Latest illegal act by Fed questioned by Gnats
June 15, 2008
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Anytime Congressmen Ron Paul gives a speach people want to hear more and more about the FED. Jim Rogers has called Ben Bernacke a "fool....who does not even understand about markets". JR has said recently the FED should be abolished and would not survive another 10 years.
Great story here from Reuters (title stolen from comment on Mish Shedlocks blog):
N.Y. Fed's private OTC actions under fire
Sun Jun 15, 2008 6:10pm EDT Rueters is reporting:
By Joanne Morrison
WASHINGTON (Reuters) - The New York Federal Reserve's closed-door rule making with top players in the massive $60 trillion credit default swaps market came under legal fire on Sunday, as a fair finance activist filed a complaint questioning why it was done in the dark.
"The Federal Reserve seems to think it can engage in rule making in secret only with the industry," said Matthew Lee, executive director of the New York-based non-profit group Inner City Press/Community on the Move.
Lee filed the administrative complaint on Sunday with both the New York Fed and the Federal Reserve Board in Washington. In the complaint, he demanded that the central bankers explain why the meetings earlier this month were private and requested copies of all communications and details about the New York Fed-sponsored talks.
Officials at the Federal Reserve could not immediately be reached for comment.
The meetings were held with more than a dozen companies led by investment bank Goldman Sachs Group Inc. The companies -- which account for the bulk of business in the $60 trillion market -- met to help set new rules for credit default swaps trading, including the establishment of a clearinghouse.
Credit default swaps are privately negotiated transactions used by companies to hedge against default risks. Over the past decade, the market has grown exponentially, from about $1 trillion to $60 trillion.
Lee, referring to the Fed-led rescue of investment bank Bear Stearns by JPMorgan Chase & Co, said, "It was one thing to bail out Bear Stearns without any comments from the public. Now the Fed is trying to bail out or benefit 17 of the largest financial institutions behind closed doors."
Citing the federal Administrative Procedures Act, he said it was illegal to have conducted the Citing the federal Administrative Procedures Act, he said it was illegal to have conducted the meetings. Continued...
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