Rigged? NYFed Slams Study Showing Alleged Collusion Between Fed, Banks Around FOMC Meetings

Back in 2015, we detailed a study by researchers at Duke University and the University of California at Berkeley pointing to quantitative evidence that The Fed consistently leaks non-public information about its meetings.

The study, first reported by The Daily Californian, considers historical patterns in stock prices relative to the distribution of non-public Fed information. “The Fed uses ‘informal communication channels’ on even-numbered weeks after FOMC meetings,” the report said, pointing to leaks making it into media stories such as the Wall Street Journal as well as showing up in private financial advice.

To support their claims, researchers point to private advice received by financial investors and news reports that contained non-public information discussed in FOMC meetings. “The informal communication can steer market expectations by engaging with private forecasters and newsletters that influence market inference of current and future policy,” the report stated, citing the goal of managing market expectations. “Informal communication facilitates learning by the Fed from the financial sector about how the Fed’s assessment of the economy compares to that of the financial sector and about how markets are likely to react to a particular policy decision.”

At the time, the report dovetailed with a recent insider trading investigation of the Fed, which was mentioned in the report. The report authors pointed to a lack of concern regarding being investigated or prosecuted for the wide-spread if brazen leaks:

We provide a list of Fed leaks of the FOMC outcome (or key determinants thereof) or the FOMC minutes to private financial institutions, again being constrained in seeing only the leaks that emerge in the public domain. The most well-known example is the October 3, 2012 leak to Medley Global Advisors (MGA), a policy intelligence firm. It is clear from that document that Regina Schleiger, the MGA analyst, had a copy of the FOMC minutes from the September 2012 FOMC meeting, which were due to be released the day after her article. In addition, she provides a step-by-step account of the policy debate among FOMC members ahead of the September 2012 FOMC meeting, information that goes beyond the content of the minutes.

Two things are notable about this example beyond the leak itself. First, it is informative that the analyst wrote the newsletter without a concern for the legality of extracting and conveying inside information to those who could trade ahead of the minute release announcement. One possible interpretation of this is that leaks are commonplace and not prosecuted. Second, the subsequent investigations of the MGA leak offers evidence of the systematic nature of informal communication between the Fed and the financial sector.

We noted at the time that in some respects, the lack of concern regarding legal consequences for its actions reflects a growing trend after 2008 where elite financial players didn’t believe their transgressions would be investigated much less prosecuted.

Three years later and still no prosecutions... and now a new report by University of Chicago Booth School of Business Ph.D. candidate David Finer, has exposed The Fed's clear manipulation and rigging of financial markets through 'leaked' information.

As The Wall Street Journal reports, Finer found a jump in New York City taxi cab activity between the Federal Reserve Bank of New York and major Wall Street banks around the time of central bank policy meetings, and the study’s author says the findings suggest an increase in informal communications between Fed employees and individuals in the private sector could be occurring.

Mr. Finer used government-provided GPS coordinates, vehicle information and other travel data to track taxi traffic between the addresses of the New York Fed and major banks. His research pointed to increased traffic between the destinations around lunch and late evening hours, which suggested informal meetings were taking place.

“The paper does not say anything illegal is happening,” Mr. Finer said in an interview. But “the pattern of interactions suggest these meetings are happening, and there’s the potential for information to be shared” between Fed employees and those in the private sector at these types of gatherings, he said.

“Their geography, timing and passenger counts are consistent with an increase in planned meetings causally linked to the incidence of monetary-policy activities,” he wrote. “I find highly statistically significant evidence of increases in meetings at the New York Fed late at night and in off-site meetings during typical lunch hours,” which is suggestive of “informal or discreet communication.”

The time surrounding the signing of Dodd-Frank saw a shocking rise in bilateral commercial-bank, Fed travel...

It seems 2012 was a big year for Fed leaks...

Of course, a spokesman for the New York Fed said the paper’s claims were fundamentally flawed.

“Many of the working paper’s inferences are flawed and misleading,” the bank spokesman said. “It is simply not credible to imply that an increase of a few taxi rides by unknown passengers between densely populated areas of the city—business, transportation and hospitality hubs—increased the risk of inappropriate communication,” he said, noting the Fed has strong policies governing how its staff interact with financial institutions.

As a reminder, just last year, then Richmond Fed President Jeffrey Lacker stepped down after revealing he had accidentally confirmed sensitive information about a Fed bond-buying program to a financial information firm and then failed to report the disclosure.



