And just as I post the most recent article about Bill Dudley, the NY Fed Chief putting on a PR blitz to save the reputation of the Fed and inform the public about the good works they do, we get another gem that reinforces just how rigged this whole system is.
FORMER KANSAS CITY FED PRESIDENT, THOMAS HOENIG NOMINATED FOR FDIC CHAIR BY OBAMA.
Hoenig, who has served as President of the Kansas City Fed for 20 years and submitted his resignation on October 1st of this year.
Is it odd that Hoenig would retire only to move into the leadership role at the FDIC? Perhaps not, however this interesting story about Bank of America, highlighted below, has me thinking a bit more now that I have noted the story.
WHEN THERE IS DISAGREEMENT IN THE WORKPLACE, FIRE THEM
When I worked at the hedge fund back in the day, you could tell when someone was about to be asked to leave the firm (fired). Typically, the timing would coincide with any challenge or disagreement with the CIO on any investment decision or issue. Once that event occurred the poor trader or manager was doomed to pack up his belongings within 30 days.
I think the Fed must have this type of leadership approach when it comes to the FDIC
B of A Said to Split Regulators Over Moving Merrill Derivatives to Bank Unit -
Hmmmmm. Think just the first two paragraphs -
"Bank of America Corp. (BAC), hit by a credit downgrade last month, has moved derivatives from its Merrill Lynch unit to a subsidiary flush with insured deposits, according to people with direct knowledge of the situation.
The Federal Reserve and Federal Deposit Insurance Corp. disagree over the transfers, which are being requested by counterparties, said the people, who asked to remain anonymous because they weren’t authorized to speak publicly. The Fed has signaled that it favors moving the derivatives to give relief to the bank holding company, while the FDIC, which would have to pay off depositors in the event of a bank failure, is objecting, said the people. The bank doesn’t believe regulatory approval is needed, said people with knowledge of its position."See, the FDIC looks at these transfers of derivatives into the bank holding company and sees these as potential claims against bank assets. The counterparties that entered into these with Merrill Lynch love this because they are getting a "better" rated counterparty with much deeper pockets.
Isn't it interesting that the FDIC and FED are split on this approval and a 20 year veteran Fed President would suddenly be nominated to a key leadership position at the FDIC?
ONE MORE JUST FOR GOOD MEASURE -
While it is not related to this story in any way, you just can't avoid a Federal Reserve connection or Goldman Sachs employee in any important office in our government. While he never worked at Goldman, you've got to know that our friend Herman Cain was on the Board of Directors for the very same Kansas City Federal Reserve in the early and mid 1990's.
MONTHLY UPDATE -
I took a much needed month off from writing the monthly reports and I feel refreshed and feel like I have a better perspective on the market due to the lay off. I'm dealing with extended family health issues so I seem to have much fewer hours to devote to writing. I will attempt to write less long, but more frequent posts in the next month. The monthly update should be finished tomorrow for some weekend reading.
Goatmug is an investor that cares about you and your family. Goatmug's Blog - Financial Perspectives From The Mountain Top is a collection of thoughts on our economy and how it impacts the lives of investors and average people. While several specific investments are named in many of his posts, these articles are simply invitations for you to do your own research and reference to these securities does not constitute financial advice. Your situation is complex and unique and you should seek professional assistance with your trading and investing. Please visit Goatmug and share your comments at http://www.goatmug.blogspot.com/