Fed, SEC, FDIC etc

Fed Loses Bid for Review of Bailout Disclosure Ruling
An appeals court refused to reconsider a decision compelling the Federal Reserve Board to release documents identifying banks that might have failed without the U.S. government bailout.

The full U.S. Court of Appeals in New York, in a docket entry dated Aug. 20, denied a May 4 request by the Fed to review a three-judge panel’s unanimous March 19 decision requiring the agency to release records of the unprecedented $2 trillion U.S. loan program begun primarily after the 2008 collapse of Bear Stearns Cos.

Unless the court stays its decision, the Fed will have seven days to disclose the documents.
http://www.bloomberg.com/news/2010-08-23/u-s-appeals-court-refuses-to-review-disclosure-ruling-on-fed-bailouts.html


We will never see the real documents, doctored/altered ones maybe. Or will they be shredded/destroyed. Scary thought.

SEC Makes Ousting Board Members Easier

In a move that promises to shake up the board elections at many U.S. companies, a divided Securities and Exchange Commission approved a rule Wednesday making it easier for shareholders to replace corporate directors.

snip
Labor unions and pension funds have pushed for years for proxy access, contending that corporate boards have little incentive to be responsive to shareholder concerns because they rarely face contested elections.

The business community says the rule will harm companies by giving power to activist investors who don't share the companies' long-term interests.

Companies also say the rule will set off annual contests for board seats that will distract management from company business and cause boards to become risk averse and too focused on short-term goals.

snipProponents expressed dismay at the phase-in for small companies, warning that they might escape having to comply with the rule altogether. "A three-year delay can ultimately turn into an exemption," said Amy Borrus, the deputy director of the Council of Institutional Investors.

She cited the new financial law, which permanently exempted small companies from audit requirements under the Sarbanes-Oxley law after a series of delays.
http://online.wsj.com/article/SB10001424052748703632304575451572616571774.html?mod=googlenews_wsj

Hmmm...will we see less corruption at the Board of Directors level? Or will ousting board members be another debasement tool? noted: The small business are once again exempt.

their favorite tool:

lol love it!

Bernanke's Mountain to Climb

If Ben goes wacko in Jacko, could stocks spike like the Grand Teton?

Trumpeting any formal policy change would, of course, be a huge surprise. But as central bankers gather this weekend in Jackson Hole, Wyo., investors would nevertheless cheer any sign that Federal Reserve Chairman Ben Bernanke is considering another big bout of bond purchases to invigorate the U.S. economy.

In an unorthodox policy dubbed quantitative easing, the Fed bought $1.7 trillion of bonds during the financial crisis. QE didn't work as well as many had hoped—much of the freshly printed money ended up idling in the banking system—and it can distort markets and interrupt important economic adjustments. Regardless, if Mr. Bernanke intimates the Fed is ready to launch QE2, stocks should rally.

What stock investors are hankering for is an unequivocal sign from the Fed that it won't allow a double-dip recession. Quantitative easing is arguably the most powerful weapon in the Fed's arsenal. After a slew of downbeat economic data, the Fed has cover to openly consider using the big gun again.

http://online.wsj.com/article/SB10001424052748703959704575453883889209168.html?mod=googlenews_wsj

lol
great response seeker.

I am anxious to see what big bad ben has to say tomorrow.

Bernanke Signals Fed Is Ready to Prop Up Economy

JACKSON HOLE, Wyo. — The Federal Reserve chairman, Ben S. Bernanke, said Friday that the central bank was determined to prevent the economy from slipping into a cycle of falling prices, even as he emphasized that he believed growth would continue in the second half of the year, “albeit at a relatively modest pace.”


To help sustain the economy, Mr. Bernanke gave his strongest indication yet that the Fed was ready to resume its large purchases of longer-term debts if the economy worsened, a move that would add to the Fed’s already substantial holdings.

“We have come a long way, but there is still some way to travel,” Mr. Bernanke said.

