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Prepared Testimony By Fed's General Counsel To Be Used In Today's Ron Paul Hearing

Tyler Durden's picture




 

Update: Hearing has been delayed until 3 pm.

While we await to find and bring to our readers the channel that will carry today's hearing between the House Financial Services Committee on the topic of "Federal Reserve Lending Disclosure: FOIA, Dodd-Frank, and the Data Dump" chaired by Ron Paul and Fed and NY Fed General Counsels, Thomas C. Baxter, Jr., and Scott
G. Alvarez, below we present their prepared testimony that was just released by the New York Fed. The key section from the testimony: "We
remain concerned that a more rapid release of information about borrowers accessing
the discount window and emergency lending facilities could impair the ability
of the Federal Reserve to provide the liquidity needed to ensure the smooth
working of the financial system. If institutions believe that publication
of their use of Federal Reserve lending facilities will impair public confidence
in the institution, then institutions may choose not to participate in these
facilities. Experience has shown that banks’ unwillingness to use
the discount window can result in more volatile short-term interest rates and
reduced financial market liquidity that, in turn, can contribute to declining
asset prices and reduced lending to consumers and small businesses." Luckily, courtesy of $1.6 trillion in excess reserves, and the stigma now associated with Discount Window borrowings, for everyone except for Dexia, we doubt the Fed will ever have to worry about the discount window before the banking kleptoracy blows itself up once again.

From Thomas C.
Baxter, Jr.
, Executive Vice President and General Counsel

Testimony of Thomas C. Baxter, Jr., and Scott
G. Alvarez, General Counsel of the Board of Governors, before the
Subcommittee on Domestic Monetary Policy and Technology, Committee on
Financial Services, U.S. House of Representatives, Washington, D.C.

Chairman Paul, Ranking Member Clay, and members of the Subcommittee, we appreciate
the opportunity to discuss the different ways in which the Federal Reserve
informs the Congress and the American people about our policies and actions. The
Federal Reserve regularly releases significant, detailed information about
its operations. Our aim in doing so is to promote understanding of how
the Federal Reserve fosters financial and economic stability and to facilitate
an evaluation of our actions while also preserving the ability to effectively
fulfill the responsibilities that the Congress has given the Federal Reserve. In
that context, we will describe the Federal Reserve’s compliance with
the disclosure provisions of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (Dodd-Frank Act), including the data we released in December
2010 about the transactions we conducted to stabilize markets during the recent
financial crisis, restore the flow of credit to American families and businesses,
and support economic recovery and job creation in the aftermath of the crisis. We
will also address our March 2011 release, under the Freedom of Information
Act, of documents regarding the use of the Federal Reserve’s discount
window during the crisis.

The role of lender of last resort is a critical responsibility long filled
by central banks around the world. Central bank lending facilitates the
implementation of monetary policy and allows the central bank to address short-term
liquidity pressures in the banking system. During normal times, the Federal
Reserve's discount window provides a backup source of liquidity for depository
institutions in sound financial condition to address unexpected, short-term
funding pressures. In doing so, the discount window facilitates the smooth
and efficient flow of credit to U.S. households and businesses. In periods
of crisis, the discount window is a tool that can be used to support market
liquidity, and thereby mitigate strains in financial markets that could otherwise
escalate and lead to sharp declines in output and employment. All discount
window loans are fully secured and the Federal Reserve has not suffered a loss
on any discount window loans.

Disclosure and Integrity of the Federal Reserve’s Financial Statements

Since it began operation in 1914, the Federal Reserve has published full financial
statements. We release our balance sheet every week, both by individual
Reserve Bank and on a consolidated basis for the entire Federal Reserve System.1 In
addition, the Federal Reserve publishes annual financial statements with information
on our assets and liabilities as well as income and expenses in the same detail
as a publicly traded corporation.2

During the recent financial crisis, the Federal Reserve expanded its weekly
balance sheet disclosures to include information about the amount of credit
outstanding under each of the credit facilities established during the crisis. The
Federal Reserve also initiated in June 2009 a special monthly report, which
we provide to the Congress and publish on the Board’s website, that provides
additional detail about the Federal Reserve’s emergency lending programs,
including information on the amount of lending under each program, a description
of the type and level of collateral associated with those loans, and information
about the borrowers under those facilities.3 This
report includes aggregate information about credit provided to depository institutions
through the discount window as well as information on the Federal Reserve’s
securities holdings and the holdings of Maiden Lane, Maiden Lane II, and Maiden
Lane III. The Board’s website also contains detailed information
about the terms and conditions of each of the emergency lending programs, the
availability of discount window lending, the swap lines opened with foreign
central banks, and the arrangements with third-party vendors used by the System
during the financial crisis, as well as expansive data and numerous reports
and other information on all aspects of Federal Reserve operations.4

The Federal Reserve Bank of New York (FRBNY) also maintains a website that
offers detailed information on open market operations taken to implement the
monetary policy decisions of the Federal Open Market Committee. This
information includes schedules of purchases and sales of securities as part
of open market operations with CUSIP information describing the securities
involved. With this information, a description of every open market operation
can be examined shortly after it is conducted. Other open market information
available on the FRBNY website includes summary and individual data on the
securities held in the System Open Market Account and information about the
federal funds rate.5 The
site also contains a great deal of additional data related to FRBNY operations,
including the names of the primary dealers, some legal forms for transacting
business, and other information about fiscal agency activities on behalf of
the U.S. Treasury.

