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Fed To Discuss Discount Rate In A Closed June 7 Meeting
These days, it appears the Fed's favorite closed session topic is the Discount Rate. After first bringing this matter up for discussion on April 26, Bernanke's henchmen will once again plot how to keep ever more vocal Fed hawks like Hoenig and Fisher quiet, even as ZIRP persists well into the thirtieth century. According to a "Notice of Meeting under Expedited Procedure" tomorrow, the Fed will once again review whether or not to hike the Discount rate. Obviously, any tightening outcome as a result of this meeting (which is the second on the issue in under two months) will send markets into an even worse tailspin.
It is anticipated that the closed meeting of the Board of Governors of the Federal Reserve System at 11:30 a.m. on Monday, June 7, 2010, will be held under expedited procedures, as set forth in section 26lb.7 of the Board's Rules Regarding Public Observation of Meetings, at the Board's offices at 20th Street and C Streets, N.W., Washington, D.C. The following items of official Board business are tentatively scheduled to be considered at that meeting.
Meeting date: June 7, 2010
Matters to be Considered:
1. Review and determination by the Board of Governors of the advance and discount rates to be charged by Federal Reserve Banks.A final announcement of matters considered under expedited procedures will be available in the Board's Freedom of Information and Public Affairs Offices and on the Board's Web site following the closed meeting.
For more information please contact: Michelle Smith, Director, or Dave Skidmore, Assistant to the Board, Office of Board Members at 202-452-2955.
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Hey, is Tink invited ?
http://as7.disneystore.com/is/image/DisneyShopping/98883?$full$
Bernanke is a pig.
You see, they need to raise it this week so they can lower it again in October. This way they will have some wicked ammo back in the war chest when the market is approaching Dow 8000.</Saracasm> (no sarcasm intended on Dow 8000).
The communiqué of the meeting made clear the G20 no longer thought expansionary fiscal policy was sustainable or effective in fostering recovery because investors were no longer confident about some countries’ public finances.
“Those countries with serious fiscal challenges need to accelerate the pace of consolidation,” it said. “We welcome the recent announcements by some countries to reduce their deficits in 2010 and strengthen their fiscal frameworks and institutions.”
These words were in marked contrast to the G20’s April communiqué, which called for support to be maintained until the recovery picked up steam.
------
Mr Geithner, himself, was open about his fears in his letter to the G20. “Concerns about growth as Europe makes needed policy adjustments threaten to undercut the momentum of the recovery,” he wrote, adding that fiscal tightening won’t “succeed unless we are able to strengthen confidence in the global recovery.”
http://www.ft.com/cms/s/0/786776b4-708f-11df-96ab-00144feabdc0.html
After a 300+ dow drop, the continued slow boil in Europe, the alread "too" strong dollar I think Bernanke will have an easy time convincing the Board that the discount rate will stay where it is for the "foreseeable future".
You mean forever, Bruce, until Bernanke is taken away to the funny farm.
...or the Bush family compound in SA.
REMEMBER: The Bush family compound in South America is within a NONextradition country.
Convince the board??? He doesn't have to, they're ALL on the same page. You didn't actually buy into that Hoenig/Fisher "hawkish" crap, did you? Theater for the masses.
How does a rational person even begin to understand "foreseeable future" when the term is used by these MYOPIC clowns ?!?!?
stop insulting clowns. it's a proud profession.
Raise. KING DOLLAR.
Reminds me of Bush2 walking to the mike daily to reassure everyone that the fundamentals are just fine back in ought8'.
Hey arent we currently still in the "forseeable future" alluded to in the last Fed expedited meeting where they pretend to be apolitical and consider raising the rate?
What possible trick is left in their bag for propping up the ecomomy? Negative interest rates? Even more lax accounting standards? Marking profits to what they would be if Keynesian theory actually worked?
The frustration with Bernanke and Geithner is starting to increase to epic proportions, not only in the US, but across the globe. If Bernanke doesn't raise rates, I hope the people will start calling for his resignation. He must go. He is ruining this country. How much money have they arleady wasted in less than 2-3 weeks on the EUR swaps? It is well over 10$ billion for sure.
And who's going to call for his resignation, our corrupt representatives in Congress or our even more corrupt spokesperson-in-chief who put him there?
The President "kept" him there, didn't put him there.
That was Bush2 and the fabulous congress. After they did the same with Greenspan.
and there's a difference?
Yes...
If you keep blaming things on Bu$hitler you don't have to experience heart-stopping buyer's remorse.
Ever notice how the most profound things in life are usually the most simple? "An invasion of armies can be resisted, but not an idea whose time has come." Victor Hugo
The grand collective of us-thousands of Internet sites with our bloggers and we who comment-have spent years now discussing the upcoming "end game". In our discussions, it never ends well, does it? Why is that? Obviously, because we all feel powerless to do anything about it other than try to figure out how to profit from what our "public serpents" are doing to us and get ready for what history tells us will be an upcoming economic disaster. Ultimate visions of national Mad Max scenarios playing out.