Cognitive Dissonance Liberal Sun, 03/11/2018 - 11:21 Permalink

It's only collusion when we say it's collusion. Otherwise it's simply an open communications policy with those who are more than equal when everyone is equal.

The secret to the Fed's sauce is to magnify your voice ten fold by including other 'influential' voices in the messaging. It's a symbiotic relationship of scratching each other's backs to achieve control.

And if a few select fulcrums become obscenely rich in the process....well, you've got to break a few middle class eggs if you wish to make kings and control the world.

In reply to by Liberal

FBaggins The Real Tony Sun, 03/11/2018 - 19:34 Permalink

The Fed was a crook enterprise from its inception.

The coup de grâce to American independence was administered in 1913 by the Rothschild international banking cartel being fronted by JP Morgan and a handful of US puppet bankers.  Wilson was President from March 4, 1913 to March 4, 1921. Whether or not he actually ever regretted signing into law the Federal Reserve Act in 1913, he certainly ought to have. He did recognize that the US as a great industrial nation was controlled by a system of credit and that system had increasingly been concentrated into the hands of a small group of dominate men. With the Federal Reserve Act the US became one of the most completely controlled and dominated Governments in the civilized world. It no longer was a Government ruled by the free opinion, conviction and vote of the majority of the people, but became a Government ruled by the opinion and duress of a small group of dominant men representing the interests of the international banking cartel, from which Washington, Jefferson, Jackson, Lincoln and many other loyal US presidents before Wilson fought so hard to keep US finances free.  

In the 100 years from 1812 to 1912 despite some fluctuations with the civil war and the use of American green backs for a time, there was 0% inflation with the American dollar. A dollar in 1812 had the same buying power as the dollar in 1912.

In 20 year increments from 1872 to 2012, the following shows what happened to the ever decreasing buying power (“value”) of the US dollar after it was put into the clutches of the US Federal Reserve cabal:

From 1872 to 1892,  $1.00 remains  $1.00 & the US dollar loses 0% of its value;

   “      1892 “ 1912    $1.00      “         $1.00 “   “     “       “        “     0%  “   “      “

                                        [1913 – Creation of the Federal Reserve]

From 1913 to 1932,  $1.00 becomes$0.62 & the US dollar loses 38% of its value;

   “     1933  “  1952   $1.00      “         $0.49 “   “     “       “        “     51%  “   “      “

   “     1953  “  1972   $1.00      “         $0.64 “   “     “       “        “     36%  “   “      “

   “     1973  “  1992   $1.00      “         $0.32 “   “     “       “        “     68%  “   “      “

   “     1993  “  2012   $1.00      “         $0.63 “   “     “       “        “     37%  “   “      “


In 40 year increments from 1872 to 1992 you have:

From 1872 to 1912,  $1.00 remains   $1.00 & the US dollar loses 0% of its value;

   “     1913  “  1952,  $1.00 becomes $0.37 “   “      “      “         “   63% “   “      “  

   “     1953  “  1992,  $1.00 becomes $0.19 “   “      “      “         “   81% “   “      “  


From 1812 to 1912, $1.00 remained $1.00 and lost 00% of its purchasing power. 

From 1912 to 2012, $1.00 became   $ 0.04 and lost 96% of its purchasing power.

In reply to by The Real Tony

glenlloyd booboo Sun, 03/11/2018 - 15:46 Permalink

Stories like this don't get traction because the invisible hand gonna come get you if you do. The invisible hand likes to say these are conspiracy theories even though we know that now it's most likely conspiracy fact.

Fed can deny all it wants but we already know that the worst case scenario is the truth.

If there's a PPT then you better damn well know that the Fed talks to all the banks as much as it wants and it tells them exactly what it wants to, regardless of the law.

It is NOT (and never has been) a level playing field.

In reply to by booboo

Endgame Napoleon Liberal Sun, 03/11/2018 - 19:31 Permalink

At least the highly paid Fed bankers are not working ([bankers hours] or far less), like the employees and many of the managers in the typical corporate or government back office, staffed with frequently babyvacationing, back-watching moms, armed with their refundable $6,444 child-tax-credit welfare, which they call their “taxes.” Analyze the traffic patterns at 2:30 pm, when the above-firing mommas in sales-related offices vacate the building, leaving phones ringing off the hook with paying customers, to see if they end up at the grocery store, getting their shopping done before the end-of-day traffic thicket, letting the grandma that keeps their kids through their every-two-month, excused, two-week vacations pick up the kiddos that they use a successful excuse for anything and everything.

