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"Have The Federal Reserve Or Prime Brokers Ever Tried To Manipulate The Stock Market?"

Tyler Durden's picture




 

Alan Grayson: I would like to know whether it is within the Federal Reserve's legal authority to try to manipulate the stock market or the futures market.

Federal Reserve GC Scott Alvarez: I don't believe the Federal Reserve tries to manipulate the stock market...(Yoda: Do or do not, there is no try.)

Alan Grayson: Does the Federal Reserve actually possess all the gold that's listed on their balance sheet.

Scott Alvarez, doing a classic poker body language tell, and taking his time: Yes...

Alan Grayson: Who actually executes the trades for the Federal Reserve in the markets?

Scott Alvarez: The Federal Reserve Bank of New York, which executes trades through Primary Dealers.

Alan Grayson: Can you name one Primary Dealer?

Scott Alvarez: JP Morgan Chase

Alan Grayson: Do you mind if we have a GAO audit to see if there has been front-running or insider trading by them? Do you mind? Is that ok with you?

Scott Alvarez: I am not sure if I have that authority...

 

 

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Fri, 09/25/2009 - 12:25 | 79642 ghostfaceinvestah
ghostfaceinvestah's picture

I have these proceedings playing in the background at work.  EVERY American should be listening to this.  The committee seems to be learning.  The issue of this problem going back to the bailout of LTCM has even come out (of course it is before that, but at least they are not blaming it on the failure of Lehman).  They are talking about Hayek, Mises, etc.

Fri, 09/25/2009 - 12:30 | 79650 Gilgamesh
Gilgamesh's picture

Huh, is there some kind of hearings going on today?  All I can see in the news is Iran and G20.  I'm sure if there were important hearings going on, it would be all over the corporate media...  Surely just a coincidence, the timing of news today - and the market selling off.

Fri, 09/25/2009 - 12:35 | 79654 koaj
koaj's picture

i wonder if cnbc is live streaming this thing also or are they running a special Kneale/Kudlow Power Lunch?

Fri, 09/25/2009 - 12:38 | 79657 ghostfaceinvestah
ghostfaceinvestah's picture

You wouldn't know there was a hearing based on the 12 people in the room, but there is some good stuff being said.

I think the direct correlation is between the selloff and the slowdown in MBS money printing.

http://www.newyorkfed.org/markets/mbs/

$25B last week, again.  With 6 months to go now, instead of 3 months, buying should slow down to $12B a week.  Is that enough in and of itself to starve the equity markets of much-needed liquidity?  Sad comment on the state of the market if that is the case.  And scary to think what will happen with UST buying stops, and then MBS buying stops in March.

S&P 500 @ 500 ahead?

Sat, 09/26/2009 - 11:05 | 80385 Anonymous
Anonymous's picture

"You wouldn't know there was a hearing based on the 12 people in the room."

And that speaks volumes about Congress' desire to understand the problem and change things, doesn't it? Most of them are worthless when it comes to representing anything other than those who pad their pockets for the next campaign or who will offer them a job after they leave office.

Sat, 09/26/2009 - 12:58 | 80423 Anonymous
Anonymous's picture

So sad ...
The entire markets directory, www.newyorkfed.org/markets, has totally vanished a day later, Saturday. One hopes future auditors will not be vexed or misled by large numbers of 'vanished' ledger entries.

Fri, 09/25/2009 - 12:48 | 79680 AndItsGone
AndItsGone's picture

 Austrian economics going toe-to-toe with the kleptocracy in an open session of Congress. The proton torpedoes are coursing through the veins of the Death Star.

Fri, 09/25/2009 - 15:14 | 79863 h4rdware
h4rdware's picture

There was another good clip later on - the testimony of Tom Woods of the Mises institute. It didn't make its way onto youtube unfortunately but it was definitely worth watching if anyone can unearth it. The testimony itself can be found on mises.org but the section extended beyond it.

Fri, 09/25/2009 - 23:45 | 80258 Fish Gone Bad
Fish Gone Bad's picture

If anyone wants to send Grayson their ideas or questions, here is his page where you can send input: http://action.firedoglake.com/page/s/1207hearing

 

As usual, let as many people know as possible.  If you have teenagers, have them post a myspace bulletin and ask others to repost it.  After some time goes by, have them delete the posting, and then re-post it.  Doing this trick about 10 times over a day can really get a message out.

Fri, 09/25/2009 - 12:26 | 79643 skeptic_ill
skeptic_ill's picture

Alan Grayson: Mr. Alvarez, would you like to take a moment to change your undergarments?

Scott Alvarez: No thank you Mr. Grayson, I'm wearing Oops I Pooped My Pants

Fri, 09/25/2009 - 14:45 | 79831 Argos
Argos's picture

Not a very strong performance for the head lawyer.  He reminds me of Barney Fife.

Fri, 09/25/2009 - 15:15 | 79864 MsCreant
MsCreant's picture

Remember, the Head Lawyer is the one with the knee pads.

Fri, 09/25/2009 - 16:01 | 79908 Anonymous
Anonymous's picture

No. That's my ex-wife.

Fri, 09/25/2009 - 12:29 | 79646 Altan311
Altan311's picture

Absolutely mind blowing stuff, Grayson seriously dropping some hammer blows, and will someone please get Alvarez a body language coach? I keep thinking of that scene from ants when the foot comes down...

Fri, 09/25/2009 - 13:05 | 79709 Anonymous
Anonymous's picture

Seems like the sheepeople are finding sufficient entertainment in another episode of The Dog and Pony Show.

Fri, 09/25/2009 - 15:17 | 79865 MsCreant
MsCreant's picture

Possibly a fair observation. What are we not attending to then? Direct us simpletons.

Fri, 09/25/2009 - 13:48 | 79759 Cow
Cow's picture

He's got the same body language coach as Timmay Geithner

Sat, 09/26/2009 - 13:52 | 80450 Anonymous
Anonymous's picture

I have visions of Tim Roth on Lie to Me just chewing him apart......how many "tells" did that asshole have.....?!!!

