Feds

[IIC]

In the past week and a half the Feds have pumped in an unprecedented amount into the 3 day Repo Pool, Issued repo's for an unusal term(14 days), lowered the Discount Rate, extended the term of Discount Rate loans from overnight to 30 days and taken further action.

[jiesen]

Doug,

1) What do you mean by "appropriately"?

And

2) Who do you mean by the Feds? If you mean the Board of Governors of the Federal Reserve System, they're the "Fed". The term "Feds" usually refers to US Government entities, which the Fed isn't. It's a quasi-government and quasi-private consortium of banks and US government institutions, including the Treasury. Its purpose is to create and control the money supply, as well as to look after the interests of itself and its constituents and stakeholders (banks, government).

It's pretty much a given that the Fed is acting to create and control the money supply (per its stated purpose) in this case. But is The Fed looking out for itself or the economy? Does/should it attempt to do both? Does it matter what we think about it, and can we really have any say in what the world's most powerful bank does with our money supply? Maybe these are more appropriate questions...

[IIC]

Doug,

1) What do you mean by "appropriately"?

And

2) Who do you mean by the Feds? If you mean the Board of Governors of the Federal Reserve System, they're the "Fed". The term "Feds" usually refers to US Government entities, which the Fed isn't. It's a quasi-government and quasi-private consortium of banks and US government institutions, including the Treasury. Its purpose is to create and control the money supply, as well as to look after the interests of itself and its constituents and stakeholders (banks, government).

It's pretty much a given that the Fed is acting to create and control the money supply (per its stated purpose) in this case. But is The Fed looking out for itself or the economy? Does/should it attempt to do both? Does it matter what we think about it, and can we really have any say in what the world's most powerful bank does with our money supply? Maybe these are more appropriate questions...

J...

"Appropriately" is subjective.

Fed...Feds...I think everyone knows what I mean...If Reuters can call them the Feds...I think I can too: http://www.reuters.com/article/hotSt...35773520070817

Can we have a say about it?...Theoretically YES...Realistically...NO

Independent Government Agencies...Quasi-Government Agencies...Are you trying to tell me that there is a difference between them and other Government Agencies? That is pretty nit-picky and the differences are miniscule.

Here are some Independent Gov't Agencies...


Independent agencies of the United States government

From Wikipedia, the free encyclopedia



Independent agencies of the United States government are those that exist outside of the departments of the executive branch. Established through separate statutes passed by the U.S. Congress, each respective statutory grant of authority defines the goals the agency must work towards, as well as what substantive areas, if any, it may have the power of rulemaking over. These agency rules (or regulations), while in force, have the power of federal law.



The executive departments are the major operating units of the U.S. federal government, but many other agencies have important responsibilities for serving the public interest and carrying out government operations. Executive branch independent agencies are not part of a fourth branch of government; they are part of the executive branch, but are not part of a specific executive department.

A few independent agencies are part of the legislative branch under Congress, such as the Government Accountability Office (formerly called the General Accounting Office), the Library of Congress, the Congressional Research Service, and the Government Printing Office.

The nature and purpose of independent agencies vary widely. Some are regulatory groups with powers to supervise certain sectors of the economy. Others provide special services either to the government or to the people. In most cases, the agencies have been created by Congress to deal with matters that have become too complex for the scope of ordinary legislation. In 1970, for example, Congress established the United States Environmental Protection Agency to coordinate governmental action to protect the environment.

The Administrative Procedure Act establishes the protocols for agency rulemaking and decisions in agency enforcement proceedings. The APA also provides for direct judicial review of agency action in the D.C. Circuit Court (and then on appeal to the Supreme Court), once all intra-agency procedures have been exhausted. The D.C. Circuit can uphold the regulation as a valid exercise of statutory authority by the agency, or it can remand back to the agency for further consideration and information gathering. Decisions and rules must be sufficiently justified by the agency to withstand judicial review. If there is no established factual or rational basis for the agency's actions, the court will not infer or assume one.

