Whatever they are doing and whatever their intent, it isn't 'juicing' the price of housing.... especially in areas where the foreclosures are rampant.

Its becoming more and more apparent that the only real ammo left for the western world economics is to attempt to print economic growth. Even the headlines for the US stock market is mostly based off of the 'hope' for more QE.

 

Debt crisis: live

"The International Monetary Fund warned the eurozone was in "critical danger", urging the European Central Bank to tackle the crisis by turning on the printing presses, as Greek leaders continue to wrestle over spending cuts."

http://www.telegraph.co.uk/finance/debt-crisis-live/9406901/Debt-crisis-live.html

Whatever they are doing and whatever their intent, it isn't 'juicing' the price of housing.... especially in areas where the foreclosures are rampant.

 

Many of these cities that are seeing increases are core areas of the foreclosure issues (Florida, Arizona, California). What is happening is inventory is being restricted in may places and this is causing prices to increase.

 

Home prices rise in nearly all major US cities

"WASHINGTON (AP) — Home prices rose in nearly all major U.S. cities in April from March, further evidence of a housing market that is slowly improving even while the job market slumps.

The Standard & Poor's/Case-Shiller home price index released Tuesday showed increases in 19 of the 20 cities tracked. That's the second straight month that prices have risen in a majority of U.S. cities."

http://www.sfgate.com/news/article/Home-prices-rise-in-nearly-all-major-US-cities-3663322.php

The other thing about REO liquidation rates: even where prices are creeping back up, there is probably some reverse causation going on.  If REO owners believe prices are increasing, they may hold back some inventory to "dollar cost average" the sales, in a sense.  In other words, rising prices may change REO sales behavior, not the other way around.  There may happen to be some positive reinforcement of the price trend, but it's a far cry from a malevolent conspiracy or monopoly pricing.

If  prices rise, then they release held back inventory. Prices will go down again. It will only piss off more homeowners having a house costing more than it's worth.

The article says prices dropped in Detroit and only tracks 20 cities without distinguishing between the neighborhoods where foreclosures were rampant and those neighborhoods which really weren't hit by foreclosure.  How's the housing market in Stockton doing? I would also guess that despite recent gains, the bubble prices have not been restored in most areas.  LV, for example, saw its prices drop dramatically from the height of the bubble, so a recent, modest gain doesn't really play into your latest conspiracy theory

The article says prices dropped in Detroit and only tracks 20 cities without distinguishing between the neighborhoods where foreclosures were rampant and those neighborhoods which really weren't hit by foreclosure.  How's the housing market in Stockton doing? I would also guess that despite recent gains, the bubble prices have not been restored in most areas.  LV, for example, saw its prices drop dramatically from the height of the bubble, so a recent, modest gain doesn't really play into your latest conspiracy theory

 

We shall see.

Of course he didn't do so good with what he expected last time. He didn't see a recession, said banking was very stable, subprime is contained and no major house bubble/bust coming. Actually, these types of comments seemed to start appearing just about the time the wheels started to fall off last time.

 

Bernanke doesn’t expect double-dip recession

Holds door open for more easing

"WASHINGTON (MarketWatch) — The economy isn’t likely to slide back into recession, Federal Reserve Board Chairman Ben Bernanke said Wednesday in his second day of questioning by lawmakers.

“At this point we don’t see a double-dip recession — we see continued moderate growth,” Bernanke said in testimony to the House Financial Services panel. On Tuesday, Bernanke presented a pessimistic outlook on the economy to the Senate Banking Committee."

http://www.marketwatch.com/story/bernanke-doesnt-expect-double-dip-recession-2012-07-18

The Daily Show has two very good videos on the international banking issues, libor and what it means to main street.

 

Part 1 - http://www.thedailyshow.com/watch/wed-july-18-2012/international-banking-actuality-part-37

Part 2 - http://www.thedailyshow.com/watch/wed-july-18-2012/international-banking-actuality-part-37---libor-fallout

 

 

 

 

Philly factory activity stays weak in July

"WASHINGTON (MarketWatch) — Factory activity in the Philadelphia region contracted for the third straight month in July, the Philadelphia Federal Reserve Bank said Thursday."

http://www.marketwatch.com/story/philly-factory-activity-stays-weak-in-july-2012-07-19-101033855

 

 

Sales of existing homes drop 5.4% in June

"WASHINGTON (MarketWatch) — Sales of existing homes in June fell to the slowest pace since October, a decline that goes against the grain of more positive indicators from the housing market and one which a trade group on Thursday blamed on foreclosure delays and tough mortgage availability."

“There are millions of homes either still tied up in the legal process surrounding foreclosure or which at some stage will be in foreclosure (mortgage delinquencies, while declining, are still very high), and these units are not yet recorded as available for sale,” said Josh Shapiro, chief U.S. economist at MFR, in a note to clients.

“The huge supply overhang of existing homes promises to keep pressure on prices and to weigh on demand for new homes and hence on housing starts.”

Median prices jumped for a third month, rising 7.9% from year-ago levels to $189,400. This is due to the mix of homes being sold, rather than re-sale prices, Yun said. CoreLogic, for instance, reported that re-sale prices were up 2% year-on-year."

http://www.marketwatch.com/story/sales-of-existing-homes-drop-54-in-june-2012-07-19

 

 

Leading economic index declines in June

‘The U.S. economy is growing very slowly,’ economist says

"WASHINGTON (MarketWatch) — The index of leading economic indicators fell 0.3% in June to 95.6, mostly reversing the increase in May, the Conference Board reported Thursday.

