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Fed Accused Of 'cover Up' In Bofa, Merrill Deal

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Fed engaged in "cover-up" of BofA-Merrill deal-lawmaker

Wed Jun 24, 2009 1:45pm

WASHINGTON, June 24 (Reuters) - The Federal Reserve sought to hide its extensive involvement and concerns about Bank of America Corp's (BAC.N) acquisition of Merrill Lynch amid the latter's worsening financial condition, a top Republican congressman said on Wednesday.

"The committee has already learned that Ben Bernanke and the Federal Reserve made inappropriate threats to fire Bank of America management unless they went ahead with the 'shotgun wedding' that was the Merrill Lynch acquisition," Rep. Darrell Issa of the House Oversight and Government Reform Committee said in a statement released to Reuters.

"The Federal Reserve also engaged in a cover-up and deliberately hid concerns and pertinent details regarding the merger from other federal regulatory agencies," the statement said.

The committee has obtained a number of emails and documents from the U.S. central bank about its behind-the-scenes role in the merger, according to sources familiar with documents.

http://www.reuters.com/article/rbssFinanci...WEN096120090624

Denninger has just written a piece on this:

http://market-ticker.org/archives/1156-Mor...-The-Media.html

Empowered with his "God Complex" Bernanke seems to think that he can not only buy things that The Fed Charter explicitly does not allow but that he can also twist around SEC disclosure rules and even lie under oath before Congress! Remember, Bernanke was asked directly whether he pressured Bank of America to close that transaction in a Congressional hearing and he denied it - under oath.

Perjury is a serious and indeed can be a criminal offense, and I would hope that Congress will pursue this matter to the fullest extent of the law.

Naughty Ben.

Edited by MOP

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Ben got a real grilling today but no decent videos on youtube yet.

The media seem to think he's out the door.

Bernanke Likely to Be Ousted by Obama in Favor of Summers

http://seekingalpha.com/article/145450-ber...avor-of-summers

Bernanke, a Machiavellian Schemer?

http://www.reuters.com/article/newsOne/idU...433426620090625

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2nd UPDATE: Lawmakers Attack Fed For Being Too Secretive

June 25, 2009: 05:20 PM

CNN

(Updates to add more comments from Bernanke.)

By Maya Jackson Randall

Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- U.S. lawmakers, during a hearing Thursday on the central bank's role in Bank of America's acquisition of Merrill Lynch, attacked the Federal Reserve as a secret agency unworthy of new enhanced regulatory powers.

"It's time to yank the shroud off the Fed and shine some light on these events," said U.S. House Committee on Oversight and Government Reform Chairman Edolphus Towns, D-N.Y., who in an opening statement repeatedly described the Fed as being "shrouded in secrecy."

"I believe that before Congress acts on the president's financial services reform proposal, we need to have a thorough understanding of what caused the current financial crisis and how the federal government responded."

The heated congressional hearing got under way Thursday with Federal Reserve Chairman Ben Bernanke defending the central bank's role in negotiations with Bank of America (BAC) and with members of the House Government Reform committee expressing skepticism of the Fed's decisions.

Usually, the Fed chief goes to Capitol Hill to take questions on monetary policy and the economy. But the economy was barely touched on at Thursday's hearing.

Instead, lawmakers criticized the Fed as an agency that has too much power and yet too little transparency and questioned whether the Fed should become the uber regulator of the financial system envisioned by the Obama administration.

Bernanke, in his first congressional appearance since the administration rolled out its controversial regulatory-revamp proposal, defended the planned overhaul of U.S. financial rules. It's clear something has to be done to prevent firms from growing so big that they pose a risk to the financial system, Bernanke said.

"Too big to fail is not a policy. It's a major problem," he said. "I hope the system will be changed."

Lawmakers are reluctant to boost the Fed's powers. Even though it could help prevent companies from becoming too-big-to-fail, critics have argued that the central bank didn't do enough before the crisis began to protect consumers and discourage firms from taking on riskier strategies that led to the credit crunch.

Bernanke, however, said the administration's plan for overhauling U.S. financial rules won't greatly boost the central bank's authorities.

"It's not a massive increase in powers," Bernanke told the House panel. :lol:

At the same time, Bernanke said Congress should consider various options for preventing the too-big-to-fail problem. One solution is to boost regulation. Another option is to break up large firms so that they no longer have the potential to damage the economy.

"I think it's legitimate to discuss both options," Bernanke said. "I would just point out that very large banks do have an economic function, a global reach, diversity of activities. But Congress may wish to look at different options. I don't want to prejudge what you will be deliberating."