Fri, 09/25/2009 - 12:29 | 79649 Art Vandelay
Art Vandelay's picture

Every time I watch these hearings, I keep hoping that a few of these other putzes would simply shut their traps and cede their time to Grayson.  Imagine what he could do with 20 or 30 minutes, instead of just 5.

Fri, 09/25/2009 - 12:35 | 79652 Anonymous
Anonymous's picture

I totally agree. He is one of the very few relevant interviewers in congress.

Fri, 09/25/2009 - 13:08 | 79714 gmrpeabody
gmrpeabody's picture

+10

Fri, 09/25/2009 - 13:49 | 79762 Cow
Cow's picture

Agreed.  What is more important than that line of questioning?  Let him finish.

Fri, 09/25/2009 - 23:39 | 80255 Missing_Link
Missing_Link's picture

Yep.  Why can't the Republicans ask these kinds of questions?  Makes me ashamed of my party.

Fri, 09/25/2009 - 12:31 | 79651 andrew123
andrew123's picture

Frankly, I thought Grayson sounded like a simpleton.  Instead of asking broad questions like "has the Fed ever manipulated the stock market" and then saying "I think you know what I mean", he should have asked very specific questions:  Has the fed ever directly or indirectly bought us equities or us equity index futures?  Has the fed ever loaned money against equities or equity futures?  Has the fed ever made guarantees to any other party regarding its purchaaes of equities or equity futures, etc."  Any pronoucnement of interst rate or manitary policies could have an indirect effect on equities, so I think Grayson's question was far too broad.  I appreciate the work he is doing, but I though he came across too simplistic.  On another matter, who was the unprepared idiot that asked Alverez all the basic points about the Fed (white guy, black hair)?  He was sitting behind a a plack that said Wilson, but the only Wilson that is on the committe, doesn't look like the guy on the web, and his office said he was not in attendence.

Fri, 09/25/2009 - 12:39 | 79662 earnyermoney
earnyermoney's picture

I believe the camera angle is providing an optical illusion. It is really apparent for members sitting on the outter edges of the dias. Most likely, Wilson sits adjacent to the person of interest.

Fri, 09/25/2009 - 12:41 | 79667 ghostfaceinvestah
ghostfaceinvestah's picture

I had the same initial reaction, but you have to remember that part of this is theatre.  Grayson knows this clip will be posted on YouTube and replayed. It has to be kept simple for the people to understand.

I don't trust Grayson as much as say Ron Paul, but whatever it takes, breaking down the Fed is going to take a lot of doing.  The last guy who did it (Andrew Jackson) had to fire several of his cabinet to get it done.

Fri, 09/25/2009 - 13:11 | 79722 Altan311
Altan311's picture

Don't forget the assasination attempts by supposed Rothschild agents. Jackson was a horrible racist man who drank too much and abused minority groups for sure, but when they aked him on his deathbed what he was most proud of he said simply "I killed the bank"

fuck yeah

Fri, 09/25/2009 - 14:48 | 79836 Anonymous
Anonymous's picture

..and then what?

The Biddles and their henchmen simply tanked the economy in the 1837 Panic turning van Buren admenstruation into a debacle.

Not saying Jackson shouldn't have done what he did but their was a very heavy price to pay. For decades.

Fri, 09/25/2009 - 19:17 | 80107 Anonymous
Anonymous's picture

...which is why we must make sure that it does not happen the same way again this time...

we loved sir grayson's schtick today but we agree that in the future, the questions should be more specific & pointed. broad strokes may reach a broader audience, but tighter inquiries make it that much more difficult to slip away.

for we bet a silver dollar that whoever the FED brings in next time will be much more slick than mr. alvarez, esq. was today.

Sat, 09/26/2009 - 03:33 | 80321 Anonymous
Anonymous's picture

U fell for it. AJ probably didn't drink TOO much and prob wasn't that much a racist.

Just like JFK who tried to dismantle the FED. The propagand
machine made him out to be a drinking, womanizer.

He could barely walk due to chronic back pain,

RIP JFK... Liberty fell with him. Now look at the mess.

Fri, 09/25/2009 - 13:22 | 79734 pigpen
pigpen's picture

Dylan and Ron Paul skewer the FED on MSNBC yesterday.

"We should never be fearful of the truth"

http://www.youtube.com/watch?v=GZ5e5MfEY2o

Fri, 09/25/2009 - 12:41 | 79668 I need more cowbell
I need more cowbell's picture

Perhaps a simpleton to you, but in the land of village idiots and corrupt bought-offs, Congress, he sounds like Atilla the hun to me.

Fri, 09/25/2009 - 13:27 | 79736 Village Idiot
Village Idiot's picture

I concur.

Fri, 09/25/2009 - 12:46 | 79676 Anonymous
Anonymous's picture

your point is well taken....he leaves open
the barn door so that the flies and cows can
escape...

grayson is merely grandstanding....he gives
the impression of asking tough questions when
all he is doing is winking....

grayson: mr hitler, has the nazi party ever
burned jews to get their gold teeth?

hitler: we have never burned a jew for their
gold fillings..

Fri, 09/25/2009 - 12:59 | 79695 RagnarDanneskjold
RagnarDanneskjold's picture

Glad to see others saw that. A competent lawyer will never step into an open ended question. I didn't even know what Grayson meant, at first it sounded like he meant direct intervention and then he seemed to back off. When the lawyer started talking about interest rates, Grayson didn't differentiate. Well played by the lawyer. It made Grayson appear ignorant, which is the Fed's goal.

If it's political red meat for the simpletons, Grayson should realize that there are non-simpletons out there. 

Fri, 09/25/2009 - 19:25 | 80109 Anonymous
Anonymous's picture

personally we think alan was just a little too overexited and a bit too underprepared, but we're not holding our breath either. however, there is a way to discover for sure...

perhaps ZH should do a poll:
Top 10 Questions to ask the FED

send the results to sir grayson, see if he bites. at the least, we'll know which way he really leans as soon as he opens his mouth next time.

Fri, 09/25/2009 - 19:54 | 80133 Anonymous
Anonymous's picture

on balance, I think he hurt his own cause, acting all cutesy and basically coming across as the ignorant party

Fri, 09/25/2009 - 12:35 | 79653 ghostfaceinvestah
ghostfaceinvestah's picture

http://www.newyorkfed.org/markets/mbs/

$25BBBBB again this week.

