Mind Over Market

This ascerbic and hilarious cartoon by Malekenoms is done in a question and answer format between two bears who speak with computer-generated voices and broken English. The first bear starts off the process by asking the second bear, "Did you hear about the Fed?" and then proceeds to explain to the second bear why the Fed is engaging in quantitative easing. The policy name "quantitative easing" is described as a euphemism for printing "a ton of money." When the second bear asks the first bear, why not just calling it "the printing money," the first bear responds that the Fed calls in quantitative easing because printing money is seen as "the last refuge of a failed economic empire and banana republics, and the Fed doesn't want to admit this is their only idea." The bears then belittle the notion that there is deflation when prices are rising everywhere. The the first bear also lampoons the Fed's credibility and claims it has bee...

In emails from the New York Fed obtained by California Republican Darrell Issa's office, the New York Fed told AIG not to disclose the payments AIG was making to counterparties when the Fed was bailing out AIG. By Robert Stowe England January 7, 2010 Officials from the New York Fed in emails in December 2008 pressured AIG not to disclose how much was paid to counterparties in the federal government bailout of AIG earlier that year. Normally, such information would be disclosed in an 8-K filing by AIG. The emails were obtain by Representative Darrell Issa, California Republican, and released to the press yesterday. Under a bailout deal overseen by then New York Fed Chairman Timothy Geithner, the government agreed to provide 100 cents on the dollar for credit default swaps that were worth considerably less. Through the bailout, full payment on the notional value of the credit default swaps were made by AIG to Goldman Sachs, Societe Generale and other counterparties. The actual emails...

When the New York Fed renegotiated its original $85 billion deal to bail out AIG last year, it "effectively" transferred tens of billions dollars of cash from the federal government directly into the coffers of the AIG’s counterparties, according to an audit by TARP Inspector General Neil M. Barofsky. The New York Fed pursued a negotiating strategy that failed to get the counterparties to accept anything approaching market value for the toxic assets taken off their books by the deal. This raises the question of whether or not this was a “backdoor bailout” of the counterparties, the audit suggests. By Robert Stowe England November 17, 2009 By November 2008 the emergency rescue of the giant insurance company AIG, engineered by the New York Fed two months earlier, was in trouble. Timothy Geithner, President of the New York Federal Reserve Bank, had played a leading role in that rescue, authorized by the Federal Reserve’s Ben Bernanke and then Treasury Secretary Hank Paulson, a f...