THE SOFTER SIDE OF THE FED (SCARY)

I encourage you to read the piece in Bloomberg this week on Bill Dudley, the President of the NYFED titled
"Not Your Father's New York Federal Reserve NY FED President - Bloomberg Article by Caroline Salas Gage

PR BLITZ INDICATES FED HATERS ARE WINNING
Are you getting the idea that the FED is putting the full court press on the public to encourage them to see the side of them that is benevolent and for the little guy?  Yes, me too.  I mean how on earth could we possibly believe that the Fed had anything but the common folk's best interest at heart as they engineered too major stock market collapses and one real estate implosion in the last decade?

Dudley is one of the 3 Fed chiefs that actually matter, the others are Fed Chairman Ben Bernanke and Janet Yellen who is the Vice Chair of the Federal Reserve Board.

The article notes how hard Dudley is trying to get out with regular people and explain how the Fed is helping them.  Clearly he hasn't internalized the criticism of the Fed and questioned if anything they have to say might be true as the Fed continues to squeeze investors that use fixed income investments or even savings accounts as part of their portfolio.  Dudley obviously believes that old ladies should need to take more credit risk or simply cut out medical coverage or incidentals like food or shelter rather than raise interest rates.

Dudley's moves highlight the growing importance of the public's view of the Federal Reserve given that it has now become politically acceptable to believe that the Fed is a part of the financial crisis.  Ron Paul has a book about Ending the Fed, Rick Perry also is quite wacky crying that the US needs to get rid of the Fed.  I've even seen a sign or two in the OWS demonstrations that actually reference the Fed.  A growing move to understand and dismantle the Fed is absolutely not in the Fed's best interest..... nor in the interest of the banks and uber-wealthy 1%ers.  I expect more concerted efforts to humanize the Fed and make Joe 6 Pack feel happy to have a benevolent Fed on our side.

INFORMATION FLOW OR BIG BROTHER?
Now, add this to the recent "rumored" request by the Fed to begin a project to scan and analyze references to the Fed in social media and the blogosphere in order to capture market sentiment, I think you have a situation that could be ultimately bad for all of us in the general public.
http://www.forbes.com/sites/mobiledia/2011/09/30/federal-reserve-wants-to-monitor-facebook-twitter/

http://info.publicintelligence.net/FRBNY-SocialMedia.pdf

Clearly the conspiratorial side of me feels like the Fed has sinister intentions when they move forward with this project, however, the NY Fed assures us that it is all good, why worry?
 
"The project reflects its (NY Fed's) commitment to “improving its communications and engagement with the public in order to enhance and improve the public’s understanding of its activities and the role it plays in supporting the U.S. Economy,” according to a Fed spokesman’s statement."

I'm sure the Fed's efforts will be passive and harmless and simply used for data collection.  Having said that, I'm sure it won't be long till a blogger or Facebooker is threatened with jail or lawsuit for disparaging the Fed and invoking some type of crisis of confidence relate to their posts.  Think it can't happen?  Look no further than the Eurozone's sovereign debt issues where investors and "evil speculators" are targeted for stating that the sovereign countries are broke and the bonds are a poor investment.  Give the US debt crisis a few more years and we'll see how "passive" this monitoring becomes.

GOATMUG

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/

WELCOME TO THE THEATHER - 1984 STYLE

WORLD MARKETS ARE THE FOCUS
I heard today that the President and CONgress were rushing to try to get some type of debt ceiling done (temporary or not) before Asian stock markets opened for the week (Sunday evening in USA time).  I'm struck by this because I'm simply floored by the fact that these politicians are spending any time focused on what equity markets are doing rather than focusing on the task at hand.  What I'm getting at is the notion that they are scurrying around to avoid a fall in markets shows me that this is all just a big show for the markets! 

Yes, this isn't some new revelation since the timing for all major announcements seem oddly planned EVERY single time to coincide with a Sunday night bombshell or options expiration Friday.  As I've noticed these events I've pinched myself saying, "no, it's just a coincidence".  However, after having an entire arm covered with red whelps, I am finally of the mindset that a game is being played to juice markets and keep them elevated. 

The story here - http://www.foxnews.com/politics/2011/07/24/leaders-seek-debt-deal-before-asian-markets-open/

"White House Chief of Staff Bill Daley warned Sunday that the financial markets are starting to have doubts about the ability of Washington to strike a debt deal, as lawmakers scramble to come up with a plan before Asian stock markets open.



The Asian markets will start to open Sunday evening Washington time, ahead of the Dow opening in the U.S. Monday morning. U.S. officials are cognizant of the possibility that a failure to outline a path forward by then on how to raise the debt ceiling could roil the markets."

Now give me a break!  We have several days until this deal needs to be done, and rest assured that our friend Ben Bernanke is quite willing to buy up all the debt in the world to keep us from having an interest rate problem.  I saw Tim Geithner on tv telling us how irresponsible those Republican politicians are being and how the apocalypse will be unleashed if something isn't agreed to immediately.  While the warnings are grave we can retain a sense of confidence in our financial overlords as every other problem we've faced in the last two years has been met with a change of the rules, a bending of all reality, twisting of economic paradigms, and a moratorium on basic math.  Forgive my tongue and cheek approach to the drama, but I personally don't think there is any chance of a deal not getting done, and with hours to spare they'll unveil another monstrosity that will solve nothing and only ensure that Amerika's future is just a bit dimmer. 

WASHINGTON GENERALS WOULD MAKE GREAT REPRESENTATIVES
Have you been to a Harlem Globetrotters game?  I love them and go every time I have a chance.  Those guys are funny and entertaining and the kids think they are a blast.  My kids haven't figured out that the Washington Generals (the perennial opponent of the Globetrotters) are laying down so the Globetrotters can win.  My kids don't realize that the entire game is a show and there is no competition going on down on the field of play.  Likewise, I think the entire drama unfolding in CONgress is simply a ruse where each side of the isle is attempting to make the most out of the situation.  They are all on the same team, they are just wearing different jerseys to keep up the facade that a competitive game is under way.

So, with that realization, I want to give you the opportunity to watch a movie you may have seen a long time ago.  You may have read it in high school back when they actually tried to teach you important ideas and challenge you to think.  The entire theater that is Washington relies on all of us buying into the divisions of a two party system where one can be good or one can be bad based on our frame of reference.  Let's face it, we all like to be on a team!  The problem sets in when you discern that neither one of these teams is good. 



I will leave you with these thoughts and questions from the movie.

Ignorance is strength!

The party gives them exactly what they want.

How do you know what exists?

I encourage you to watch it.  How Orwell would have ever imagined the things he did when writing it is amazing.  I am awed by the idea of the screen in every home and building monitoring every action.  It is very much like today.

GOATMUG

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/