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View Full Version : Inspector General Federal Reserve is Clueless



Franco
07-08-2009, 11:28 AM
Anyone that was against all the finacial bailouts has good reason to be angry. The Federal Reserve is asleep at the wheel!

Is this the change many of you voted for? They don't know were billions of our taxpayer money is.

Just another great reason why we need less government and not BIG government.

http://dailybail.com/home/there-are-no-words-to-describe-the-following-part-ii.html (http://dailybail.com/home/there-are-no-words-to-describe-the-following-part-ii.html)
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Bayou Magic
07-08-2009, 12:33 PM
A trillion here, a trillion there...what's the big deal?

fp

YardleyLabs
07-08-2009, 01:15 PM
Anyone that was against all the finacial bailouts has good reason to be angry. The Federal Reserve is asleep at the wheel!

Is this the change many of you voted for? They don't know were billions of our taxpayer money is.

Just another great reason why we need less government and not BIG government.

http://dailybail.com/home/there-are-no-words-to-describe-the-following-part-ii.html (http://dailybail.com/home/there-are-no-words-to-describe-the-following-part-ii.html)
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Grayson is, of course, a typical wise-a$$ liberal Democrat who migrated from New York to Florida after graduating from Harvard. The specific actions he was "investigating" occurred under Bush. However, it sounds to me like in this questioning Grayson was either knowingly grandstanding by asking questions that could not reasonably be answered, or he was demonstrating a lack of understanding of the monetary system consistent with a Freshman Congressman newly appointed to the committee and holding his first "seance." I suspect the former based on comments he made about Limbaugh at about the same time:

"In early 2009, Grayson responded to controversial comments by talk radio (http://en.wikipedia.org/wiki/Talk_radio) personality Rush Limbaugh (http://en.wikipedia.org/wiki/Rush_Limbaugh), in which Limbaugh stated that he wanted President Barack Obama (http://en.wikipedia.org/wiki/Barack_Obama) "to fail", by saying, "Rush Limbaugh is a has-been hypocrite loser, who craves attention. His right-wing lunacy sounds like Mikhail Gorbachev (http://en.wikipedia.org/wiki/Mikhail_Gorbachev), extolling the virtues of communism (http://en.wikipedia.org/wiki/Communism). Limbaugh actually was more lucid when he was a drug addict. If America ever did 1% of what he wanted us to do, then we'd all need pain killers."[10] (http://en.wikipedia.org/wiki/Alan_Grayson#cite_note-9) On March 3 (http://en.wikipedia.org/wiki/March_3) of that year, satirizing incidents in which prominent Republican officials (including Republican National Committee (http://en.wikipedia.org/wiki/Republican_National_Committee) Chairman Michael S. Steele (http://en.wikipedia.org/wiki/Michael_S._Steele)) were forced to apologize to Limbaugh for criticizing him, Grayson released a second statement, in which he said, "I’m sorry Limbaugh called for harsh sentences for drug addicts while he was a drug addict. I'm also sorry that he’s bent on seeing America fail. And I’m sorry that Limbaugh is one sorry excuse for a human being." (from Wikipedia)

The money system in America works by virtue of intraday loans between financial istitutions that are part of the Fed. Every transactions through the banking system actually generates multiple paper (electronic) transactions in the form of debits and credits as funds move from regional bank to Federal reserve banks, between Federal reserve banks, and finally back to the receiving bank. To allow availability of funds pending actual transfer of reserves, there are numerous cash advances made prior to settlement (typically done the following business day). The velocity of these transactions is innately untrackable in real time. In that sense, no one can identify where "loans" are being given at any point in time. As the risks of bank failures mounted last year, the actual process of transferring funds began to fail because banks were not prepared to assume the risk of a bank failure during the day that could place them in the position of having to recover advanced intraday credit to the bank that failed. To allow the system to continue, the Fed began guaranteeing these intraday loans. As I understand Grayson's questions he was basically asking for an audit of what loans were guaranteed. While it would be possible to audit the process and the screening procedures for allowing a bank to participate in Fed transactions, the actual numbers at any point in time cannot be pinned down with any degree of precision. In addition, audits of the details of intraday bank guarantees would need to be audted at the individual Federal Reserve Bank level. These banks are legally independent of the Federal Reserve Board of Governors and are not within the scope of responsibilities of the central board's IG.

