The Long Knives

by Larry Levin

The Federal Reserve is above the law. The Federal Reserve in general, and the New York Federal Reserve specifically, can do whatever it wishes whenever it pleases. They control ALL of your money. They control ALL of the banks. They control ALL of Congress save one: Ron Paul. They operate outside the law and there is nothing you can do about it.

For those of you who wrote to me and said Ron Paul's Audit the Fed Bill was nuts, I'd say reconsider that notion or it's you who is nuts. This belief of being able to act like a financial-Ninja behind the scene and get away with it in a puff of smoke MUST END!

To President Obama I ask: Will you really have an administration that operates entirely "above board" and "in the sunshine" like you promised on the campaign trail? Hmm, the first clue that you won't is that you knowingly hired an admitted tax cheat to run the Treasury and the IRS. Brilliant.

Now we find out he's worse! I for one am not surprised.

It's time for the long knives to come out: it's time to kick this punk, Tax-Cheatin-Timmy, to the curb at least, and preferably to JAIL for securities fraud!

Jan. 7 (Bloomberg) -- The Federal Reserve Bank of New York, then led by Timothy Geithner, told American International Group Inc. to withhold details from the public about the bailed-out insurer's payments to banks during the depths of the financial crisis, e-mails between the company and its regulator show.

AIG said in a draft of a regulatory filing that the insurer paid banks, which included Goldman Sachs Group Inc. and Societe Generale SA, 100-cents on the dollar for credit-default swaps they bought from the firm. The New York Fed crossed out the reference, according to the e-mails, and AIG excluded the language when the filing was made public on Dec. 24, 2008. The e-mails were obtained by Representative Darrell Issa, ranking member of the House Oversight and Government Reform Committee.

"It appears that the New York Fed deliberately pressured AIG to restrict and delay the disclosure of important information," said Issa, a California Republican. Taxpayers "deserve full and complete disclosure under our nation's securities laws, not the withholding of politically inconvenient information."

The e-mail exchanges between AIG and the New York Fed over the insurer's disclosure of the transactions show that the regulator pressed the company to keep details out of the public eye.

Kathleen Shannon, an AIG deputy general counsel, wrote to the insurer's executives in a March 12, 2009, e-mail about the conflicting demands from the New York Fed and SEC.

"In order to make only the disclosure that the Fed wants us to make," Shannon wrote, "we need to have a reasonable basis for believing and arguing to the SEC that the information we are seeking to protect is not already publicly available."

...AIG's Shannon replied that "the better practice and better disclosure in this complex area is to file the agreements currently rather than to delay." The agreements were included in the Dec. 2 filing.

You can read it all here:

http://www.bloomberg.com/apps/news?pid=20601087&sid=aXIvW4igKV38&pos=1

Throughout the ordeal Tax-Cheatin/SEC-violating-Timmy of the Fed wanted to delay, stonewall, impede, and lie about the truth. To AIG's credit, it wanted to do just the opposite.

In case you forgot, President Obama said Tax-Cheatin/SEC-violating-Timmy was the only person of 330,000,000 Americans that was capable of handling the job. Yeah, good call.

AUDIT THE FED...THEN END IT!

In more handout/bailout madness we find out that President Obama's "gracious" $8,000.00 giveaway of your tax dollars to strangers who want to buy a house (why is it your responsibility to assist someone to buy a home anyway?) is costing the nation a FORTUNE. Of course, you won't see this on the nightly news.

From Bloomberg...

http://www.bloomberg.com/apps/news?pid=20601109&sid=awb9FaECLYt4

Tax credits designed to revive the U.S. housing industry are costing taxpayers as much as $80,000 for every additional home sold, according to Michael R. Widner, a Stifel Nicolaus & Co. analyst.

The federal program is "an exceptionally inefficient use of tax dollars," Widner wrote yesterday in a report. He estimated the total cost through last November at $17 billion, "a high price to us for relatively little benefit."

And if you didn't know it, this is exactly why I am against these handouts that horribly misallocate precious dollars via incompetent governmental stupidity.

Well done President Obama...umm, not so much!

With regard to Tax-Cheatin-Timmy I'd like to reiterate... It's time for the long knives to come out: it's time to kick this punk to the curb at least, and preferably to JAIL for securities fraud!




Previous Day's Trading Room Results:

Trade Date: 1/7/10

E-Mini S&P Trades*
(before fees and commissions):


1) No "Secrets" trades today.

2) Algorithm positions (3)

3) "Reading the Tape" positions (6) ...combined Secret's, Algo, & "Reading the Tape" total...+4.50



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