Rep. Alan Grayson questions the Fed’s Alvarez before Congress

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Rep. Alan Grayson questions the Fed’s Alvarez before Congress

Monday, September 28th, 2009 | Economics |

Via Zero Hedge and Matt Tiabbi. Grayson (D-FL) comes off as a slightly-crazed attack dog, but wow does he ever put Alvarez on the hot seat.

Alan Grayson: I would like to know whether it is within the Federal Reserve’s legal authority to try to manipulate the stock market or the futures market.
Federal Reserve GC Scott Alvarez: I don’t believe the Federal Reserve tries to manipulate the stock market…(Yoda: Do or do not, there is no try.)
Alan Grayson: Does the Federal Reserve actually possess all the gold that’s listed on their balance sheet.
Scott Alvarez, doing a classic poker body language tell, and taking his time: Yes…
Alan Grayson: Who actually executes the trades for the Federal Reserve in the markets?
Scott Alvarez: The Federal Reserve Bank of New York, which executes trades through Primary Dealers.
Alan Grayson: Can you name one Primary Dealer?
Scott Alvarez: JP Morgan Chase
Alan Grayson: Do you mind if we have a GAO audit to see if there has been front-running or insider trading by them? Do you mind? Is that ok with you?
Scott Alvarez: I am not sure if I have that authority…

Grayson isn’t the only Congressman tired of the secrecy at the Federal Reserve. Wall Street Journal - Fed Weighs Naming Borrowers:

At a House hearing, Fed General Counsel Scott Alvarez struck a conciliatory tone when a top lawmaker indicated that he wanted more information revealed about the Fed’s loans.

Rep. Barney Frank (D., Mass.), chairman of the House Financial Services Committee, said the central bank’s loans and securities transactions should be disclosed, with a lag to avoid a short-term influence on financial markets. He said he wanted to include a provision to do so in coming legislation.

“You don’t have a right to go to a federal agency, borrow money [and] keep it secret forever,” Mr. Frank said of financial institutions. “We don’t want public entities buying and selling securities with nobody ever knowing,” he said. “We want there to be publicity. We don’t want there to be a market effect in the near term.”

I’d never thought I’d say it, but… go, Barney Frank, go.

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