets.

To go off only on the central-banking system shows what a self-conflicted moron the guy is.

[Ghost of Philip Marlowe]

Actually, what they do is take any of the DJIA indicators and pump those that need pumping in order to control the average. It switches all the time. So, what they are really doing, is supporting “only those stocks that need supporting when they need it.”

But this is all silly nonsense. Because the DJIA is greatly controlled by currency fluctuations.

The Fed is HEAVILY involved in international currency swaps to bolster whatever currencies and exchanges need bolstering. So, focusing on individual companies in an exchange is not nearly as big a deal as controlling the life blood of those companies.

[PGalt]

revisiting thread BUMP!

[jonno]

ping

[blam]

Thanks. I believe very little that is said these days.

[orinoco]

As long as there is Wall Street corruption and government intrusion in the market we will never have a free market. Unless the market is free you can throw out all investment formulas. I for one will not be participating in crony-capitalism.