Fed Chair Jerome Powell says his conflicts on interests are being managed “extremely carefully”

Federal Reserve Chair Powell wants you to know that instead of avoiding or eliminating conflicts of interest, he's decided to manage them.

BlackRock, which manages about $7 trillion in assets, was hired by the Fed in March to steer tens of billions of dollars in bond purchases as part of the U.S. central bank’s efforts to stabilize the bond market amid the economic turmoil caused by the coronavirus pandemic.

BlackRock’s own ETFs accounted for a large share of corporate bond ETFs it bought on behalf of the Fed as part of the central bank’s relief program. BlackRock waived asset management fees on ETFs purchased on behalf of the Fed.

“BlackRock is just our agent,” Powell said at his virtual news conference following the close of the Fed’s two-day meeting, in response to a reporter’s question on the handling of potential conflicts of interests. “We make the policy decisions in conjunction with our colleagues and they just execute our plans.”

“I think their conflicts are managed extremely carefully in the contractual arrangement that we have with them,” Powell said.

It's not just that the Fed hired BlackRock to buy ETFs that BlackRock created. There's also the lack of transparency.

Federal Reserve Chairman Jerome Powell and Randal Quarles, the Vice Chairman for Supervision at the Fed, have stated in testimony before Congress that they would be providing transaction level details of their Section 13(3) Emergency Lending Facilities on a regular, ongoing basis. But the three oldest of those facilities, the Primary Dealer Credit Facility (PDCF), the Commercial Paper Funding Facility (CPFF), and the Money Market Mutual Fund Liquidity Facility (MMLF), which were all created more than four months ago in mid-March, have yet to release any transaction level details to the public.

BlackRock was hired by the Fed to manage the assets of the PDCF, and the don't think it necessary to report what they're doing.
Corruption? What corruption? If there is any corruption going on here, it is being managed.

Earlier this year, Wall Street On Parade reported that the Chairman of the Federal Reserve, Jerome Powell, had an upward range of $11.6 million invested with the investment management firm, BlackRock, and its iShares Exchange Traded Funds, according to Powell’s 2019 financial disclosure form.

Powell’s 2020 financial disclosure form is now available. It was signed by Powell on May 15, 2020 and it shows that Powell’s holdings in BlackRock investments have reached an upward range of $24.95 million – an increase of $13.35 million over the prior year’s upward range.

There's nothing suspicious about a 120%+ return on investment in just five months with a company that's getting no-bid trillion dollar contracts.
One more thing: The Reuters article that quoted Powell, didn't include his very next sentence.

And again, I would have — I can’t recall exactly what those conversations were, but they would have been about what he is seeing in the markets and things like that to generally exchanging information. And he’s typically trying to make sure that we are getting good service from the company that he founded and leads. I’d say that’s his main objective when we talk.”

The most dangerous section of Powell’s explanation is the phrase “exchanging information.” The Chairman of the Federal Reserve sits on a pile of market-moving information and is expressly forbidden from “exchanging information” with a Wall Street investment manager if it is inside information. That’s why any phone calls of this nature are problematic and raise serious red flags.

Looks managed to me.

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ovals49's picture

@gjohnsit
paid up on over 30% of the student loan delinquencies. Either that or perhaps the NY Fed simply redefined “delinquency” to make things look better. After all, appearance is far more important than reality these days.

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“Unthinking respect for authority is the greatest enemy of truth.”
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Lookout's picture

to further enrich the oligarchs.
https://www.corbettreport.com/federalreserve/

G. Edward Griffin: What happened is the banks decided that since there was going to be legislation anyway to control their industry, that they wouldn’t just sit back and wait and see what happened and cross their fingers that it would be OK. They decided to do what so many cartels do today: they decided to take the lead. And they would be the ones calling for regulations and reform.

They like the word “reform.” The American people are suckers for the word “reform.” You just put that into any corrupt piece of legislation, call it “reform” and people say “Oh, I’m all for ‘reform,'” and so they vote for it or accept it.