The Federal Reserve’s annual financial statements are audited by an independent
public accounting firm, which performs customary procedures to assure their
accuracy and integrity. For the last four years, for example, Deloitte
and Touche has audited the financial statements of the Federal Reserve Board
and the Federal Reserve System as a whole. In each year, the Federal
Reserve has received a clean auditor opinion, meaning that the financial statements
present fairly the financial positions of the Federal Reserve. Further,
the external auditor also opines that the Federal Reserve has maintained effective
internal controls over financial reporting. The independent audit also
covers transactions conducted through each of the special lending facilities
established by the Federal Reserve under section 13(3) of the Federal Reserve
Act and the financial statements of Maiden Lane, Maiden Lane II, and Maiden
Lane III, as well as the transactions conducted through the discount window
and with foreign central banks. By statute, the Board’s Office
of Inspector General (OIG) is responsible for ensuring that the auditor and
the audits are independent. The results of these financial audits are
reported annually to the Congress along with the audited financial statements
of the Federal Reserve System and published on the Board’s website.6 The
OIG also has conducted its own review of the special lending facilities established
under section 13(3) of the Federal Reserve Act.

In addition to these audits, the Federal Reserve, and in particular, the
special lending facilities established by the Federal Reserve during the recent
financial crisis, have been subject to a number of other audits and reviews. These
include special audits by the Office of the Special Inspector General for the
Troubled Asset Relief Program for each program that involved any funding from
the TARP program.7 The
Congressional Oversight Panel and the Financial Crisis Inquiry Commission also
conducted reviews and both have issued public reports.8

Moreover, the Federal Reserve’s financial statements and a broad range
of our functions are subject to review by the Government Accountability Office
(GAO). For example, in recent years the GAO has conducted reviews of
the policies and practices of the Federal Reserve in its supervision and regulation
of bank holding companies, state-chartered banks that are members of the Federal
Reserve System, and other banking organizations. It has also conducted
reviews of the Federal Reserve in other areas, including our oversight and
operation of payment systems; our implementation and enforcement of consumer
protection laws; our policies on the acquisition of U.S. banking organizations
by sovereign wealth funds; our efforts to address cyber security; and the need
for financial regulatory reform. These reviews are not limited to auditing
the integrity of the financial statements or public reporting of these activities. Rather,
the GAO reviews the development of policies and provides assessments of and
suggestions regarding appropriate policies.

In response to a directive from the Congress in the Dodd-Frank Act, the GAO
is currently conducting a special review of all loans and other Federal Reserve
transactions between December 1, 2007, and July 21, 2010, under the special
lending facilities and other programs developed during the financial crisis.9 This
review will assess operational integrity, internal controls, security and collateral
policies, policies governing third-party contractors, and the existence of
any conflicts of interest or inappropriate favoritism in the establishment
or operations of the facilities.10 The
Federal Reserve is fully cooperating with the GAO in its conduct of this extensive
review and will continue its close cooperation with the GAO to assist in its
reviews of Federal Reserve functions generally.

Recent Information
Releases

As provided by the Dodd-Frank Act, on December 1, 2010, the Board published
detailed information on its website about the Federal Reserve’s actions
during the financial crisis, including transactions to stabilize markets, restore
the flow of credit to American families and businesses, and support economic
recovery and job creation in the aftermath of the crisis.11 Many
of these transactions, conducted through a variety of broad-based lending facilities,
provided liquidity to financial institutions and markets through fully secured,
mostly short-term loans. Purchases of agency mortgage-backed securities
(MBS) supported mortgage and housing markets, lowered long-term interest rates,
and fostered economic growth. Dollar liquidity swap lines with foreign
central banks helped stabilize dollar funding markets at home and abroad. Other
transactions provided liquidity to particular institutions whose disorderly
failure during the financial crisis could have severely stressed an already
fragile financial system.12 The
Federal Reserve followed sound risk-management practices in administering all
of these programs, most of which ended during 2010. The Federal Reserve
has incurred no credit losses to date on these programs, and does not expect
to incur any credit losses on the few programs still outstanding.

In the December 1 data release, the Federal Reserve provided vast amounts
of information about the programs and the terms and conditions of the individual
transactions made under them. The information provided detailed explanations
as well as definitions of the material terms for each facility. Data
concerning the material terms were made available in multiple formats, including
Excel files that allow users to search, sort, and filter the data for each
program in multiple categories. For the broad-based lending facilities,
details included the name of the borrower, the amount borrowed, the date the
credit was extended, the interest rate charged, information about collateral,
and other relevant credit terms. Similar information was provided for
the draws of foreign central banks on their dollar liquidity swap lines with
the Federal Reserve. For agency MBS transactions, details included the
name of the counterparty, the security purchased or sold, and the date, amount,
and price of the transaction.

In addition, as mandated by the Dodd-Frank Act, the Board’s website directly
links to the Federal Reserve’s audit-related information, including GAO
reports, annual audited financial statements, and reports related to emergency
lending authority provided to the Congress.13 The
Board has also charged staff with identifying other information that could
be posted to this site that would help to explain the accounting, financial
reporting, and internal controls of the Board and the Reserve Banks.

On March 31, 2011, the Federal Reserve released documents related to the discount
window in response to requests filed by Bloomberg L.P. and Fox News Network
LLC under the Freedom of Information Act. Discount window lending under
section 10B of the Federal Reserve Act offers secured, short-term loans from
the Reserve Banks to depository institutions located in the lending Reserve
Bank’s district. The March 31 release included documents containing
information related to borrowers at the discount window between August 8, 2007,
and March 1, 2010, that was not required to be disclosed under the Dodd-Frank
Act.

