Money Manufacturers Bail Out of the Market

Money Manufacturers Bail Out of the Market. By Tyler Durden.

Tuesday’s news that Dallas Fed president … Robert Kaplan had made multiple million-dollar trades in his massive portfolio in 2020, which in addition to $1MM+ holdings of stocks such as Apple, Tesla, Amazon, Google Chevron and Boeing, also held at least $1 million of the Floating Rate Bond ETF, FLOT.

Trading on clear, explicit inside information in a time when the Fed was setting monetary policy benefiting stock investors and potentially benefiting himself to the tune of millions dollars sparked a widespread popular furore.

Subsequently it also emerged that Boston Fed president Eric Rosengren was also a Fed daytrader, further bolstering claims that not only is the market rigged and manipulated by the Fed but that it is rigged directly for the benefit of Fed members like Kaplan and Rosengren who — whether they intended or not — benefited monetarily from their own decisions and their inside information that nobody else was privy to.

Day trading in the very things they regulate? How overtly corrupt. But it gets even sicker:

Well, less than two days after the widespread public fury at this grotesque discovery, the presidents of the Federal Reserve banks of Boston and Dallas said Thursday they would sell their individual stock holdings by Sept. 30 amid “ethics concerns”, and invest the proceeds in diversified index funds or hold them in cash. …

The two Fed presidents had no problem daytrading all the way on the up, but only now, with the S&P at its all time high of 4,500 did they suddenly realize that what they were doing is improper. …

Time to get out, perhaps?




Price to sales:


How is it that Powell, Yellen and Bernanke had no problems with any of this? And if they thought that their daytrading was “perfectly normal”, just what other unethical activities has the Fed been engaging in?

This corruption gets to the very heart of the trouble with capitalism — how money is manufactured. Free markets are good, but allowing some people to create “capital” out of thin air is the root cause of so many pathologies.