Weakness in business orders, consumer confidence and building permits contributed to the decline, the board said."

http://www.marketwatch.com/story/leading-economic-index-declines-in-june-2012-07-19

 

 

U.S. weekly jobless claims shoot back up

"Applications for benefits jump 34,000 to 386,000

Claims in the prior week were revised up to 352,000 from 350,000."

http://www.marketwatch.com/story/us-weekly-jobless-claims-shoot-back-up-2012-07-19

 

 

Picking the winners of this battle would be tough.

 

Feeding Frenzy Seen If Wall Street Sues Itself Over Libor

"Wall Street, grappling with mounting regulatory probes and investor claims over alleged interest-rate manipulation, may face yet another formidable foe: Itself.

Goldman Sachs Group Inc. (GS) (GS) and Morgan Stanley (MS) (MS) are among financial firms that may bring lawsuits against their biggest rivals as regulators on three continents examine whether other banks manipulated the London interbank offered rate, known as Libor, said Bradley Hintz, an analyst with Sanford C. Bernstein & Co. Even if Goldman Sachs and Morgan Stanley forgo claims on their own behalf, they oversee money-market funds that may be required to pursue restitution for injured clients, he said.

Because Libor is based on submissions from only some of the world’s largest banks, the probes threaten to pit firms uninvolved in setting the rate against any implicated in its manipulation, Hintz said. Libor serves as a benchmark for at least $360 trillion in securities."

http://www.businessweek.com/news/2012-07-19/feeding-frenzy-seen-if-wall-street-sues-itself-over-libor

 

 

Deutsche Bank, HSBC Traders Investigated in Libor Probe

"Traders at Deutsche Bank AG (DBK), HSBC Holdings Plc (HSBA), Societe Generale SA (GLE) and Credit Agricole SA (ACA) are under investigation for interest-rate manipulation in a global probe that led to a record fine for Barclays Plc (BARC) last month, a person with knowledge of the matter said."

http://www.bloomberg.com/news/2012-07-18/traders-at-deutsche-bank-and-hsbc-investigated-in-libor-probe.html

 

 

You have to give the banking industry one thing, they are on a roll right now for all of their illegal activity.

 

Capital One to pay $210M for deceptive credit card practices

"Capital One, the fifth largest bank in the country, said Wednesday it reached an agreement with regulators to pay $210 million to resolve charges that it misled and pressured customers into purchasing unnecessary products.

The McLean bank has agreed to refund $150 million to 2.5 million consumers enrolled in debt cancellation as well as credit and identity monitoring products on or after Aug. 1, 2010."

http://www.washingtonpost.com/blogs/capital-business/post/capital-one-to-pay-210m-for-deceptive-credit-card-practices/2012/07/18/gJQAKodetW_blog.html?hpid=z3

 

^Makes me want to bury a coffee can in my backyard.

Libor arrests 'imminent' as US authorities close in

"International law enforcement agencies are close to arresting traders under suspicion of attempting to manipulate inter-bank interest rates."

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9420432/Libor-arrests-imminent-as-US-authorities-close-in.html

 

 

Spain, Italy bond yields soar on bailout fears

"FRANKFURT (MarketWatch) -- Fears that Spain will require a full-fledged sovereign bailout helped push Spanish government bond yields to another round of euro-era record highs Monday."

http://www.marketwatch.com/story/spain-italy-bond-yields-soar-on-bailout-fears-2012-07-23?dist=lcountdown

 

 

Greece reportedly faces IMF aid cut-off

"LOS ANGELES (MarketWatch) — The International Monetary Fund is set to stop aid payments to Greece, raising the odds that the nation will become insolvent as early as September, according to a German press report Sunday citing unnamed European Union officials."

http://www.marketwatch.com/story/greece-reportedly-faces-imf-aid-cut-off-2012-07-22?dist=lcountdown

 

 

Insider trading probe dethrones 'King of Tokyo'

"England had its 'London Whale' but Japan has the 'King of Tokyo'

Dubbed the "King of Tokyo" by traders, the 53-year-old American seemed to have it all: wealth, professional acclaim and status as a patron of contemporary art.

In his best year, Brogan had managed over one billion dollars in his flagship Whitney Japan Fund, although much of that has been withdrawn.

Now Brogan is at the center of a probe of insider trading. His Tokyo-based firm Japan Advisory has been closed since regulators imposed a fine and revoked its license at the end of June."

http://www.marketwatch.com/story/greece-reportedly-faces-imf-aid-cut-off-2012-07-22?dist=lcountdown

 

 

US poverty on track to rise to highest since 1960s

"US poverty on track to reach 46-year high; suburbs, underemployed workers, children hit hard

WASHINGTON (AP) -- The ranks of America's poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the 1960s amid a weak economy and fraying government safety net."

http://finance.yahoo.com/news/us-poverty-track-rise-highest-113013239.html

Negative data is starting to really take hold and getting deeper.