Examples of independent agencies

• The Central Intelligence Agency (CIA) coordinates the intelligence activities of certain government departments and agencies; collects, correlates, and evaluates intelligence information relating to national security; and makes recommendations to the National Security Council within the Office of the President.
• The Commodity Futures Trading Commission (CFTC) regulates commodity futures and option markets in the United States. The agency protects market participants against manipulation, abusive trade practices and fraud. Through effective oversight and regulation, the CFTC enables the markets to serve better their important functions in the nation's economy providing a mechanism for price discovery and a means of offsetting price risk.
• The United States Environmental Protection Agency (EPA) works with state and local governments throughout the United States to control and abate pollution in the air and water and to deal with problems related to solid waste, pesticides, radiation, and toxic substances. EPA sets and enforces standards for air and water quality, evaluates the impact of pesticides and chemical substances, and manages the "Superfund" program for cleaning toxic waste sites.
• The Federal Communications Commission (FCC) is charged with regulating interstate and international communications by radio, television, wire, satellite, and cable. It licenses radio and television broadcast stations, assigns radio frequencies, and enforces regulations designed to ensure that cable rates are reasonable. The FCC regulates common carriers, such as telephone and telegraph companies, as well as wireless telecommunications service providers.
• The Board of Governors of the Federal Reserve System (Fed board) is the governing body of the Federal Reserve System, the central bank of the United States. It conducts the nation's monetary policy by influencing the volume of credit and money in circulation. The Federal Reserve regulates private banking institutions, works to contain systemic risk in financial markets, and provides certain financial services to the U.S. government, the public, and financial institutions.
• The Federal Trade Commission (FTC) enforces federal antitrust and consumer protection laws by investigating complaints against individual companies initiated by consumers, businesses, congressional inquiries, or reports in the media. The commission seeks to ensure that the nation's markets function competitively by eliminating unfair or deceptive practices.
• The General Services Administration (GSA) is responsible for the purchase, supply, operation, and maintenance of federal property, buildings, and equipment, and for the sale of surplus items. GSA also manages the federal motor vehicle fleet and oversees telecommuting centers and child care centers.
• The National Aeronautics and Space Administration (NASA) was established in 1958 to run the U.S. space program. It placed the first American satellites and astronauts in orbit, and it launched the Apollo spacecraft that landed men on the moon in 1969. Today, NASA conducts research aboard earth-orbiting satellites and interplanetary probes, explores new concepts in advanced aerospace technology, and operates the U.S. fleet of manned space shuttle orbiters.
• The National Archives and Records Administration (NARA) preserves the nation's history by overseeing the management of all federal records. The holdings of the National Archives include original textual materials, motion picture films, sound and video recordings, maps, still pictures, and computer data. The Declaration of Independence, the U.S. Constitution, and the Bill of Rights are preserved and displayed at the National Archives building in Washington, D.C.
• The National Labor Relations Board (NLRB) administers the principal U.S. labor law, the National Labor Relations Act. The board is vested with the power to prevent or remedy unfair labor practices and to safeguard employees' rights to organize and determine through elections whether to have a union as their bargaining representative.
• The National Science Foundation (NSF) supports basic research and education in science and engineering in the United States through grants, contracts, and other agreements awarded to universities, colleges, and nonprofit and small business institutions. The NSF encourages cooperation among universities, industry, and government, and it promotes international cooperation through science and engineering.