Next week (starting yesterday) is when purchases are supposed to slow.  Do you think we will actually see a slowdown?

Note the disbursement between purchases of Fannie/Freddie paper versus Ginnies.  Ginnies have nearly the market share of Fannie/Freddie, but have full faith and credit backing.

What will happen to the market for Fannie/Freddie's if the Fed stops buying.

How much is this bailout of Fannie/Freddie really costing us, and why has there been no move to reform them?

Why are they not just rolled into the FHA?

Fri, 09/25/2009 - 12:42 | 79671 mbielik24
mbielik24's picture

If I'm notmistaken, they would have to raise the debt ceiling (a few trillion) to take FNMA, FHLMC on their books.

Sat, 09/26/2009 - 00:30 | 80271 Anonymous
Anonymous's picture

the fed is not subject to debt ceilings.

Fri, 09/25/2009 - 13:02 | 79705 SDRII
SDRII's picture

ghost trying to piece together the implicationt hat mbs buying frees up cash for PDs to buy the longer dated treasury auctions rince wash repeat. that said any thoughts on the repo implciations of flooding the market with collateral to the MM? Liked the comment the PDs don;t have the balance sheet for such a move?

Fri, 09/25/2009 - 12:35 | 79655 Anonymous
Anonymous's picture

I've got to send a thank you note to Mr Grayson.

Fri, 09/25/2009 - 12:38 | 79659 JohnKing
JohnKing's picture

Maximize employment, stabilize prices..make our buddies rich. Psycho-bankers!

Fri, 09/25/2009 - 12:38 | 79660 Bolweevil
Bolweevil's picture

"Save the unfortunate rhetorical flourishes for us (congress), that's what we get paid for."

Barney Frank

Fri, 09/25/2009 - 13:08 | 79717 Rusty_Shackleford
Rusty_Shackleford's picture

I know.

 

What a f-ing douchebag.

 

Fri, 09/25/2009 - 13:41 | 79752 Anonymous
Anonymous's picture

We have a second, and the motion brought to the table is : Barney is a douchebag...

Fri, 09/25/2009 - 15:26 | 79879 MsCreant
MsCreant's picture

Massengill disposable douche. Re-elections you know.

Fri, 09/25/2009 - 20:52 | 80170 Hephasteus
Hephasteus's picture

I'm going to go with dual purpose douche bag colostemy bag.

Fri, 09/25/2009 - 12:39 | 79661 chindit13
chindit13's picture

While that was a good exchange, I wish Grayson had been more pointed and just asked, "Has the Fed engaged directly or through a proxy in any buying of equities or futures in the last year?"

Another interesting moment was when Watt demonstrated why democracy, as wonderful as it is, is fraught with danger in that it might lead to the inmates running the asylum.

Of course in the end we all know that everyone in the Fed is honorable and beyond reproach, and that we should just mind our own goddamn friggin business and let these honorable people handle trillions of dollars with a small select group of firms without any transaction open to the full light of day.  Taxation without illumination.

 

Fri, 09/25/2009 - 12:39 | 79663 Anonymous
Anonymous's picture

In the late 19th century,and before the demise of the Ottoman empire,corruption was rampant between the governing elite. Does that mean people were sleeping?of course not. There were many reform movements that were constantly pointing out to that and trying to correct it. Except that all their trials were in vain.So after it was at the edges of Vienna,the Austrian capital in the 1600's,there are currently three countries between Turkey an Austria. I watch with facination all those testimonies about trillions of dollars that nobody knows(or claim that they don't)where it went,and yet it seems that nobody is capable of doing anything about it.

Fri, 09/25/2009 - 19:53 | 80132 Uros Slokar
Uros Slokar's picture

As always here at ZH, love the history lessons. Keep them coming.

Fri, 09/25/2009 - 12:39 | 79665 You Cant Handle...
You Cant Handle the Truth's picture

Grayson needs to work on his stage presence.  His expression, voice, posture ... they make the mood confrontational beyond the content of the questions alone.  If you want to obtain a moment of candor from an attorney like Alvarez, you're going to need to do better than that.

Also, some of the questions were profoundly ham-handed.

BUT, with that said, it's nice to see a public servant like Grayson doing his job.  Kudos to him.

Fri, 09/25/2009 - 13:10 | 79719 shargash
shargash's picture

"...a moment of candor from an attorney..."

Surely, you jest.

Fri, 09/25/2009 - 23:56 | 80261 Hephasteus
Hephasteus's picture

Disagreement heiarchy. People not only apply it to arguements they apply it to the people behind the arguements.

http://www.kontraband.com/pics/12696/Disagreement-Hierarchy/

Thank you for bringing superficiality to this subject. I know it's all you can do. After Grayson is finished pulverizing everyone who can't refute the central point. I'm sure he'll stop by for some style coaching.

 

Sat, 09/26/2009 - 15:10 | 80486 You Cant Handle...
You Cant Handle the Truth's picture

Hi, welcome to politics and media.  You must be new here.  Enjoy what is obviously going to be a short stay once reality settles in for you.

Fri, 09/25/2009 - 12:42 | 79669 SilverIsKing
SilverIsKing's picture

Grayson is da MAN!

Fri, 09/25/2009 - 13:07 | 79713 Careless Whisper
Careless Whisper's picture

Indeed, I'm almost ready to log on to his web site and make a contribution.

Grayson: I said manipulate the stock market, or the futures market; wouldn't we want to know?

Alvarez: (silence)

Grayson: Yes or No?

Alvarez: Could you define what you mean by ...

Garyson: I think you know what I mean Mr. Alvarez. Now wouldn't it be very helpful to have a GAO audit on that subject? Wouldn't it?

Alvarez: I don't know what it is you're seeking to audit.

This witness was sliced and diced. Pathetic.

I find it unbeleiveable that the lawyer for the Federal Reserve Bank refused to deny that the Fed could legally manipulate the stock market.