 

Richmond Fed Data Signals Ongoing Broader Weakness

"The market is getting to digest some additional manufacturing data this morning, with the latest installment of economic weakness coming out of the Richmond Federal Reserve. The manufacturing index fell to -17 in July, versus only -1 in June. The services revenue also was down sharply at -11 for July, versus a positive 11 reading from June. Bad news continues on the retail front as the July data came down to -18, versus a positive reading of 3 in June. The shipments component was the worst component here at -23 in July, versus a flat reading of zero in June."

Read more: Richmond Fed Data Signals Ongoing Broader Weakness - 24/7 Wall St. http://247wallst.com/2012/07/24/richmond-fed-data-signals-ongoing-broader-weakness/#ixzz21ZM9ULMd

 

 

Oops, our bad.

 

JPMorgan Chase settles with credit card customers for $100 million

"JPMorgan Chase & Co has agreed to pay $100 million to settle litigation by credit card customers who accused the largest U.S. bank of improperly boosting their minimum payments as a means to generate higher fees."

http://bottomline.msnbc.msn.com/_news/2012/07/24/12929479-jpmorgan-chase-settles-with-credit-card-customers-for-100-million?lite

Major steel supplier Arcelor Mittal (MT) & US Steel (X) both near 52 week lows currently.

 

Major coal producer Peabody (BTU) at 52 week low.

 

Major mining & shipping company Cliffs International (CLF) at 52 week low.

World bankruptcy. We just all need to start over.

World bankruptcy. We just all need to start over.

 

We still have a printing press and we are not afraid to use it.

 

Fed moving closer to action: WSJ

"WASHINGTON (MarketWatch) - Federal Reserve officials are moving closer to taking new action to try to spur the economy, according to a report Tuesday by the Wall Street Journal. Officials at the central bank are growing impatient with the sluggish growth and high unemployment and worried that growth is too slow. The report said that conversations inside the Fed had turned toward how and when to move but did not find a consensus for what steps the Fed might take at its meeting next week."

http://www.marketwatch.com/story/fed-moving-closer-to-action-wsj-2012-07-24?dist=afterbell

 

Major steel supplier Arcelor Mittal (MT) & US Steel (X) both near 52 week lows currently.

 

Major coal producer Peabody (BTU) at 52 week low.

 

Major mining & shipping company Cliffs International (CLF) at 52 week low.

 

You're picking particularly bad ones, though.  Major American steel supplier Nucor is in the middle of its 52-week trading range and has continued to pay a dividend of about 4% all through the recession.

ok name 2 other steel suppliers that are up for the year.  THese are major indexes showing a real slowdown in global & domestic demand

Subprime mortgage market up 24% in 2012

"Bloomberg: The market for the same sub prime mortgage bonds that caused the financial crisis is up 24% so far in 2012."

http://www.marketwatch.com/story/subprime-mortgage-market-up-24-in-2012-2012-07-25?dist=lcountdown

 

 

The housing euphoria that hit in the spring seems to have been overstated. Usually June and July are the peak of homes sales and prices for the year. What would the market be like if rates were not at historically low levels?

 

New U.S. home sales decline 8.4% in June

"WASHINGTON (MarketWatch) - Sales of new single-family homes fell 8.4% in June to an annual rate of 350,000 after reaching a two-year high in May, the U.S. Commerce Department said Wednesday.

The median price of new homes, meanwhile, fell 1.9% in June to $232,600, the lowest level since January."

http://www.marketwatch.com/story/new-us-home-sales-decline-84-in-june-2012-07-25?dist=lcountdown

 

This also shows just how unsustainable new home prices are compared to the average income of American households (about $46,000). This prices is 5 times the household income, way above the historic numbers of 2.5% to 3%.

Debt crisis: live

"The UK economy has shrunk by a shock 0.7pc in the second quarter, official statistics show, as Spanish officials are forced to deny that Germany is pushing the country to accept a €300bn bail-out."

http://www.telegraph.co.uk/finance/debt-crisis-live/9424694/Debt-crisis-live.html

 

 

Ford doubles projected Europe losses

"US carmaker reports large drop in second-quarter profit"

http://www.ft.com/home/us

 

 

Caterpillar warns on industrial slowdown

"US manufacturer cuts sales outlook amid growth fears"

http://www.ft.com/home/us

How dare anyone recommend the banks not win from both directions. Plus, such action would put more pressure on the banks to loan to main street and not just play the stock market, commodities game with the easy money from the FED.

 

One Fed tool that gives Wall Street heartburn

"WASHINGTON (MarketWatch) — Wall Street is enthusiastic about the prospect of more Federal Reserve easing but want the central bank to jettison one tool: reducing the interest rates paid to banks for reserves they park at the Fed.

At the moment, the Fed pays banks 0.25% for reserves they park at the Fed. These reserves currently total $1.46 trillion.

Proponents of the measure say that cutting the rate would make banks work harder to make loans."

http://www.marketwatch.com/story/one-fed-tool-that-gives-wall-street-heartburn-2012-07-25?dist=afterbell

 

 

House Passes Ron Paul’s ‘Audit the Fed’ Bill

 

By Kristina Peterson and Siobhan Hughes

 

The House voted Wednesday to open up the Federal Reserve‘s core monetary policy decisions to the scrutiny of the federal government.

 

The vote marks the latest clash between House Republicans, wary of the unprecedented moves the central bank has taken since the financial crisis to stabilize the economy, and Fed Chairman Ben Bernanke, who has warned the bill could expose the Fed to political pressures.