Future Information Disclosures
Going forward, the Dodd-Frank Act provides for the release of information on
any broad-based emergency lending facility one year after the termination of
the facility. The act also provides for the release of information regarding
discount window lending and open market operations conducted by the Federal
Reserve after July 21, 2010, with a two-year lag. For lending facilities
(including both emergency lending facilities and the discount window) and for
open market operations, the Federal Reserve will publish information disclosing
the identity of the borrower or counterparty, transaction amount, interest
rate or discount paid, and collateral pledged.

The Federal Reserve believes that the lags provided by the Dodd-Frank Act
for the release of transaction-level information about open market operations,
emergency lending facilities, and discount window lending activities establish
an important balance between the public’s interest in information about
participants in transactions with the Federal Reserve and the need to ensure
that the System can effectively use its congressionally authorized powers to
maintain the stability of the financial system and implement monetary policy. We
remain concerned that a more rapid release of information about borrowers accessing
the discount window and emergency lending facilities could impair the ability
of the Federal Reserve to provide the liquidity needed to ensure the smooth
working of the financial system. If institutions believe that publication
of their use of Federal Reserve lending facilities will impair public confidence
in the institution, then institutions may choose not to participate in these
facilities. Experience has shown that banks’ unwillingness to use
the discount window can result in more volatile short-term interest rates and
reduced financial market liquidity that, in turn, can contribute to declining
asset prices and reduced lending to consumers and small businesses.

We will
carefully monitor developments in the use of the discount window and other
Federal Reserve facilities and keep the Congress informed about their effectiveness.

Conclusion
The Federal Reserve has worked and will continue to work with the Congress
to ensure that our operations promote the highest standards of accountability,
stewardship, and policy effectiveness, consistent with meeting our statutory
responsibilities. We appreciate the opportunity to describe the Federal
Reserve’s efforts on this important subject and are happy to answer any
questions you may have.

__________________________________________

1 This information
is published each Thursday, for the week ending the preceding Wednesday,
through the Federal Reserve’s H.4.1 Statistical Release, “Factors
Affecting Reserve Balances of Depository Institutions and Condition Statement
of Federal Reserve Banks.” The current release, as well as
past releases dating from 1996, is available on the Board’s website
at www.federalreserve.gov/releases/h41/default.htm.offsite The website also
provides descriptive information and an interactive guide for each table
in the release.
2 This information
is included in the Board’s annual report, which is submitted to the
Congress each spring and published on the Board’s website at www.federalreserve.gov/boarddocs/rptcongress. offsite
3 See
the Monthly
Report on
Credit
and Liquidity Programs and the Balance Sheet
, offsite available
at www.federalreserve.gov/monetarypolicy/clbsreports.htm.
offsite For more information on the various Federal Reserve liquidity and credit
facilities and further background on the Federal Reserve’s balance
sheet, see www.federalreserve.gov/monetarypolicy/bst.htm.
4 The
Board’s
website is at www.federalreserve.gov. offsite
5 FRBNY’s
website is at www.newyorkfed.org.
See www.newyorkfed.org/markets/openmarket.html for
information about open market operations.
6 The
latest Annual
Report of the Board of Governors of the Federal Reserve System
is
available on the Board’s website at www.federalreserve.gov/boarddocs/rptcongress. offsite
7 See www.sigtarp.gov/audits.shtml. offsite
8 See
Congressional Oversight Panel (2011), March Oversight Report—The
Final Report of the Congressional Oversight Panel
(Washington: GPO,
March 16), www.gpo.gov/fdsys/pkg/CHRG-112shrg64832/pdf/CHRG-112shrg64832.pdf;
offsite pdf The
Financial Crisis Inquiry Commission (2011), The Financial Crisis
Inquiry Report
(Washington: GPO, January), www.gpoaccess.gov/fcic/fcic.pdf. offsite pdf
9 This
audit is being undertaken pursuant to section 1109 of the Dodd-Frank
Act and is to be completed in July 2011.
10 See
31 U.S.C. § 714(f).
11 See section
1103(b) of the Dodd-Frank Act. The data released on December 1, 2010,
included transaction-level information about the following programs:
the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity
Facility (AMLF); the Term Asset-Backed Securities Loan Facility (TALF);
the Primary Dealer Credit Facility (PDCF); the Commercial Paper Funding
Facility (CPFF); the Term Securities Lending Facility (TSLF); the TSLF
Options Program (TOP); the Term Auction Facility (TAF); agency MBS purchases;
dollar liquidity swap lines with foreign central banks; assistance to
Bear Stearns, including Maiden Lane; and assistance to American International
Group, including Maiden Lane II and III. The information can be found
on the Board’s
website at www.federalreserve.gov/newsevents/press/monetary/20101201a.htm. offsite
12 The
Dodd-Frank Act has substantially modified the ability of the Federal Reserve
to extend emergency credit to single identified non-banking companies.
Now, credit under section 13(3) of the Federal Reserve Act may only be
offered through credit facilities with broad-based eligibility.
13 See www.federalreserve.gov/newsevents/reform_audit.htm. offsite

 

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Wed, 06/01/2011 - 14:18 | 1329646 FunkyMonkeyBoy
FunkyMonkeyBoy's picture

Ron Paul = Wet lettuce

... until i see evidence of otherwise.

Wed, 06/01/2011 - 14:32 | 1329674 swissaustrian
swissaustrian's picture

Take a look at his voting record:

http://www.votesmart.org/summary.php?can_id=296

Wed, 06/01/2011 - 15:53 | 1329982 JW n FL
JW n FL's picture

this is the link but there is nothing there.. for me.. http://www.c-spanvideo.org/program/299832-1

Wed, 06/01/2011 - 15:52 | 1329991 JW n FL
JW n FL's picture

these guys had some video.. but no sound was working.. everything in the world is on cspan... shuttle landing bullshit.. what the fuck ever! when it comes to the FED nothing is working on accident! Oops!

