There was lots of news coming out of Washington today. Both Ben Bernanke and Timothy Geithner agree: more bailouts are coming. That $700 Billion? That was just the downpayment. Congress wasn't pleased.
Representative Ginny Brown-Waite, a Florida Republican, told Geithner that she had “mixed” emotions about his appearance before the committee.
“Every time a statement is issued by you, the stock market plummets,” she said. “I am sure that is not something you feel good about.”
Getting lost in all the rhetoric was an interesting little tidbit.
The Federal Reserve and U.S. Treasury eliminated executive-compensation limits for companies that bundle loans accepted under a new $1 trillion program, indicating the rules may have hampered efforts to start the plan.
The rules won’t apply to the Term Asset-Backed Securities Loan Facility out of “desire to encourage market participants to stimulate credit formation and utilize the facility,” the New York Fed said in a document on its Web site today. The government separately said it will expand the TALF to support vehicle-fleet leases and loans for business, construction and farm equipment.
Well isn't that nice. Wall Street CEO's that drove their companies into the ground can still get taxpayer-funded multi-million dollar salaries.
Isn't that why we all pay taxes?
But that isn't what caught my eye. The most interesting part was half-way down the article.
The Treasury and Fed also today reiterated that they will seek legislation to give the Fed “additional tools” to manage its balance sheet. The effort stems from concern that taking on longer-term assets will make it more difficult for the central bank to raise interest rates once the economy recovers.Possible legislation may allow the Fed to issue its own debt or let the Treasury issue bills for Fed use that are exempt from the federal debt ceiling, JPMorgan Chase & Co. economist Michael Feroli said.
Uh, excuse me? Debt that is exempt from the debt ceiling? Then what is the point of a budget? Fed issuing its own debt? Exactly what is the purpose of the Fed again? And what has that to do with raising interest rates?
This is looking more and more like an end-around on Congress.
man
is it possible these actions are basically cause the United States to implode? I think we have to turn Peterson and start asking these questions.
Concerning the Fed issuing its own debt
The WSJ had an article about this a few months back.
Kind of makes you feel warm and fuzzy all over, huh?
U.S. Treasury-Fed. Res. are,
U.S. Treasury-Fed. Res. are, in essence, a singular
entity ... one askes to borrow, and in exchange the other issues credit (as money). "What's the limit?" as one Senator asked. It's a function of ratio and proportion to--was the Bernanke answer--as a percentage of GDP. But basically, the Keynesian pot is limitless to the extent that 'money' is a legal fiction. Basically, a relative concept. Consider the Obama borrowing scheme. To the extent it translates into long-term public infrastructural investments, it becomes instilled as off-book public assets, just like most non-toll public bridges and highways. They carry public value in a real sense, but they're not accounted for as assets...they've been previously booked as prior period expenses. Just an FYI.:-)
reminds me
CSPAN is not offering embedding and that's a very useful tool in addition to being able to search transcripts and then just show the relevant clip. These hearings are usually 3 hours long and so it's impossible for people to listen to so many hearings, so long and need those tools to zero in on the clip of concern.
Everybody bug CSPAN will ya? They are slowly but surely getting it on web 2.0 and I can do some "tricks" and embed their videos anyway but it would be simple if they just offered it.
They have a fairly cool transcript coordinated to video clip script but they don't implement it most of the time.