Fri, 09/25/2009 - 13:27 | 79737 Anonymous
Anonymous's picture

lowering target rate can be interpreted as manipulation. Grayson should have specifically asked whether they purchase stocks.

Fri, 09/25/2009 - 12:44 | 79674 Anonymous
Anonymous's picture

The link above is not working. Does anyone have another place I could watch the hearings.

Thanks.

Fri, 09/25/2009 - 12:55 | 79688 TwoJacks
TwoJacks's picture

They're in recess right now. here's your link for when they return:

Watch the hearing LIVE NOW

Fri, 09/25/2009 - 13:02 | 79702 Anonymous
Anonymous's picture

Thank you.

Fri, 09/25/2009 - 13:14 | 79726 gmrpeabody
gmrpeabody's picture

much grass!

Fri, 09/25/2009 - 12:44 | 79675 digalert
digalert's picture

sans Paulsen and Grayson, we have idiot representatives. Uncle Ben needs to be in jail, but noooo...

We'll have house chair announce "this is a fishing expedition and pointless" while asking the FED what kind of turf to use in their newly expanded playground. While Barnacle Frank motions to erect a statue of Bernanke.

Fri, 09/25/2009 - 13:02 | 79701 Anonymous
Anonymous's picture

I think you want to remove the sen from Paul's name.

Fri, 09/25/2009 - 13:30 | 79740 Anonymous
Anonymous's picture

And that should read: "motions to a statue of erect Bernanke."

Fri, 09/25/2009 - 12:47 | 79677 lieutenantjohnchard
lieutenantjohnchard's picture

the fed situation will take time to play out. the politicians (even those on the take) and the public (those that count) have the fed, banks, sec (et al) and the treasury in the crosshairs.

as it takes more and more frn coupons in exchange for bread the heat is going to be ramped up.

i expect a very hostile reception for the chopper chairman pilot going forward.

a very public, failed auction is but a matter of time.

Fri, 09/25/2009 - 12:48 | 79678 Cocktosen
Cocktosen's picture

No more words.  I want to see action!  Dammit!

Fri, 09/25/2009 - 12:48 | 79679 Anonymous
Anonymous's picture

JP's hal 9000 is switched off today protesting Alan Greyson grillings. The only ones running are GS's

Fri, 09/25/2009 - 12:49 | 79681 Anonymous
Anonymous's picture

I agree with Andrew. Posturing for the cameras and asking vague questions is counterproductive.

While appearing to really go after the FED, he actually lets them waffle around and avoids some key questions that could have been asked.

Keep in mind Congressional hearings are largely for show.

I really like Ron Pauls efforts, hes got my vote for prez.

I dont think the system will ever be fixed by the two main parties, they are too beholden to the very crooks they are supposed to be cracking down on.

Fri, 09/25/2009 - 12:51 | 79682 Anonymous
Anonymous's picture

To TD: we need those terminal captured pics of who is gunning the market today,to see who is on and who is off.

Fri, 09/25/2009 - 12:51 | 79684 TwoJacks
TwoJacks's picture

I watched this live. The attorney for the Fed said he didn't know if he had the authority to audit a "private entity," calling the very public J.P. Morgan a private company.  He was also very careful not to mention Goldman Sachs as the first primary dealer, the largest and biggest player in the market. Odd? 

Fri, 09/25/2009 - 12:56 | 79690 Gilgamesh
Gilgamesh's picture

To be truthful, there is the public JPM and the private JPMorgan.  I'd like to see the clip and the manner.

Fri, 09/25/2009 - 18:42 | 80085 Careless Whisper
Careless Whisper's picture

Maybe we should cut JPM some slack. Jamie hasn't been getting much sleep lately. Moammar Kadafi moved in to his hood in Bedford this week and the security helicopters have been very noisy.

http://www.lohud.com/article/2009909250350

 

Fri, 09/25/2009 - 13:41 | 79751 Strom
Strom's picture

I think he meant "private" as in "not a government entity". Like "private sector" vs. "public sector". They are publicly traded, but not part of the government (officially).

Fri, 09/25/2009 - 12:53 | 79686 buzzsaw99
buzzsaw99's picture

GRAYSON 4 PREZ!

Fri, 09/25/2009 - 12:58 | 79692 London Banker
London Banker's picture

Nice to see some questions being asked.  It's a start. 

Fri, 09/25/2009 - 13:15 | 79694 pigpen
pigpen's picture

Alan, will you marry me? - we can do it in CA, VT, MA and IA.

Ms. Bachman as much as I don't like your religious views I love your financial questioning.

Maybe we can do a stars war marriage with all three of us.

Fri, 09/25/2009 - 13:00 | 79697 Anonymous
Anonymous's picture

graysons phone number to tell him to keep it up
Washington, D.C.
(202) 225-2176

Fri, 09/25/2009 - 13:03 | 79707 Handle with care
Handle with care's picture

I agree that Grayson's questions were very cleverly phrased to appear to be tough but to be exactly what was needed to provide enough wiggle room for deniability in case this show of "doing something" doesn't pacify the proles and it doesn't die down.

 

Saying that, it was obvious that the attorney knows full well that the Fed is manipulating markets and was being very careful to sound like he was denying it while not explicitly committing perjury.  

 

The really smart ones always have a plan B in case the monarchy falls so they can slot right into the new ruler's system.  Bernanke wasn't smart enough (or cynical enough) to plan that well and has perjured himself several times.  If the crony network ever falls he's toast.  The attorney wants to make sure that if it happens he can hop over the fence to join those throwing rocks at Bernanke

Fri, 09/25/2009 - 13:17 | 79730 gmrpeabody
gmrpeabody's picture

+1

Fri, 09/25/2009 - 14:38 | 79822 DaddyWarbucks
DaddyWarbucks's picture

Why would the crony network fail now? It's been in place for hundreds of years. True, the players get shuffled around and things don't always go exactly as planned but the system, and there is a fuedal system, survives and carries on.

Good observation about the plan B. I like to have a plan C so that I don't get left out on a limb if plan B does become plan A.

 

Fri, 09/25/2009 - 15:12 | 79856 Cognitive Dissonance
Cognitive Dissonance's picture

Police Chief: "I'm shocked, shocked that there is gambling going on in this establishment."

