Federal Reserve staff move into offices of investment banks to monitor activities

Federal Reserve staff move into offices of investment banks to monitor activities

business.timesonline.co.uk

The US Federal Reserve has sent staff into some of Wall Street’s biggest firms and its New York branch is gathering evidence on key traders’ activities as America’s central bank raises its scrutiny of risk to an unprecedented level.

Fed staff have set up shop in Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch, and Bear Stearns to monitor their financial condition just days after Henry Paulson, the US Treasury Secretary, proposed that the Fed become the financial industry’s “risk czar”.

(visit the link for the full news article)

Does this mean theres something there not telling us. Sounds like the s**t is about to hit the fan and they want to know what is going on in the big banks before it happens.

business.timesonline.co.uk
(visit the link for the full news article)

That is just about exactly the list of big firms that have been in major financial trouble with recent billion dollar write downs and rumours of bankruptcy circulating all over the place.

I smell a huge cover-up or scam underway.
.

Can't beleive this story has nobody talking. The feds move in the accounting offices of all the major banks and sets up shop just after bailing out Bear Stearns for $30 billion and then befor the following opening bell of stock market having them sell for $2 dollars a share to JP Morgan when they had been as high as $150 dollars a share six months befor. Then when a British billionare complains he lost all his money because of what they did he manages to have the sale revoked and the deal changed to $10 a share.

This is huge and should be in the front page of every newspaper! What I see here is the nationalization of US banking. This isn't just creeping socialism folks this is a coup d'etat. Maybe they should set up an office in every American's living room to monitor their economic activity as well. It's comforting knowing that the elite's have things well under control.....

Consolidation of power folks. I'd like to think the Fed is going in there to stop all the shady dealings that supposedly got us into this mess. But I think the truth is far more sinister. After all, what right does the Fed really have to be doing this? They're not the government, they're just the biggest and most powerful bank. The Fed is stepping in to run the economy into the ground more effeciently and with less realization by the public. We will all be left holding the empty bag when they decide to go set up shop somewhere else.

[edit on 4/3/0808 by jackinthebox]

Some background can be found here:

In Bankers We Trust -or- Financial Socialism for Dummies in the Current Events Forum

and

Bush proposes to expand powers of Federal Reserve & financial regulation overhaul in the Alternative News Forum
.

I also found this article interesting. www.blacklistednews.com...

So what's Treasury Secretary Henry Paulson's call for changes in regulation of the financial markets all about? A clue may have been revealed today by Randal Quarles, former Under Secretary of the Treasury who led the Treasury Department's effort in the coordination of the President's Working Group on Financial Markets and is a current Managing Director at Carlyle Group.

Quarles spoke at a luncheon meeting of the Washington DC-based National Economists Club. His topic: "Restructuring Financial Regulation". Quarles told the luncheon group that he chose the topic in January. Hmmm. Didn't Treasury Paulson just make the proposal to restructure the financial regulatory agencies last week? How did Quarles pick this topic back in January? Short-answer, Quarles is a major insider and his comments should be monitored to get a sense for what insiders are thinking.

In his talk, Quarles said that estimates go into the hundreds of billions in terms of capital that will be required by the financial industry, because of losses sustained by the financial industry. He said there will be more financial institutions that will go under in coming months.

He said that public markets will not supply the necessary funds because they don't have the capabilities to study in detail the risks and potential rewards of the complex financials of financial institutions. He said private equity firms have the capabilities to do so and to supply the necessary funds. (N.B. Carlyle Group is a private equity firm).

Heres a link to Carlyle Groups web site with a page on Quarles.
www.carlyle.com...

Randal K. Quarles
Managing Director
Washington , DC

Fund : Global Financial Services Buyout
Industry : Financial Services

Randy Quarles is a Managing Director and is focused on transactions in the global financial services sector. He is based in Washington, DC.

