[machinehead]

"Fannie Mae and Freddie Mac are not'' backed by the credit of the U.S. government "and hold capital far below that required of regulated banking institutions,'' said [St. Louis Fed president William] Poole in the text of speech to an Office of Federal Housing Enterprise Oversight.

"Should either firm be rocked by a mistake or by an unforecastable shock, in the absence of robust contingency arrangements the result could be a crisis in U.S. financial markets.''

Here be mortgage monsters

WHAT, dear friends, is going on? Have Al Green and Bill Poole suddenly decided to tell us what they REALLY think?

Bloody unlikely, when you consider the bureaucratic mindset. More probably, they are annoyed that with commercial loans moribund, Fannie and Freddie have taken over the Fed's role of printing all the new money.

Now if the urgent task of money creation breaks down into a Mogadishu-style guerrilla war between competing warlords Al Green, Frank Raines and Freddie Mac, then we really do have the recipe for economic chaos and anarchy.

[EasyAl]

Here is text of Mr. William Poole's speech

By the way, Wall Street's spinning machine said that as Fed does not have any regulatory authority over the GSE, its decisions and its members' comments are irrelevant. "It's like Congress trying to pass legislation that would affect Mexican law. It can't be done."

[Jorma]

Poole has strayed off the ranch. His head is now being called for on a platter up and down The Street, and all over Alexandria too I can imagine. Did he clear this with Al. No matter I suppose. This will add fuel to the fire over on the right wing of the administration, its only wing, to get rid of Al and get a team player.

The Fed, in the end, has a bit of independence, still. Not for long I suspect. Bush will want to take charge of it as well. If things deteriorate watch for some sweeping legislation on the Fed. We might thinkl Al is easy. Bernake might be too tight for these guys.

I wonder if Poole will get fired like Mr. Falcon, who issued the report a few weeks ago about the GES's.

[EasyAl]

Jorma, on Mar 10 2003, 04:53 PM, said:

Poole has strayed off the ranch. His head is now being called for on a platter up and down The Street, and all over Alexandria too I can imagine. Did he clear this with Al. No matter I suppose. This will add fuel to the fire over on the right wing of the administration, its only wing, to get rid of Al and get a team player.

The Fed, in the end, has a bit of independence, still. Not for long I suspect. Bush will want to take charge of it as well. If things deteriorate watch for some sweeping legislation on the Fed. We might thinkl Al is easy.  Bernake might be too tight for these guys.

I wonder if Poole will get fired like Mr. Falcon, who issued the report a few weeks ago about the GES's.

Bush has already told the world that you are either with us or against us. Well, since Al is not with Bush in tax cut, it follows that Al is against Bush. Remember Bush Sr bitterly attributed his lose to Clinton to Greenspan. Bush Jr is trying to finish the contest between Sr. and Saddam. When he is done, Greenspan could be next target. Considering the damages done to this nation by Greenspan's irresponsible monetary policy, I do not have any sympathy to Easy Al. But my nightmare would be that Bush appoints either Printing Press Bernake or New Economy McTeer to succeed Al.


I do not kown if the firing of Mr. Falcon is related to the GSE report. Falcon was appointed by Clinton.

[Jorma]

The fireing of Falcon was hours before the release of his report. Reach your own conclusion.

The nature of such an appointments is not necessarily political. Modern Public Administration, adopted in fits and starts in the US, the hallmark being the adoption of the Civil Service system, is based upon appointing essentially non partisans. The rank and file of government workers are shielded from political winds. However thousands of managers are not. Still since TR many of these appointments moved out of the political sphere. That changed under Reagan He hugely increased such appointments to political friends. Bush I and now Bush II have continued his lead, to appoint partisans to lead the bureaucracy (not a pejorative term), instead of appointing professionals from within it.

Of course it is the mantra of the conservatives that 'bureaucrats' are the devil and must be cleaned out. The problem is that cronies and the self interested revoving door crowd is worse. Much much worse. It is the perogative of every administration to appoint literally thousands of leadership positions anyone they want. In modern times that has meant many came up thru the civil service ranks. All sorts of minor offices, like Falcons Office of Federal Housing Enterprise Oversight traditionally came out of these ranks, not out of the political sphere.

That changed markedly under Reagan. The Bush's continued the tradition. Clinton I have no scorecard. I'd be shocked if this Falcon guy was some sort of political animal at all. If you find he is so I will defer.

Even if he is however the fact remains his report was valid. Solid. Irrefuteable. Just because an arguement has a partisan basis does not make it wrong. Or would you suggest that all people are hacks? Clinton's hack was thrown out for Bush's. If so then I suppose you refute his report on the systematic risk created by the GSE's.

The fireing of Falcon cannot be anything but a political act. Any other conclusion is absurd. Especially someone charged with oversight should not be appointed nor fired on political grounds.

[DogBoy]

"When he is done, Greenspan could be next target."

I've been saying for a long time that AG is the "goto scape goat" when the shit hits the fan.

That's the only reason he's still Fed chairman ---- to take be the fall guy.