 

On Wednesday, the House on a 327-98 vote, passed a bill that would permit the government to review the policy deliberations that are at the heart of the central bank’s mission.

 

A senior Democratic Senate leadership aide said there are no plans to bring the bill up in the Senate, but didn’t rule out an attempt by Republicans to seek a vote on the measure as part of another piece of legislation. The Senate would be almost certain to defeat it given the Democratic majority in the chamber.

 

Read the rest:

http://blogs.wsj.com/economics/2012/07/25/house-passes-ron-pauls-audit-the-fed-bill/

^I suppose this is one time that the inefficiencies, ineptitude, and lobby-driven interests of Congress would be a good thing to throw into the mix?  Another purely symbolic vote IMO which would have never been brought to a vote if the House leaders didn't know it would never pass the next two levels of scrutiny.  Besides, we already have private sector, god fearing, job creating, real Americans auditing the Fed.  Do you expect the spawned from hell public sector to do a better job?  Keep your dirty government hands off my printing press!!  I don't want any government beauracrat standing between me and my Benjamins!  That might force people to resort to their 2nd Amendment remedies.  KILL THE BILL!

U.S. jobless claims sink 35,000 to 353,000

Big swings in data linked to temporary auto-sector conditions

"WASHINGTON (MarketWatch) — The number of people who filed applications for unemployment benefits fell sharply last week, marking the third straight week of big swings related to changing employment patterns in the auto industry.

The Labor Department said jobless claims sank by 35,000 to a seasonally adjusted 353,000 in the week ended July 21, putting them just above a four-year low. It was also the biggest one-week decline of the year."

http://www.marketwatch.com/story/us-jobless-claims-sink-35000-to-353000-2012-07-26?dist=lcountdown

 

 

Durable-goods orders rise for 2nd straight month

"Demand for airplanes, defense equipment boosts orders by 1.6%

However, the details of the report were not as strong as the headline suggested. Outside of the volatile aircraft and defense sectors, orders were mainly flat or lower. Despite the recent increases, the level of new orders for big-ticket items during June was still below the level hit in February.

Excluding an 8% rise for transportation equipment, durable orders fell 1.1% in June, the biggest decline since January".

http://www.marketwatch.com/story/durable-goods-orders-rise-for-2nd-straight-month-2012-07-26?dist=lcountdown

 

 

Debt crisis: Mario Draghi pledges to do 'whatever it takes' to save euro

"Mario Draghi, President of the European Central Bank, has pledged to do "whatever it takes" to protect the eurozone from collapse - including fighting unreasonably high government borrowing costs.

Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough," he told an investment conference in London.

"To the extent that the size of the sovereign premia (borrowing costs) hamper the functioning of the monetary policy transmission channels, they come within our mandate."

When asked what probability he would assign to the euro zone having the same number of members it has today in two years, he added: "I don't venture into speculations about things like changes in the treaty. The treaty was meant to have the number of countries that we see today, so frankly I can't really estimate the probability of that."

"We think the euro is irreversible."

http://www.telegraph.co.uk/finance/financialcrisis/9428894/Debt-crisis-Mario-Draghi-pledges-to-do-whatever-it-takes-to-save-euro.html

 

 

More good news for great housing recovery.

 

Pending Sales of U.S. Homes Unexpectedly Fell 1.4% in June

"Contracts to purchase previously owned homes unexpectedly dropped in June for the second time in the last three months, a sign of limited momentum in housing.

The index of pending home resales decreased 1.4 percent to 99.3 after a revised 5.4 percent gain in May that was less than initially reported, figures from the National Association of Realtors showed today in Washington."

http://www.bloomberg.com/news/2012-07-26/pending-sales-of-u-s-homes-unexpectedly-fell-1-4-in-june.html

^I suppose this is one time that the inefficiencies, ineptitude, and lobby-driven interests of Congress would be a good thing to throw into the mix?  Another purely symbolic vote IMO which would have never been brought to a vote if the House leaders didn't know it would never pass the next two levels of scrutiny.

 

This bill had 270 co-sponsors. I disagree that the motives were symbolic.

 

Just listen to my main man and hot-wife-marrying confidant, Dennis!

 

In a little over a minute Rep Dennis Kucinich explains entirely why we need to pass HR 459 and conduct a full audit of the Federal Reserve.

 

There is absolutely no reason a full audit of the Federal Reserve has not been and should not be conducted.

 

Yet we still have an overwhelming number of corrupt politicians in Washington DC that won’t allow it to happen.

 

 

^It was a foregone conclusion that it would pass in the House.  When that situation presents itself, as many politicians as can fit will jump on board (especially in an election year) of a legislative measure with such headline appeal for which the general public has little understanding of the potential dangers.  This is the type of legislations which idealists like Paul and Kucinich advocate for, but pragmatists usually oppose.

^It was a foregone conclusion that it would pass in the House.  When that situation presents itself, as many politicians as can fit will jump on board (especially in an election year) of a legislative measure with such headline appeal for which the general public has little understanding of the potential dangers.  This is the type of legislations which idealists like Paul and Kucinich advocate for, but pragmatists usually oppose.

 

Oh the Danger! You're not drinking Bernanke's Kool Aid, are you? 

 

In this context, what is "pragmatic" vs. "idealistic" is simply one's opinion.