“I believe that additional purchases of longer-term securities, should the F.O.M.C. choose to take them, would be effective in further easing financial conditions,” Mr. Bernanke told a Fed policy symposium here. He was referring to the Federal Open Market Committee, the panel that sets interest rates, which Mr. Bernanke leads; some members have expressed unease about the Fed’s pursuing any further monetary accommodation.
http://www.nytimes.com/2010/08/28/business/economy/28fed.html

There you have it...MORE STIMULUS. Unbelievable and the Dow likes the news! Armstrong suggested an August low...hmmmm Legatus no longer a player?

Fed gets 60-day delay on bailout disclosure

A appeals court granted the Federal Reserve a 60-day delay in implementing a ruling to force the central bank to reveal details of its emergency lending programs to banks during the financial crisis.

The delay is 30 days shorter than the Fed requested and was granted in a two-sentence order by the U.S. Second Circuit Court of Appeals. It gives the Fed time to consider whether to appeal to the U.S. Supreme Court.

http://www.reuters.com/article/idUSTRE67Q5WT20100827

wtf does "unconventional" mean..sounds bad..

Intel Trading Halted — Was Something Fishy?

snip
Just after that trade, also at 10:15:00am ET, there were 3 trades on Arca: an 800 share trade, a 200 share trade, and a 100 share trade, all at $16.55. All three were subsequently cancelled.

These were declines of 8.3 percent, NOT ENOUGH to trip the circuit breaker, which requires that a stock be halted for 5 minutes if it moves up or down 10 percent in less than

snip
The question traders are asking is, “how did those $16.55 trades get on the tape?” — when they were clearly outside the parameters of where the stock was trading.

snip
This is not an argument against circuit breakers: better to halt and limit the damage. However, why does a clearly erroneous trade get printed in the first place, even if it is subsequently cancelled?

Expect the SEC to address fragmentation of markets in their final Flash Crash report, due in September.
http://www.cnbc.com/id/38882419

hmmm SEC Flash Crash report due in September…

Found this
Staff from both the Commodity Futures Trading Commission and the Securities and Exchange Commission are expected in early September to deliver a report on the market events of May 6
http://www.marketwatch.com/story/sec-flash-crash-report-to-be-released-in-september-2010-08-11

Early September…hmmm

Ex-Illinois Governor Ryan Challenges Corruption Conviction, Cites Skilling

George Ryan, the ex-Illinois governor sentenced to 6 ½ years in prison for corruption, asked the judge who presided at his trial to throw out parts of his conviction on the basis of a Supreme Court decision this year.

Attorneys for the governor, a Republican, cited the court’s June decision in the case of former Enron Corp. Chief Executive Officer Jeffrey K. Skilling, which narrowed a fraud statute involving so-called deprivation of honest services because it was unconstitutionally vague.

snip
Ryan, 76, was convicted in April 2006 of violations of the Racketeer Influenced and Corrupt Organizations Act and mail fraud. The verdict was based on conduct that the Supreme Court found not to be criminal in the Skilling case, his lawyers told U.S. District Judge Rebecca Pallmeyer. Prosecutors relied on the same law in the federal criminal cases against Ryan and former Hollinger International Inc. Chairman Conrad Black.
http://www.bloomberg.com/news/2010-08-31/ex-illinois-governor-ryan-challenges-corruption-conviction-cites-skilling.html

Skilling, Black..and now Gov. Don Siegelman, former HealthSouth CEO Richard Scrushy and Gov. Ryan...

HONEST SERVICES RULING ="UN"-Handcuff all the Bastards.

The wholly fallible Ben Bernanke
Despite three crucial errors at the Federal Reserve, its chairman is still revered as if he is the pope – while we pay the price

Many have noted the resemblance between the Federal Reserve Board and the Catholic church. Both have long traditions of secret convocations: meetings of the open market committee and the College of Cardinals. Both have a revered leader: the chairman of the board of governors and the pope. And both have claims to infallibility.

OK, it is only the pope who can explicitly claim infallibility. In the case of the Fed chair, infallibility is bestowed by the business reporters and politicians who treat every word from the reigning Fed chair as a priceless pearl of wisdom.

