INDESCRIBABLE

I mean, why?   Now we know that Janet Yellen is a Democrat, but one would think that she's been around long enough to realize that two weeks before a major election the Chairperson of the Federal Reserve should stay away from hot button topics, but there she was last week speaking out against the dangers of the wealth gap and income distribution in a manner that placed her firmly on The Leader's election campaign committee.  Guaranteed to raise a few eyebrows.  But then consider that there is very little disagreement that one of the reason for this terrible state of affairs has been the actions of the Fed which has enormously benefited those who control financial assets.  Like, girl, it's one thing to be partisan but do you have to be a dumb partisan at the same time, putting a whacking big hurt on the reputation of the institution you chair and the people within it who serve?

I really couldn't believe that this was a real policy statement on the part of the Fed so I called everybody I know to try to figure out just how much attention this received before Janet went blah-blah.  No one to whom I spoke really knew but the consensus was that it was not one of those passed around things that every one has a shot at drafting and every phrase is carefully parsed. Yeah, the board knew but no one had paid it much attention.  That of course is indicative of another problem it being you can't take too seriously what these buggers say any more much less believing in their independence.  Not good, but I came away feeling mollified to an extent.  Then yesterday, came Billy the Dud.

One has to go back in time a bit to try to figure this one out.  William Dudley became the President of the New York Federal Reserve as a result of Being There, having joined from his senior economic position at---you guessed it--Goldman Sachs where he was what is known in the trade as a "Fed Watcher," a job not associated with star power.  He is a good, academic economist, who as far as I can tell has never had, nor does he have now, the slightest understanding of what the Fed has meant to the world…and I mean WORLD…of finance.  He has never really understood that he is the President of a public policy institution…a GLOBAL public policy institution…whose utterances has enormous implications rather than just his bright idea of the day.  So, when Billy the Dud makes a speech yesterday right out of the playbook of Occupy Wall Street which you might remember turned entire neighborhoods in New York City into cess pools a few years ago on top of Janet's redistribute the wealth remarks, one might call up the lines from a few years back, "Something happening here, what it is ain't exactly clear…"

In a nut shell, The Dud told the banks that unless they cleaned up their act and demonstrated an ability to manage their vast businesses, they wee going to be broken up.  He also got into designing completely unworkable compensation programs but that's small potatoes, so let's stick to the headline-making ideas.

Now there is no real secret that The Dud wants to be the Secretary of the Treasury and may well get that job as the present occupier of the seat, our dear friend Jacob/Jack is completely hopeless and recognized around the world as a mere political tool.  Gravitas is not a word with which he is easily associated.  But then again The Dud, whose remarks were greeted today in a street blog as being akin to a "Chicago alderman threatening Al Capone" can be said to suffer from the same juxtapositional absence.  But suddenly, in conjunction with Janet's pronouncements of last week there is no longer any doubt as to the total politicalization of the Federal Reserve which in any case is a mere shadow of its former self.  Once an institution that commanded profound respect it has become just another quasi-public institution run out of pure self interest rather than for the purpose of the public good.

There is really no point in going into exactly what it is he said other than  to point out in making his case he used examples of dastardly deeds committed by the world of banking such as the "London Whale," forgetting that it was the shareholders and perps who suffered from the loss of $6.5 billion and their jobs not the public and most importantly, the affair was overlooked entirely by the regulators who reported to HIM!  Is ritual seppuku on line?  Should be easy to find a second to lop off his head after an appropriate amount of time of his screaming over his severed guts.  Or should one merely ask ones self is he simply a Fed Watcher and that is what he will always be or is he a particularly stupid Fed Watcher.  The implications of the latter could have grave consequences.

All of this, of course, is made more meaningful by the presence of Crazy Lizzy Warren who will give cover and succor to anyone who she believes can produce the right stuff to allow her to kill a bank in conjunction with her partner in the Fed.  Lizzy is desperately trying to schedule hearings on this and other subjects before the end of this Congress in January in case there is a change in control as a result of the elections.  If she succeeds it will be terrible for the banks, but what might well be standing in the way is my old buddy, Charles ("call me Chuck") Schumer who, when things get ugly has never forgotten where his cash comes from which is not far removed from Wall Street.  That showdown could be delicious, but if there is a change in leadership, what a Republican Congress could and might do in relation to the Fed, is something about which I shudder to think.  Then again, the institution has sown the seeds of it's own destruction as one of the finest institutions still standing over the last century with a continued diminishing of the quality of.  More than a pity.