In reply to by Liberal

two hoots BennyBoy Sun, 03/11/2018 - 11:24 Permalink

So why don't stories like this get traction?  Only 52% of families own any stock and the top 10% of American households, as defined by total wealth, owned 84% of all stocks in 2016, thus making the remaining 42% an insignificant minority and the other 48% non owners irrelevant.    Not enough people "own" enough to matter.  Those that do are doing well and won't complain....until.

And:   The Federal Advisory Council (FAC), which is composed of twelve representatives of the banking industry, consults with and advises the Board on all matters within the Board's jurisdiction.  This admixture of public/private/quazi money control is not reasonably auditable...as it is the darkest of all nebulous factions.  It would be like trying to count the wind.  And when one is living paycheck to paycheck who cares about a Federal Reserve?  They (- the bobbing head appointments) have more staying power than any elected officials.

There is no reasonable conclusion or action other than abolishing the Federal Reserve which, unfortunately, is the buyer of last resort of US debt which feeds SS, SSI, welfare, Medicare/caid and all else which many depend.  They, the Fed, has created the optimum necessary evil.

In reply to by BennyBoy

All Risk No Reward two hoots Sun, 03/11/2018 - 15:26 Permalink

>>So why don't stories like this get traction?<<

"Most people prefer to believe their leaders are just and fair even in the face of evidence to the contrary, because once a citizen acknowledges that the government under which they live is lying and corrupt, the citizen has to choose what he or she will do about it. To take action in the face of a corrupt government entails risks of harm to life and loved ones. To choose to do nothing is to surrender one's self-image of standing for principles. Most people do not have the courage to face that choice. Hence, most propaganda is not designed to fool the critical thinker but only to give moral cowards an excuse not to think at all."
~Michael Rivero

In reply to by two hoots

Endgame Napoleon two hoots Sun, 03/11/2018 - 19:51 Permalink

Social Security is a pay-as-you go system, where current, [non-offshored] employees contribute 7.65% of every penny earned up to $127,200 in yearly income, and self-employed Americans contribute twice as much: 15.3% of their earned income up to $127,200.

  1. The biggest problem Social Security has is over 2 million American jobs, offshored to Asian countries, where American-in-name-only companies have access to low-cost laborers galore and no ethnic or racial diversity to complicate the work lives of highly paid managers. 
  2. The second biggest problem is automation-based underemployment, whereby machines are replacing human workers at a rapid pace, as various welfare agencies and the US Treasury Departnent pay citizens and noncitizens — legally and illegally in the USA — to have sex and produce more and more human workers to compete with robots for future jobs, offering free groceries, free rent and monthly cash as pay for sex and reproduction, with recently doubled, refundable (EITC) child-tax-Credit welfare now at $6,444, paying parents in single-earner households to work part time so that they stay below the earned-income limits for welfare programs, which undercuts citizens who must live on earned-only income in the job market, while also ensuring less SS revenue due to facilitating a part-time, low-wage economy. 

Perhaps, the Fed meets in secret to discuss the nutty, head-in-sand choices of our oh-so-elite leaders and the pay-per-birth electorate that they serve. 

In reply to by two hoots

veritas semper… BennyBoy Sun, 03/11/2018 - 16:10 Permalink

Exactly. Why is this so difficult to understand. Since their creation in 1913 . Names may have changed ,but the owners are the same(the REAL owners of America).

We have a Centrally planned economy ,manipulated and rigged in their favor .All the time.

They gave themselves "laws" to justify this and make it "legal".

They created monopolies to kill any possible competition (didn't one of those psychopaths say that competition is a SIN?) and this way kill the enterprise of the little guy. Monopolies in EVERY aspect of life.

They moved the production and manufacture base abroad ,to make profits from slave labor. And left you ,schmucks ,with the lingering for MAGA. Keep dreaming!

They own everything of value here: best land(you schmucks only RENT IT) and properties ,all the stocks ,all the big corporations.

They own the politicians and the repressive apparatus.And the propaganda media.

So ,I ask again ,what type of -ism we have here ,in the land of the free ?