This aura of infallibility is especially painful in the current economic situation when error seems to be the new religion of the Fed. Just to remind everyone – since so much denial has dominated the debate – the only reason that we are facing near double-digit unemployment and the worst economic calamity in 70 years is that the Fed was out to lunch in combating the housing bubble.
http://www.guardian.co.uk/commentisfree/cifamerica/2010/sep/08/ben-bernanke-federal-reserve

On Friday, the National Credit Union Administration (NCUA) seized three wholesale credit unions that provide financing and investment services to more than 7,000 retail credit unions around the country.

The problem: Like the bailed-out banks and failed mortgage giants of recent years, these giant credit unions made big bets on commercial and residential mortgages. Their mortgages collapsed in value. They ran out of cash to cover the losses. And on Friday, regulators decided they were too far gone to save.

Result: All three will be shuttered … their executives will be fired … and their toxic assets will be scooped up by the government.

Moreover, this wasn’t the first time the government has been forced to act. All told, since March of last year, FIVE of the nation’s largest wholesale credit unions have gone under, representing a whopping SEVENTY percent of the assets among ALL of the nation’s wholesale credit unions.

Smaller retail credit unions, which deal directly with the public, are in better financial shape. But the large failed credit unions are at the core of the entire industry. They are the institutions that thousands of credit unions depend upon for financing and other services. And they are mostly in ruins, with the entire industry relying on yet ANOTHER government bailout to keep it running.

It’s a stark reminder of what happens when banks treat your money like a speculative game. And it’s one of many telltale signs that the financial crisis is NOT over. Quite the contrary, as Mike Larson has detailed here repeatedly, the housing bust, which triggered the crisis in the first place, is continuing — and so are its repercussions.
http://jutiagroup.com/2010/09/27/3-government-warnings-of-financial-fiascos/

FIVE of the nation’s largest wholesale credit unions have gone under, representing a whopping SEVENTY percent of the assets among ALL of the nation’s wholesale credit unions.
All five bailed out and the hens were barely informed

Fed’s Lacker calls for clear bailout rules
Plosser also says Congress did not do enough

Hard rules governing whether and how to bail out ailing financial institutions should be adopted in order to promote financial stability — and the recently passed banking reform legislation doesn’t appear to do so, Richmond Fed President Jeffrey Lacker said Friday.

In the text of a speech delivered in Frankfort, Ky., and titled “Reflections on economics, policy and the financial crisis,” Lacker said the implicit support given to financial institutions, like mortgage buyers Freddie Mac and Freddie Mac as well as European banks, fueled the demand for securities backed by risky subprime mortgages. Federal Reserve Chairman Ben Bernanke will be giving a similarly titled speech after the market close on Friday on the implications of the financial crisis for economics.

snip
However, the recently passed Dodd-Frank Act embodies two contradictory approaches, he said: It sharply constrains and strengthens accountability around government funded rescues, but it also provides more tools to intervene to prevent the distress associated with bankruptcy.

Lacker also called for more work on the economic impact from financial fragility, and for policymakers to make better use of what’s already available.

snip
In a separate speech Friday in Zurich, Charles Plosser, the president of the Philadelphia Federal Reserve Bank, agreed that the bank reform bill did not put enough restraints on the Fed, especially on constraining the little-known emergency funding power used to rescue AIG and sell Bear Stearns to JPMorgan.

The Dodd-Frank bill limits the Fed’s discretion to lend to a single firm in the future, but the central bank can still provide liquidity to the overall system.

This was a good first step but more is needed, he said.

“Market participants now see such lending as more likely and will be tempted to urge the Fed to use the authority again,” Plosser said.

He said the Fed should agree not to use its emergency powers without prior public support from the congressional leadership along with the Treasury Department.

The Fed should also decide to hold only Treasurys on its balance sheet. The Fed has purchased $1.7 trillion of housing-related assets to ease the constraining impacts of the crisis.
http://www.marketwatch.com/story/feds-lacker-calls-for-clear-bailout-rules-2010-09-24?dist=afterbell

“little-known emergency funding power ”
hmmm the little known provision strikes again

Hard rules governing whether and how to bail out ailing financial institutions should be adopted in order to promote financial stability — and the recently passed banking reform legislation doesn’t appear to do so,
Pretending to fail? Dodd-Frank didnt do enough..imaging that!