 

http://www.ronpaulforums.com/showthread.php?296157-6-1-2pm-Ron-Paul´s-hearing-on-quot-FED-Lending-Disclosure-FOIA-Dodd-Frank-the-Data-Dump-quot/page3

 

this country is filed with idiots! you dumb fucks deserve what you are going to get!

Wed, 06/01/2011 - 14:31 | 1329676 NidStyles
NidStyles's picture

You = Ignorant, or just not informed. Try watching CSPAN sometime.

Wed, 06/01/2011 - 14:41 | 1329685 plocequ1
plocequ1's picture

Exactly. He tells us what the issues are and my response is, " AND.... NOW WHAT?????????????"   Look, I know we are screwed. I don't need Ron Paul to confirm it.

Wed, 06/01/2011 - 14:45 | 1329712 zeek
zeek's picture

...that's funny... I thought the words 'end the Fed' pretty much says it all...

Wed, 06/01/2011 - 14:49 | 1329737 plocequ1
plocequ1's picture

Anyone can say words. Its like say no to drugs. Sounds nice, but thats about it

Wed, 06/01/2011 - 15:21 | 1329848 Raynja
Raynja's picture

1 vs 534, i wonder how its gonna turn out.

on the otherside of it is he knows his vote won't count .... no i dont want any drugs, oh you bought them, ya i guess i'll do some

Wed, 06/01/2011 - 14:46 | 1329715 Bolweevil
Bolweevil's picture

One leaf of wet lettuce has more nutritional value than all the stuffed shirts on Capitol Hill combined. Maybe if he had some help? You can continue to curse the darkness if you please.  (Great avatar)

Wed, 06/01/2011 - 14:51 | 1329735 Robot Traders Mom
Robot Traders Mom's picture

Yeah dude. We don't need anymore fucking trolls on ZH. Go back to the Huff Po and spout your bullshit.

Wed, 06/01/2011 - 15:00 | 1329761 plocequ1
plocequ1's picture

Man, Thats cruel. They delete anything they dont want to hear over there. ZH gives meaning to the words open forum. God bless Tyler

Wed, 06/01/2011 - 16:20 | 1330126 Plata con Carne
Plata con Carne's picture

Only in the past few weeks has Dr. Ron Paul...

1. Publically accused the President of the United States of engaging in an illegal (and impeachable) act in the form of flagrant abuses of the War Powers Act.
2. Openly declared the Chairman of the Federal Reserve Bank a Counterfeiter and vowed to destroy the (all-powerful) FRB "System".
3. Acknowledged the Pentagon as a wasteful and corrupt Federal entity.
4. Brought into question the legitimacy of the CIA.
-AND-
5. Stated (what everyone already knew) that the ME wars were for Corporate control of oil dollars.

No other politician, candidate is talking about these issues or taking action like Ron and Rand.

Wed, 06/01/2011 - 19:24 | 1330763 I Stand Alone
I Stand Alone's picture

This Friend speaks my mind! The only other option is to engage in the war of attrition.

Wed, 06/01/2011 - 19:37 | 1330805 downwiththebanks
downwiththebanks's picture

Ron "John Birch Society" Paul isn't doing ANY action.

It's all jaw-flapping, designed to get ZeroHedgers to VOTE GOP, baby!!

Wed, 06/01/2011 - 19:43 | 1330830 downwiththebanks
downwiththebanks's picture

Ron "John Birch Society" Paul's role is to keep ZeroHedge loyalists giving time, money, and attention to the 2 Party System.

That's why people get so pissy whenever ANYONE says ANYTHING, however true, about the geriatric, impotent, impish little Bircher.

Wed, 06/01/2011 - 22:08 | 1331208 Transformer
Transformer's picture

Wow, that's a new one.  I thought I had heard every possible way to slice and dice RP, but you take the cake.

Wed, 06/01/2011 - 14:18 | 1329647 TruthInSunshine
TruthInSunshine's picture

Bernanke will ensure there's a discount window, though they'll change the name and employ stealth measures and diversion to keep it as hush hush as possible (think about the 80 billion Bernankincide loaned out at .001% interest that we just found out about).

Maybe they'll call it the Federal Reserve Glory Hole.

Wed, 06/01/2011 - 15:04 | 1329777 Urban Redneck
Urban Redneck's picture

All banking can be reduced to spread arithmetic.  This has been the case for thousands of years.  The $80 billion at .001% is a rather scrawny tree in a large forest.  The problem is the trillions at 0% or negative.

Wed, 06/01/2011 - 14:19 | 1329648 I_ate_the_crow
I_ate_the_crow's picture

The Federal Reserve has worked and will continue to work with the Congress to ensure that our operations promote the highest standards of accountability, stewardship, and policy effectiveness, consistent with meeting our statutory responsibilities. We appreciate the opportunity to describe the Federal Reserve’s efforts on this important subject and are happy to answer any questions you may have.

I'm surprised whoever wrote this paragraph didn't spontaneously combust into flames.

Wed, 06/01/2011 - 14:33 | 1329672 cougar_w
cougar_w's picture

An earlier draft:

The Federal Reserve has mislead the Congress to ensure that our secrecy promote the highest levels of opacity, obfuscation and misdirection, consistent with protecting the interests of member banks. We appreciate the opportunity to extend and continue the Federal Reserve’s efforts on this important subject and are happy to utterly fail to honestly answer any questions you may have. Oh and fuck you.

Wed, 06/01/2011 - 14:40 | 1329702 Zymurguy
Zymurguy's picture

Hillarious!!!  Now I just have to clean up the half chewed apple I spit out all over my keyboard.

