Fed 'extremely uncomfortable' about bailouts

[FreakinDJ]

Source: Ieva M. Augstums and Jeannine Aversa, AP Business Writers

Fed 'extremely uncomfortable' about bailouts

Bernanke: Fed 'extremely uncomfortable' about bailouts; but strategy to ease crisis is working

CHARLOTTE, N.C. (AP) -- While acknowledging that the Federal Reserve was "extremely uncomfortable" about last year's bailouts of big financial companies, Fed Chairman Ben Bernanke said Friday the central bank's strategy to ease the financial crisis is working.

Bernanke was referring to the Fed's unprecedented decisions last year to step in and financially back JPMorgan Chase & Co.'s takeover of then-troubled investment house Bear Stearns and throw its first of four financial lifelines to insurance giant American International Group Inc.

In remarks during a Fed conference in Charlotte, N.C., Bernanke said the central bank was forced to take action because the collapse of those companies would have dealt a serious blow to the financial system and the national economy.

The situation underscores the need for new powers to allow the government to safely wind down such huge firms, he said. Bernanke and Treasury Secretary Timothy Geithner recently asked Congress for such powers.



Read more: http://finance.yahoo.com/news/Fed-extremely-uncomfortable-apf-14845836.html

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Interesting - First they order the CEO of GM to step down and now they are seeking jurisdiction to wind down the big TARP sucking Welfare Witches of Wall St.

Just might be an approach that works

[dixiegrrrrl]

1. Bernenke doesn't seem too uncomfortable with gaining enormous power over "non-banks"

They have teamed up well to use "Shock Capitalism" to grab oversight/rule over investment "banks", thus avoiding Congressional oversight and WH authority.
Remember, The Fed. is NOT under the control of the Government.
Even Greenspan admitted that recently.
Any decisions it makes is NOT under the control of the government.
But the Fed has powers to set money rates, money suppy rules, and the Treasury willingly prints up tons of paper notes for the Fed. ( thus decreasing the value of the dollar).

[FreakinDJ]

2. Does not the President appoint Fed Res. Chairs

has the power to dismiss and appoint

1 of the many problems Bush created was he refused to fill vacant seats on the Federal Reserve Board and that eventually led to 3 people making ALL the decisions that helped create this mess

[dixiegrrrrl]

3. Pres. "appoints" ...but...see below.

Governors are appointed by the President of the United States and confirmed by the Senate one on Jan. 31 of every even-numbered year, for staggered, 14-year terms.

Means every 2 years, one board member might be eligible for replacement.

"Appointed" can be mis-leading. Who does the Pres. rely on for info. on who to appoint?

[FreakinDJ]

5. Bernanke's term as chairman expires Jan. 31, 2010

Which means he was appointed by Bush

The Fed is the U.S. central bank, founded by Congress in 1913 during the Wilson administration to provide the nation with a safer and more stable financial system. "Over the years, its role in banking and the economy has expanded," a Fed history notes. Its actions on interest rates can dampen inflation or jump start the economy out of the doldrums, but it cannot by itself fix an ailing economy, as the current crisis demonstrates. It sets reserve requirements for banks and decides the federal funds rate that they are charged on their balances at the Federal Reserve. It buys and sells U.S. securities in the open market, which also influences interest rates. The Board of Governors relies on an 1,800-member staff to carry out its work. There have only been 14 Fed chairman in its 94-year history.

Fed governors serve staggered 14-year terms to insulate them from political pressures, but Fed chairmen serve four-year terms that can be renewed only if the President and the Senate so choose. Bernanke's term as chairman expires Jan. 31, 2010, which means that President-elect Barack Obama will get to decide whether to keep Bernanke on the job or nominate a successor. Two weeks after the election, Obama named former Fed chairman Paul Volker to chair a new Economic Recovery Advisory Board. Volcker, 81, was credited with curbing the runaway inflation of the late 1970s by pushing up interest rates during his tenure at the Fed. Obama's choices for his economic team include Treasury Secretary-designate Timothy Geithner, president of the Federal Reserve Bank of New York, and former Treasury Secretary Lawrence H. Summers, who will head the President's National Economic Council.

http://www.excellenceintransition.org/prune/prunedetail.cfm?ItemNumber=10721

"Swing and a Miss"

[Skidmore]

4. Wow! Way to speak up, Bennie boy, now that the horse is out of

the barndoor and the peasants want to burn the barn down.

[On the Road]

6. He *Should* Have Been Uncomfortable

but he still should have gone ahead and done it. Which he did.