The Federal Reserve is a quasi public corporation that is directed by Board of Governors that serve for specific terms. There are currenly five governors for the Federal Reserve: four originally appointed by Bush and one by Obama. Obama also reappointed Bernanke as Chairman.

kjrice
07-08-2009, 02:02 PM
http://www.retrievertraining.net/forums/showthread.php?t=41556

http://finance.yahoo.com/tech-ticker/article/275761/Why-Ron-Paul-is-Right-to-Audit-The-Federal-Reserve?tickers=XLF,GLD,SPY,DIA,TBT,TLT,%5EDJI&sec=topStories&pos=9&asset=&ccode=

Gerry Clinchy
07-08-2009, 02:24 PM
Jeff, shouldn't the Fed lady have been able to give the same coherent answer that you gave?

YardleyLabs
07-08-2009, 03:37 PM
Jeff, shouldn't the Fed lady have been able to give the same coherent answer that you gave?
Federal bureaucrats learn early that you only lose by being argumentative with a member of congress -- especially when they are grandstanding.

Gerry Clinchy
07-08-2009, 04:38 PM
Sorry, Jeff, not a good enough reason.

It is Congress's job to ask such questions, and the answer is to the taxpayers. There are a lot of jerks in Congress, but even a jerk can occasionally ask a question that deserves an answer. It does not help the cause of "transparency" to blow off a Congressional inquiry.

txbadger
07-09-2009, 09:00 AM
Jeff, I understood his questions a bit differently. He appeared to question where had the money, which the Fed had apportioned, had gone. With around 500 failed banks, so far, it would seem a reasonable line of questioning and your bringing Rush into the conversation a typical liberal attempt to misdirect attention of the mater at hand. Similar to ol Bill's perjury, it was just about sex never mind the law.

It would seem your intellect would be better served addressing why BO has now expanded government with over 30 Czars who only answer to him.

Meanwhile while we bicker over tidbits while Our government expands far beyond the powers granted to it.

dnf777
07-09-2009, 09:29 AM
Jeff, I understood his questions a bit differently. He appeared to question where had the money, which the Fed had apportioned, had gone. With around 500 failed banks, so far, it would seem a reasonable line of questioning and your bringing Rush into the conversation a typical liberal attempt to misdirect attention of the mater at hand. Similar to ol Bill's perjury, it was just about sex never mind the law.

It would seem your intellect would be better served addressing why BO has now expanded government with over 30 Czars who only answer to him.

Meanwhile while we bicker over tidbits while Our government expands far beyond the powers granted to it.

My take on this is that W drove our Titanic into the ice berg and we started taking on water at a catastrophic rate....now BO is spending money on upgrading the accessories, rather than good, solid patches.

YardleyLabs
07-09-2009, 09:29 AM
Jeff, I understood his questions a bit differently. He appeared to question where had the money, which the Fed had apportioned, had gone. With around 500 failed banks, so far, it would seem a reasonable line of questioning and your bringing Rush into the conversation a typical liberal attempt to misdirect attention of the mater at hand. Similar to ol Bill's perjury, it was just about sex never mind the law.

It would seem your intellect would be better served addressing why BO has now expanded government with over 30 Czars who only answer to him.

Meanwhile while we bicker over tidbits while Our government expands far beyond the powers granted to it.

There were $750 million TARP funds administered by the Treasury Department (under Paulsen) that were used to finance grants and guarantees for specific financial institutions. It is perfectly legitimate to ask where those funds went since the disbursement of those funds last fall still seems to lack much documentation.

There is also the trillion or so in Fed loan guarantees which were made at the discretion of the Fed (no congressional or presidential approval was needed) which were used to guarantee interbank loans to support funds flow. Historically, these transactions were not guaranteed by anyone and the individual banks were solely at risk. When bank failures made the risks unacceptable, the Fed began guaranteeing them. These were not grants to individual banks, but to a process for funds flow. As a result of these guarantees, interbank loans needed to support routine currency transactions began to flow again. I understood his question to be a request for investigations of "who benefited" from these loans.

There were two problems in responding that I felt the IG attempted to provide. First, these loans represent a balance sheet exposure, not an expense in the absence of a bank failure that triggers the guarantee. Therefore, there is no identifiable beneficiary. Second, the transaction flow in managed through the individual Federal Reserve Banks which are independent legal entities. The scope of responsibilities for the the IG being questioned only extends to the activities of the Board of Governors which does not administer the Federal Reserve Banks. This point was actually made both in her presentation and in a subsequent letter to the Committee. As a separate issue, it is worth noting that the activities being questioned occurred under the Bush administration and under the aegis of a largely independent banking strucutre not directed by the President anyway. (The structure if the Federal Reserve system actually results in part from fears dating back to founding of our country concerning the creation of a Government operated central bank.)

What does any of this have to do with the various czars? FWIW, Obama has clearly used this approach more than prior Presidents, but it has been routine for a long time (e.g.drug czars, energy czars, war czars, czars for funneling funds to faith based organizations, etc.).