 

So when "idealists" like Paul and Frank introduce legislation to legalize hemp, their bill is then left to die by the "pragmatists?" Maybe if by "pragmatic" you're defining it as "afraid to rock the boat" or perhaps "enlightened on the dangers of industrial hemp."

 

 

Didn't I give legitimate enough reasons in my initial post?  They work for healthcare..... and just about anything else DC tries to stick its nose in and cram/ram/bam/wham/jam/kazaam down our throats..... so why not the Fed?  ;)  And I doubt Bernake puts enough sugar in his kool-aid for my liking.

 

I agree, though, that it is a matter of perspective, and I'm just stating mine...... which I believe would be shared by most who understand why the Fed exists if they were voting on a piece of legislation which had more than a snowball's chance in hell of becoming law.  The Fed was created specifically to be free from political pressure.  And considering the level of transparency which already exists for the Fed (another fact little known by the drum-beating public), I don't see any reason for this legislation other than to place that undesired political pressure on the Fed.  For better or worse, the Fed is supposed to focus on long term economic health and avoid trying to score short-term political points.  If you give some politically motivated Congressional committee, which is subject to change with the ebb and flow of elections, such power over the Fed, you might as well just do away with the Fed altogether (one of Paul's goals) and let Congress set all monetary policy.  We know how well and efficiently that branch of government operates.

 

I view this idea the same as I would any proposal to make US Supreme Court Justices run for election every 4 years.  THere are simply some elements of our society which must be free from mob-rule and the whims of the majority

 

I will also note that idealism and pragmatism are not always counterintuitive..... so I don't find your hemp analogy very persuasive

I will also note that idealism and pragmatism are not always counterintuitive..... so I don't find your hemp analogy very persuasive

 

The analogy is brilliant because it pits pragmatism vs. pragmatistm:  It's pragmatic to allow hemp as it has multiple purposes and is not a drug. But if you're an elected official it's also pragmatic to be safe, and to avoid a lightning rod issue in order to remain elected.

 

See? Brilliant!

Didn't I give legitimate enough reasons in my initial post?  They work for healthcare..... and just about anything else DC tries to stick its nose in and cram/ram/bam/wham/jam/kazaam down our throats..... so why not the Fed?  ;)  And I doubt Bernake puts enough sugar in his kool-aid for my liking.

 

 

Those were convincing points ha ha. I imagine you got them from your recent tea party or militia meeting no doubt.

 

I'm sure the FED was created to be free from pressure. But human nature being what it is, and the FED being as powerful as it is, there should indeed be the highest level of scrutiny applied to their decisions.

 

You have stated numerous that government serves the role to advance our interests; that government solutions to problems are necessary or often preferable to private solutions. Well so be it. Political pressure, whether that's good or bad in someones opinion, comes with the territory. I don't see it as negatively as you do ie "mob rule." I see it as a flawed system with flawed results. The best we can given the circumstances, is provide more access, more insight into what the hell  they are actually doing.

The Fed is not private sector.  It is not driven by personal interests and profit.  It has a mandate from the people and its actions are directed towards carrying out that mandate without being forced to play politics.

 

The concern whcih I have is whether this so-called audit will make the Fed more or less effective.  The argument that its dealings need to be more transparent ignore the fact that it probably already is the most transparent central bank in the world.  Frequent updates on its direction are given and meeting minutes are released periodically.  That said, the key to the effectiveness of any central bank is its INDEPENDENCE in deciding how best to meet its mandate.  I daresay you could not find one case study which suggests otherwise.  And that is what this is really all about - independence vs. control.  It's not about transparency which is already there.  What the proponents of this legislation really are seeking is to eliminate or significantly narrow the Fed's mandate, but don't have the political will and/or support to do so notwithstanding Congress' ability to do just that in theory.

The Fed is not private sector.  It is not driven by personal interests and profit.  It has a mandate from the people and its actions are directed towards carrying out that mandate without being forced to play politics.

 

Okay, if we want to talk "mandates from the people" you should be in favor of allowing the Senate put the bill up for a vote.

 

 

 

I don't selectively oppose using the threat of a filibuster as an actual filibuster, or using a filibuster at all for that matter, when it would prevent what I would consider a bad policy decision..... and I'm glad you recognize that mandate, which should be universally applied of course.  Too bad, for your desires, the precedent has already been set in stone and it won't be put up for a vote.... which the House surely knew when it passed yet another DOA piece of legislation in lieu of spending time on measures which might actually help the economy

I don't selectively oppose using the threat of a filibuster as an actual filibuster, or using a filibuster at all for that matter, when it would prevent what I would consider a bad policy decision..... and I'm glad you recognize that mandate, which should be universally applied of course.  Too bad, for your desires, the precedent has already been set in stone and it won't be put up for a vote.... which the House surely knew when it passed yet another DOA piece of legislation in lieu of spending time on measures which might actually help the economy

 

That "mandate" language is grandstanding and you know it's basically meaningless. It's just fun to use when it's something you agree with.

 

Yes Federal Reserve Bank, please keep "helping" the economy....right off the cliff. 

No, I don't know.  The Fed has a mandate and I expect it to be followed in good faith, regardless of whether I agree with the selected mechanisms through which the mandate is carried out.  If the chairman and the governors fail, there are mechanisms to have them replaced.

