Monday, September 28, 2009

The Plotting Turns Domestic

This afternoon, Secretary Geithner will meet with the Financial Stability Oversight Board.

Oversight Board members:

Secretary of the Treasury: Timothy Geithner

Chairman of the Board of Governors of the Federal Reserve System: Ben Bernanke [chair]

Secretary of the Department of Housing and Urban Development: Shaun Donovan

Chairman of the Securities and Exchange Commission: Mary Schapiro

Director of the Federal Housing Finance Agency: James Lockhart


  1. I'm starting to think, and even believe, that the new "super-regulatory" agency will simultaneously swallow and abolish the Federal Reserve in its current form. Summers will still get his fiefdom, but it is not by accident a GS man is still heading Tresury. It seems likely the new agency will be based in the Treasury. One of the compelling reasons I see is that it would then be easier to cross reference tax-return data with banking activity.
    With the CFTC and SEC involved, it will also be more difficult to hide or channel funds from the taxman.
    I wonder if this new agency will feed this data to GS' high-powered HFT as "non-price" inputs?

    We will still have an agency to regulate coinage and by default interest rates, thus the FED will still exist.

    Any way this goes, though, I conjecture that GS will eventually regret the centralized power. I think they are unintentionally delivering virtually unmitigated power to a group of people who have no clue the condequences of playing with something as potentially devastating as a nuclear missile.

  2. Also, it would add more layers of bureaucracy to obfuscate the incestuousness of the FED, Treasury, SEC, GSEs Fannie and Freddie, etc.

  3. I wonder if the team will talk about Citi's suit against Morgan Stanley for bailing on CDS commitments:

    China set the example. Morgan Stanley followed.