Before joining Carlyle, Mr. Quarles was Under Secretary of the U.S. Treasury, where he led the Department’s activities in financial sector and capital markets policy, including coordination of the President’s Working Group on Financial Markets, development of administration policy on hedge funds and derivatives, regulatory reform of Fannie Mae and Freddie Mac, developing policy on terrorism risk insurance, and proposing fundamental reform of the U.S. financial regulatory structure. Before serving as Under Secretary, Mr. Quarles was Assistant Secretary of the Treasury for International Affairs, where he was responsible for a wide range of international financial matters, focusing particularly on financial structure and stability, cross-border investment and financial regulation, and promotion of free trade in financial services. He led the financial regulatory dialogue between the United States and the European Union, was policy chair of the Committee on Foreign Investment in the United States, which reviews inbound investments that raise national security issues, led the U.S. delegation to the Financial Stability Forum (the semi-annual meeting of the heads of regulatory agencies from the world’s largest developed and emerging market countries), and negotiated the financial services provisions of several free trade agreements. Mr. Quarles was also the U.S. Executive Director of the International Monetary Fund, a member of the Board of Directors of the Overseas Private Investment Corporation, board representative for the Pension Benefit Guaranty Corporation and, in the private sector, is a member of the board of directors of NTR Acquisition Co.

Before entering the Bush Administration, Mr. Quarles was a partner with the law firm of Davis Polk & Wardwell, working at various times in both the New York and London offices, where he was co-head of the firm’s financial institutions practice and advised on transactions that included a number of the largest financial sector mergers ever completed.

Mr. Quarles received an A.B. summa cum laude in philosophy and economics from Columbia in 1981 and a J.D. from the Yale Law School in 1984.

reply to post by Gools


Scary stuff, Gools, Star!

Been reading your link(s), and can't help but hyperventilate, a little!
Just glad i'm not rich, or involved with markets myself.

There probably isn't a good solution to any of this. I'm struggling as much
as the next swingin' stick! Got my house half paid for, and a nice little
retreat elsewhere all paid for; may have to sell this one, and move to my
other one!

"Can ya loan me fifty bucks?"
just kidding



[edit on 4/3/2008 by FRIGHTENER]

Originally posted by JBA2848

Quarles told the luncheon group that he chose the topic in January. Hmmm. Didn't Treasury Paulson just make the proposal to restructure the financial regulatory agencies last week? How did Quarles pick this topic back in January? Short-answer, Quarles is a major insider and his comments should be monitored to get a sense for what insiders are thinking.

No surprise there.

If you read my thread "In bankers we trust" you will see that they have been working on this plan for at least a year going back to March 2007.

Amazing that a real ongoing conspiracy gets so little attention on this board.

Sometimes I wonder about this place.
.

reply to post by SevenThunders


From what I understand the Federal Reserve is not actually part of the US government but a private institution. Therefore, it wouldn't be nationalizing of the banks but rather monopolizing. Thus, you would have more of a fascist/corporatist model, not a socialist one.

I'm not an expert though so I am open to being corrected.

reply to post by deadboi


That's the way I understand it as well and it's an important distinction to keep in mind. Another distinction is that whatever their nature, they follow the principle of socializing the costs and risks while privatizing the profits.

Whether or not you call them fascist, socialist, capitalist or whatever (a rose by any other name) the end result for the average person is the same. They foot the bill for getting screwed (taxes, inflation etc) and nobody is on their side.
.

reply to post by deadboi


The Federal Reserve is formed by private companies to form a sort of "oversight" and regulations within the industry. Though they are made up of the largest banks in the country (world) they do have to hold banks, including themselves, to the regulations that put in place..

The reason for the Fed in the offices to me is that the banks where all working behind the regulatory board of the Fed and broke some rules.. or rather, found big loopholes. Because of this the Fed its self is in danger.. its in Self Preservation Mode.

Honestly though as Jack said, consolidation.. the extremes they are taking show that eventually we may end up with one Bank, a national bank of all banks.. no more JP, no more Citi, no more Bank of America.. just the FED.

Whether they intend that or not, who knows.. they are trying desperately to keep things together.. and it is far worse then we know because they are performing actions not seen ever, or in some cases, since 1929. Concerning.

Either way, the economy is sick. The fed is trying to bring it together .. there is just so much debt, I don't see how its possible without a large influx of bankruptcy and a deep recession.

EDIT: Almost every industry has a regulatory board, from insurance and auto companies to banks.. the Fed is this for the banks, and because banking is so important to the survival of the country.. the Fed is what it is .. the Fed. Still not Federal though. And the fact that the Gov is giving the Board MORE power is.....

