Tuesday, December 9, 2008

FDIC and the Fed

"If the [Fed] were a commercial lender, it would be a candidate for a receivership, based on its capital ratios. ... Although the Fed's role as a central bank is much different from the role of a private-sector operation, the drastic changes in the size and shape of its balance sheet worry even some long-time Fed officials. Its consolidated assets have swelled to $2.2 trillion from $915 billion in about 11 months, and contain at least a half-dozen items that weren't there before. ... 'If the Fed had been [a savings-and-loan] ballooning its balance sheet so fast, the supervisors would have been all over it,' says Ed Kane, a Boston College finance professor. Yet others see a willy-nilly series of moves that didn't weed out insolvent banks. Boston College's Kane blames Treasury Secretary Henry Paulson for frightening Congress into parting with $700 billion. ... 'The Fed has violated two principal tenets of central banking,' says Lee Hoskins, former president of the Cleveland Fed: 'First, don't lend to insolvent institutions, and second, don't lend on anything but the most pristine collateral'--and at a penalty rate", Jack Willoughby at Barron's, 24 November 2008.

Yes.

6 comments:

Anonymous said...

The actions of the Fed/Treas were a mess...

Sad time in our history...

Edgar Alpo said...

blagojevich-spitzered

Independent Accountant said...

BS:
It looks that way to me. Yesterday, Blago said Illinois may stop doing business with the Bank of Americaas a result of the sit-in at the company in Chicago. Today, he gets arrested. Coincidence? Hahahahaha! Federal law enforcement is a complete joke. Blago should hire Mary Jo White and get the charges dismissed. Will the US attorney for the Northern District of Illinois show up next month as B of A's general counsel?

Anonymous said...

Double bank shot for BofA... cause I'm sure that it spooked the O-Man too...

But this may blow up on Fitzgerald cause he's dragging in the journalists... the NYT already have this under the microscope...

http://www.nytimes.com/2008/12/10/us/10tribune.html?hp

Independent Accountant said...

Anonymous:
This is funny. Blago meets with the Republic workers on Monday and gets arrested Tuesday. This is another argument for federalism. There is only one way to stop this nonsense, the state police must put the 94 US attorneys under constant surveillance. There are about 650,000 local law enforcement personnel and only 11,000 FBI agents. When US attorneys start getting arrested wholesale for running red lights, if nothing else, this nonsense will stop. What do I care about Blago and his $150,000 even if true? Look at what goes on with the Feds failure to prosecute big time miscreants in New York, Los Angeles, etc.
I have an idea. Let the Feds indict a few more Blackwaters before 20 January 2009. Anything to ingratiate Connie & Co. with the Iraqi government. "Round up the usual suspects"! Laugh. I wonder if Fitzgerald channels Vyshinky, Stalin's favor prosecutor. I suspect Putin is laughing at this.

Anonymous said...

Ha ha ha IA... law enforcement competition... nice idea... locals shadow the federales... crimping their style...

Putin says "child's play..."