The Federal Reserve’s policy-making committee met last week and not much happened. One headline summed it up: “Fed Looks for Other Ways to Aid the Economy.”
Usually the first item of this column is the longest, but not today. The Fed has to accomplish something to rate space.
The consensus after last week’s meeting was that the Fed would soon start pulling back on its Quantitative Easing buys of $85 billion a month in bonds and mortgages.
But it won’t because it can’t.
Especially with Congress soon arguing again about budget deficits and debt ceiling — the economy is not going to be strong enough to allow the Fed to change course.
Therefore, as the headline says, the Fed needs “other ways to aid the economy.” The trouble is, there aren’t any other ways that the PhDs at the Fed have ever learned about in their college courses.
So let me once again suggest the only thing available: Change the rules on personal retirement plans so that people can spend their own money to stimulate the economy.
Fiddle with the tax code to make this look like a revenue producer for the government.
But until someone starts thinking outside the academic box — or is that really a coffin? — US economic growth will remain dead.
I’ll finish by quoting Forrest Gump: “That’s all I have to say about that.”
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The House Oversight Committee’s probe of the Census Bureau’s falsification of data is still in its infancy and everyone has clammed up — a good sign, I believe, that people are taking this seriously.
Even my whistleblower has — as they say on TV — “lawyered up.” This anonymous source, you might recall from last week’s column, charged that people at the Census Bureau were playing games with figures being put together for the Labor Department.
Before the source went incommunicado there were reassurances of cooperation in any Congressional investigation.
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Now someone else is proving that the Federal Reserve has been fooling around in the stock market.
Anyone who has read my column for any length of time knows that I’ve been suspicious that the New York Fed has been playing footsie with something called the President’s Working Group on Financial Markets to make sure that stocks behave.
The Working Group was founded in 1989 by President Reagan after the near crash of that year. It been nicknamed the Plunge Protection Team.
In what seems to be carefully researched piece for the website WallStreetonParade.com, writer Pam Martens tells about the equity- trading desk at the New York Fed — the only one of the 12 regional banks with such an operation.
“The New York Fed is the only institution with a trading floor and highly sophisticated trading platforms. But despite multiple requests, the New York Fed will not provide a photo of the full trading area,” Martens wrote.
The Fed, of course, is authorized to trade currency to keep the US dollar where it needs to be among world currencies. And it buys bonds as part of its interest rate program.
On top of that the Fed has its highly controversial Quantitative Easing program that purchases government bonds and mortgage-backed securities each month in an operation that could lead to the destruction of the US economy.
But stocks? This is the most controversial of all operations, if the Fed is really doing it, since rigging equities would be the surest sign of a desperate government trying to make rich people feel richer.
Martens writes about Kathleen Margaret Kolchin, who told a group at the annual Lehigh University Financial Services Forum that she works at the New York Fed “performing equity research on large cap US and European banks.”
Kolchin bragged that her Wall Street experience helps her to garner insights into the market’s reaction to “stock and bond prices.”
The resume that Kolchin posted on LinkedIn, says writer Martens, includes the fact that New York Fed has an “internal equity research team.”
So, besides QE, what are the rascals at the Fed really up to?
You’ve had my opinion years ago. Now you have someone else’s.
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Retailers this Christmas are begging people to come into their stores. But I have to admit that JCPenney may have inadvertently come up with the most unique idea — solicit shoplifters.
I joked in this column a few years back that the failing retailer had more one-day sales than there were days in the year. But Penney went one better last week when it admitted to Wall Street analysts that it was now getting so many shoplifters that its profit margins were being hurt.
Brilliant! Don’t you think?
The whole idea is to get people into your stores. And if “shoppers” think they might be able to swipe a thing or two while at Penney’s, more people will come.
Even better would be a shoplifter challenge to replace coupons. “Come to JC Penney and see if you can shoplift 20 percent of the value of your order?”
Why give out 20 percent-off coupons if you can make people work for a sticky-finger discount?