Wed, 06/01/2011 - 14:42 | 1329713 carbonmutant
carbonmutant's picture

 Said or unsaid this certainly the attitude they bring to the table.

Wed, 06/01/2011 - 14:55 | 1329756 cougar_w
cougar_w's picture

Though I'm pretty sure that "Oh and fuck you" really was in an earlier draft. They are just very very careful about editing it out at the very last minute, after much discussion, which goes something like the following:

"We just cannot leave the oh and fuck you in there I feel. It's not time to tell them to actually fuck off, gentlemen."

"Oh come now, surely we've been hinting at it long enough. That they can actually just fuck off."

"No sorry, while our man Obama is in office we'll just have to play it close to the vest."

"Well it seems dishonest to think they should fuck off and not actually, well you know, tell them all to fuck off."

"Indeed it is, and contrary to our normal position in such matters, but this is more about politics than actual banking."

"Very well. But after 2012?"

"Oh yes, after 2012 we absolutely tell them to fucking fuck the fuck off."

Wed, 06/01/2011 - 15:01 | 1329779 cahadjis
cahadjis's picture

Chewed apples all over the place here too! :)

Wed, 06/01/2011 - 22:10 | 1331210 Transformer
Transformer's picture

What do you think they mean by that?

Wed, 06/01/2011 - 15:17 | 1329829 NotApplicable
NotApplicable's picture

Hilarious.

Though I'd say their conclusion in the final draft is just a more polished form of "fuck off."

Wed, 06/01/2011 - 15:32 | 1329897 cougar_w
cougar_w's picture

Quite right. "Happy to answer your questions" is what you say when you have no intention of any kind to answer any questions, and you will thwart any attempt at answering even the most trivial question that can be imagined, and thinking about the question session and what an utter sham it will become makes you very, very happy.

Wed, 06/01/2011 - 15:23 | 1329857 tarsubil
tarsubil's picture

It's funny because it's true.

Wed, 06/01/2011 - 22:18 | 1331232 TruthInSunshine
TruthInSunshine's picture
by cougar_w
on Wed, 06/01/2011 - 14:33
#1329672

 

An earlier draft:

The Federal Reserve has mislead the Congress to ensure that our secrecy promote the highest levels of opacity, obfuscation and misdirection, consistent with protecting the interests of member banks. We appreciate the opportunity to extend and continue the Federal Reserve’s efforts on this important subject and are happy to utterly fail to honestly answer any questions you may have. Oh and fuck you.

 

Bravo, Cougar. You did it.

You effectively, efficiently and accurately conveyed their real attitude and intent. And even though they'd never actually write what you did, it's absolutely how they convey their feelings about the peons in Congress (who literally gave away the printing press to the Lizardians who pull the strings of the Federal Reserve 'Bank'), peon POTUS and the ultimate peons and pawns, in their minds, to wit, the American People. This is how they begin to speak out loud when discussing such matters over drinks, after the 3rd or 4th round.

I'd give a lot to be able to get access to the inner communications of the Federal Reserve Members and their Bosses, but there's no doubt they're so arrogant (and why not?) that they literally have contempt at the whole idea or notion that they even have to appear to be and pretend to be responsive to Congressional Hearings and the like.

Wed, 06/01/2011 - 14:19 | 1329650 Xibalba
Xibalba's picture

"Disclosure and Integrity of the Federal Reserve’s Financial Statements" - Where?  

Wed, 06/01/2011 - 14:24 | 1329651 Duuude
Duuude's picture

 

OMFG

 

I was gonna highlight parts for Chuck and Rod and tha stink got to be too much....

 

 

 

 

 

Wed, 06/01/2011 - 14:27 | 1329652 MarketTruth
MarketTruth's picture

Neither stream is working as of this moment:

ADDED: Hearing delayed until 3pm.

http://www.c-spanvideo.org/program/299832-1

http://financialserv.edgeboss.net/wmedia-live/financialserv/16489/300_fi...

Wed, 06/01/2011 - 14:22 | 1329654 Mercury
Mercury's picture

Fed to Paul et al:  You can't handle the truth!!

Wed, 06/01/2011 - 14:23 | 1329655 iinthesky
iinthesky's picture

Where's the goddamn video? Figures CSPAN wouldnt carry it.. they feel talking about the shuttle landing is more important. The house web site is also broken mysteriously. Oh... duh.. TD just said its delayed till three.

Wed, 06/01/2011 - 14:23 | 1329656 Dr. Acula
Dr. Acula's picture

"Experience has shown that banks’ unwillingness to use the discount window can result in more volatile short-term interest rates and reduced financial market liquidity that, in turn, can contribute to declining asset prices and reduced lending to consumers and small businesses"

Is this a bad thing? Is it immutable interest rates, infinite prices, and infinite lending that is desired?

This statement is clearly a bunch of mealymouthed B.S.

Wed, 06/01/2011 - 14:28 | 1329665 razorthin
razorthin's picture

"Experience has shown that banks’ unwillingness to use the discount window can result in more volatile short-term interest rates and reduced financial market liquidity that, in turn, can contribute to declining asset prices and reduced lending to consumers and small businesses"

Yeah, the desired effect.  LOL!  These coxxokkers don't even realize the concept of "lending" at interest is the crux of the problem.

Wed, 06/01/2011 - 15:27 | 1329722 Dr. Acula
Dr. Acula's picture

> the concept of "lending" at interest is the crux of the problem

Not at all. Lending at interest is completely normal and healthy. As a Distinguished Scholar of the Ludwig von Mises institute, Ron Paul surely knows this.