 

Your last sentence gets at the point I was making.  The Fed haters really just want it to be eliminated and this measure which would introduce political meddling into a process which was specifically designed to keep out such meddling is really just a thinly veiled attempt to start that process of elimination (and you know it ;)).  Whether you like the Fed or not or agree with its decisions or not, its purpose is to provide stability in the financial markets and I certainly don't see a reasonable alternative proposed.

I'm not sure I agree with abolishing the FED. But no matter what or if the Senate ever votes on this one bill, questionable actions taken by the FED (and economic collapse elsewhere) are putting them under increased scrutiny.

 

 

This makes sense to me. It's from John Mauldin's blog:

 

Massive central bank involvement in the markets risks returning us to a de facto centrally planned economy. Those S&P 500 companies all have the same chairman; it is Ben Bernanke because his policies are affecting everybody. That is what makes money management so difficult. Correlations will ebb and flow; they always do. But what makes them go away? This will only happen when governments and central banks go away.

 

But if they go away, then does that not mean things get ugly? Maybe they do get ugly, but it also means that we sort out the excesses in the market. We reward the people that do the right thing and we punish the people that do the wrong thing. And we have an adjustment process that may be ugly, but then we have a period of long expansion.

 

 

See rest, and alarming looking graphs here:

http://www.ritholtz.com/blog/2012/01/living-in-a-qe-world/

 

 

 

July consumer sentiment at lowest point of year

"WASHINGTON (MarketWatch) — Despite a slight upward revision from the preliminary report, a gauge of consumer sentiment in July came in at the lowest point of the year, according to an indicator released Friday."

http://www.marketwatch.com/story/july-consumer-sentiment-at-lowest-point-of-year-2012-07-27

 

 

If you subtract inflation we are now experiencing negative GDP.

 

U.S. growth slows to 1.5% in second quarter

"Consumers pare spending, and business investment slows

WASHINGTON (MarketWatch) — The U.S. economy took a turn for the worse in the spring as consumers pared spending and businesses invested at a slower pace, with little sign growth will sharply accelerate anytime soon."

http://www.marketwatch.com/story/us-growth-slows-to-15-in-second-quarter-2012-07-27?link=MW_story_insert

 

 

Who cares about Main Street? I am sure incomes will increase nicely to cover the increase in food prices along with increase in other commodities do to another round of QE. Just suck it up boys and girls, what the FED needs to do is for the betterment of?

 

Why the Fed will look past rising food prices

"WASHINGTON (MarketWatch) — The most far-reaching drought in fifty years in the United States is pushing corn prices to new records, signalling higher food price inflation by the end of the year.

But the prospect is not expected to stop the Federal Reserve from easing to help the struggling economy, analysts said.

“Corn prices won’t factor in the Fed’s thinking,” said Michelle Meyer, senior U.S. economist at Bank of America Merrill Lynch. Meyer expects the Fed to launch a new round of bond buying, or QE3, in September."

http://www.marketwatch.com/story/why-the-fed-will-look-past-rising-food-prices-2012-07-27

I'm not sure I agree with abolishing the FED. But no matter what or if the Senate ever votes on this one bill, questionable actions taken by the FED (and economic collapse elsewhere) are putting them under increased scrutiny.

 

 

This makes sense to me. It's from John Mauldin's blog:

 

Massive central bank involvement in the markets risks returning us to a de facto centrally planned economy. Those S&P 500 companies all have the same chairman; it is Ben Bernanke because his policies are affecting everybody. That is what makes money management so difficult. Correlations will ebb and flow; they always do. But what makes them go away? This will only happen when governments and central banks go away.

 

But if they go away, then does that not mean things get ugly? Maybe they do get ugly, but it also means that we sort out the excesses in the market. We reward the people that do the right thing and we punish the people that do the wrong thing. And we have an adjustment process that may be ugly, but then we have a period of long expansion.

 

 

See rest, and alarming looking graphs here:

http://www.ritholtz.com/blog/2012/01/living-in-a-qe-world/

 

 

 

 

Thank you for the very informative charts.

Eurozone break-up would trigger £1 trillion of QE, see banks nationalised and deep recession, warns Fathom

"A Eurozone break-up would plunge the UK into an even deeper recession than the last one, force the Government to nationalise the banks, and trigger a £1 trillion bout of money printing, leading economic consultancy Fathom has warned.

Fathom’s Danny Gabay said the UK would be hit hard by a euro break-up because “the policy cupboard this time is nearly empty”. To prevent the pound strengthening as investors ploughed into the relative safety of the UK, he reckoned the Bank would have to launch £1 trillion round of quantitative easing.

Deanne Julius, a former member of the Bank’s rate-setting Monetary Policy Committee, said companies have already begun preparations for a break-up but she warned that the markets are not prepared and could inflict enormous damage. “The next global shock will be like an earthquake,” she said."

http://www.telegraph.co.uk/finance/financialcrisis/9441120/Eurozone-break-up-would-trigger-1-trillion-of-QE-see-banks-nationalised-and-deep-recession-warns-Fathom.html

 

 

Debt crisis: live

"Greece's deputy finance minister warns that the near-bankrupt country is "on the brink" with cash reserves at "almost zero," as eurozone unemployment hits a record level of 11.2pc."

http://www.telegraph.co.uk/finance/debt-crisis-live/9439261/Debt-crisis-live.html

 

 

The stock market spike over the last week or so was all based off of 'hope' for German support for massive EU funds. How many times can the stock market spike off of the same hope?