In reply to by BennyBoy

Endgame Napoleon veritas semper… Sun, 03/11/2018 - 20:17 Permalink

Are you being sarcastic? The Federal Reserve Bank is not the Wizard of Oz, nor the Wicked Witch of the West. The yellow brick road to various investment bubbles, partaken of by the top 20%, was laid by a lot of different forces, none of them with the waning American middle class’ best interests in mind.

Yet, the real Wicked Witch was not the monetary policy, but the undercutting of American labor and Main Street businesses by 1) the offshoring of over 2 million manufacturing jobs and 2) the impossible-to-compete-with big-box volume sellers.

Then there is the Wicked, womb-productivity-based welfare and child-tax-credit-welfare state, which is not a Fed creation, but a creation of the US Congress, which has the power of the purse, through which it funds mass, welfare-buttressed immigration, helping to undercut underemployed, male citizens in the job market.

Not to mention all the single-earner moms who are citizens, unlike the legal / illegal immigrants getting welfare via US-born kids and a male breadwinner, staying below the earned-income limits for the programs in [traceable] income.

But the moms are advantaged in the cheapskate labor market by a welfare system, which pays their main household bills (rent, groceries) more per kid produced, in addition to adding a child-tax-credit welfare allotment that maxes out at $6,444, when they work part-time, staying below the earned-income limit for welfare, thereby driving wages and hours down for welfare-ineligible citizens living on earned-only income, facing rent that absorbs more than half of their pay.

It is, INDEED.com, a rigged, rigged, rigged-cubed labor market, but not by the Federal Reserve Bank.


In reply to by veritas semper…

lincolnsteffens topspinslicer Sun, 03/11/2018 - 12:50 Permalink

The US Gov. has given itself the right to control all markets as we are under the un"Patriot" act and a continually re-ratified state of emergency. The Fed as a whole is a Foreign Agent and colludes with other central banks.

The lack of prosecution of the Fed is no different than the Commodity Futures Commission refusing to stop or prosecute those responsible for rigging the gold and silver markets.

In reply to by topspinslicer

Endgame Napoleon tahoebumsmith Sun, 03/11/2018 - 20:29 Permalink

Actually, I think you do have to be a mathematical thinker to understand economics in detail and the day trading, too. From the academic to the applied, it is kind of a brainiac profession, like computer programming, but sometimes, I think the true brainiacs get too caught up in the intricacies of their theories to see how it all plays out on the ground level, with the crappy, unfair, womb-productivity-based welfare system being one example.

In reply to by tahoebumsmith

wildbad Déjà view Sun, 03/11/2018 - 10:46 Permalink

thou doth protest too much:

Papua New Guinea: Bank of Papua New Guinea Paraguay: Central Bank of Paraguay Peru: Central Reserve Bank of Peru Philip Pines: Bangko Sentral ng Pilipinas Poland: National Bank of Poland Portugal: Bank of Portugal Qatar: Qatar Central Bank Romania: National Bank of Romania Russia: Central Bank of Russia Rwanda: National Bank of Rwanda San Marino: Central Bank of the Republic of San Marino Samoa: Central Bank of Samoa Saudi Arabia: Saudi Arabian Monetary Agency Senegal: Central Bank of West African States (BCEAO) Serbia: National Bank of Serbia Seychelles: Central Bank of Seychelles Sierra Leone: Bank of Sierra Leone Singapore: Monetary Authority of Singapore Slovakia: National Bank of Slovakia Slovenia: Bank of Slovenia Solomon Islands: Central Bank of Solomon Islands South Africa: South African Reserve Bank Spain: Bank of Spain Sri Lanka: Central Bank of Sri Lanka Sudan: Bank of Sudan Surinam: Central Bank of Suriname Swaziland: The Central Bank of Swaziland Sweden: Sveriges Riksbank Switzerland: Swiss National Bank Tajikistan: National Bank of Tajikistan Tanzania: Bank of Tanzania Thailand: Bank of Thailand Togo: Central Bank of West African States (BCEAO) Tonga: National Reserve Bank of Tonga Trinidad and Tobago: Central Bank of Trinidad and Tobago Tunisia: Central Bank of Tunisia Turkey: Central Bank of the Republic of Turkey Uganda: Bank of Uganda Ukraine: National Bank of Ukraine United Arab Emirates: Central Bank of United Arab Emirates United Kingdom: Bank of England United States: Federal Reserve, Federal Reserve Bank of New York Vanuatu: Reserve Bank of Vanuatu Venezuela: Central Bank of Venezuela Vietnam: The State Bank of Vietnam Yemen: Central Bank of Yemen Zambia: Bank of Zambia Zimbabwe: Reserve Bank of Zimbabwe The FED and the IRS FACT: US Federal Reserve is a privately-owned company, sitting on its very own patch of land, immune to the US laws. Q

