Benjamin S. Madoff

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Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Benjamin S. Madoff

From ZeroHedge 

New York Fed Bringing Mortgage Bond Purchasing In-House, Halves External Managers

In taking a page straight out of Goldman's book of horrendous PR, the Federal Reserve, even as its fate is about to start being deliberated tomorrow, has chosen to throw sand in the eyes of all those who claim its days of secrecy must end, and has decided to beging purchasing the QE allocated portion of MBS/Agency bonds directly from the market using in-house personnel, and bypassing external managers. This way, most information leakage will be prevented, the Fed can buy (never sell) however many MBS it wants while disclosing whatever (if anything) it chooses, with nobody being the wiser, and 30 year mortgage rates continuing their inexorable creep to zero percent. At least the Fed will finally unleash its massive trading desk all over the world, and all those recently hired Fed traders can put their Bloomberg terminals to good use (ironically leaving them with just the biometric tentacleprint unit and a buy button should be more than sufficient).

 

In today's amendment to the NY Fed's MBS page, the Fed discloses (those two words just don't seem right together) the following:

 

As of August 2009, the Federal Reserve streamlined the set of external investment managers, reducing the number of investment managers from four to two. The New York Fed retained Wellington Management Company, LLP for trading, settlement and as a secondary provider of risk and analytics support; and BlackRock Inc. as the primary provider of risk and analytics support. The program custodian is J.P. Morgan.

 

 

DrKrbyLuv's picture
DrKrbyLuv
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 1995
Re: Benjamin S. Madoff

Thanks Davos,

Wall Street, through it's control of the omnipotent private New York branch of the Federal Reserve (11 other branches bow to New York).

Hey wait a minute; CitiBank, Goldman Sachs, HSBC and JPM are all big owners of the New York Fed.  Do conflicts of interest matter anymore?

Larry

BTW - Enjoyed your post at ZeroHedge - fewer words sometimes say bigger things Wink

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Benjamin S. Madoff
DrKrbyLuv wrote:

Thanks Davos,

Wall Street, through it's control of the omnipotent private New York branch of the Federal Reserve (11 other branches bow to New York).

Hey wait a minute; CitiBank, Goldman Sachs, HSBC and JPM are all big owners of the New York Fed.  Do conflicts of interest matter anymore?

Larry

BTW - Enjoyed your post at ZeroHedge - fewer words sometimes say bigger things Wink

Thanks for the kind words, and I'll continue to work on brevity. Take care

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