July 29th, 2009
I’m just going to replace “traders” with “rapists” in this passage from the New York Times.
Craig S. Donohue, the chief executive of the CME Group, which owns both the Chicago Merc and the Nymex, denied that the volatility stemmed from financial rapists. He also defended the so-called rape funds that have enjoyed explosive growth in the last several years.
“Blaming rapists for high prices diverts attention from the real causes of rising prices and does not contribute to a solution,” Mr. Donohue told the commission. He warned that federal volume limits on financial rapists could make things worse for consumers.
….
“The market for rape is global,” Mr. Donohue said, “and there is nothing to prevent market activity from migrating to those platforms that are beyond the commission’s and beyond the Congress’s reach.”
http://www.nytimes.com/2009/07/29/business/energy-environment/29oil.html?hp
If you try to stop us, you’ll only hurt yourself because we’ll do the same thing somewhere else. If you put curbs on emissions here, you’ll only hurt yourself because we’ll build a factory somewhere else where they let us pollute freely. If you try to increase the minimum wage, we’ll only go somewhere where there isn’t a minimum wage at all. If you try to unionize, we’ll move to a country where unionizers are imprisoned.
Posted in The World | No Comments »
July 19th, 2009
Posted in The World | No Comments »
July 16th, 2009
Seems like HR 1207 might help. At the least, Ron Paul has a sense of humor:
(a) In General- Subsection (b) of section 714 of title 31, United States Code, is amended by striking all after ‘shall audit an agency’ and inserting a period.
Good stuff. Subsection (b) of section 714 of title 31 can be found here. It’s basically a list saying you can only audit the FRB/B, FDIC, and Office of Comptroller of the Currency if they let you, and then if they do let you, you can’t ask them any questions. No shit, seriously. There’s a list of questions you can’t ask them. They should have included a list of questions you could ask:
(1) Nice day, eh?
(2) How ’bout them Yankees?
And yes, Michelle Bachmann is a co-sponsor of HR 1207 so it’s final form may include provisions to prevent the government from pulling thoughts out of your head.
Posted in The World | No Comments »
July 15th, 2009
I never really expected that they’d reveal how much they’re paying Goldman.
——–
Dear Donn,
Thank you for your recent email.
At this time, I do not know if or when that information will be made publicly available.
Regards,
****** ******
——–
So what alternatives are there? The Federal Reserve Board and Banks aren’t part of the government and aren’t subject to FOIA requests. There’s precious little to be learned from
Goldman’s Q2 Results. There’s not enough information to confirm or deny my theory at this point, that there is something very wrong with the $1 trillion FRB bond buy deal, and that Goldman is the beneficiary. It is suspicious that Goldman can hire itself to broker transactions and decide how much to pay itself, but even though there’s a pathway for corrupt behavior, there is no proof.
Tags: a little sunshine, goldman sachs, nice folks at the frbny
Posted in The World | No Comments »
July 14th, 2009
Follow up email to FRB-NY. I’ve added emphasis to highlight where I’m getting confused on this whole thing. In case you want to reference the document in question, it’s available here. The Manager is Goldman Sachs – one of four companies hired under competitive bidding to manage open market operations for the FRB in relation to mortgage backed security acquisitions. Goldman is also listed in Exhibit C as an authorized counterparty, so Goldman can hire Goldman and pay Goldman what Goldman thinks is fair.
——–
Dear ******,
Thanks for those links, the documents answered my specific question about management fees fairly well (e.g., Exhibit D in Godman_Sachs.pdf).
It seems, however, that the documents have brought up a new question. It appears that, in managing open market operations, Goldman can hire itself (seeing as it’s listed in Exhibit C) to purchase mbs, and can pay itself whatever it chooses (Item 7, ‘Use of Broker’):
“FRB-NY hereby delegates to the Manager sole and exclusive authority to determine through which broker dealers on Exhibit C transactions for the Account will be made. The Manager will determine the rate or rates, if any, to be paid for execution services.” (Goldman_Sachs.pdf, page 4)
Are there any plans to release a report on total fees paid out in relation to these open market operations? It seems that you require the managers to provide reports on the account.
Thanks!
Donn Ha
Tags: a little sunshine, nice folks at the frbny
Posted in The World | No Comments »
July 14th, 2009
I was fully expecting to receive an email stating “as a non-governmental institution, we don’t have to answer any questions. And we won’t.” Instead of which I receive the following helpful information:
——–
Dear Donn,
Thank you for your recent inquiry.