Click here to learn more about interest: http://mises.org/humanaction/chap19sec2.asp

"the abolition of payment of interest to the owners of capital, would result in capital consumption. The capitalists would consume their capital goods and their capital precisely because there is originary interest and present want-satisfaction is preferred to later satisfaction....Therefore there cannot be any question of abolishing interest by any institutions, laws, or devices of bank manipulation. He who wants to "abolish" interest will have to induce people to value an apple available in a hundred years no less than a present apple. What can be abolished by laws and decrees is merely the right of the capitalists to receive interest. But such decrees would bring about capital consumption and would very soon throw mankind back into the original state of natural poverty." - Ludwig von Mises

Wed, 06/01/2011 - 15:08 | 1329797 NotApplicable
NotApplicable's picture

No, as Dr. Acula (or Mises) says, interest is the cost of time. The problem you likely mean to state is the concept of "lending" something that doesn't exist. That is what allows the compounding interest to transfer wealth on such a massive scale. They get risk free interest streams, while we get less purchasing power as a result of the monetary inflation, both of which undermine the financial system.

If lending had to involve real money, then the interest rate would rise and fall as peoples' time preferences influenced its demand, and the amount of loans outstanding at any time would be limited to the size of the money supply. As it stands now though, there are little to no restrictions to how much debt the fed create/buy.

If interest rates were abolished, then the only loans you can obtain will be from political orgs with connections to the Treasury (or none at all). Do you not think it better to pay a reasonable rate on a car loan, rather than not be able to get to work? or are you somehow being exploited?

Wed, 06/01/2011 - 14:24 | 1329662 MiningJunkie
MiningJunkie's picture

Ron Paul is a jewel. He is the Hank Reardon (Atlas Shrugged) of American politics. Gold will print $1,600 before Independence Day.

Wed, 06/01/2011 - 14:37 | 1329690 NidStyles
NidStyles's picture

Not with Silver holding it back.

Wed, 06/01/2011 - 19:40 | 1330820 downwiththebanks
downwiththebanks's picture

Vote GOP!

Wed, 06/01/2011 - 14:32 | 1329679 ebworthen
ebworthen's picture

 

"We have an addiction to debt and excess liquidity problem but we don't want you to know what addicts (who just robbed your Parents, Grandparents, and Children while the cops looked the other way) are hitting the drive up window where the heroin is sold - or which addicts are outpatients at the methadone clinic.

BTW - you might be able to find your families stolen posessions at the Pension/Mutual Fund Pawn Shops, and yes - you will have to buy them back."

 

Wed, 06/01/2011 - 14:43 | 1329703 baseball13
baseball13's picture

"but you can only buy them back with gold or silver..."

Wed, 06/01/2011 - 14:33 | 1329686 Lord Koos
Lord Koos's picture

"...could impair the ability of the Federal Reserve to provide the liquidity needed to ensure the smooth working of the financial system.

Yes because the economy has been so, ah smooth the last few years.

Wed, 06/01/2011 - 15:07 | 1329809 buzzsaw99
buzzsaw99's picture

"...could impair the ability of the Federal Reserve to provide the liquidity needed to ensure the smooth working of the bank bonus system."

fixed it

Wed, 06/01/2011 - 14:33 | 1329691 Zymurguy
Zymurguy's picture

If I were Ron Paul, I'd have these prepared statements ready to rebuke the Fed's prepared statements:

"If institutions believe that publication of their use of Federal Reserve lending facilities will impair public confidence in the institution, then institutions might become more responsible in their actions and the Fed' might become less brazen with the abuse of our currency."

"Also, that crap about not being willing to lend???  Hello!  Bueller?  They HAVEN'T been lending.  So your argument has no basis in reality."

Although I doubt Ron would use a Ferris Bueller's Day Off quote, but that'd be kewl if he did.

Wed, 06/01/2011 - 14:34 | 1329692 Cdad
Cdad's picture

The Federal Reserve has worked and will continue to work with the Congress to ensure that our operations promote the highest standards of accountability, stewardship, and policy effectiveness, consistent with meeting our statutory responsibilities.

Does the fed include lending money to Libyan banks part of its stewardship or responsibility?

How about buying T bills at ridiculous prices and padding the pockets of criminal syndicate Wall Street bankers...and providing them with cash to buy Netflix shares every day?

How about preserving the criminally corrupt bankers at Freddie and Fannie?

How about supporting the US housing market?  That's been working so swell.  

Wasn't it the Fed's responsibility to police the mortgage market and reign in the insanely bad underwriting done to promote CDO crimes?

Does the Fed specifically believe that destroying the US dollar so as to allow profligate DC politicians the opportunity to pay less for their spending is part of its responsibility?

Isn't it simply time for the Fed to consider it primary responsibility just now to shutter the doors and windows at all of its facilities as an admission of its failure in all of its presumed responsibilities?


Wed, 06/01/2011 - 14:42 | 1329709 Dr. Richard Head
Dr. Richard Head's picture

Logic schmogic.  Don't you know the shining light on the hill is Congress mooning us?

Wed, 06/01/2011 - 15:09 | 1329815 NotApplicable
NotApplicable's picture

Dat Ass!

Wed, 06/01/2011 - 14:40 | 1329704 Bolweevil
Bolweevil's picture

Consumers and small businesses? Consumers and small businesses? WTF!? Whose got a number on how much credit is being withdrawn from said population then relate it back to the amount of debt owed THEN adjust accordingly for $ debasement, decreased buying power, lowered savings, raw cost inflation and... you get my point.

Wed, 06/01/2011 - 14:43 | 1329717 janchup
janchup's picture

I'm confident that Bernanke and Governors all wake up at 2:30 a.m. and with the honesty and clarity of early morning fear realize an unwanted visitor has yet again entered their conscious minds, the awareness of a swiftly approaching depression.

