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NY Fed's market-rigging post goes to Goldman Sachs economist
From The King Report
By Bill King
M. Ramsey King Securities
Burr Ridge, Illinois
Thursday, November 30, 2006
Goldman's former chief economist, Bill Dudley, will become the New York Fed's market operations chief. According to The Wall Street Journal, "The New York Fed's markets chief is manager of the central bank's 'open market account,' responsible for implementing the central bank's interest-rate decisions through operations in the bond and money markets. He also overseas foreign-exchange intervention on behalf of both the Fed and Treasury. ...
"The markets chief is also a point person when the Fed needs to intervene during periods of turmoil. ...
"He doesn't have direct experience in markets, although he frequently advised Goldman's traders on how to react to economic news."
Can you imagine the media wailing and general outcry if as many Exxon or Halliburton executives were appointed to posts in the Environmental Protection Agency, Department of Energy, and Commerce Department as Goldie execs have been appointed to White House, Treasury, exchange, and Fed positions? And now we have an ex-Goldie guy responsible for overseeing the New York Fed's market-fixing operations, which includes gold. Most people do not realize that it is the New York Fed that is responsible for fixing the markets. How convenient! ...
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New York Fed Taps
As Markets Chief
By Greg Ip
The Wall Street Journal
Wednesday, November 29, 2006
The Federal Reserve Bank of New York is appointing one of Wall Street's best-known economists to a key job overseeing financial markets.
The bank announced today that William Dudley, currently an advisory director of Goldman Sachs & Co., will become executive vice president for markets on Jan. 1, succeeding Dino Kos.
Mr. Dudley, 53 years old, had spent a decade, up until last year, as chief U.S. economist for Goldman.
The New York Fed's markets chief is manager of the central bank's "open market account," responsible for implementing the central bank's interest-rate decisions through operations in the bond and money markets. He also oversees foreign-exchange intervention on behalf of both the Fed and the Treasury.
The markets chief also briefs meetings of the interest-rate-setting Federal Open Market Committee on market developments and the likely response to particular monetary policy strategies. Between meetings he also advises the Fed chairman and other Fed staff and policy makers on strategy and markets. Mr. Kos, for example, played a pivotal role in 2003 researching ways the Fed could implement monetary policy when its key tool, short-term interest rates, had already fallen to zero. At the time, that rate was just 1.25%.
The markets chief is also a point person when the Fed needs to intervene during periods of market turmoil. Mr. Kos's predecessor, Peter Fisher, helped to broker the private-sector bailout of the huge hedge fund Long Term Capital Management in 1998.
Mr. Dudley is better known for economic forecasting than experience with markets. His forecast was ranked most accurate in a Wall Street Journal semiannual survey in 2002 and second most accurate in 2004. His department was ranked No. 1 in a survey of fixed-income economic research by Institutional Investor magazine in 2000 and 2003.
He doesn't have direct experience in markets although he frequently advised Goldman's traders on how to react to economic news. He is currently a member of the New York Fed's economic advisory committee. Early in his career, he spent several years as an economist at the Federal Reserve Board in Washington.
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