 

U.S. stocks steady as Germany curbs confidence

"NEW YORK (MarketWatch) — U.S. stocks held near unchanged Tuesday as an increase in U.S. consumer confidence neutralized media reports that chilled hope that Europe would take bold steps to curb its debt crisis."

http://www.marketwatch.com/story/us-stocks-fall-as-germany-curbs-optimism-2012-07-31 

Looks like another Libor type manipulation might be starting to unfold.

 

Son of LIBOR: Muni Market Eyes All-American Rate-Rigging Scandal

"As the LIBOR scandal continues to encircle global banks, an All-American version of banks manipulating a key lending rate may be unfolding.

The municipal bond industry's self-regulator the Municipal Securities Rulemaking Board is "concerned about the transparency" of the Municipal Market Data (MMD), a benchmark rate for state and local government debt, The NY Times reports.

The MMD Index is owned and published by Thomson Reuters, which calculates the data based, in part, by surveying banks. As with LIBOR, the potential for manipulation is high.

"For years I have been hearing from bankers, usually underwriters, complaining about how the [MMD] scale is manipulated somehow," says one veteran muni bond market watcher."

http://finance.yahoo.com/blogs/daily-ticker/son-libor-muni-market-eyes-american-rate-rigging-142813097.html

 

Manufacturers see little improvement in July

"Companies scale back plans to hire workers, ISM survey finds

WASHINGTON (MarketWatch) — The latest snapshot of the U.S. manufacturing industry suggests growth has cooled off considerably over the past few months.

A gauge that measures the strength of the manufacturing sector remained under the key 50% mark for the second straight month. It’s the first time that’s happened since the tail end of the last recession."

http://www.marketwatch.com/story/manufacturers-see-little-improvement-in-july-2012-08-01

 

 

 

As I posted a few pages back, by the time this Libor issue is over it will be the biggest financial theft in recorded history. We are talking billions and billions. I guess main street really should not be upset, this was needed to support the lifestyle of the world's elite.

 

Behind the Scenes in the Libor Interest Rate Scandal

"There have been plenty of banking scandals, but none quite like this: Investigators and political leaders believe that the manipulation of the Libor benchmark interest rate was the result of organized fraud. Institutions that participated could face billions in fines and penalties. By SPIEGEL Staff"

 

"The Libor manipulation is presumably the biggest financial scandal ever," says Majcen, a man with slightly disheveled-looking hair and Viennese sarcasm. Yes, he says, it did shock him that something like this was even possible, namely that a group of international banks had been manipulating interest rates for years. But Majcen takes a matter-of-fact approach to it all. As a financial professional, he is only one of many who want to get back the money that they feel they've been cheated out of."

 

"Deutsche Bank and more than a dozen other financial giants have come under sharp criticism due to the alleged manipulation of the Libor ( London Interbank Offered Rate), a benchmark interest rate. Some are even referring to the banks that are instrumental in calculating that rate a cartel, the sort of vocabulary not normally associated with the financial industry.

 

Regulators are using terms like "organized fraud." European Justice Commissioner Viviane Reding has suggested that bankers ought to be called "banksters." But in the case of some agencies, especially in New York and London, the outcry is also convenient; it diverts attention away from their own failures. For years, regulators overlooked what was happening right in front of their eyes."

 

 

http://www.spiegel.de/international/business/the-libor-scandal-could-cost-leading-global-banks-billions-a-847453.html

The Fed is not private sector.  It is not driven by personal interests and profit.  It has a mandate from the people and its actions are directed towards carrying out that mandate without being forced to play politics.

 

The concern whcih I have is whether this so-called audit will make the Fed more or less effective.  The argument that its dealings need to be more transparent ignore the fact that it probably already is the most transparent central bank in the world.  Frequent updates on its direction are given and meeting minutes are released periodically.  That said, the key to the effectiveness of any central bank is its INDEPENDENCE in deciding how best to meet its mandate.  I daresay you could not find one case study which suggests otherwise.  And that is what this is really all about - independence vs. control.  It's not about transparency which is already there.  What the proponents of this legislation really are seeking is to eliminate or significantly narrow the Fed's mandate, but don't have the political will and/or support to do so notwithstanding Congress' ability to do just that in theory.

 

Perhaps, but I think that many members have more cynical and self-serving reasons for wanting more political control over the central bank.  Ron Paul may be the exception, but for better or worse, he usually is.

 

This piece roughly sums up my view on the topic:

http://www.nationalreview.com/articles/312592/beware-audit-fed-noah-glyn

 

The Fed is a creature of statute, and Congress has both the authority to audit it and the responsibility to oversee it. A fiscal audit of the Fed is not in itself objectionable — the problem is having Congress insert itself into the Fed’s internal monetary-policy deliberations, which are for very good reason insulated from the political process.

 

This is not a question of the Fed’s fiscal probity: The Government Accountability Office (GAO) already audits the Fed’s financial statements. What Paul and his House colleagues are seeking is for the comptroller general to audit the Fed and then return a “detailed description” of its operations to Congress, along with “recommendations for legislative or administrative action.” This would undermine the monetary-policy independence that is the Fed’s main reason for existence.

