The fix is still in

The following is relatively self-explanatory, and maybe opens the door to lawsuits from anyone who lost money in stocks getting "blindsided" by Fed announcements the last few years.  Emphasis and Editor's notes yours truly.

Fed official alleges Geithner may have alerted banks to rate cut

 (Reuters) - In the summer of 2007, as storm clouds gathered over the world's financial system, then-New York Federal Reserve President Timothy Geithner allegedly informed the Bank of America and other banks about the possibility the U.S. central bank would lower one of its critical interest rates, according to a senior Fed official.

 

Jeffrey Lacker, the head of the Richmond Fed, originally raised the allegation during a Fed conference call in August 2007.

 

"From conversations I had prior to the video conference call on August 16, 2007, I was aware of discussions among a few large banks about borrowing from their discount windows to support the asset backed commercial paper market," Lacker said in the statement. "My understanding was that (New York Fed) President Geithner had discussed a reduction in the discount rate with these banks in connection with these initiatives."

 

Geithner at the time denied that banks knew the Fed was considering cutting the discount rate. The Fed regularly releases transcripts of its policy meetings with a five-year lag.

Private disclosure of confidential, market-sensitive information by the central bank would be highly unusual, but it was not immediately clear if it would be illegal.

The central bank delivered a surprise cut in the discount rate, which governs direct loans it makes to banks, the day after the call. The action spurred a big stock market rally, with the Standard & Poor's 500 Index enjoying its best gain in 4-1/2 years.

Editor's Note:  The rally started about 30 seconds after Geithner got off the phone with JPM, Citi, BofA, Goldman Sachs, etc. on Thursday and DID NOT, repeat DID NOT tell them any surprises were coming.

Here's the headlines Thursday Night:
August 16 2007: 6:12 PM EDT

Dow makes stunning comeback

Major gauges erase most of the day's losses as investors recover from mortgage, credit fears; Dow, Nasdaq, S&P 500 bounce back after falling 10% from 2007 highs.

By Alexandra Twin, CNNMoney.com senior writer

NEW YORK (CNNMoney.com) -- Stocks staged a big comeback Thursday, erasing most of the session's losses by the close as investors worked through the panic about the mortgage and credit markets which was sparked by Countrywide Financial's latest financial problems.

The Dow Jones industrial average (Charts) fell 15 points, erasing virtually all of the day's declines, after plunging as much as 342 points earlier in the session.

Stocks have been shellacked for the last week on worries about tightening credit and the fallout from the subprime mortgage market. The declines added to losses over the last month, and by early Thursday afternoon, the three major gauges were off 10 percent from the 2007 highs hit in mid-July, the formal definition of a market correction.

Yet, after hitting those lows Thursday afternoon, stocks began to recover, with the hard-hit financial sector leading the way.

"Equity markets went on another roller-coaster ride Thursday," wrote Michael Sheldon, chief market strategist at Spencer Clarke, in a note to CNNMoney. "However, stocks erased almost all of their losses and finished the session with only minor losses as financial stocks rebounded late in the day."

Big bank stocks including Citigroup (Charts, Fortune 500), JP Morgan (Charts, Fortune 500) and Merrill Lynch (Charts, Fortune 500) all rallied back near the close after having been battered in recent days.

Editor's note:  Geithner denied leaking insider info to the largest prop traders in the market, the TBTF banks on August 16th, the very day the market staged it's "stunning" turnaround and the day BEFORE  the FED cut rates publicly.  Anyone else think it's weird that the very financial firms that were NOT getting inside information led the charge?  Strange indeed.

Here's the headline the next day, well after the party started.
August 17 2007: 4:11 PM EDT

Fed cuts discount rate

The central bank, citing tough market conditions, cuts the symbolic rate half a percentage point.

By Paul R. La Monica, CNNMoney.com editor at large

NEW YORK (CNNMoney.com) -- The Federal Reserve, reacting to concerns about the subprime lending crisis that's rocked financial markets in recent weeks, Friday cut its so-called discount rate half a percentage point, to 5.75 percent.

In it's "stunning" turnaround from the Thursday August 16th low of 12517 to the Friday August 17th high of 13382 the Dow moved up a whopping 865 points or 7%.  The entire move down until then was only 10%.

