Top of Your Reading List! Federal Reserve Bank of New York Website!

The Federal Reserve used to be a pretty quiet club for the most powerful.  The players are still the most powerful but it's not so quiet anymore.  OWS camped out in front of Fed Banks.  Ron Paul says, "End the Fed!"  Investigators like www.zerohedge.com follow and report on the Fed intensively.

The Fed is so much at the root of what's happening in the world economically it makes sense to follow what they're saying and doing.  The New York Fed, the central power station of the powerful institution, is a methodical publisher and chronicler.  Maybe not a late night action novel romp, but plenty to wonder at, be scared by and even laugh at here: http://www.newyorkfed.org/index.html.

Item 1 - History of the Primary Dealers

How about the history of the membership of the elite "Primary Dealers" group - the too-big-to-fail bank/investment bank/brokerage hydra, the Fed's financial tennis partners, who make a cut on every transaction (thanks taxpayers!).   You might expect that this group's roster would be pretty darn stable... but NO!  The Fed provides a blow-by-blow timeline of all the membership changes, here: 

http://www.newyorkfed.org/markets/pridealers_current.html  - click on the tab labeled ch-ch-ch-Chay-ayn-gezz and be amazed.  They come and go like cocktail party guests.

Item 2 - The Reverse Repo Posse

If you're looking for a really scary story, read up on how the New York Fed is assembling and testing a bigger financial firefighting posse because it doesn't think the vaunted Primary Dealers can handle a three-alarm debt-fueled blaze alone.  It's right here:  http://www.newyorkfed.org/markets/rrp_counterparties.html .  How many Americans know what Reverse Repos even are?  I didn't!  When you read through the material, it's clear that this is about strengthening the Fed's "wet work" crew - when the SHTF bigtime, the Fed will be working Reverse Repos overtime - essentially buying and moving toxic debt securities from and between bank counterparties, so that drowning banks can "rebalance" with fresh cash on their books, which will help them meet capital reserve ratios.  Reading about the Fed's Reverse Repo project is like watching a neighbor who works top-secret at DoD building a bunker in his back yard.  Shouldn't we be on alert?

Item 3- Bank Supervision

Yes, there is even comedy at the NY Fed site!  Just check out the knee-slapper on "a new era of bank supervision" -- http://www.newyorkfed.org/newsevents/speeches/2011/dahlgren111111.html.   Huh? What about the FDIC, the SEC...  ?   Before mirth and merriment overcome you, it might be well to consider that the Fed, central pillar of financial stability, now has a balance sheet of more than $1.5 Trillion, resting on capital reserves of $50 Billion... that's  50:1 leverage - a 2% loss on balance sheet assets would wipe out the reserve capital.  Is that the new math of the new era of bank supervision?