Saddening.. our founding fathers are rolling in their graves.

[edit on 4/4/2008 by Rockpuck]

reply to post by Gools


Good point, in either case the average person gets the short end of the stick.

reply to post by Rockpuck


Thank you for the clarification.

I agree that loopholes and rule breaking are the cause of the current economic situation. I also agree that whether the steps they are taking now have been planned or are out of necessity there are two most likely outcomes; major recession or consolidation of the banks. There are other possibilities of course but those two seem to be the most probable to me. There is the slim possibility of a new economic system being put in place, but I think a change like that would probably require a collapse of the current system.

With more power being given to the Fed and with them putting their own eyes and ears in to "monitor their financial condition" of the financial institutions... that just reeks of corporatism/fascism to me.

[edit on 4-4-2008 by deadboi]

reply to post by deadboi


I agree with the loop hole theroy. Its what the ones at the top are paid for find the loop holes to get away with it. Heres a story from wikileak with the JP Morgan presentation.

88.80.13.160...

A confidential memo obtained by Wikileaks shows that not only has the U.S. Securities and Exchange Commission created an insider trading loophole big enough to drive a truck through, but that Wall Street is taking full advantage of it, establishing 'how-to' programs and even client service divisions to help well-heeled clients circumvent insider trading regulations.

Most of us think of insider trading as illegal. It allows those with inside knowledge to tilt the playing field, with the small investors invariably losing to the privileged few. Unfortunately for the small investor, the big boys get to play by different rules, and it has all been made legal, thanks to the SEC.

Here's how it works:

1. An insider client transfers all or a portion of their company stock into a JP Morgan Securities Inc. brokerage account.

2. The insider then develops, in conjunction with the 10b5-1 team, a 'phased, pre-planned sales program to be executed at either market or specified prices'.

3. Depending on the information available to the insider (but not the public), the insider can decide whether to execute the sale or not.

By gaming the system this way, JP Morgan teaches insiders how to use their knowledge to create a rigged market, one in which it is the "house" that always wins, and the small investor that always loses.

Alan D. Jagolinzer, an assistant professor at Stanford University Graduate School of Business, completed a study of roughly 117,000 trades in 10b5-1 plans by 3,426 executives at 1,241 companies. He found that trades inside the plans beat the market by 6% over six months. By contrast, executives at the same firms who traded without the benefit of plans beat the market by only 1.9%.businessweek.com...

One can only guess at how many insiders profited under JP Morgan's "insider trading program," leaving small investors holding the bag.

[edit on 4-4-2008 by JBA2848]

These activities need to be monitored, if we're experiencing wide-scale corruption, people stealing our money, then this needs to be looked into definitely!


I dunno about you lol but I want America to survive, not perish due to greedy people!

CountryWide BANK - emphasis B A N K just got a rating of D. D = Default.

Rating is from Moodys.

biz.yahoo.com...



www.youtube.com...

Wow D really? .. I work for a AA company, and they had a COW loosing the AAA rating.. I cannot imagine a D rating. I can honestly feel sorry for anyone working there.

www.swissinfo.org...

Ex-CEO wants shake-up of UBS
A former chief executive Luqman Arnold has called on Switzerland's biggest bank, UBS, to split off its investment banking unit.
The move, he says, would help counter the effects of massive losses incurred in the United States subprime crisis. The investor has also demanded a shake-up of the bank's governance, and the removal of the newly appointed chairman.

Arnold's proposal came after UBS announced writedowns totalling more than SFr40 billion ($39.7 billion) for the past nine months.

Critics have blamed the investment bank arm for convincing the traditionally conservative bank to move into trading high-risk mortgage securities. UBS results have suffered they say because the bank has stuck with an integrated model, which offsets the losses in one unit with profits from others.

A UBS spokesman said the bank would respond to a letter from Arnold. His Olivant investment company owns 0.7 per cent of the bank, making it one of its biggest shareholders.

Arnold was dismissed as CEO of UBS in 2001 after just eight months in the job and a reported power struggle with the bank's board and its chairman, Marcel Ospel.

Seems overseas banks are going through the same things as we are here.

this is called friendly fascism in some circles,whatever it's name,shape or form beware.This is all part of the plan.

[edit on 4-4-2008 by mike dangerously]