Wed, 06/01/2011 - 14:49 | 1329728 karzai_luver
karzai_luver's picture

You "peepole" can't understand the great and godly works we undertake daily to support your utterly slovenly and careless AmeriKAN way of life.

 

 

Now back to your AMerikan Idolatry and make it snappy.

BOL lil tim and benny

 

Wed, 06/01/2011 - 14:49 | 1329729 TraderMark
TraderMark's picture

Mohamed El-Erian says Fed won't do QE3. (video)

http://www.fundmymutualfund.com/2011/06/video-pimcos-mohamed-el-erian-un...

Wed, 06/01/2011 - 14:55 | 1329757 Arius
Arius's picture

okay - if Mohammad says so...the mountain will come to mohammad then... LOL

Wed, 06/01/2011 - 16:11 | 1330100 JW n FL
JW n FL's picture
by TraderMark
on Wed, 06/01/2011 - 14:49
#1329729

 

Mohamed El-Erian says Fed won't do QE3. (video)

http://www.fundmymutualfund.com/2011/06/video-pimcos-mohamed-el-erian-un...

**************************************************************

Great Grab!! that makes JP Morgan and Pimco on the Record as "NO's" for QE-2!

 

we need one more brand name to go public and we will have a winner!

 

(although, I have always said it was coming.. and I am dumber than a box of rocks.. so I imagine the market knew way back when too / already!)

Wed, 06/01/2011 - 15:00 | 1329760 AldoHux_IV
AldoHux_IV's picture

If the fed has to keep secret or delay the transactions of institutions utilizing the discount window for fear of the public losing faith in these institutions then it's already too late in terms of a secure financial system.  It's like saying I'm a ponzi schemer and you can look at my books after I've made some accounting and off-balance sheet adjustments, but if you were to look somewhat real time into my books then you'd realize that this is a farce-- a ponzi as what I'm supposed to have isn't there until there is some financial alchemy.

In the end, the whole point of full disclosure for the sake of gauging the health of the financial system is to understand just what institutions are failing and why-- not after the fact of boosted capital and accounting gimmicry.  It's time for people to wake up and end the ponzi-- end the fed, break up the TBTF's reduce their size and return the banking sector to that of utility and nothing more.

Wed, 06/01/2011 - 14:59 | 1329768 firstdivision
firstdivision's picture

It's 3pm...do you know where your hearing is?

Wed, 06/01/2011 - 15:01 | 1329776 mfoste1
mfoste1's picture

anyone have a good link to this? is it even being recorded?

Wed, 06/01/2011 - 15:07 | 1329789 r101958
r101958's picture

Good question and I second it.

Wed, 06/01/2011 - 15:08 | 1329813 clymer
clymer's picture

ten banks control all twelve Federal Reserve Bank branches.  He names N.M. Rothschild of London, Rothschild Bank of Berlin, Warburg Bank of Hamburg, Warburg Bank of Amsterdam, Lehman Brothers of New York, Lazard Brothers of Paris, Kuhn Loeb Bank of New York, Israel Moses Seif Bank of Italy, Goldman Sachs of New York and JP Morgan Chase Bank of New York.  Schauf lists William Rockefeller, Paul Warburg, Jacob Schiff and James Stillman as individuals who own large shares of the Fed. [3]  The Schiffs are insiders at Kuhn Loeb.  The Stillmans are Citigroup insiders, who married into the Rockefeller clan at the turn of the century.

 

 

http://www.blacklistednews.com/The_Federal_Reserve_Cartel%3A_Part_I%3A_T...

Wed, 06/01/2011 - 15:12 | 1329826 slewie the pi-rat
slewie the pi-rat's picture

ok.  i read that.  i am now shovel-ready!

Wed, 06/01/2011 - 15:14 | 1329833 iinthesky
iinthesky's picture

Is anyone's link working?

Wed, 06/01/2011 - 15:21 | 1329835 Motorhead
Motorhead's picture

I almost spit out a gulp of water after reading this quip:

"We remain concerned that a more rapid release of information about borrowers accessing the discount window and emergency lending facilities could impair the ability of the Federal Reserve to provide the liquidity needed to ensure the smooth working of the financial system...."

Wed, 06/01/2011 - 15:24 | 1329859 tony bonn
tony bonn's picture

if that's the best argument the banksters have for continuing stealth operations then flush the god damned turd down the toilet.....not only is it a lie but it doesn't even pass the laugh test....

fuck you bernanke

Wed, 06/01/2011 - 15:28 | 1329861 sasebo
sasebo's picture

BOOOOOOOOOOOOOO HOOOOOOOOOOOOOOO

Blow my nose & wipe my ass.

 

Wed, 06/01/2011 - 15:33 | 1329882 firstdivision
firstdivision's picture

Was the hearing canceled?!?

Wed, 06/01/2011 - 15:33 | 1329884 SilverDosed
SilverDosed's picture

Lame... at least let me look you in the eyes while you rape me.

Wed, 06/01/2011 - 15:35 | 1329909 swissaustrian
swissaustrian's picture

Starting now!

Wed, 06/01/2011 - 15:41 | 1329919 SilverDosed
SilverDosed's picture

link?

Wed, 06/01/2011 - 15:37 | 1329917 iinthesky
iinthesky's picture

Anyone have an alternate live link asside from the house financial services web site?

Wed, 06/01/2011 - 15:41 | 1329922 firstdivision
firstdivision's picture

Anyone getting problems with audio?

Wed, 06/01/2011 - 15:45 | 1329934 swissaustrian
swissaustrian's picture

yep. had the same problems during the prior hearings...

Wed, 06/01/2011 - 15:43 | 1329942 SilverDosed
SilverDosed's picture

where are you getting video?