The Dow would go on to post an all-time high of 14198 in October before collapsing 65% to 6469.  At this point, the Fed announced they would start printing money with QE1.  They have printed $2.8 Trillion and counting, and are currently printing $85 billion a month as of 01/22/2013. 

As for any remaining "Investors" in this "Free" market, a word of advice.  It is not what you know that allows you to succeed in equity trading, it's who.  And if you don't know this guy, then... 

Addendum 4/11/13

Market in Confirmed Uptrend!

The DJIA, S&P 500 and the NASDAQ closed at record highs today as overall volume rose and it was definitely on the upside. Investor's Business Daily changed its Market Call to "Market in Confirmed Uptrend."

So what drove the market higher? Perhaps, it was the release of the FOMC minutes which indicated that the punch bowl was nowhere near ready to be taken off the table. Most FOMC members saw the benefits of quantitative outweighing the risks, and that was at a time when economic data were coming in better than expected, not like Friday when nonfarm payroll growth couldn't even make 100,000.

And of course, it was just a mistake that the FOMC minutes were released yesterday to about 100 people early yesterday who were politicians and lobbyists. A Fed spokesman told CNNMoney the mistake was "entirely accidental," and it was a "human error," not a technological one. The roughly 100 individuals on the list mostly included Congressional employees and employees of trade organizations. They received the minutes shortly after 2 p.m. on Tuesday.

Here is a partial list of the people receiving the inside information according to the BBG and CNN:

• HSBC RECEIVED FED MINUTES EARLY YESTERDAY
• MOST OF THE BANK EMPLOYEES APPEAR TO WORK IN GOVERNMENTAL RELATIONS (Lobbies)
• ABA, SIFMA, SENATE STAFFERS RECEIVED FED MINUTES EARLY
• FED NAMES 154 RECIPIENTS OF EARLY RELEASE OF FOMC MINUTES
• FED MINUTES SENT EARLY TO BANKS, LAW FIRMS, PRIVATE EQUITY
• FED EARLIER SAID RELEEMPLOYEES AT GOLDMAN SACHS, BARCLAYS, JP MORGAN, CITI, NOMURA, UBS, ASE WENT MAINLY TO CONGRESS, TRADE GROUPS

The Wall Street Journal also supplied a more extensive list which clearly shows that many could have profited from the information.

As the day went along, it became obvious that the FED's initial comments were not correct.

And not a single one of them brought the early release to the attention of the Federal Reserve ... I wonder how long this has been going on. Is it just me or does the situation smell funny?

http://money.cnn.com/2007/08/17/news/economy/fed_rates/index.htm

fed cuts rates

http://www.reuters.com/article/2013/01/19/us-usa-fed-geithner-idUSBRE90I04220130119

Geithner feeds banks insider info

http://money.cnn.com/2007/08/16/markets/markets_0445/

Obama v. Obama on the Debt ceiling

hy·poc·ri·sy

n. pl. hy·poc·ri·sies

1. The practice of professing beliefs, feelings, or virtues that one does not hold or possess; falseness.

2. An act or instance of such falseness.

 

Hypocrisy is the state of promoting or administering virtues, moral or religious beliefs, principles, etc., that one does not actually have and is also guilty of violating.^[1] Hypocrisy often involves the deception of others and thus can be considered a kind of lie

 



“The fact that we are here today to debate raising America’s debt limit is a sign of leadership failure. It is a sign that the U.S. government can’t pay its own bills. ... I therefore intend to oppose the effort to increase America’s debt limit.” 



— Then-Sen. Barack Obama, floor speech in the Senate, March 16, 2006

The following are quotes from Obama's 2006 speech: 

 “It is a sign that we now depend on ongoing financial assistance from foreign countries to finance our government’s reckless fiscal policies. Over the past five years, our federal debt has increased by $3.5 trillion to $8.6 trillion. That is ‘‘trillion’’ with a ‘‘T.’’ That is money that we have borrowed from the Social Security trust fund, borrowed from China and Japan, borrowed from American taxpayers.”