Aid while handing something to the Police Chief: "Sir, here are your winnings."

Fri, 09/25/2009 - 13:08 | 79715 Great Depressio...
Great Depression Trader's picture

No way the FED is getting audited. Very simple reason as to why: NO ONE KNOWS AND EVEN IF THEY DID NO ONE CARES. Most of my friends have at least a BA many others JD's, MBA's and some PHD's. I tell them these things and they look at me like im some kind of a wierdo. Zerohedge and these other sites are a refuge for us truth seekers. Look around you people, CNBS, Showtime, CNN, FOX, NYT, WASHPOST, HBO, they rule and will continue to rule because people dont care. So long as they can make their payments and buy the latest gadget from bestbuy or ebay no structural changes in the ponzi scheme will occur. I commend R. Paul and Grayson for their efforts but in a few short months all this will be forgotten. A revolutionary spirit, involving free people, is required to bring down the corrupt system in place. Impossible that a few virtuous senators and at most 30,000 concerned and informed citizens can have the fed "audited".

Fri, 09/25/2009 - 20:07 | 80140 Uros Slokar
Uros Slokar's picture

I agree with the mass ignorance of the "elite" and "academics" - far too prevalent, and the complacency is downright scary. That said, I think you grossly underestimate two factors: those entities outside the U.S. which would love to see it fail (see Russia, China, etc.), and also the anger amongst the middle and lower classes, which has the chance boil over as soon as the "strife" and "hardship" becomes too widespread amongst the proles. Here's hoping.

Fri, 09/25/2009 - 13:08 | 79716 ED
ED's picture

Was Alvarez reflexively reaching for his (paying off Congressmen) wallet at 0.51, or was he groping for a wildly thrashing Salmon he'd thought'd snuck into his shirt-pocket only to realise it was his heart all a-flutter?

Fri, 09/25/2009 - 13:17 | 79731 D.O.D.
D.O.D.'s picture

yeah, I think he almost died right there...

Fri, 09/25/2009 - 15:48 | 79893 MsCreant
MsCreant's picture

Reaching for a concealed firearm he did not have because of the metal detectors???

Seriuosly, that was one flustered character.

Show or no show folks, that guy was squirming bad with those questions. If I have a moron questioning me who does not have good points to make, I look on in surprised disbelief at how stupid he is. I don't squirm.

I have been a hostile witness before, defending a committee decision that I myself did not believe in and voted the other way. It was after my grilling, realizing how uncomfortable I was during the process, that I had to own it that the person making the accusations had a point, and in my gut, I knew it. I could not be clean, because some of the allegations were just true.

God did I squirm.

Fri, 09/25/2009 - 19:38 | 80116 Anonymous
Anonymous's picture

that's a really wonderful anecdote...so true too.
gracias for sharing.

Fri, 09/25/2009 - 23:31 | 80250 MsCreant
MsCreant's picture

:-)

Fri, 09/25/2009 - 13:13 | 79725 Anonymous
Anonymous's picture

I'm sure there are already PR efforts and plans afoot to discredit him and dismiss him as a simpleton who doesn't "get" it.

He speaks far too directly and asks uncomfortable, pointed questions that TPTB won't like.

Fri, 09/25/2009 - 13:58 | 79780 Gordon_Gekko
Gordon_Gekko's picture

But he's amassing what is going to be the most important thing in coming days - support of the Joe public. If the Fed/US Govt. thinks they can stop an unruly mob with nothing left to lose with their paid GOONS known as the police, they are sadly mistaken. Each and everyone of the current crop of 'rulers' and oligarchs will be guillotined in public squares. These idiots CANNOT imagine the sheer amount of rage boiling inside the public.

Fri, 09/25/2009 - 14:07 | 79790 Great Depressio...
Great Depression Trader's picture

Each and everyone of the current crop of 'rulers' and oligarchs will be guillotined in public squares. These idiots CANNOT imagine the sheer amount of rage boiling inside the public.

Just because me and you are pissed off doesnt mean the public is. Get this through your head there IS NO PUBLIC RAGE!!! And in the event of a currency crisis the feds will blame "currency speculators" and "manipulators" just like Nixon did when he severed the $/gold relationship. Remember, the only reason the country is in such a mess is because the people have been asleep for the last 30 yrs. What makes you think they will wake up now? Americans are getting what they deserve for allowing TPTB to rape them over and over again. Iraq war? Where were the real protests? Afghanistan buildup? Not a peep. Its every man for himself here (in a selfish way) so there wont be any change.

 

When the real currency crisis hits the American sheeple will be so afraid they will turn to big GOV to save them.

Fri, 09/25/2009 - 14:31 | 79820 Cursive
Cursive's picture

Over a million citizens protested in D.C. about two weeks ago.  I realize that you may not have heard about it since the MSM boycotted the story.  There is huge discontent and it will only grow as the ranks of the unemployed continue to grow.  I would not want to be one of the powerful elite in these days.  Sure, they are on top now, but look what happened to the Romanovs.  I'm not saying it goes down that way, I am saying that the elites will have trouble keeping a lid on this discontent and, well, keeping their lids on.

Fri, 09/25/2009 - 14:43 | 79828 DaddyWarbucks
DaddyWarbucks's picture

but look what happened to the Romanovs.

That was a bit of a black swan moment wasn't it? I've read that Dzerzhinsky's criteria for sorting out the elite was correct grammar among the women and uncalloused hands on the men.

Fri, 09/25/2009 - 15:27 | 79880 jlr
jlr's picture

If you really want to let the TPTB know you're pissed, march your millions down Broadway, Maiden, Wall, Pine, and then head up to Park.  This is where you idiot Teabaggers have it all wrong. 