There is an alternative. That alternative would require 60 million committed voters. Ask yourself-if you were POTUS with an army of "voters"- How would you fix this nation and economy? Here are my thoughts. Not all of which are original ideas mind you. You can tell me how ridiculous this is and bash all you want. I would rather you give the "collective us" a better idea. I call this "The Big Fix".
1) Sell all government assets not related to defense. It's my understanding that the Federal Government owns 66% of all land west of the Mississippi. Sell it. Details about mineral rights and national Parks could be worked out but sell it all. Nothing would be sold to sovereign governments. I've heard estimates that this would raise over a trillion dollars.
2) Take the proceeds from the sales and buy out every one's social security. One lump sum payment to everyone drawing or paying in. This would allow for the average check to be around 300k. Ask anyone drawing if they would rather keep getting their monthly check or this? Think how many businesses could be started with that money, which leads to number 3.
3) Privatize or end every dept. of the government except Defense and Justice. This would cut the Federal budget in half. Yes, private education would be more affordable for everyone. Over a million federal workers would be displaced but would ultimately end up truly working for us. So what? eight million of "us" have recently lost our jobs.
4) A 15% flat tax rate for everyone. Period. A 0% corporate tax rate. All savings from item 3 and the gains from item 4 would be used pay off the national debt.
5) End the Federal Reserve.
6) Senate and House one term limits.
If we all can't get on board with something like this, we probably should stockpile food, ammo, and gold. Is that what we want? We are big boys and girls, it doesn't have to end like this. We can be truly FREE and prosperous. I'm just sayin.
"Public Serpents"
Superb.
This is one time I will agree with Mako. There is NO good ending.....and end it must.
Good endings are SO Disney style!
And last time I checked, Mickey Mouse wasn't running the white house...
.
...
Or is he?
Not bad Mac. I guess what ticks me off about how this will all end is that the normal guy is the one that gets screwed. Unfortunately, most Americans don't read zero hedge. The "normal everyday guy" is being told everything is fine, we are in a recovery... The only people preparing are the politicians and connected bankers that know what is coming (and of course, zero hedgers). The politicians think we can't deal with the truth, or they fear we will protect our families thereby, run the banks and destroy their ponzy scheme.
Let me take a contrarian view. What if in light of the Europeans' turn down of more QE at the G-20 meeting, Berbungler's hand has been forced into a raise to keep up with the Joneses? If not, why have this closed door, almost emergency meeting-just to tell each other how well they're doing?
No way in hell do they raise rates - This is a damage control meeting. Things are slipping out of their control and they are going to try to contain it .
OK. I buy into what you say. But the game is slipping away from them. What is t they are going to contain? If the Europeans are really going to pay attention to fiscal tightening, that makes the euro stronger at the expense of the dollar and raises our rates. So does that lead to more printing which raises our rates even more? I buy your premise. I just don't see what they can do once the Europeans decided to break ranks and the Japanese changed PMs.
If he raises rates I will laugh my mofo ass off.
Any thoughts on what tomorrow will look like? If futures are any indication, looks brutal. Maybe they can pull a rabbit out of the hat?
Looks like anyone who can eat gold and crap euros will.
I'll be blunt. The futures do not f'in matter any longer. You can wait until this decision is released. If they raise it 50 bps, this mofo is going DOWNTOWN big time because with no short term borrowing happening from the banksters already, what freaking incentive is there going to be when you can't run your laundering con through the discount window to maintain capital reserve requiements. Look at 3 year charts of GS and MS and you'll get the idea of just how f'd our markets are and about to get. We've had EPIC fails at the 200 DMAs and that means shit is about to get just nasty as hell.
Thanks for the reality check. I'm staying out for awhile.
There is going to be some really great stuff for sale when this thing blows. I have my eye on BP. This company is already on sale.....but could be even a greater fire sale very soon if market weakness persists. If you could pick BP shares up at $20-25 ish, that would be a great long term hold.
This meeting will be to rally markets -Bernanke will come out of the meeting saying "no rate increase until at least 2011." or something to that effect and the market will get a pop -
let's see what has passed so far this weekend to try to get a rall or damage control rally monday :
Hungary states their finances aren't as bad as they had anticipated (less than 48 hours later .
Iran's CB issued a statement that they will NOT be selling 45 billion in Euros and buying gold and dollars .