• The Office of Personnel Management (OPM) is the federal government's human resources agency. It ensures that the nation's civil service remains free of political influence and that federal employees are selected and treated fairly and on the basis of merit. OPM supports agencies with personnel services and policy leadership, and it manages the federal retirement system and health insurance program.
• The Peace Corps, founded in 1961, trains and places volunteers to serve in foreign countries for two years. Peace Corps volunteers, now working in some 80 nations, assist in agricultural-rural development, small business, health, natural resources conservation, and education.
• The Small Business Administration (SBA) was created in 1953 to advise, assist, and protect the interests of small business concerns. The SBA guarantees loans to small businesses, aids victims of floods and other natural disasters, promotes the growth of minority-owned firms, and helps secure contracts for small businesses to supply goods and services to the federal government.
• The Selective Service System (SSS) is an independent federal agency operating with permanent authorization under the Military Selective Service Act (50 U.S.C. App. 451 et seq.). It is not part of the Department of Defense; however, it exists to serve the emergency manpower needs of the Military by conscripting untrained manpower, or personnel with professional health care skills, if directed by Congress and the President in a national crisis. Its statutory missions also include being ready to administer an alternative service program, in lieu of military service for men classified as conscientious objectors.
• The Social Security Administration (SSA) manages the nation's social insurance program, consisting of retirement, disability, and survivors benefits. To qualify for these benefits, most American workers pay Social Security taxes on their earnings; future benefits are based on the employees' contributions.
• The Securities and Exchange Commission (SEC) was established to protect investors who buy stocks and bonds. Federal laws require companies that plan to raise money by selling their own securities to file reports about their operations with the SEC, so that investors have access to all material information. The commission has powers to prevent or punish fraud in the sale of securities and is authorized to regulate stock exchanges.
• The United States Agency for International Development (USAID) administers U.S. foreign economic and humanitarian assistance programs in the developing world, as well as in Central and Eastern Europe and the New Independent States of the former Soviet Union. The agency supports programs in four areas — population and health, broad-based economic growth, environment, and democracy.
• The United States International Trade Commission (USITC) provides trade expertise to both the legislative and executive branches of government, determines the impact of imports on U.S. industries, and directs actions against certain unfair trade practices, such as patent, trademark, and copyright infringement.
• The United States Postal Service is operated by an autonomous public corporation that replaced the Post Office Department in 1971. The Postal Service is responsible for the collection, transportation, and delivery of the mails, and for the operation of thousands of local post offices across the country. It also provides international mail service through the Universal Postal Union and other agreements with foreign countries.
• An independent Postal Rate Commission, also created in 1971, helps the Postal Service set the rates for different classes of mail by holding hearings on rates proposed by the Postal Service, and recommending rates to the Postal Service Board of Governors, which in turn may accept or reject the rates. As of February 2006, legislation had passed both houses of Congress greatly increasing the regulatory powers of the Postal Rate Commission.
• The Federal Retirement Thrift Investment Board is one of the smaller Executive Branch agencies, with just over 100 employees. It was established to administer the Thrift Savings Plan (TSP), which provides Federal employees the opportunity to save for additional retirement security. The Thrift Savings Plan is a tax-deferred defined contribution plan similar to a private sector 401(k) plan.

