Fed Fluff on Audits and How This Is All One Big Misunderstanding

Python versus pig. I shouldn't have to explain this.

The Fed is in the frying pan and it's absolutely awesome but I expect the novelty will wear off eventually. As fun as it is to see them squirm, it also means we're kind of doomed since they've got the gold and all we've got is the debt. Damnit. Someone really should have taken a closer look at the terms and conditions when we signed up for this shit in 1913.


The embattled Federal Reserve is ratcheting up its response to congressional criticism in an effort to protect its regulatory authority and autonomy—an effort that is softening some attacks but doesn't appear to be enough to win over hostile lawmakers.

Fed Chairman Ben Bernanke earlier this week publicly invited congressional auditors to review the Fed's role in the rescue of American International Group Inc. 16 months ago. And the Federal Reserve Bank of New York issued a point-by-point defense of the Fed's decision to pay off AIG's trading partners 100 cents on the dollar.

Trying to blunt charges that the Fed is unnecessarily secretive, Mr. Bernanke and other officials are proclaiming their commitment to transparency. "The notion that the Federal Reserve's financial dealings are somehow kept hidden from the public is a surprisingly widely held view—and it is simply incorrect," New York Fed President William Dudley said in a speech Wednesday.

After the House Oversight and Government Reform Committee subpoenaed the New York Fed for all documents related to AIG's payments to counterparties in advance of a hearing next Wednesday, the bank turned over 250,000 pages of documents and a more detailed rebuttal of criticism of its actions than it had offered previously. The statement, for instance, outlined securities laws, listed the sequence of events and cited relevant e-mails to explain why the Fed initially supported AIG in its decision not to release the identities of its trading partners.

The documents didn't satisfy some House lawmakers. The committee's top Republican, Rep. Darrell Issa of California, asked the panel's chairman to require the Fed to produce more documents .

The NY Fed, knowing Issa is coming for dat ass, released a statement yesterday that they support a full GAO audit:

The Federal Reserve Bank of New York said today that it welcomes Federal Reserve Chairman Ben Bernanke’s call for a comprehensive review by the U.S. Government Accountability Office (GAO) of all aspects of the Federal Reserve’s involvement in American International Group, Inc. (AIG). The New York Fed also announced that it has delivered detailed records requested by the House Committee on Oversight and Government Reform related to AIG.

“We are in favor of a full and objective review of our actions and look forward to the opportunity to document for the public and members of Congress our involvement in AIG. All of the Federal Reserve’s actions regarding AIG were undertaken to protect the American people from an even more severe economic downturn and to safeguard U.S. taxpayers’ interests in the company,” said Federal Reserve Bank of New York President William C. Dudley.

“We are confident that a comprehensive GAO review and the documents we have provided to Congress will clarify the government’s role in AIG and underscore the importance of the intervention,” Mr. Dudley said.

And as if that weren't enough, we've also got Dudley stuttering in a speech today on regulatory reform:

The legislative proposals concerning the Federal Reserve are not limited to the Federal Reserve’s role in supervision. Consider, for example, one proposal that calls for what it terms "audits" of the Federal Reserve by the U.S. Government Accountability Office (GAO), an arm of Congress. These wouldn't be audits at all in the commonly understood sense of the term. The Federal Reserve's financial books and transactions are already audited by wide range of professionals internal and external to the institution. Rather, these new audits would involve ex-post review of Federal Reserve monetary policy decisions, a potential first step toward the politicization of a process that Congress has carefully sought to insulate from political pressures.

The notion that the Federal Reserve's financial dealings are somehow kept hidden from the public is a surprisingly widely held view—and it is simply incorrect. An independent outside audit of the Federal Reserve's books is conducted annually. You can find the results online, including a detailed accounting of the Federal Reserve's income and operating expenses in its annual report. The financial books of the regional Federal Reserve Banks also undergo independent outside audits, also available online. In addition, the GAO is empowered to review almost all Federal Reserve activities other than the conduct of monetary policy, including the Federal Reserve's financial operations, which the GAO has done so frequently. The Federal Reserve's balance sheet is posted online weekly, with considerable detail, in what's called the H.4.1 report. Finally, an additional accounting of the Federal Reserve's emergency lending programs created over the last two years is available online in a monthly report.

Take your H.4.1 and stick it directly up your ass, Bill, no one is claiming the Fed is entirely opaque and you know exactly what the unwashed masses are after so stop acting coy. Certainly Dudley doesn't believe any of this, does he? Wasn't he there for the Don Kohn classic when he told Congress "fuck you" when asked who'd received Fed loans?

Market Ticker and Zero Hedge wanted to get worked into a lather recently over Fed officials trying to weasel their way out of a full audit recently but tagged the wrong Fed official in a lather, how about this asshat Dudley? He's perfect.

Send Skeptical CPA into those books with a pair of rubber gloves and a can of mace, I bet he'll fare better than the GAO ever could.

Let me make sure I understand the logic here: Isn't a GAO audit of the Fed similar to the function of a corporate internal audit committee? Congress would hate to make it look like they let the Fed get out of control since that would expose the fact that they failed in their duties (babysitting our manic money-printing friends at the Fed). And since the GAO is just an arm of Congress, what's to stop them from fudging the facts to keep Congress from looking like the ignorant asshats they are?

Song and dance. Indictments or it didn't happen and the rest of this showing off needs to stop as the Fed is only making themselves look worse. Dance, bitches.

Jr Deputy Accountant

Some say he’s half man half fish, others say he’s more of a seventy/thirty split. Either way he’s a fishy bastard.


The problem is that most people just don't understand what the Fed is or how privately owned it is.

If we are going to have true transparency of the FEd first we must know who the owners are.

How can we ever trust a company to control all of our money and economy when we don't know who they are.

The Fed and the Central Bank of England work hand in hand. Why? Are they connected in any way? The answer is, I believe, yes. The Central Bank of England is also privately owned and as far as I can see it is controlled by the Rothschild family. Remember, it was Meyer Rothschild in the late 1700's that created the concept of central banks which are privately owned.

Woodrow Wilson shortly after signing the bill to create the Fed made a statement saying he regretted doing that as he believed he had betrayed his country by doing so. He know it would be the ruination of our democracy and how right he was.

The real question is: Who are teh handful of people that control the money of the world?

We are slaves to these people whoever they are but we can proclaim our freedom by simply removing the Fed and turning the money creation and supply over to the Treasury Department so that the people can control it as it should be.

We have no democracy and no freedom as long as we are held captive by a dictatorship.

Meyer Rothschild's statement, "Let me control the money of a nation and I care not who makes its laws" rings true. The money supply dictates our laws and influences our lawmakers.

Latest news is that the Supreme Court just voted to allow corporations to spend what ever they want on campaign election ads.

Once again, money will determine who we elect. So it looks like even The Supreme Court of the United States is a servant of the Fed.

Houston, we have a problem.