 “Every dollar we pay in interest is a dollar that is not going to investment in America’s priorities. Instead, interest payments are a significant tax on all Americans — a debt tax that Washington doesn’t want to talk about. If Washington were serious about honest tax relief in this country, we would see an effort to reduce our national debt by returning to responsible fiscal policies.”

“This rising debt is a hidden domestic enemy, robbing our cities and states of critical investments in infrastructure like bridges, ports and levees; robbing our families and our children of critical investments in education and health-care reform; robbing our seniors of the retirement and health security they have counted on.

“Increasing America’s debt weakens us domestically and internationally. Leadership means that ‘the buck stops here.’ Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better. I therefore intend to oppose the effort to increase America’s debt limit.” 

 




Senator Obama

Senator Obama on NOT RAISING the debt limit: 

- The buck stops with the President. 

-We have a failure of leadership.

- Washington is failing us and burdening our children

-Washington is robbing our seniors of their retirement and health care, our children of their education and our cities of infrastructure.

-Rising debt is a hidden domestic enemy

-Debt is a hidden tax on all Americans

 

-National Debt January 15th 2008:
$9.2 Trillion.

Cause:  George W. Bush.



Elect me President and.....

Hear me now Bu-lieve me later!

The following are quotes from Obama's 2013 "Raise the Debt Ceiling" speech:

 

"What I will not do is to have that negotiation with a gun at the head of the American people,"   ( Republicans want Obama to cut some spending to rein in the deficit before they agree to raise the debt limit again.)

 
"They can act responsibly, and pay America's bills or they can act irresponsibly, and put America through another economic crisis," he said. "But they will not collect a ransom in exchange for not crashing the American economy."

"If congressional Republicans refuse to pay America's bills on time, Social Security checks and veterans' benefits will be delayed. We might not be able to pay our troops, or honor our contracts with small business owners. Food inspectors, air traffic controllers, specialists who track down loose nuclear material (my personal favorite!) wouldn't get their paychecks,"

"Even entertaining the idea of this happening, of the United States of America not paying its bills, is irresponsible. It's absurd."

 

President Obama on RAISING the Debt Limit:




President Obama

-The buck stops with Congress (specifically Republicans)

-We have a failure of responsibility in Congress.

-Congress is holding a gun to America's head

-Congress is holding America hostage and demanding spending cuts ransom.

-Congress will bear the responsibility for senior citizens, veterans and small business owners not getting their checks.

-Congress will be responsible for all food-born illnesses, airline disasters and nuclear blasts that occur as a result of not raising the debt limit.  Yes, sharks with frickin' lasers nuclear-frickin'-blasts.  Seriously.   

-National Debt January 15th 2012: 
$16.4 Trillion

Cause:  Congress.

 

If you're keeping score, when Obama was a Senator George W. Bush was responsible for everything, from bad breath to ugly babies.   We needed a new president.  A responsible one.

  Now that Obama is President and has been for 4 years, Congress is responsible for everything, from bad breath to sharks-with-frickin' lasers.

What Obama really thinks of the American People who "deserve better":

mo·ron
n. 1. A stupid person; a dolt.
 

 What Americans should think of Obama and the "debt debate" by now:

 
ox·y·mo·ron

A rhetorical figure in which incongruous or contradictory terms are combined, as in a deafening silence and a mournful optimist.

 

or Honest Politician and Debt Ceiling. 

 

Since 1960, Congress has raised or revised the ceiling 79 times, including 49 times under Republican presidents, according to the Treasury Department. 

 

 Republicans controlled both houses of Congress and the Presidency from 1999-2007, minus an evenly split Senate 2001-2003.  Democrats controlled both houses of Congress and the Presidency from 2007-2011 minus an evenly split Senate 2007-2009.  They will control the Presidency and the Senate through at least 2015.

"Hope.  Change.  Ha.  Haha.  Hahaha.
BuWahahahahahahaha!!"

http://www.reuters.com/article/2013/01/15/us-usa-obama-debt-idUSBRE90D0UK20130115

http://www.washingtonpost.com/blogs/fact-checker/post/annotating-obamas-2006-speech-against-boosting-the-debt-limit/2013/01/14/aa8cf8c4-5e9b-11e2-9940-6fc488f3fecd_blog.html