American hedge fund billionaire George Soros is back in the headlines after revelations that the shadowy political donor has been hiding his fortune from US regulators with at least three offshore companies, including Mossack Fonseca, the firm exposed by the Panama Papers leak. While it seems like this slipped by the mainstream media, another controversy seems to have even more so. The notorious billionaire has sold off an entire third of his stocks and bought a $264 million share in the world’s largest gold mining company. If history teaches us anything, Soros is a great financial mastermind who hatches schemes with global impact. Gold expert and Regal Gold Assets CEO Tyler Gallagher joins “News With Ed” to talk about it.
Democratic presidential candidate Bernie Sanders lambasted the Federal Reserve on Wednesday as an institution that has been “hijacked by the very bankers it regulates” and called for banning bank executives from regional Fed governing boards.
The populist Sanders last week criticized the Fed’s decision to raise interest rates and acknowledged proudly in a Saturday night debate that Wall Street won’t like him in the White House.
“Wall Street is still out of control,” Sanders wrote in a New York Times opinion piece.
Seven years after large U.S. banks were bailed out by the Treasury Department because they were too big to fail, the banks have become even bigger, leaving taxpayers at risk of another bailout, he said.
This afternoon, the Federal Reserve announced that it will keep interest rates near zero for the time being, maintaining its critical support for the sluggish economic recovery. The decision came as a surprise to many observers on Wall Street, including analysts at Citigroup, Bank of America, and JPMorgan Chase, who expected a rate hike to be announced today. But citing instability in the financial market and the global economy, the Fed said today it would not raise rates in the short term. Some six years after the recession officially ended, today’s decision is a sign that the economy is still far from recovered.
The decision comes less than a month after Fed Up, a nationwide coalition of economists, union members, and grassroots activists, descended on the central bank’s annual symposium in Jackson Hole, Wyoming, to demand that the Fed not abandon its role in the recovery. As I reported last month for TheAmerican Prospect, Fed Up organizers cited large racial gaps in unemployment and poverty as well as paltry wage growth as indicators that the recovery has yet to reach millions of communities, particularly those of color. During the symposium, the coalition held teach-ins on economic policy and delivered a petition to Fed leaders demanding they hold off on a rate hike until more Americans had a chance to feel the recovery.
“This is a victory for the working families who stepped up with innovative organizing to send the Fed a clear message: Our voices belong in the debate about our economy,” said Fed Up Director Ady Barkan in a statement today. “With the recovery still far too weak in too many communities, it would have been economically devastating—and immoral—to slow the economy.”
The U.S. Federal Reserve kept interest rates unchanged on Thursday in a bow to worries about the global economy, financial market volatility and sluggish inflation at home, but left open the possibility of a modest policy tightening later this year.
In what amounted to a tactical retreat, Fed Chair Janet Yellen said developments in a tightly linked global economy had in effect forced the U.S. central bank’s hand.
“The outlook abroad appears to have become less certain,” Yellen told a news conference after the Fed’s policy-setting committee released a statement following a two-day meeting.
If Congress really wanted to save hundreds of billions of dollars, the Fed could stop paying interest on bank reserves.
When Mitch McConnell wanted to pay for a transportation bill this summer, he targeted a subsidy the Federal Reserve automatically pays to banks. All 2,900 banks who purchase stock in the Federal Reserve system—a kind of membership fee for using services like check-clearing and the discount window—get a 6 percent annual dividend, costing the government $16.3 billion over ten years. McConnell used this pot of cash for his highway bill, which remains in limbo until the House passes its own long-term version.
But there’s a bigger risk-free payout the Fed makes to big banks, one set to rise exponentially as the economy improves. In fact, according to the Congressional Budget Office, hundreds of billions of dollars that would otherwise go into the federal Treasury will leak out to banks, including branches of foreign banks, in the coming years. If Congress needs to find money to pay for new programs, they could cancel the Fed’s recent practice of paying interest on bank reserves.
For nearly 100 years, the Federal Reserve managed the nation’s monetary policy without paying interest on reserves, including the 10 percent of the value of loans which banks are required by law to park at the Fed. But in 2006, Congress passed the Financial Services Regulatory Relief Act, authorizing interest payments. It was actually an old idea first promoted by conservative economist Milton Friedman.
Eyder Peralta | National Public Radio | Reader Supported News | October 2, 2014
en. Elizabeth Warren, a Democrat from Massachusetts, says newly released recordings of conversations between Federal Reserve officials show that the same kind of cozy relationships that led to the 2008 financial crisis still dominate Wall Street.
In an interview with Morning Edition, Warren says the recordings provide definite proof of that relationship.
“You really do, for a moment, get to be the fly on the wall that watches all of it, and there it is to be exposed to everyone: the cozy relationship, the fact that the Fed is more concerned about its relationship with a too-big-to-fail bank than it is with protecting the American public,” Warren says.
Warren talked to Morning Edition days after ProPublica and This American Life ran stories about Carmen Segarra, a former bank examiner for the Federal Reserve in New York, who in 2012 surreptitiously recorded conversations by Fed officials considering regulatory decisions on Goldman Sachs.