Federal Reserve Secrecy
Research for Online Investors

by John Dalt

8/26/09

The Federal Court in Manhattan has ruled against the Federal Reserve in a freedom of information request.  Bloomberg News sought the names of banks that received emergency loans from the Federal Reserve beginning last year in the midst of the financial panic.  The Fed refused, sighting harm to the financial institutions if the public knew how much was borrowed and the assets that were pledged as collateral.

The court gave the Federal Reserve five days to turn over documents it located and to continue to look for more, especially at the New York Federal Reserve Bank.  The New York bank was central to most of the loans made, and formerly headed by Turbo Tim Geithner.  You can read the complete story about Bloomberg vs Federal Reserve.

There is more going on here than who borrowed what.  The Fed does not want any scrutiny.  The more secretive they are the more some in congress will press for oversight.

The Lion of the Senate is dead.  My mother said if you couldn’t say something nice about someone, don’t say anything.  I always have obeyed my mother.

The market seems weary, we want to go higher but the volume is low and just cannot seem to put the foot on the accelerator.

The Energy Information Agency (EIA) released last week’s inventory for crude oil and derivatives.  Crude inventory built by 200,000 barrels, but gasoline was down 1.7 million barrels.  These numbers were not what I expected.  The market yawned and sold oil, but these numbers are not that bad.  Hurricane Bill turned away, tankers should be able to unload.  What happened to the 7 million barrels that disappeared in last week’s report?

I dug deeper into the numbers.  Last week’s report showed the average daily import of crude oil was down almost 1.5 million barrels, with most of the reduction in the gulf coast.  This week’s import numbers bounced back to the four-week average that was in existence before the last reports drop.  Gasoline stocks have been dropping for the last five weeks.

I was concerned about a drop in the price of crude when the supply came back to the market.  Gasoline stocks are still above last year inventory levels, but only by 6%.  Distillate stocks are 19% higher than one year ago!  Refinery inputs are running about 4% less than last year.  Crude may soften if the equities market sells off, but the numbers seem to be showing us the way higher.  Watch USO.

Stuff you cannot make up.  The local head of the AFL-CIO has been appointed Chairman of the Board of Directors at the New York Federal Reserve.  This is amazing.  The Central States Pension Fund wasn’t big enough, now the mob and unions have their fingers in the Federal Reserve.

Sen. Chuck Grassley has a warning for Ben Bernanke, Chairman of the Fed, “…shoveling money out of an airplane to solve problems can be inflationary — in this case, hyperinflationary — if he doesn't start mopping up some of the money that's out there."  Grassley is the ranking member of the Senate Finance Committee.

Eric Holder, Attorney General, has decided to prosecute CIA officers that may have used harsh interrogation techniques. This is part of the continuing attack on our nation’s intelligence agencies and the defense department the democrats have waged since the 1970s. The Church Commission decapitated the CIA with hearings in 1973.

Treasury sold $39 billion in five-year bonds today.  Seven-year bonds will sell tomorrow.  These short-term bonds are attracting buyers, next week the 3, 10, and 30-year bonds will test the market.

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

MarketToday Home Page

Back to Top