Fri, 09/25/2009 - 18:14 | 80057 Sisyphus
Sisyphus's picture

+1000

Fri, 09/25/2009 - 16:55 | 80004 Great Depressio...
Great Depression Trader's picture

I know about the protest. And what happened as a result therefrom? Nothing. What we need in the US is some real protests like the ones in Greece after the shooting of the student last year. You remember those 3 weeks in Athens? Just because the cops shot and killed one 16yr the government was brought to its knees. Here, people are arrested, beaten, shot and killed daily by the gov and NOTHING happens. Until you start seeing BAC's, WFC's, JPM's, CitiBanks and other financial institutions being protested at (use your imagination) then nothing will change. And if you ask me, i dont see protests reaching this level of intensity as the sheeple are too scared. Thats why God will judge this nation so harshly because it is full of cowards, from the bottom all the way to the top.

Sat, 09/26/2009 - 10:47 | 80380 Anonymous
Anonymous's picture

all the sheeple are scared because all their $ (and their iou's) is tied up in one of those aforementioned institutions.

which is why it is vitally important to encourage as many as possible as quickly as possible to stop doing business with the Stress Test 19.

that is true protest, 21st century style.

Fri, 09/25/2009 - 16:19 | 79941 Anonymous
Anonymous's picture

What is different now is the Internet.

Fri, 09/25/2009 - 20:41 | 80166 sgt_doom
sgt_doom's picture

Sadly, I must agree with you, although there is a sound reason for this situation existing:

50,000 foundations (skewing reality and "engineering consent" -- Bernays' phrase)

40,000 D.C. lobbyists (was 35,000 but grew by 5,000 for this backdoor insurance bailout laughingly called the "not-to-be-public-option")

and,  5 media-controlling corporations

And we wonder why so many are confused & bewildered?

Sat, 09/26/2009 - 10:58 | 80384 Takingbets
Takingbets's picture

"Get this through your head there IS NO PUBLIC RAGE!!!"

 

I beg to differ, you need to get out more often and talk to people. Lots of folks know whats happening I just think they are going to use their votes before the violence breaks out. Lets see what happens in 2010.

Fri, 09/25/2009 - 13:21 | 79733 Ruth
Ruth's picture

EVERYONE PLEASE RELINQUISH YOUR TIME TO GRAYSON, I WANT MORE BLOOD!

Fri, 09/25/2009 - 14:44 | 79830 Anonymous
Anonymous's picture

DITTO

Fri, 09/25/2009 - 23:40 | 80256 Fish Gone Bad
Fish Gone Bad's picture

Now that would be a great idea, here is Grayson's input page: http://action.firedoglake.com/page/s/1207hearing

Fri, 09/25/2009 - 23:49 | 80259 Missing_Link
Missing_Link's picture

Wow, so you're not only a hot blonde with dark glasses, you're also a vampiress.  Damn!  Need more ladies like you in my neck of the woods.

Fri, 09/25/2009 - 13:24 | 79735 Rusty_Shackleford
Rusty_Shackleford's picture

Why does no one cut to the chase though?

Why does no one ask, "Where does the Fed get the money that it disburses?"

"What is to theoretically stop the Fed from purchasing every asset on the entire planet?"

If there truly are no consequences to such activity, explain why the Fed doesn't just pay off every American's debts.

 

Fri, 09/25/2009 - 13:28 | 79738 rhinotrader
rhinotrader's picture

Thought Grayson was fantastic, needs to hammer even more.

Fri, 09/25/2009 - 13:35 | 79743 Sancho Ponzi
Sancho Ponzi's picture

It's about time for Rahm and company to conjure up a mega distraction. 

Fri, 09/25/2009 - 13:54 | 79765 …unexpectedly…
…unexpectedly…'s picture

Scary truth, Sancho.  

Fri, 09/25/2009 - 15:14 | 79862 Cognitive Dissonance
Cognitive Dissonance's picture

They are working on a distraction. This is why Iran is suddenly back in the news with big bad nuclear weapons.

Fri, 09/25/2009 - 15:20 | 79872 Sancho Ponzi
Sancho Ponzi's picture

If that's their distraction, it will take more than sabre rattling or Obama giving a speech to the G20.  If you were Ahmadinejad, would you be afraid of Obama? 

 

Fri, 09/25/2009 - 16:30 | 79952 Anonymous
Anonymous's picture

Of course not. Mr. Obama already looks like a lame-duck
president to Ahmadinejad.

Fri, 09/25/2009 - 13:46 | 79757 Gordon_Gekko
Gordon_Gekko's picture

The bears who think last couple of days' fall in stocks was not condoned by the Fed are dreaming. Their objective was to bring down Gold by causing the IDIOT momentum chasing weak longs in Gold to sell, even at the cost of a few red candles in the stock market. 

Fri, 09/25/2009 - 13:56 | 79776 Nathan Smith
Nathan Smith's picture

Agreed. 

I saw the idiots on FM last night thrashing gold after its nose dive yesterday. 

Funny, they failed to mention that yesterday was op ex for COMEX gold, and that 5000+ contracts were in the money @ the 1000 strike. 

Could it have been that the writers shorted to fuck the longs yet again.  Rinse repeat. 

Fri, 09/25/2009 - 13:55 | 79767 Cow
Cow's picture

I'm not sure Grayson got a straight answer on the "possession" of gold question.  Does possession mean physical possession or accounting possession?

I'm not sure he got a straight answer on the manipulate the market question.   The Fed could be manipulating the market in order to affect interest rates and rationalizing that that was in their jurisdiction...

Fri, 09/25/2009 - 14:45 | 79832 DaddyWarbucks
DaddyWarbucks's picture

I'm not sure Grayson got a straight answer...

If this helps remember that he was speaking to an attorney( Sorry Marla).

 

Fri, 09/25/2009 - 14:45 | 79833 Anonymous
Anonymous's picture

that damned lawyer didn't give any straight answers. but he sure seemed to be sweatin' his suit.

Fri, 09/25/2009 - 13:52 | 79769 Pizza Delivery Man
Pizza Delivery Man's picture

I don't see why we need to audit the Fed.

They are clearly an institution acting with the highest regard of ethical intergrity but also clearly act in a sound and responsible manner in benefit of the citizens of the U.S.

Please stop bashing them...Leave Ben alone! Just replace the person with Ben Bernanke. http://www.youtube.com/watch?v=kHmvkRoEowc

 

Fri, 09/25/2009 - 21:01 | 80175 Gordon_Gekko
Gordon_Gekko's picture

Yeah, you're right - we don't need to audit the Fed, WE NEED TO KILL IT.