I am missing another off the top of my head but expect spin to be in full force tomorrow AM because it's all they got left .
the language will be changed ..
from
see no rate change in the foreseeable future
to:
rate change are on the table for the foreseeable future
action
7 yes 3 no 2 abstain
rate will stay the same .
markets explode upward,, as the fed bids all futures up/ algorithms go crazy . morgan plays book takes 1/2 penny cut on way up 1/2 penny on down ,, record volumn,, morgan has another record profit day.. with the risk free 1/2 penny.
this last for a day, then the grind down ,,
I posted this earlier and I won't belabor the point.... BUT...here it is again in case you missed it. Great read, it will get you fired up! (Try the PDF from Google.com-left menu bar)((At least I am not pushing 'updated dow charts'!))
http://www.archive.org/details/federalreservem01jemsgoog
Even the Pakis are on to it! Help wake people up and post around, Please!
http://www.flipkart.com/federal-reserve-monster-jim-jam-book-0559921527
And now I am on my way to the street fair in my End the Fed T-shirt....come get me NSA...I'm in Chicago! http://www.mayfestchicago.com/
even as ZIRP persists well into the thirtieth century.
Haha I love it.
ZIRP4EVA
I would guess that they are just going to drop "forseeable future" and simply state that "Interest rates will remain unchanged for the next several quarters". This will both give the market a quick pop to keep the 10000 dow pipe dream alive and enforce the idea that they wish to hell they could start their inflate baby inflate. Without a jobs bill Benarcoboob is hamstrung with 27million unemployed as gleaned from debt clock. And, the party of no is using the economy for their own political advantage by suddenly becoming fiscally responsible so they can regain some seats. At least they have not wavered from ever giving a damn about the working class anyhow and apparently are willing to sabatoge America's economy to get power back. In the meantime welcome to about 1932....three years after the crash and waiting for the 1937 tightening, only four and a half measley years away. Damn reality sucks does'nt it helicopter boy.
I'm sure the central planners have all of our best interests in mind.
i'd laugh my butt off too if they raised rates. of course i think what the fed did in the Great Depression (raising rates) was the right thing to do then, too, unlike Ben Bernanke says now (insofar as history is concerned.) Be that as it may I know expertise when i see it and these guys know what they're doing. i have no doubt no one on this site, piss and moan as you all do, could even imagine doing better. Needless to say no alternative has ever been offered.
"Be that as it may I know expertise when i see it and these guys know what they're doing."
hahahahahaha-
one of the dumbest things I have ever heard- all they have managed to do is delay the inevitable-
and what was the price tag for that?
these fools would give their left nuts to find a new bubble such as housing again- so they could wipe the sweat form their brow and say whew!!!! we saved the world for another couple years- we're heroes- lmao
The fuck you say.
june 23 my CCB license expires. I have to move now to buy bond and liablity ins. Shall i retire or go another year? Seems pointless to blow 1,200.00 to reup if the economy, government and dollar fails. Many other contractors have fallen by the wayside already. as long as i work i will owe the government more money and i see no way of getting out of the tax debt trap except to quit. I cant seem to come out ahead so why try anymore is my feeling. Been in business over 30 years.
What are the odds we will still be playing the same game as now in 2/3 months? Anybody?
You, me, and I would hazard many ZHers are just biding our time awaiting the arrival of the Catalyst, whetever it may be. Besides When, my next question is intentional or accidental or maybe just joss. I have always admired Hugh Axton's response to the question "Why is a philosopher working as a short-order cook?"
I'm afraid you must read at least that portion of the novel to get the answer.
Ask yourselves this question: do the banks benefit by raising the discount rate?
Or, may be you thought Uncle Sugar will do what's right for you?
ZIRP4EVER baby
So now not raising the rate after a few days of suspense will be the new "rate lowing" and give cover for the next buy program.
The only interest rate that matters is the one the Fed is paying banks to keep their money on deposit at the Fed. Everything else pales in comparison when the amount of no strings money that will be released is considered.
Hmmm….so let's recap:
About the only nice thing one can say about Bernanke is the man does know his standard monetary theory (which is roughly akin to a computer technician knowing how to repair computers with vacuum tubes, but no matter). Practically speaking, it means he knows that for monetary policy to “work,” any changes to policy have to unexpected. In other words, stripped of the academic claptrap, for a theft to “work,” (i.e., to convey purchasing power to the undeserving) the victim cannot be expecting the theft; else the victim will take steps to thwart it.
So, what's the outcome of tomorrow's meeting? Unknown, except that it will most likely be surprising whatever it is and perhaps even a bit unpleasant.
The market is decoupled from all other factors but the market itself and raising the rate would have no effect on the indexes.
Discount rate shall go a little higher
Updated DOW charts:
http://stockmarket618.wordpress.com
http://www.zerohedge.com/forum/latest-market-outlook-1
.25% is not the end of the world. We are talking .25%. Can stay there for 3-6 months. Try It. .25%.
Once this "devastating move" is digested, and accepted, we keep there longer than historical norms. Then the "fool in the shower" will gradually turn off the hot water...there...better...
Could this be Ben today?
http://www.youtube.com/watch?v=hJoPNBEdduk
Rabbit Trick from the Twilight Zone, the movie.
Germany cancelled talks with France over Euro bailout. Rut RO!!!!
http://www.france24.com/en/20100607-sarkozy-merkel-talks-cancelled-frenc...