So that’s what they were doing. They decided, “We will ‘reform’ our own industry.” In other words, “We will create a cartel and we will give the cartel the power of government. We’ll take our cartel agreement so we can self-regulate to our advantage and we’ll call it ‘The Federal Reserve Act.’ And then we’ll take this cartel agreement to Washington and convince those idiots there to pass it into law.”

And that basically was the strategy. It was a brilliant strategy. Of course we see it happening all the time, certainly in our own day today we see the same thing happened in other cartelized industries. Right now we’re watching it unfold in the field of healthcare, but at that time it was banking, alright?

And so the banking cartel wrote their own rules and regulations, called it “The Federal Reserve Act,” got it passed into law, and it was very much to their liking because they wrote it. And in essence what they had created was a set of rules that made it possible for themselves to regulate their industry, but they went even beyond that. In fact, it’s clear to me when I was reading their letters and their conversation at the time, and the debates, that they never dreamed that Congress would go along and also give them the right to issue the nation’s money supply. Not only were they now going to regulate their own industry, which is what they started out as wanting to do, but they got this incredible gift that they didn’t dream would be given to them (although they were negotiating for it), and that was that Congress gave them the authority to issue the nation’s money. Congress gave away the sovereign right to issue the nation’s money to the private banks.

So what, precisely, did this conclave of conspirators devise at their Jekyll Island meeting? A plan for a central banking system to be owned by the banks themselves, a system which would organize the nation’s banks into a private cartel that would have sole control over the money supply itself. At the end of their nine-day meeting, the bankers and financiers went back to their respective offices content in what they had accomplished. The details of the plan changed between its 1910 drafting and the eventual passage of the Federal Reserve Act, but the essential ideas were there

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Much more at the link. Take care and be well gjohn!

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“Until justice rolls down like water and righteousness like a mighty stream.”

snoopydawg's picture

@Lookout

See mine that goes well with the one you posted. How to get this info out to the rest of the country that isn't aware of what is happening? Wish I knew. I tweet many great articles on the economic shit show that we are being showered with and a few people retweet them. Hopefully more people read than "like."

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“You know me. Do I look like a radical socialist with a soft spot for rioters? Really?” - Joe Biden 8/31/2020

snoopydawg's picture

This adds on to what Lookout posted above on the Federal reserve. I posted this article in a previous essay and it's an eye opener. It should be read at its source to get the whole effect. Actually most articles should be if you want the whole picture instead of just excerpts. IMO.

Welcome to Sweatshop Amerika!

Imagine if the congress approved a measure to form a public-private partnership between the US Treasury and the Federal Reserve. Can you imagine that?

Now imagine if a totally captured congress panicky and ill-informed Congress gave the Fed a blank check to bail out all of its crooked crony corporate and Wall Street friends, allowing the Fed to provide more than $4.5 trillion to underwater corporations that ripped off Mom and Pop investors by selling them bonds that were used to goose their stock prices so fatcat CEOs could make off like bandits. Imagine if all that red ink from private actors was piled onto the national debt pushing long-term interest rates into the stratosphere while crushing small businesses, households and ordinary working people.

Now try to imagine the impact this would have on the nation’s future. Imagine if the Central Bank was given the green-light to devour the Treasury, control the country’s “purse strings”, and use nation’s taxing authority to shore up its trillions in ultra-risky leveraged bets, its opaque financially-engineered ponzi-instruments, and its massive speculative debts that have gone pear-shaped leaving a gaping black hole on its balance sheet?