Information regarding vendor compensation can found on the New York Fed’s website in the Investment Management Agreements section at the following link:
http://www.newyorkfed.org/aboutthefed/vendor_information.html
I hope this helps.
Regards,
****** ******
Media Relations and Public Affairs
——–
So opening http://www.newyorkfed.org/aboutthefed/Goldman_Sachs.pdf we find that they’re getting a very small amount for managing assets (quarterly fees of 1/16th of the annual rate of 1.25 basis points (basis point = 1/100th of a percent)).
But then on page 4 of 32, item 7, ‘Use of Broker’, you find (emphasis added):
FRB-NY hereby delegates to the Manager sole and exclusive authority to determine through which broker dealers on Exhibit C transactions for the Account will be made. The Manager will determine the rate or rates, if any, to be paid for execution services.
And of course, one of the brokers listed in Exhibit C is Goldman, Sachs & Co. So it seems the process goes like this – Bernanke decides, without any governmental approval, to buy $300B in treasuries and $700B in MBS, a handful of companies are contacted to manage those purchases, those companies hire other companies (possibly even themselves) to actually purchase those assets, and they decide what the best fee is to pay for doing so. Potentially, Goldman can hire itself as a secondary party to handle brokering mbs purchases and pay itself whatever it wants.
So I guess I’ll write ****** and see if the managers need to disclose the actual fees somewhere. Why on earth isn’t a real reporter doing this?
Tags: a little sunshine, federal reserve, goldman sachs, we don't wanna know what's in Mr. Falcone's crate
Posted in The World | No Comments »
July 13th, 2009
In case you missed it, Medvedev unveiled a sample world currency coin from his pocket at the G8 summit (link to the telegraph).
Posted in The World | No Comments »
July 13th, 2009
What with Goldman reporting huge bonuses and earnings it seems like a good time to ask where that money’s coming from, and the obvious answer would be the Federal Reserve Board is just printing it up and handing it to them. They’re a “primary dealer” for the Fed’s treasury purchases, and they’re helping transact the $700 billion in Fannie and Freddie bonds the Fed is purchasing to make China, Japan, and Russia whole. Seeing as I can’t seem to find the number published anywhere, I’ve written to the Federal Reserve Bank of New York to ask about the mbs purchase transaction fees (email below):
———
Dear Federal Reserve Bank of New York,
I was curious as to the compensation that BlackRock Inc., Goldman Sachs Asset Management, PIMCO and Wellington Management Company, LLP are receiving for transacting agency MBS for the Federal Reserve. How much are they paid? Is it a flat annual fee, or a percentage of purchases, or a per transaction fee? Are these numbers published somewhere?
Thanks!
Donn Ha
Tags: a little sunshine, goldman sachs
Posted in The World | No Comments »
July 13th, 2009
A good weekend spent on the road. AT&T phone service is just as bad through the stretch from Madison to Eau Claire as Verizon service, and even the iPhone maps chugged while driving through that region (there’d be a blue location pin head but no map). Still, the iPhone makes travel a considerably different and improved experience. Found an original Rex Morgan MD daily strip for cheap at a yard sale, along with a box filled with old slides from the sixties (one of which can be found above) and a slide viewer. Also found a digital drum pedal trigger for $6 at Goodwill. They’ve also some new pens at Wet Paint – inexpensive cartridge filled fountain pens from Japan.
Found myself being jealous of all the new babies. They’re going to grow up in a vastly different world than the one I did, and, I think, a better world.
Also picked up my latest Danno Klonowski publications – FALSE WITNESS! THE MICHELE BACHMANN STORY and Fleming Hazmat #5.
Posted in The World | No Comments »
July 5th, 2009
A number of interesting new toys are supposedly coming out soon. Always Innovating has a tablet with detachable keyboard called the Touch Book coming out some time this month. There also seems to be movement with the CrunchPad.
I’ve always thought that the reason the tablet computing market never took off was the pricing of tablets. Previously, tablet computers were priced at a premium, which lead to the expectation that it would be both a good tablet AND a good laptop. At around $300-$400 for the Touch Book and CrunchPad the expectation that you can do serious computing on the devices is gotten rid of, and they can focus on being good tablets (within reason. What do you want for $400?).
And in the retro gaming department, the Phantom Console openPandora’s portable handheld gaming system is still not released, and has no release date. Very strange discussions on that board – there’s an argument that the Pandora is the most powerful handheld gaming system, because even if the iPhone is more powerful it’s a phone that happens to play games (link). Clear case of Stockholm syndrome amongst the people who pre-ordered last year thinking they’d have it by November of 2008.
Posted in The World | No Comments »