In reply to by Déjà view

SoDamnMad topspinslicer Sun, 03/11/2018 - 12:46 Permalink

Think of this in a coming movie. Select taxis cruise these addresses and pick up the bankers for the return trip only they don't make it back.  Separation shields show gases coming up in the back seat while drivers slip on protective masks. The taxis all drive to garage locations where the "meat" is removed by chemical suited teams. Within 15 minutes the airwaves are crackling with calls reporting missing bankers. Panic strikes THE STREET

In reply to by topspinslicer

mvsjcl wildbad Sun, 03/11/2018 - 15:33 Permalink

With even greater immunity than the diplomatic variety. Persons plugged into the BIS system have immunity from EVERYTHING. The countries which are part of "The System" sign treaties stipulating such. They give the very people who will invariably destroy them carte blanche authority to do so! Look up BIS settlements.

In reply to by wildbad

DuneCreature Sun, 03/11/2018 - 10:41 Permalink

~~~~))?((|-|-|-|mm|-|-|-|  The Bad Guys  |-|-|-|mm|-|-|-|-|))?((~~~~

Let's talk about The Bad Guys.

Who are the bad guys?

They are the nasty (pedo) greedy cut-throat pirates.

But, but, but, WHO ARE they??

If you really don't know let me tell you.

The Central Bankers, known on ZH colloquially as The Banksters, including the central banks and banking clearing houses around the globe, the private investment banks, the credit card companies and their banking enforcement arms like, but not limited to, the SEC, IRS AND their 'vault keepers' like the insurance corps, foundations and holding companies.

That's a really BIG group of bad guys, isn't it?

It certainly is.

Why so many?

Because there is safety in crook numbers.

And great places to hide.

We have been told this a thousand times by hundreds of researchers who have spent their lives figuring out who the 'bad guys' really are. This is another researcher dude, Wayne Jett, I have only recently learned of so here is the same message again for those that need redundancy in their lives to be sure of all of this:

The Cut Throat Pirate Bad Guys Aren't Hard To Find (They stay just 'off shore'........tehehehe,...he,....he,..he.)

If you are running a big cumbersome pirate flagship pilfering up and down along some coast line you need a lot of little pirate sloops and brigs running around covering your back and keeping the coastal population on edge and watching suspiciously everything that floats, attempts to enter their port or even passes by hull down on the horizon. ... You need your victims to adopt a siege mentality. You don't want them building a couple of swift, heavily armed frigates that can sail out and run down your big floating luxury hotel full of fat lazy pirates and blow it out of the water.

You need to keep your golden geese shore flock, paranoid, embattled, 'taxed' scraping up tribute (ransom), exhausted, too busy worrying about the small raiding parties attacking, each using a 'different flag', to organize and mount a real 'evil pirate round up' mission.

The fact is; There really AREN'T that many real pirates. .. Lots of duped crewmen on the various pirate craft but without the pirate ship's officers and senior boatswains these crewmen (and women) are just sailors. ... They can be re-trained or made to sail a merchant ship just as well as a raider.

We need a mission to lop off the head(s) on this dragon.

We need to seize that big pirate flagship and use all of those large canons on the rest of the pirate raiders.

SIEZE those STOLEN ASSETS!! ...... ALL of them.

If The Pirates Can Seize Assets,....So Can We The People

That wealth DOES NOT rightfully belong to the pirates and the pedos.

Ignore the little pirate boats and ships, sail right past them and go for the pirate HQ ship. ..... Sinking a little pirate raider boat here and there does nothing to address the big overall pirate problem. .. The pirates just commandeer another ship and keep on raiding.

Let's use the same Admiralty Law and US Military Tribunals to pound the pirates and seize some assets that they have been using on us!

Live Hard, Without The Head The Dragon Is Dead, No Matter How Big And Scary The Dragon Is......Or Rather Appears To Be, Die Free

~ DC v8.8