Monday, November 28, 2011

Is Bernanke Leaking Inside Information to Goldman Sachs?

Bloomberg reports:
The biggest bond dealers in the U.S. say the Federal Reserve is poised to start a new round of stimulus, injecting more money into the economy by purchasing mortgage securities instead of Treasuries.

Fed Chairman Ben S. Bernanke and his fellow policy makers, who bought $2.3 trillion of Treasury and mortgage-related bonds between 2008 and June, will start another program next quarter, 16 of the 21 primary dealers of U.S. government securities that trade with the central bank said in a Bloomberg News survey last week. The Fed may buy about $545 billion in home-loan debt, based on the median of the 10 firms that provided estimates.
Now how the hell could primary dealers, who include Goldman Sachs and other banksters, know this, unless Fed chairman Bernanke and other Fed officials are leaking this information to the favored elite?

I mean, as a Primary Dealer, do you just one day wake up and say to yourself, "Aha, the Fed is going to buy about $545 billion in home-loan debt, next quarter." And 16 primary dealers all had this same vision?

WSJ has reported that Fed officials have leaked market sensitive information before. This is a damn outrage.  Bernanke justifies all this by holding the position that he doesn't announce the exact amount of buying. It could actually be $550 billion or maybe $551 billion. Puhleeze. They are sending the non-inner circle, an ethnic Sri Lankan Tamil, for example, Raj Rajaratnam to prison for eleven years for insider-trading that most assuredly is less valuable information than what the Fed is leaking to the elites.

Glenn Greenwald is correct, the country is fast becoming a country where there are two segments of society, an elitist group who can get away with anything and the rest of us who are burdened by more laws and regulations everyday.

Greenwald states:
[L]aw is no longer what it was intended to be - a set of rules equally binding everyone to ensure that outcome inequalities are at least legitimate - and instead has become the opposite: a tool used by the politically and financially powerful to entrench their own power and control the society...elites are immunized for egregious crimes while ordinary Americans are subjected to merciless punishment for trivial transgressions.
This is the only way to understand how Bernanke can get away with leaking his next moves to the elites, while Rajaratnam gets thrown in prison for what shouldn't even be considered a crime.

When power centers are created, and the Federal Reserve is a huge power center, the elite figure out how to use such a power center for their own benefit. It is really time to end these power centers, the world will get along much better without them.


  1. EPJ: "Now how the hell could primary dealers, who include Goldman Sachs and other banksters, know this, unless Fed chairman Bernanke and other Fed officials are leaking this information to the favored elite?"

    MJW: Please correct me if I'm oversimplifying this, but aren't "Goldman Sachs," "other banksters" and "the favored elite" the very same people who compose the higher ranks of the Federal Reserve? Every once in a while -- when they think no one is looking -- they remove their bankster masks, don their official Fed hats, set self-serving policy, remove their official Fed hats and put their bankster masks back on.

    Right? Or is that a bit too oversimplified?

  2. Frankly, I've assumed that Bernanke has been doing this all along, as I imagine Greenspan did before him. I only would have been shocked if proof came out that Bernanke WASN'T leaking info. It's become pretty obvious that the entire "Federal Reserve System" has been corrupt since its inception.

  3. Aren't they the same? All FED commercial banks are insiders. Monopoly counterfeit money rackets have to work this way - by definition...Right?

  4. Speaking about G.S., I was surprised to read this the other day.

    "...Sidney Weinberg, who headed the firm in the 1930s and 1940s and was perhaps the firm’s most charismatic top boss, was one of Franklin Roosevelt’s closest advisers and was offered the job of ambassador to the Soviet Union...."

    (See source)

    'New American' has a quality piece on the relationship between G S and the emerging corporatist order in the 1940s here.