Franco
07-09-2009, 11:44 AM
More thoughts on the clueless Fed and bailouts;

Bailing out any entity with money that doesn't exist will cause more pain. More stimulus is just a typical bureaucratic response to standing between a rock and a hard place. Politicians have no incentive to tell the public the truth and make hard choices to cut services. Raise taxes, they lose. Don't provide services, they lose. We're all working without a net now. And if you think the Democrats care about anyone but themselves, you're kidding yourself. Politicians always seem to get theirs in a crisis.

The current administration is making a bad situation much worse!

dnf777
07-09-2009, 12:04 PM
More thoughts on the clueless Fed and bailouts;

Bailing out any entity with money that doesn't exist will cause more pain. More stimulus is just a typical bureaucratic response to standing between a rock and a hard place. Politicians have no incentive to tell the public the truth and make hard choices to cut services. Raise taxes, they lose. Don't provide services, they lose. We're all working without a net now. And if you think the Democrats care about anyone but themselves, you're kidding yourself. Politicians always seem to get theirs in a crisis.

The current administration is making a bad situation much worse!

Hard to argue with what you said. Some have attempted to justify the bailout by comparing it with the "new deal" of FDR. No comparison could be further from accurate! Back then, we BUILT things in this country, and created wealth from raw materials. We had factories and trained workers ready to roll. In that case, a primer of cash into the system could kick-start things, and we resumed.

This is different. It seems what little money does filter down into the hands of consumers, is used to pay off credit cards, or worse yet, is given directly to banks in the TARP fund, and benefits a few wealthy bankers. We have no manufacturing base anymore. I blame NAFTA and multi-national corporations for migrating labor to cheap markets (NAFTA has been the great enabler in this process), rather than any individual. Remember, every president since Bush I has signed onto and supported NAFTA.

I get sick when I hear radio commercials urging you to "exercise your consumer rights" by basically skipping out on credit card balances, and letting banks use TARP funds to cover your debt. Way I see it...some people break windows and steal TVs. Others promise to pay for them and walk out the door with them, knowing they will not. One goes to jail if caught, the other is given tax dollars and thanked for stimulating the economy.

We can blame Obama or Bush, but folks, this is a paradigm of American greed. For every dem, there is a repub, equally to blame. We better figure this out, and fast. Bush wasn't doing it, so the country gave Obama a chance. So far, I'm not impressed, but it took us longer than 6 months to get into this mess. I don't expect a quick fix.

Franco
07-09-2009, 12:16 PM
I don't expect a quick fix.



Agreed.

We should be taking our lumps now instead of making the situation worse and we will have to deal with it shortley and not in our childrens future.

I've said before that anyone can spend money but, it takes a leader to find the alternatives. Even if those alternatives cause pain.

dnf777
07-09-2009, 01:08 PM
Agreed.

We should be taking our lumps now instead of making the situation worse and we will have to deal with it shortley and not in our childrens future.

I've said before that anyone can spend money but, it takes a leader to find the alternatives. Even if those alternatives cause pain.

Just got back from lunch, heard several more radio ads telling folks to "exercise your consumer rights, so you can live pressure free, the lifestyle YOU DESERVE"

That's the #$%@'d up attitude that got us here, and is going to KEEP us here in this mess!

When I use my credit card, that's the store owner trusting me to walk out his door with a product, in return, I have promised to PAY for it. Anyone who blames "the system" or "banks" for credit card debt, is in my mind a thief. Maybe we should be reposessing plasma screen tvs and wiis. They do have resale value at sheriffs auction. Won't pay for the whole mess, but it's a start!

Sorry, just a real sensitive nerve with me, seeing people walk out of stores with things that I will end up paying for , when I have denied myself the same luxury because I don't feel I can afford it right now.

brandywinelabs
07-09-2009, 01:23 PM
........ Maybe we should be reposessing plasma screen tvs and wiis. They do have resale value at sheriffs auction. Won't pay for the whole mess, but it's a start!

Now that's one thing I agree with you on!!!!!!!!.

dnf777
07-09-2009, 03:46 PM
Now that's one thing I agree with you on!!!!!!!!.

Told ya....I used to be a republican! I still have a conservative mean-streak in me! (especially when people have their hand in my wallet)

txbadger
07-10-2009, 08:34 AM
"Second, the transaction flow in managed through the individual Federal Reserve Banks which are independent legal entities. The scope of responsibilities for the the IG being questioned only extends to the activities of the Board of Governors which does not administer the Federal Reserve Banks"

Ahh, the ol I only can investigate so far.....

Any input as to whom is the Fed??

Who's balance sheet reflects the toxic debt guarantees?