[skiracer]

quite an impressive and informative post doug. still in all the most accepted use when discussing the Federal Reserve Board is the FED. Feds leans towards any government agency or bureau. they pulled one off on everybody over the last couple of days with the guy from the St. Louis board stating that there would have to be a crisis before they would lower rates and then on Friday the drop the rate 1/2 point. they could care less about any of us common folk.

[IIC]

From Bloomberg:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a20JTpGk5JgM

Poole Skipped Fed's Conference to Maintain Secrecy (Update1)

By Anthony Massucci

Aug. 17 (Bloomberg) -- William Poole, president of the Federal Reserve Bank of St. Louis, kept dinner plans last night to avoid tipping the Fed's hand.

In a surprise announcement in Washington, the Fed today cut the discount rate it charges banks for loans by half a percentage point to 5.75 percent, after a 6 p.m. teleconference late yesterday. Poole, in Arkansas for a speech, skipped the Federal Open Market Committee call to have a meal as scheduled at the University of Arkansas at Little Rock.

``He didn't want to run the risk that it looked like the FOMC was holding an unscheduled meeting,'' St. Louis Fed spokesman Joseph Elstner said in a telephone interview. ``He thought it was more important to stick to his schedule.''

Richard Fisher, president of the Dallas Fed and Poole's alternate on the FOMC, stood in for Poole on the call.

Poole dined with Jane Wayland, interim dean of the university's college of business, a half dozen professors and about 25 students. Cancelling the dinner plans ``could have led to speculation in the press about'' the FOMC meeting, said Elstner, who is traveling with Poole.

Poole, a voting member this year of the FOMC, was not available for comment.

The meeting occurred a day after Poole told Bloomberg News there's no sign that the subprime-mortgage rout is harming the broader U.S. economy. Only a ``calamity'' in markets would require the Fed to convene and cut rates before its next scheduled meeting Sept. 18, he said in the interview.

Today, the FOMC acknowledged for the first time that ``market conditions have deteriorated, and tighter credit conditions and increased uncertainty have the potential to restrain economic growth going forward.''

2001 Comments

On April 10, 2001, Poole spoke about an inter-meeting rate cut as a possibility, while saying quick action wasn't necessary. ``Most of the time, in most circumstances, I think it makes sense to move at the regular meetings,'' he said at the time.

Eight days later the Fed cut rates by half a percentage point after an unscheduled meeting.

Two weeks ago Poole was singled out for ``shame'' by Jim Cramer, a CNBC television host who called Fed officials ``nuts'' for leaving interest rates unchanged as global credit was under siege. Cramer's rant came after Poole said July 31 that a 4.9 percent drop in stocks a week earlier was ``typical market upset.''

``Bill Poole has no idea what it's like out there,'' Cramer yelled in a segment that drew more than 1.6 million hits on YouTube, the video-sharing Web site.

Poole, 70, plans to retire from the central bank next year. He is a former economics professor at Brown University in Providence, Rhode Island, and joined the St. Louis Fed as its president in 1998. The St. Louis Fed includes Arkansas and portions of Missouri, Mississippi, Tennessee, Kentucky, Indiana and Illinois.

------------------------------------

What is a "Calamity"?...Well, dictionary.com defines it as a "Disaster"

Is the Fed grasping at straws...throwing Hail Mary passes???...Do they know what they are doing???...I don't know...But the affect on $60+ bil in 3 day repos, unprecedented 14 day repos (Normal is 1 to 7 days)...Cutting the discount rate and extending the discount rate loans from 1 day to 30 days hasn't helped much so far except to give us a 15 min spike at the open on Friday (Major Indices all ended lower after the 15 min high...see chart below)

Here are the discount/fed funds rate back to 2003 (No use in posting pre '93 as the discount rate was completely overhauled in Jan '03)

Perhaps there really is a CALAMITY???




Yesterday's action on major indices:

[billyjoe]

Doug,
I think the Feds screw up most everything they have a hand in. Why couldn't they see this crisis in the making a few years ago. With real estate appreciating as fast as it was , jobs going to China ,and real estate signs offering 125% financing even I knew something was screwed up.

-----------billyjoe

[IIC]

Fed injects liquidity into the markets:

[jiesen]

One opinion (pretty close to mine)

http://www1.investorvillage.com/smbd...sg&mid=2822269

Inflation is back I found this snippet in a Barron's teaser this AM on AOL:

"...The Federal Reserve, of course, is also playing doctor. As the mortgage/credit/liquidity stress raised the markets' cardiac risk factors, Fed officials first prescribed diet and exercise (more sensible pricing of risk). With liquidity injections and Friday's cut in the discount rate, the Fed has moved on ..."

