This is going to be quite short. I was going to continue our discussion on the re-regulation of the financial system but today's events intervened. Rep. Darrell Issa, Rep. of Ca issued a statement today to the effect that the Fed and its Chairman, Mr. Bernanke used undue pressure against our buddy Ken to force him to complete the acquisition of Merrill Lynch and then covered up their actions as well as the information concerning the true state of affairs at Merrill for a number of weeks. On the face of it, this is a serious charge and one which certainly got a good deal of press for Rep. Issa.
Speculation was immediate as to what motivated Rep. Issa to come out so publicly at this time just before the on-going hearings of the committee on which he sits is scheduled to continue tomorrow. The speculation has taken two directions: one is that it is the opening salvo in an attempt to unseat Mr. Bernanke which, to me at least, seems a bit foolish coming from a Republican as the next logical choice would be Larry Summers who one would think would be anathema to the GOP. The other, in which I put more credence, is that it is an opening salvo against the Fed who, at this stage at least has emerged as the clear winner in the great regulatory raffle. By denigrating the role of the Fed during the crisis, this would appear to reopen the discussion of who does what to whom going forward. Of course it also puts a serious hurt on Brother Ben to the point that if he is to be replaced the independence of the institution is brought into even greater question. And that, I promise, will be the subject of tomorrow's discussion. As for my opinion on the entire mess, I think they scared the livin' hell out of our buddy Ken. Given what they believed to be the severity of the situation I probably wodda done the same. Don't make me a bad person either. We'll be watchin' things for ya.
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