The Renegade Fed

A major split has developed between the Treasury Dept. and the Federal Reserve. Fed Chairman Ben Bernanke has denied a request from Treasury Secretary Tim Giethner for a public review of the Fed's structure and governance. Earlier this year the Fed denied a similar request from congress. According to American Banking News:

Much of the impetus behind this initiative from the Treasury Department came from concerns over Ben Bernanke going far beyond his delegated authority, to bail out businesses like those in the auto industry, along with AIG and Bear Stearns, which aren’t part of its mandate. Of course bailing out the financial industry isn’t part of its mandate either, but these other industries are easier to identify as obvious to not being related to the Federal Reserve and its stated purpose.

Ironically, even with the Feds bogus claims of independence, many of the regional fed chairman were initially in favor of the review. They have now closed ranks and will be fighting against it. The Feds insistence on independence and secrecy, combined with the mounds of taxpayer money they are spending, is slowly isolating it.

Together with HR 1207, which would audit the Federal Reserve and currently has 290 cosponsors in the House, S.604 in the Senate has 27 cosponsors. Senators as diverse as Orrin Hatch of Utah and Barbara Boxer of California have signed on. Neither Nevada Senator Reid or Senator Ensign have said a single word about it. One might think that being on the side of the people would give either one a much needed PR boost. We'll see.

Mob Museum Stimulus

Thanks to the Drudge Report, KNXT Radio is reporting that Las Vegas Mayor Oscar Goodman will be meeting with Senator Harry "Pinky" Reid soon to discuss local development projects to be included in the upcoming stimulus package. Among the projects is a "Mob Museum".

So, when Mom and Dad are in the casino throwing away their children's inheritance, little Jr. will be learning all about the exciting life of Murder Inc., and the lucrative profession of extortion. Who knows, with such an education maybe he'll grow up to be a New York City banker, or even a Nevada senator.

I thought we were going to be repairing bridges and making Pinky's office bio-degradable with that money. If we're just going to waste it on stupid idea's I have one too. For a million bucks I'll be glad to set up the prostitution exhibit. I could even make it interactive if you'd like. C'mon Senator, we were both 13 year old boys once. Remember?

Pinky, The Wayward Prognosticator

After the collapse of the Big 3 Bailout on Thursday, Our illustrious Senator Harry "Pinky" Reid took a shot at wall street analysis:

"I dread looking at Wall Street tomorrow. It's not going to be a pleasant sight,"

The Dow dropped 215 points at the open, but finished the day up 66.5 points. All in all, a pretty average day on the street by recent standards. But, thanks to Seeking Alpha, it wasn't just the bailout that investors were watching.

At 8:30 AM EST, one hour before the market opened,

Bernard Madoff, founder and president of Bernard Madoff Investment Securities, a market-maker for hedge funds and banks, was charged by federal prosecutors in a $50 billion fraud at his advisory business. The firm specialized in handling orders from online brokers in some of the largest U.S. companies, including General Electric Co (GE). and Citigroup Inc. (C).

But he wasn't just a large investor:

Madoff served as vice chairman of the NASD, a member of its board of governors, and chairman of its New York region. He was also a member of NASDAQ Stock Market's board of governors and its executive committee and served as chairman of its trading committee.

So Pinky The Prognosticator could have been partially right for the wrong reason, which I believe fulfills one of the requirements for a job at CNBC, or any one of a thousand investment newsletters. With a little more practice, he could even start his own blog.

The Ruling Class Speaks

In the DC Examiner, our own Harry Reid, champion of the common man, explains the best part about the new visitors center at the Capitol Building:

"In the summer because of the heat and high humidity, you could literally smell the tourists coming into the Capitol."

But it's no longer going to be true, noted Reid, thanks to the air conditioned, indoor space.

And that's not all. "We have many bathrooms here, as you can see,"

Wow, and bathrooms too? C'mon Ma, we's a-goin' to the big city. The little-un's never done seed a bathroom a-fore.