Still, Bernanke warned lawmakers against moving forward on legislation that would give the Government Accountability Office, Congress' investigative arm, new authority to audit the Fed. :ph34r: More than half of the U.S. House has signed on a measure that would make way for audits of the Fed.

"My concern about the legislation is that the GAO is auditing not only the operational aspects of our programs and details of the programs, but is making judgments about our policy decisions that would effectively be a takeover of monetary policy by the Congress, a repudiation of the independence of the Federal Reserve, which would be highly destructive to the stability of the financial system, the dollar and our national economic situation," he said. :ph34r:

Furthermore, Bernanke argued that the Fed, under his leadership, has made " enormous strides" to expand the information it releases to the public.

"We think we are quite transparent," Bernanke said. :lol:

Lawmakers, meanwhile, remain skeptical. Rep. Dennis Kucinich, D-Ohio, argued that the Fed's decisions in the Bank of America-Merrill merger make the case " for a significant increase in accountability at the Fed."

"We can't afford to make the Fed a super-regulator, as some have proposed, without also increasing its transparency in meaningful ways," said Kucinich.

-By Maya Jackson Randall, Dow Jones Newswires; 202-862-9255; maya.jackson- randall@dowjones.com

http://money.cnn.com/news/newsfeeds/articl...58_FORTUNE5.htm

Ben resorting to the threat of economic collapse now if the fed audit ever happens. <_<

Edited by MOP

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If you think Gordo and Cammy are evasive, just you sit back and watch a master class by Bernanke. He is far far too intelligent to be caught out by any politician, barring direct examination by Ron Paul of course.

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If you think Gordo and Cammy are evasive, just you sit back and watch a master class by Bernanke. He is far far too intelligent to be caught out by any politician, barring direct examination by Ron Paul of course.

Yes. The term Bernanke-speak has been coined to define one who lies but isn't caught out because of the obfuscatory nature of their lies.

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I think it's more to do with Bernanke covering his own incompetent a$$.

I have to disagree. He is the most competent banker in America.

How else could you prop up a nation in such fashion?

Look at the achievement with their fiat currency....space program, iraq wars, global tyranny, oh...

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Yes. The term Bernanke-speak has been coined to define one who lies but isn't caught out because of the obfuscatory nature of their lies.

He didn't look very comfortable with his web of lies yesterday:

Rep Burton Questions Fed Chairman Bernanke on Cover up of B of AMerrill Lynch Merger Pressures

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He didn't look very comfortable with his web of lies yesterday:

Rep Burton Questions Fed Chairman Bernanke on Cover up of B of AMerrill Lynch Merger Pressures

Yes, I was watching him squirm yesterday on C-Span. Loved it :P

Edited by RajD

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Guest UK Debt Slave
I have to disagree. He is the most competent banker in America.

How else could you prop up a nation in such fashion?

Look at the achievement with their fiat currency....space program, iraq wars, global tyranny, oh...

Yeah! Pretty impressive really. Greenspan is the King of fraudsters though. Barnanke ain't bad though

I love seeing him get a griiling from Ron Paul

He looked like he was going to burst into tears in one of those YouTube videos

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Now that Bernanke has done his part and its time for him to depart, what about Summers?

Summers forced the Korean government to raise its interest rates and balance its budget in the midst of a recession, policies criticized by liberal economists such as Paul Krugman and Joseph Stiglitz.[7] According to the book The Chastening, by Paul Blustein, during this crisis, Summers, along with Paul Wolfowitz, pushed for regime change in Indonesia.[8]

As Treasury Secretary, Summers led the Clinton Administration's opposition to tax cuts proposed by the Republican Congress in 1999. [9] Also during his stint in the Clinton Administration, Summers was successful in pushing for capital gains tax cuts.[citation needed] During the California energy crisis of 2000, then-Treasury Secretary Summers teamed with Alan Greenspan and Enron executive Kenneth Lay to lecture California Governor Gray Davis on the causes of the crisis, explaining that the problem was excessive government regulation.[10] Under the advice of Kenneth Lay, Summers urged Davis to relax California's environmental standards in order to reassure the markets.[11]

Summers hailed the Gramm-Leach-Bliley Act in 1999, which lifted more than six decades of restrictions against banks offering commercial banking, insurance, and investment services (by repealing key provisions in the 1933 Glass-Steagall Act): "Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century," Summers said.[12] "This historic legislation will better enable American companies to compete in the new economy."[12] Many critics, including President Barack Obama, have suggested the 2007 subprime mortgage financial crisis was caused by the partial repeal of the 1933 Glass-Steagall Act.[13]

More here:

http://en.wikipedia.org/wiki/Lawrence_Summers

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