Well, you won’t have to imagine this scenario for much longer, because the reality is nearly at hand. You see, the traitorous, dumbshit nincompoops in Congress are just a hairs-breadth away from abdicating congress’s crucial power of the purse, which is not only their greatest strength, but also allows the congress to reign in abuses of executive power by controlling the flow of funding. The power of the purse is the supreme power of government which is why the founders entrusted it to the people’s elected representatives in congress. Now these imbeciles are deciding whether to hand over that authority to a privately-owned banking cartel that has greatly expanded the chasm between rich and poor, incentivized destructive speculation on an industrial scale, and repeatedly inflated behemoth asset-price bubbles that have inevitably blown up sending stocks and the real economy into freefall. The idea of merging the Fed and the Treasury first appeared in its raw form in an article by former Fed chairman Ben Bernanke and Janet Yellen in the Financial Times. Here’s a short excerpt from the piece:

“The Fed could ask Congress for the authority to buy limited amounts of investment-grade corporate debt… The Fed’s intervention could help restart that part of the corporate debt market, which is under significant stress. Such a programme would have to be carefully calibrated to minimize the credit risk taken by the Fed while still providing needed liquidity to an essential market.” (Financial Times)

But notice how Bernanke emphasizes how “Such a programme would have to be carefully calibrated to minimize the credit risk taken by the Fed”. Why do you think he said that?

He said it because he anticipates an arrangement where the new Treasury-Fed combo could buy up to “$4.5 trillion of corporate debt” (according to Marketwatch and BofA). And the way this will work, is the Fed will select the bonds that will be purchased and the credit risk will be heaped onto the US Treasury. Apparently Bernanke and Yellen think this is a “fair” arrangement, but others might differ on that point.

Keep in mind, that in the last week alone, investors pulled a record $107 billion out of corporate bonds which is a market which has been in a deep-freeze for nearly a month. The only activity is the steady surge of redemptions by frantic investors who want to get their money back before the listing ship heads for Davey Jones locker. This is the market that Bernanke wants the American people to bail out mainly because he doesn’t want to submerge the Fed’s balance sheet in red ink. He wants to find a sucker who will take the loss instead. That’s where Uncle Sam comes in, he’s the target of this subterfuge. This same theme pops up in a piece in the Wall Street Journal. Check it out:

This is the contempt these people have for you and me and everyone else who isn’t a part of their elitist gaggle of reprobates. Here’s a clip from another article at the WSJ that helps to show how the financial media is pushing this gigantic handout to corporate America:.

Fair use so read the rest yourselves to see how bad this is.

History does repeat itself.

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More from the essay

What Matt means:

$6 trillion at 0% interest means you can buy up America, the world really, and essentially rent it back out to the peasants at 2%, 4%, 10%, 20% by buying Treasuries, housing, real estate, MBSs, REITs, ETFs, stocks, natural resources, etc. etc..

How bad do we get screwed? Bigly.

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This is from March 25 and not a lot has changed since then. Evictions are happening across the country, but you wouldn't know it unless you read alternative media sources. The main stream media cannot tell you what the elite are doing. Of course not because people might get ideas that we should put a stop to it.

Hey Nancy did your prayers help this woman not be kicked out of her home over medical bills that she was not responsible for? Hell no, but then you knew that your gawd wouldn't lift a finger for those in need in this country because he hasn't since it was created and we began our history of treating the vulnerable and less fortunate abominably. Again take your prayers and shove them. Sideways and hard you worthless bag of bones and water!!

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“You know me. Do I look like a radical socialist with a soft spot for rioters? Really?” - Joe Biden 8/31/2020

snoopydawg's picture

Jaime Dimon, Mike Bloomberg, Susan Rice and lots of old and renewed neocons will be running Biden's White House because Joe ain't up to the job. Citibank picked Obama's cabinet and it would be interesting to find out who is making Joe's because I doubt he is taking part in daily discussions. I really hope that they don't cancel the debates because I think they will show the disaster we are in by electing either of these corporate tools. The elite are working hard and throwing lots of money into the election to get their CEO in place.

Meanwhile centrists are making up what a Biden presidency will be like:

Biden’s FDR Sized presidency
Biden will bring smart, progressive policies to help Americans
Biden’s Housing Plan
Biden will bring smart, progressive policies to help Americans
Biden has a great plan for saving the planet
Biden will protect, empower, and expand unions
Biden has a great healthcare plan
Biden will increase housing equality
Biden loves dogs

source

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“You know me. Do I look like a radical socialist with a soft spot for rioters? Really?” - Joe Biden 8/31/2020