This Rally Is for Suckers, Courtesy of the Fed

Government trying to unwind stock without losing on the deal

(NEWSER) - The Treasury Department has had a tough time selling off some of the stock it took on in exchange for TARP bailout funds, meaning taxpayers are still on the hook for some $132.9 billion—some of which they may never get back, according to a report released today by the government watchdog overseeing the program. Selling the stock has been complicated by swingy stock market prices, and deep dips in some of the bailed out companies, the AP reports. More»

Fed says inflation on target, but unemployment high, growth sluggish

(NEWSER) - Don't get too excited about that pending economic rebound . The Federal Reserve's announcement it will keep interest rates super-low into 2014 is a key sign that the US economy is years away from truly recovering, reports the New York Times . Yes, the economy has picked up "moderately," said the Fed in a statement, but jobs are still scarce and growth is expected to be sluggish for the foreseeable future—2.7% in 2012, 3.2% in 2013, and perhaps as high as 4% in 2014. “What did we learn today? Things are bad, and they’re not improving at the rate that they want them to improve,” said the chief US economist at HSBC. More»

Bo Zhang accused of pilfering Treasury software

(NEWSER) - A Chinese computer programmer has been charged with stealing software code worth $9.5 million while working at the Federal Reserve Bank of New York. Prosecutors say Bo Zhang, a Chinese citizen who worked for a technology firm contracted to work on code at the New York Fed, copied a software system relating to the "tracking of the billions of dollars that are electronically transferred every day in the US’ general ledger" onto a hard drive, then copied those contents onto his home computer, Bloomberg reports. More»

Geithner, Bernanke, others missed signs of the pending collapse

(NEWSER) - The Fed released transcripts from meetings in 2006 today that reveal just how badly its top officials blew it on the looming housing crisis, the New York Times reports. The industry was showing signs of distress, but the Fed's attitude boiled down to, eh, no big deal. The officials clearly did not grasp how "deeply intertwined the housing sector and financial markets had become," writes Binyamin Appelbaum. They would get the picture soon enough. Some highlights:

• Timothy Geithner (then with the New York Fed): “We think the fundamentals of the expansion going forward still look good," he said in December 2006. A few months earlier: “We just don’t see troubling signs yet of collateral damage, and we are not expecting much."

Forecast sees it at 8.6% at end of 2012

(NEWSER) - If President Obama were hoping for a quick election-year turnaround in the jobless rate, the Federal Reserve burst his bubble today. The Fed projected unemployment will be at 8.6% at the end of 2012, not much better than the 9.1% registered in September of this year, reports the Wall Street Journal . The projections don't get remarkably better after that: The Fed sees the rate at 8% by the end of 2013 and 7.7% the following year. More»