BillHolter.com

Bill’s Commentary:

“Can “confidence” in money continue when the overlords of that money do what they do and get caught?”

DERBY: Thank you for taking my question. You noted earlier in the press conference that you weren’t aware of the trading activity of the Boston and Dallas Fed Bank presidents. As you know, those, all 12 regional Fed Bank presidents, just went through the renomination process earlier this year. And Governor Brainard described it as a rigorous process at the time. So I want to know, did anybody know—did anybody at the Board level know about the stock trading activity? And, going forward, do you still have confidence in the Dallas and Boston Fed Bank presidents to do their job?

POWELL: So these, I don’t need to tell you, we file, people file these reports annually. And I think they were just quite recently filed for 2020. So I don’t have any reason to think people at the Board would have known about particular trading that’s going on. They will see that—there are people at the Fed who see the, you know, see the trading reports when they’re, you know, when they’re annually filed. You know, in terms of having confidence and that sort of thing, I think no one is happy, no one on the FOMC is happy to be in this situation, to be having these questions raised. It’s something we take very, very seriously. This is an important moment for the Fed, and I’m determined that we will rise to the moment and handle it in ways that will stand up over time. I’m very reluctant to get ahead of the process and speculate, though, about different things. And, you know, when we have things to announce, we’ll go ahead and do that, but that’s really what I have for today.

Torres was explaining to Powell that there is no reason for the dates of Kaplan’s trades to be withheld from the public because of any ongoing investigation because that information, per the Fed’s disclosure rules, was previously legally owed to the American people and Kaplan didn’t provide it as legally required. When Kaplan made his multiple “over $1 million” trades in bets on which way the stock market would move using S&P 500 futures – during the year of 2020 when he was both sitting as a voting member of the Fed’s FOMC as well as making market-moving comments himself to the media – he was legally obligated to report the dates of each individual buy and sell on the form provided to him by the Dallas Fed. Every other regional Fed Bank President listed the dates of the buys and sells. But Kaplan simply wrote the word “multiple” where the date was required. (See Kaplan’s financial disclosure forms from 2015 through 2020 here.)

By eliminating the dates from his financial disclosure forms, it was impossible to see if Kaplan was trading during Fed blackout periods and if he was shorting the market and then the dates when he covered his shorts.

A Gallup poll released in May of last year found that just 36 percent of those Americans surveyed said they had either a “great deal” or a “fair amount” of confidence in Fed Chair Powell. Clearly, Michelle Smith’s endeavors to colonize the minds of a free press are not working out as planned.

Reporters Who Ask Tough Questions at Fed Press Conferences Have a Habit of Being Disappeared from the Room (wallstreetonparade.com)