So Barron's believes that the doctor (the Fed) had at one time analyzed the symptoms of the economy and prescribed "diet and exercise" (which means in this case that the excesses of the superheated economy should be allowed to resolve themselves through bankruptcies and other business failures, unemployment increases, etc., and in this manner to naturally wring out the "fat," in order to cure the patient.) But when the Fed INJECTED LIQUIDITY (read, " adding more money [in the form of lendable paper] which dilutes the old", conforming to the definition of inflating), "the Fed has moved on..., (meaning that the Fed just caved in to the interests of Wall Street, the Treasury, and other fonts of big money.)"

This conforms well with my previous msg of last night.

I don't know how much plainer the Fed can be. Maybe I'm wrong, but it sure looks like inflation is here to stay. When push comes to shove, the Fed has no stomach to allow the economy's excesses to be worked off for its own good.

Protect yourselves.

[IIC]

http://www1.investorvillage.com/smbd...sg&mid=2822269

Inflation is back I found this snippet in a Barron's teaser this AM on AOL:

"...The Federal Reserve, of course, is also playing doctor. As the mortgage/credit/liquidity stress raised the markets' cardiac risk factors, Fed officials first prescribed diet and exercise (more sensible pricing of risk). With liquidity injections and Friday's cut in the discount rate, the Fed has moved on ..."

So Barron's believes that the doctor (the Fed) had at one time analyzed the symptoms of the economy and prescribed "diet and exercise" (which means in this case that the excesses of the superheated economy should be allowed to resolve themselves through bankruptcies and other business failures, unemployment increases, etc., and in this manner to naturally wring out the "fat," in order to cure the patient.) But when the Fed INJECTED LIQUIDITY (read, " adding more money [in the form of lendable paper] which dilutes the old", conforming to the definition of inflating), "the Fed has moved on..., (meaning that the Fed just caved in to the interests of Wall Street, the Treasury, and other fonts of big money.)"

This conforms well with my previous msg of last night.

I don't know how much plainer the Fed can be. Maybe I'm wrong, but it sure looks like inflation is here to stay. When push comes to shove, the Fed has no stomach to allow the economy's excesses to be worked off for its own good.

Protect yourselves.

There were some interesting articles in Barrons...many are emailable but this forum doesn't accept postable emails

BTW...I posted a rather lengthy .pdf link on my site http://Sharptraders.com on the USEFUL LINKS page (I mentioned that on the Cup w/ Handles thread...But I know a lot of people don't look at that thread) about the Fed...It is published by the Fed itself (See J...I got it right now)...Rather dry and I have not read the whole thing...But, it is educational.

Take a look.

Now I'm wondering if we are not in worse shape than I thought???

[skiracer]

The Fed’s compromise action on Friday satisfied the US stock market which rallied 2.5% last Friday. The Fed also left its powder dry in the sense that it can still implement a cut in the federal funds target if credit market conditions continue to deteriorate. However, the markets will remain on edge as additional bad news is likely to emerge on investment fund and bank losses and on other investment funds that may be forced to halt investor withdrawals.
The Fed’s discount rate cut last Friday firmed up market expectations that the Fed will cut the funds rate target fairly quickly in coming weeks. Based on the federal funds futures pricing, the market is discounting a 25 bp rate cut by the next FOMC meeting on Sep 18, an overall 50 bp cut by November, a 75 bp cut by January, and a 100 bp rate cut by next July. Those are fairly drastic expectations, which may be scaled back as conditions in the credit market settle down in coming months.

another example of FEDS being used to designate the Reserve Board. Doug was right. FEDS always make me think of border patrols, FAA,DEA,FBI or Bonnie and Clyde.

[IIC]

Where's the FED w/ today's bailout???

The Naz Comp is down 33 points since 9:45am EDT on Friday

[IIC]

Where's the FED w/ today's bailout???

The Naz Comp is down 33 points since 9:45am EDT on Friday

So they threw in $3 bil today...Chump Change

[IIC]

What is the Fed Fund Rate???...OK...You say what???....5.25%...Wrong...That is a target rate...They have been lowering it behind your back:

http://www.federalreserve.gov/releases/h15/Current/