Fri, 09/25/2009 - 13:51 | 79770 Anonymous
Anonymous's picture

So what do you think the gal w/the sleeveless dress behind looked like???

Fri, 09/25/2009 - 14:13 | 79797 Anonymous
Anonymous's picture

I'm a little shakey on this subject. But exactly who owns the gold on the Federal Reserve's balance sheet?

Since the Federal Reserve is a privately owned corporation chartered by the US government as a central bank I would have to believe any gold on their balance sheets belongs exclusively to the Federal Reserve corporation and its shareholders. Therefore any gold held on the Federal Reserves' balance sheet is none of the US governments business.

Now whether the Federal Reserve is using that gold to manipulate the gold markets would come under the jurisdiction of the US Congress and Justice Department.

But, exactly who owns the gold held in depositories such as Fort Knox?

The Treasury, and by extension the US taxpayer?

Or the Federal Reserve?

I amazed that the congress critter had the temerity to pop its head out of its rabbit hole and question the Federal Reserves' consigliere as to whether the GAO had the authority to audit the gold balance sheets of the Federal Reserve.

But, when said congress critter made no mention of auditing the gold at Fort Knox, I began to have my doubts about this whole show trial. I have to wonder if this hasn't been scripted on both sides of the aisle for the benefit of the ignorant masses. Or maybe I'm just extremely paranoid and have been reading to many conspiracy websites.

But, I refuse to believe any propaganda that emanates from Washington D.C.

If H.R. 1207 passes the House and Senate and is signed by Doofus Twofus in the White House, and the audit of the Fed and all the gold is performed by the GAO and a multitude of other independent auditors, and all this can be cross referenced and corroborated, unlike the 9-11 commission, then maybe, just maybe I'll be convinced.

But, I have a hard time believing that the Vampire Squid will give up its shadow Fascist criminal government empire all that easily.

Fri, 09/25/2009 - 15:46 | 79896 MsCreant
MsCreant's picture

The squirming on the part of the lawyer was real, or he is an actor who can rival Brad Pitt. Not scripted. Watch it again.

Fri, 09/25/2009 - 20:43 | 80167 sgt_doom
sgt_doom's picture

"Who owns the gold?"

Geez, I thought everyone knew that....it's the Rockefeller family -- they've got a 400-year lease on the stuff.

Sat, 09/26/2009 - 00:02 | 80267 Hephasteus
Hephasteus's picture

That was actually a screw up. Treasury owns the gold. Not fed.

http://cumber.com/print.aspx?file=/content/commentary/090809.asp

Sat, 09/26/2009 - 00:47 | 80275 Anonymous
Anonymous's picture

but the fed carries it on its balance sheet.

Sat, 09/26/2009 - 12:50 | 80421 Hephasteus
Hephasteus's picture

Just until the right jackass sees that. Then it's oops im kneeling behind a kicking donkey time.

Fri, 09/25/2009 - 14:20 | 79809 Anonymous
Anonymous's picture

So all the SPY purchase made my JPM are for FED.

Fri, 09/25/2009 - 14:28 | 79819 Anonymous
Anonymous's picture

Honestly, there are probabaly so many things that could be levelled againt the Fed, however, Grayson is not the man to do so. His lack of any preparation before these hearings is astounding. The laywer said primary dealers for NY Fed are on the website go check. If Grayson is trying to be clever in making some point he fails big time. He doesn't understand what currency swaps are, he trys to make a point but comes across as a slimey fat head, ask intelligent questions rather than waste your 5 minutes looking/acting like a wanker.

Ron Paul can question the Fed because he has facts to back up both his questions and approach, Grayson comes in with i'm gonna get u sucker approach. I'm surprised the guy from the Fed didn't say to the Chairman is this is idiot for real.

Fri, 09/25/2009 - 14:47 | 79834 Anonymous
Anonymous's picture

Of course, Grayson's not asking straight questions. Because he doesn't want a straight answer. The fed "manipulating" the stock market? Duh. As the market will react to anything the fed does.

Grayson's just the House version of a Rush Limbaugh light, catering to his very own tin-foil crowd of Wall Street birthers.

Fri, 09/25/2009 - 14:50 | 79838 TraderMark
TraderMark's picture

Obviously Grayson reads blogs... fun.

Fri, 09/25/2009 - 14:51 | 79839 TPC
TPC's picture

We know the banks are hoarding $2T in cash.  We know they're not lending that money out.  We also know the banks aren't stupid enough to let it sit in their money market accounts earning nothing.  We know they're not buying bonds because the bond market has tanked this year.  So the only logical conclusion is that the banks are buy risky assets.  What risky assets have rallied this year?  Hmmmm. 

It's now abundantly clear that the banks have been driving this rally.  Can you say ponzi scheme? See my latest thoughts here: http://pragcap.com/how-the-government-run-rally-morphed-into-the-bank-ru...

Fri, 09/25/2009 - 15:18 | 79871 Assetman
Assetman's picture

Actually, real commercial banking institutions are buying bonds (and other very high rated debt)with these extra reserves. In fact, it appears just recently many banks have been buying short and mid-dated Treasuries. The recent Treasury rally hasn't appeared out of thin air, and the Fed hasn't accelerated the pace of their purchses, either.

Many banks really don't mind idea of of purchasing a "true" AAA security and getting a yield of 1.8%, when the cost of funds is essentially zero. They can still shrink their loan book and still make money on guaranteed spread income.

And banks can possibly make even more $$$ if a flight to quality trade comes about for the implied purpose of "supporting a strong dollar".

On the other hand, those "investment" banks that have operated more like "hedge funds" than the "commercial banks" they now supposed to be-- have been taking their free money and going into the equity market casino. Goldman did it on Day One, followed by JP Morgan, and then tepidly by Morgan Stanley. I think those are the boyz you've been looking for.

Fri, 09/25/2009 - 16:16 | 79932 ghostfaceinvestah
ghostfaceinvestah's picture

Not to mention they arbitrage in the MBS market.  Apparently Bernanke believes he is legally allowed to buy Fannie and Freddie MBS because they are "agencies" of the government.  however, despite the market nomenclature, they are no such thing.  They do not have full faith and credit.

