The Creature from Jekyll Island Gets Bludgeoned and Unceremoniously Dragged into the Light
If the Federal Reserve begins to feel a slight tingling in the area where their balls would be had they a pair, don't worry, that's just the slight pressure of the unwashed masses placing said non-existent cojones into the nut vice. The nut vice, for the uninitiated (I'm not talking to you, Ben Bernanke, you should know full well what that is since yours truly has had your pair clamped there for at least a year), is not a comfortable experience. Long late night conference calls across the System trying to diffuse PR nightmares, excessive strings of emails on how to handle the flaming pitchforks... you get the idea.
The Fed knows damn well we're coming for that ass. And by we I mean mostly me but thankfully it appears as though the sheep are right behind me wielding those gleaming pitchforks ready to take back their country.
Well done, kids, keep going, we have a long way to go but this is certainly a start.
With thousand-paged bills requiring a law degree to understand sailing through Congress every day, Senators Jim Bunning (R-KY) and David Vitter (R-LA) have decided it’s time to put an end to the obfuscation and to take transparency on a new massive government program into their own hands.
In a letter dated Dec. 2 to the New York Federal Reserve Chairman, Dennis Hughes, Senators Bunning and Vitter asks him to explain in clear cut terms precisely how the Term Asset-Backed Lending Facility (TALF), for new loans, is administered.
And rightfully so.
In November 2008, the Federal Reserve Board authorized the TALF program. Shortly after, the Treasury gave the Fed $20 billion dollars of TARP funds to back these new loans for TALF. And now, current reports say that as of October, there had been over $40 billion dollars worth of loans made.
What we do know is that TALF applies to everything from credit card debt, student loans, Small Business Administration loans, car loans, and even commercial real estate mortgage-backed securities.
What we do not know is how the financial institutions get paid, how the deals are brokered, and how the recipients are selected. This leaves much to be desired.
The NY Fed isn't used to this, of course. Serving instead as Bottom Bitch to the Board of Governors (I'll save you the trip to Urban Dictionary: in a harem of prostitutes, the Bottom Bitch is the one who gets most of the Pimp's love and affection and not so much of his backhand across her face), it has up until about a year ago operated in the dark shadows of the open market, slithering around doing the Fed's dirty work undetected. Sure, you've got traders who actually care and economists who track what information they provide but up until recently, no one actually cared what the Fed was up to. At least not normal people. Yours truly obviously has a problem and needs to work on her Federal Reserve fixation but we'll save that for another day...
TALF isn't the only sketchy acronym that could use a little sunshine, the Fed's got an entire alphabet soup of programs that don't make sense. No one is asking them to write a children's book on monetary policy, all we'd like to see is some level of "this is what we are doing and here is why".
As we learned previously, the bloody footprints are leading out of the crime scene like Hansel and Gretel's crumbs leading their way out of the forest (Sprott):
In the latest Treasury Bulletin published in December 2009, ownership data reveals that the United States increased the public debt by $1.885 trillion dollars in fiscal 2009. So who bought all the new Treasury securities to finance the massive increase in expenditures? According to the same report, there were three distinct groups that bought more than they did in 2008. The first was “Foreign and International Buyers”, who purchased $697.5 billion worth of Treasury securities in fiscal 2009 – representing about 23% more than their respective purchases in fiscal 2008. The second group was the Federal Reserve itself. According to its published balance sheet, it increased its treasury holdings by $286 billion in 2009, representing a 60% increase year-over-year. This increase appears to be a direct result of the Federal Reserve’s Quantitative Easing program announced this past March. Most of the other identified buyers in the Treasury Bulletin were either net sellers or small buyers in 2009. While the Q4 data is not yet available, the Q1, Q2 and Q3 data suggests that the State and Local governments and US Savings Bonds groups will be net sellers of US Treasury securities in 2009, while pension funds, insurance companies and depository institutions only increased their purchases by a negligible amount.
Go on, just tell us. We already know. Seriously, we all know what you did there.
If the Dirty Fed has some sins to confess, feel free to give me a call. I'll be sure to put on that soothing voice from my days as a California Call Box operator and you can tell me allllll about what you did there. It'll be cleansing. Hurry up and repent, you never know when your day will come and at this rate, the Fed will never make it to its 100th birthday. Awww, poor Fed, I'll shed a tear when I stop laughing maniacally at this delicious turn of events.
Nice knowing you money-printing pricks but it looks like JDA might need a new hobby. Any suggestions? Basketweaving? Tiddlywinks?