Wed, 06/01/2011 - 15:48 | 1329970 firstdivision
firstdivision's picture

I was using this link http://is.gd/UUYll7 but now the feed is not working for me.  Anyone else able to still watch it?

Wed, 06/01/2011 - 15:56 | 1329993 swissaustrian
swissaustrian's picture

Probably they shut it down to fix the sound

Wed, 06/01/2011 - 15:44 | 1329931 proLiberty
proLiberty's picture

 

The Federal Reserve Corporation may receive an unqualified opinion from its third-party auditor each year, that all that proves is that all the trillions of dollars the Fed has created out of thin air are properly accounted for.

 

This is the flip side of Sarbanes-Oxley, where a publicly held corporation with billions in sales and billions in assets certifies its annual financial statement to the penny, BUT NOBODY CARES HOW MUCH THE VALUE OF THE DOLLAR HAS BEEN DISTORTED IN THE ACCOUNTING PERIOD BY GOVERNMENT ACTIONS.

 

While it is normally considered gauche to shout in normal postings, this is the critical monetary issue of our lifetimes: too many people confuse money with wealth.

 

The Federal Reserve Corporation has two mandates. The last time I looked up that word, it was pretty compelling. The first is to seek full employment, the second is to protect the value of the dollar. Earlier this year, when Congressman Ron Paul asked Chairman Bernanke what was the definition of the value of the dollar, he replied, sometime like “whatever it will buy.” But Chairman Bernanke is in charge of executing the Fed's mandate as well, so he should know that in 1914, the value of the US Dollar, as measured by the dollar price of gold, was $20/ounce; in 1934 it was $35/ounce and in 2011 it was $1,500/ounce. So by the Chairman's own definition, the Federal Reserve has diluted the value of the dollar by a factor of SEVENTY TIMES.

 

Even in the current year, the value of the US Dollar has declined by several percent. Yet the Federal Reserve Corporation seems committed to keep diluting it, and I would ask until what happens? Only a person who confuses money with wealth thinks that we can print our way into prosperity. And if anyone wants to know why people are not buying many new homes, or many new cars, or why many businesses are not hiring many new employees, it is exactly because government policy is busy destroying wealth even as the number of dollars in circulation grows and grows. As a consequence, people are forced to take steps to protect what financial assets they have as best they see fit, because under the present circumstances what they see is far more wealth destruction than opportunities for wealth creation.

 

Since part of that wealth destruction is the actions of the Federal Reserve Corporation, it is essential that absolutely as much of its operations be made absolutely as transparent as possible, and that includes ALL their efforts to support other central banks through leasing and lending of gold, currency swaps, and repos, purchases of stocks and any other securities. We should loth the day the Federal Reserve Corporation was created, for it has the power to destroy our wealth entirely through its actions, and it currently seems hell bent on doing so, no matter how many good intentions the good and wise Chairman expresses.

 

Wed, 06/01/2011 - 15:55 | 1330003 iinthesky
iinthesky's picture

Stupid ass congress gives away 8 trillion dollars and they can't steal 50 million for a decent streaming video system. Oh yeah.. they don't really want us watching them.

Wed, 06/01/2011 - 16:09 | 1330087 Buzz Fuzzel
Buzz Fuzzel's picture

The only effective "regulation" known to man is FEAR of FAILURE. 

If nothing can fail and nothing need be revealed concerning potenital failure there is no "regulation".

Wed, 06/01/2011 - 16:25 | 1330150 navy62802
navy62802's picture

I can't get the fucking stream to play. Damn it.

Wed, 06/01/2011 - 16:38 | 1330228 navy62802
navy62802's picture

Ron Paul's twitter page says CSPAN will replay the hearing tonight at 8:45 PM EST and again at 1:05 AM EST.

Wed, 06/01/2011 - 16:29 | 1330190 Threeggg
Threeggg's picture

Can anyone get the stream to play ?

CSPN not running it because they are running spending feeds.

What a fucking joke !

Wed, 06/01/2011 - 16:35 | 1330227 swissaustrian
swissaustrian's picture

Tyler :

Today's hearing: "Federal Reserve Lending Disclosure: FOIA, Dodd-Frank, & the Data Dump," airs tonight on CPAN-2 at 8:45pm & 1:05am EST. https://twitter.com/#!/FinancialCmte/status/76015925073166336

 

Wed, 06/01/2011 - 17:05 | 1330364 jkruffin
jkruffin's picture

"If institutions believe that publication of their use of Federal Reserve lending facilities will impair public confidence in the institution, then institutions may choose not to participate in these facilities."

 

In short, if we can't rig the system to our advantage, we just won't let anyone play anymore.......bunch of friggin crooks. Public confidence has nothing to do with it.  These slimeball bankers want it all and it doesn't matter who they kill or leave homeless to get it.  This included Bernanke and his little morons too.  All they care about it themselves. America must demand the banking system be majorly reformed.

Wed, 06/01/2011 - 17:23 | 1330421 GeneH3
Wed, 06/01/2011 - 17:36 | 1330445 optimator
optimator's picture

The FED accomplishment that overshadows all other for profit companies is that it hasn't been auditied in 98 years.  They'll leave for greener pastures before any audit is opened -- just as they have in other countries.

Wed, 06/01/2011 - 19:44 | 1330832 downwiththebanks
downwiththebanks's picture

Ron "John Birch Society" Paul is still a GOP flunkie, isn't he?

Wed, 06/01/2011 - 22:18 | 1331231 Transformer
Transformer's picture

You're  hilarious.  What??

Thu, 06/02/2011 - 11:26 | 1332390 aminorex
aminorex's picture

and the cake is a lie

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