Here Is Your Chance To Demand Answers From The Fed's General Counsel, Scott Alvarez
For all Zero Hedge readers who have long waited for their chance to ask Mr. Scott Alvarez of "Have The Federal Reserve Or Prime Brokers Ever Tried To Manipulate The Stock Market?" fame a question about life, the universe or why the CME decides to hike ES margins in an environment of rising realized vol, here it is. Tomorrow, at 2PM, Ron Paul will lead a hearing by the Financial Services Committee, which will luckily be carried by C-SPAN meaning one will be actually able to hear the dialog (alas, the House continues to believe that investing in microphones for their internal webcasts is a bad idea), titled: "Federal Reserve Lending Disclosure: FOIA, Dodd-Frank, and the Data Dump." The witnesses will be Mr. Thomas C. Baxter, Jr., General Counsel, Federal Reserve Bank of New York, and the one and only Scott G. Alvarez, General Counsel, Board of Governors of the Federal Reserve System. While the usual heeming and hawing will follow each and every question, what is unique about this session is that the FSC actually allows anyone to submit questions for the honorable lawyers. The link to submit questions is here: we urge Zero Hedge readers to take advantage of this opportunity and have Mr. Paul read their questions to the two general counsels, even if no legible answers will be (ever) forthcoming.
As a reminder, Baxter is the same lawyer who a year and a half ago said that it was the Fed's actions to bail out Goldman Sachs, pardon, AIG, that prevented the end of the world:
The actions taken by the Federal Reserve and its New York office to rescue American International Group Inc. (AIG) were necessary to avoid the "potentially catastrophic consequences" of a failure by the insurer, a top official plans to tell lawmakers Wednesday.
Thomas Baxter, the general counsel for the Federal Reserve Bank of New York, defended the actions by government officials to stem a major cash bleed at the insurer in November 2008 by reaching agreement with over a dozen banks to tear up $62 billion in insurance contracts.
In prepared remarks for a Wednesday hearing before the House Committee on Oversight and Government Reform, Baxter said officials had little time and leverage as they scrambled to prevent AIG from spiraling towards bankruptcy. After stepping in to rescue the insurer in September 2008, officials could not let the insurer collapse weeks later, Baxter contends.
"This abrupt reversal of course would not only have triggered all of the adverse consequences for the U.S. and global economies that prompted the initial intervention, it would also have undermined the public's trust in the U.S. government's commitment to the broader range of extraordinary financial stability initiatives."
Kinda like the whole debt ceiling thing...
As for Scott Alvarez, who can forget this memorable exchange:
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
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: 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
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
Scott Alvarez: I am not sure if I have that authority...
Perhaps it is time to paraphrase those same questions.