 

In congressional testimony, Fed chairman Ben Bernanke described the effect of the bill: “What the Audit the Fed bill would do would be to eliminate the exemption for monetary-policy deliberations and decisions from the GAO audit. So, in effect, what it would do is allow Congress, for example, to ask the GAO to audit a decision taken by the Fed about interest rates.” Bernanke is correct when he argues that this would “create a political influence . . . on the Federal Reserve’s policy decisions.”

While I don't believe were are currently experiencing as severe events as the great depression, their are many similarities and its become very clear we are not out of the woods yet.

 

The depression is here — it’s just invisible

Commentary: The crash wasn’t sudden, but it’s still a tragedy

 

"DENVER (MarketWatch) — The Great Depression that Federal Reserve Chairman Ben Bernanke claims to have averted has been part of the background radiation of our economy since at least 2008.

It’s just that like radiation — it’s invisible."

 

"It is easy to avoid seeing all of these events as constituting a depression if you somehow have kept your livelihood intact all this time. But it’s important to remember that not everyone has to stand in a bread line during a depression.

Nearly one out of seven Americans receives food stamps, according to the U.S. Department of Agriculture. That’s more than 44 million people. If they all stood in a line and someone photographed them using black-and-white film, they easily could be mistaken for people from the 1930s. Instead, they go to a grocery store and spend their credits like money. There isn’t even a social stigma to make them stand out as any more glum or destitute than anybody else."

 

"Last week, the Associated Press reported that America’s poverty rate likely has hit levels not seen since the 1960s. Surveying several economists and academicians, the wire service predicted the official poverty rate would come in as high as 15.7% when the Census Bureau releases it in September. That would wipe out all the gains of President Lyndon Johnson’s War on Poverty."

http://www.marketwatch.com/story/the-depression-is-here-its-just-invisible-2012-08-01?link=MW_story_latest_news

Not all Depressions are the same and very few are like the Great Depression or the after effect of the Panic of 1837. We are in a Depression. I expect to last likely through most of the next decade and possibly beyond, but they do eventually come to an end one way or another. My only hope is that we don't have a repeat of 1939-1945.

The Fed is not private sector.  It is not driven by personal interests and profit.  It has a mandate from the people and its actions are directed towards carrying out that mandate without being forced to play politics.

 

The concern whcih I have is whether this so-called audit will make the Fed more or less effective.  The argument that its dealings need to be more transparent ignore the fact that it probably already is the most transparent central bank in the world.  Frequent updates on its direction are given and meeting minutes are released periodically.  That said, the key to the effectiveness of any central bank is its INDEPENDENCE in deciding how best to meet its mandate.  I daresay you could not find one case study which suggests otherwise.  And that is what this is really all about - independence vs. control.  It's not about transparency which is already there.  What the proponents of this legislation really are seeking is to eliminate or significantly narrow the Fed's mandate, but don't have the political will and/or support to do so notwithstanding Congress' ability to do just that in theory.

 

Perhaps, but I think that many members have more cynical and self-serving reasons for wanting more political control over the central bank.  Ron Paul may be the exception, but for better or worse, he usually is.

 

This piece roughly sums up my view on the topic:

http://www.nationalreview.com/articles/312592/beware-audit-fed-noah-glyn

 

The Fed is a creature of statute, and Congress has both the authority to audit it and the responsibility to oversee it. A fiscal audit of the Fed is not in itself objectionable — the problem is having Congress insert itself into the Fed’s internal monetary-policy deliberations, which are for very good reason insulated from the political process.

 

This is not a question of the Fed’s fiscal probity: The Government Accountability Office (GAO) already audits the Fed’s financial statements. What Paul and his House colleagues are seeking is for the comptroller general to audit the Fed and then return a “detailed description” of its operations to Congress, along with “recommendations for legislative or administrative action.” This would undermine the monetary-policy independence that is the Fed’s main reason for existence.

 

In congressional testimony, Fed chairman Ben Bernanke described the effect of the bill: “What the Audit the Fed bill would do would be to eliminate the exemption for monetary-policy deliberations and decisions from the GAO audit. So, in effect, what it would do is allow Congress, for example, to ask the GAO to audit a decision taken by the Fed about interest rates.” Bernanke is correct when he argues that this would “create a political influence . . . on the Federal Reserve’s policy decisions.”

 

Just read the article, thanks for posting. Some very good points made imho. But I found the comments section equally interesting. There were 18 total comments and every single one was critical of Glyn's reasoning.  Human nature being what it is, I still think the FED is not been free of political persuasion and history shows this to be true.  Avoiding embarrassment and ridicule is a heavy factor in their fears of transparency.

All that speculation, and hope that shot the world's stock markets up significantly over the last week or so turned out to be the same as the past, nothing. I am beginning to believe that all that is left in the gun for the central bankers is talk and that may not work much longer.

 

Draghi doesn’t back up the talk

Commentary: Central banker doesn’t take action

"WASHINGTON (MarketWatch) — One notion that can quickly be put to rest is the idea the Federal Reserve didn’t take action on Wednesday because it knew the European Central Bank was about to unleash a bazooka, because all ECB President Mario Draghi did on Thursday was point to a weapon without any ammunition in it.

What Draghi really has revealed is that he hasn’t outmaneuvered the elephant in the room, the Bundesbank, which is ferociously resisting a new round of bond purchases of Spanish and Italian debt."

http://www.marketwatch.com/story/draghi-doesnt-back-up-the-talk-2012-08-02?dist=lcountdown