Thus, banks have to hold more capital for Fannie/Freddie MBS.  But Ginnies have full faith and credit.

So they sell their Fannie and Freddie to Bernanke, and buy Ginnie's, and their capital requirements go down, even though Fannie's and Golds trade on top of Ginnies due to the Fed interference in the market (meaning they give up no yield by swapping them).

Nice scam.

Sat, 09/26/2009 - 13:41 | 80442 sgt_doom
sgt_doom's picture

You are getting closer and closer but still missing the big picture, TPC (great graph, BTW!).

A goodly portion of that $2T went to the private equities. Why?  Because 80% of pension funds with more than $5B apiece are invested in them, and, should their ABSes, CLOs, and CFOs, etc., go into "credit-event-triggered" mode then all that credit derivatives being held at JPM, GS, Citi, BofA and Morgan Stanley will go RED ALERT! (Between 2005-2007 $633.8 billion worth of loans to PE firms for their leveraged buyouts - which were then re-packaged - who knows how many times or layers of securitization - and peddled as ABSes, etc.

And suddenly, all those pension funds are vapor!  (And that's not in the immediate design.)

 

Fri, 09/25/2009 - 14:55 | 79840 Anonymous
Anonymous's picture

Barney Frankis trying to scrap the one page Pual bill and include it in broader financial reform -- That needs to be stopped.

You know there would be a sentence in the 10,000 page document they're going to produce which will viscerate it.

Fri, 09/25/2009 - 15:24 | 79877 mattco
mattco's picture

Man. Greyson is a dead man if he keeps this up. He will soon be found with a self inflicted gunshot wound in the back of a car dealership. 

Fri, 09/25/2009 - 16:01 | 79910 Anonymous
Anonymous's picture

The video reeks of grandstanding, just like all Congressional hearings.

Fri, 09/25/2009 - 16:06 | 79918 Anonymous
Anonymous's picture

Um, when have they not? Thats a better question. The whole idea to the fed is that of a centralized planned market manipulator.

Fri, 09/25/2009 - 16:11 | 79925 ghostfaceinvestah
ghostfaceinvestah's picture

This garbage just makes me sick:

http://www.bloomberg.com/apps/news?pid=20601087&sid=adDANopNzewM

"Sept. 25 (Bloomberg) -- Federal Reserve General Counsel Scott Alvarez said audits of monetary policy by the U.S. Congress could lead to higher interest rates and reduced confidence in central bank policy."

what a crock of shit.

 

Fri, 09/25/2009 - 16:52 | 79966 payitdown (not verified)
payitdown's picture

It's my comical entertainment for the day... while I drive to work... I like to see how they are going to spin 'straw' into 'gold' each day... I missed their spin this morning on the Durable Goods Report... but I bet they managed to make 'gold' out of it also.

Goldman and Bank of Amerika run the markets along with Geithner, and beagle boy Ben. There is no free markets, only welfare capitalism and socialism for capitalism.

good articles; good articles 4 slow news day ..http://www..
hat tip: financial news & opinion updated daily

Fri, 09/25/2009 - 16:44 | 79968 MsCreant
MsCreant's picture

Alvarez, you disgusting, slimey, brown stripe wearing, little, ineffectual, weasel. Unless I am mistaken, all an audit does is show what is where. It does not tell anyone to do anything. Am I wrong about this? I think not.

Found another picture of him. Better looking here than in these sessions.

http://www.debhoeffner.com/animals/images/weasel.jpg

Fri, 09/25/2009 - 16:15 | 79933 Anonymous
Anonymous's picture

Let me guess - nothing will come out of this since we are a country of wusses (including me) !!

Fri, 09/25/2009 - 16:34 | 79963 payitdown (not verified)
payitdown's picture

Alan Grayson doing his immaculate Jaws impression here. And the man is definitely smelling a wounded and bleeding Fed. Must watch clip.

Fri, 09/25/2009 - 16:38 | 79982 MsCreant
MsCreant's picture

When I was growing up, there was a bad cartoon called Jabber Jaws (a shark). Grayson kind of looks like him...

http://3.bp.blogspot.com/_o6gTlGxCWVw/R8h3pnbaLAI/AAAAAAAAAHQ/9xnyAWQdha...

Fri, 09/25/2009 - 17:18 | 80024 MsCreant
MsCreant's picture

I hope your shark is the right one. It will take a shark like that one to get the job done. We shall see.

Fri, 09/25/2009 - 16:37 | 79978 Anonymous
Anonymous's picture

The House bill to audit the Fed is going to pass. THere are already enough votes/sponsors to assure that. The question is will the Senate produce something compatible with the House bill? THAT is the question.

After that, I'd bet my left nut that Obama would veto any such bill that hits his desk. He DID, afterall, kiss Bernanke's ring and renom him for renewal at his criminal post. To then sign a bill that would, sure as Cheney is Satan, lead to the utter dissolution of the Fed is just not going to happen.

Fri, 09/25/2009 - 18:03 | 80051 Assetman
Assetman's picture

I think this thing gets killed in the Senate.

It would be a pretty dangerous thing to have Obama on the spot regarding Fed transparency.  It could really bite the Dems in the ass come 2012-- especially if the Fed make some serious policy errors in the process.

Nope.  Barney the purple dinosaur of a legislator will try some of his tricks, and it will fail to be reconciled between House and Committees.  There will be plenty of rational, yet essentially unrealted. reason why the Senate can turn this down... even with House passage.

The key will be what Ron Paul attenpts next.

Fri, 09/25/2009 - 19:28 | 80113 Hephasteus
Hephasteus's picture

It's all blackmailing driven. I mean compromise driven.

Fri, 09/25/2009 - 16:39 | 79983 Anonymous
Anonymous's picture

Karl Denninger has repeatedly posted evidence of front-running and has been hitting the Fed quite hard lately on obvious signs of inside dealing.

Grayson should have been sent a few of KD's postings on the subject so he could directly ask about the public evidence of corruption and deceit.

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