From Reuters:

WASHINGTON, Jan 30 (Reuters) - A group representing large financial institutions urged the U.S. Congress on Friday to give the Federal Reserve new powers to ensure stability of the country's financial system.

These powers would override all regulators and apply to all types of financial firms and markets, according to the Financial Services Roundtable plan to reform the U.S. regulatory system.

The record of The Fed on this matter is:

• It intentionally blew a bubble after the 2000 tech wreck - per Greenspan's own admission - which went into Real Estate, thereby producing the destabilization we have now.
• Despite the power to regulate leverage through reserve ratios The Fed pushed for and has overseen removal of reserve ratios through the last 20 years, beginning with "sweep accounts" and ending with an obscure change in the EESA/TARP law allowing them to set reserve ratios to ZERO.
• Despite the power to force mark-to-market and turn over failing institutions to the FDIC for resolution The Fed has instead taken in trash as collateral and loaned against it, and has made statements regarding the expected gains on those positions that have turned out to be false (Bear Stearns Maiden Lane, for example.)

In other words The Fed has demonstrated through its actions over the last 20 years that it is unfit as a "regulator"; ergo, this request is nothing more or less than asking for a toothless organization that has demonstrated willful blindness and even complicity in the events leading up to this meltdown.

I have a better idea.

We put The Fed under Congressional control with its actions explicitly subject to Congressional oversight as a department of The Treasury and all actions it takes, along with all documents, are published for The People on The Web.

There are not many things that I agree with Dennis Kucinich on, but this is one of them:

At the same time we pursue disgorgement of all ill-gotten gains from all executives and bonused employees of Wall Street firms and other banks during the previous five years as the fruits of fraudulent practice and thereby subject to recapture.

Yeah, it won't be enough to pay back the people's Treasury for what has been looted, but at least the banksters won't get to keep their plunder.

If Barney Frank goes for or advocates this "proposal" by the banks he deserves to be tarred and feathered - then run out of town on a rail.

On this point, I have received a couple of comments recently that The Ticker has turned into a political bash-fest.

The Market Ticker was designed to be (and is) commentary on The Capital Markets.  Unfortunately the unprecedented (and foolish) action of our government, along with other governments, has made it literally impossible to discuss the Capital Markets without the government and its actions being a central - if not THE central - theme of those discussions. 

It would be nice if this were not so - in fact, I'd prefer to focus explicitly on earnings and the prospects for firms going forward, but to do so would not be doing the readers of this blog a service, as in my opinion at the present time the driving force behind the capital markets is the government and its actions.

I sincerely hope this changes in the near future, but am not hopeful that it will. 

For the time being my commentary will of necessity include the government and its acts, simply because when it comes to "what moves the markets", unfortunately, government has gone from being a force that is always in the background to the primary motivation in both directions - up and down.

Finally, the rout over in Europe today and Asia last night appears to have been driven by Hitachi that warned on earnings due to be released this evening over in Japan and was immediately sacked for about 18% of its share value.  Why anyone would have expected different results is beyond me, given that Seagate, one of their primary competitors in the disk drive space, had just reported horrible results.

I have, however, and will continue to do my part to help Hitachi when it comes to the larger disk drives; for the last year or so in the larger (500GB and up) size range I've been an exclusive user of Hitachi Deskstar products. 

Disk drives are a funny thing - for the more than 20 years I've been in the IT business I've found that the "right" choice on drives tends to move in cycles of three to five years, with one manufacturer taking a clear lead in the performance and reliability arena for a given class of storage solutions, then they get "leapfrogged" by someone else.  For a few years when I ran MCSNet Maxtor products were "the jazz" - then they became "the jizz" and were absolute junk.  Seagate went through similar "good and bad" times.  In recent years my storage needs have become less intensive (in terms of number of disks purchased) than they were then, of course, but I remain obsessed with finding the best deal in terms of dollars spent, reliability and performance.

At this point in the larger drive regime the Hitachis have earned a "clearly superior" designation around here.  However, in the 250GB area I prefer Seagate - not so much for performance reasons but because they now come in a 1/3 height profile and run cooler.  Heat is a primary killer of electronics, so anything that is both smaller and runs cooler promotes better airflow and thus, all other things being equal, makes for a better bargain.