Foxes and hen-house?
I’m not quite sure how I feel about this yet. The Fed recently announced that it has appointed a long-time staffer with the New York Fed to head a newly created branch to oversee the the parts of its balance sheet acquired in efforts to bail out firms like AIG.
These massive asset purchases, orchestrated by Timothy Geithner, the current Treasury Secretary and former New York Fed official, ballooned the Fed’s balance sheet from $800 billion in primarily government bonds to $2.3 trillion in toxic assets.
Now the New York Fed is overseeing the assets brought into the Fed by the Treasury Secretary as he moved from the New York Fed to the Treasury. All while the Treasury functions are supposed to be isolated from the Federal Reserve’s role in its implementation of monetary policy.
Smacks of the fox watching the hen house….
By Sherry Jarrell
Learning from Dogs 