This Newsbite Deserves a Stand-Alone Posting

The things you learn when you read Zero Hedge...

Courtesy of Reuters...

To the outside world, the Federal Reserve is an impenetrable fortress. But former employees and big investors are privy to some of its secrets - and that access can be lucrative.

FOLKS... CAN YOU SPELL O*L*I*G*A*R*C*H*Y...???

On August 19, just nine days after the U.S. central bank surprised financial markets by deciding to buy more bonds...former Fed governor Larry Meyer sent a note to clients of his consulting firm with a breakdown of the policy-setting meeting.

HMM... I WONDER IF MARTHA STEWART GOT A HEAD'S UP?

The minutes from that same gathering of the powerful Federal Open Market Committee, or FOMC, are made available to the public - but only after a three-week lag.

(*SMIRK*)

Meyer's clients were provided with a glimpse into what the Fed was thinking well ahead of other investors.

(*JUST SHAKING MY HEAD*)

APPARENTLY ALL PERFECTLY LEGAL, FOLKS. HEY... HOW'S THE HOPE AND CHANGE TREATING YA?

A respected economist, Meyer charges clients around $75,000 for his product, which includes a popular forecasting service. He frequently shares his research with reporters, though he kept this note out of the public eye. Reuters obtained a copy from a market source. Meyer declined to comment for this story, as did the Federal Reserve.

This selective dissemination of information gives big investors a competitive edge in the market.

YA THINK...?!?!

No one is accusing Meyer and his firm, Macroeconomic Advisers - or any other purveyors of Fed insights for that matter - of wrongdoing.

SEE...! I'M TELLING YOU, FOLKS... THERE'S "THEM" AND THERE'S "US" AND THE OBAMA ADMINISTRATION IS IN WITH THE "THEMS."

They are not prohibited from sharing such information with their hedge fund and money manager clients.

NO, FOLKS... THIS NOT A SATIRE OUT OF THE ONION - THIS IS REUTERS.

"It's certainly not what Fed officials should be doing," said Alice Rivlin, a former Fed governor and now a fellow at the Brookings Institute think tank. "The rules when I was there were you don't talk to anybody about anything that could be used for commercial purposes."

I GUESS IN THE AGE OF OBAMA THE RULES ARE A BIT... er... LOOSER.

The precise number of former Federal Reserve employees tapping their network of old colleagues can't be determined, but by most accounts they are a sizable group.

"The revolving door between the Fed and the private financial sector is quite significant," said Timothy Canova, professor of international economic law at Chapman University School of Law in Orange, California. There is no required registration process for economic and monetary policy consultants, former Fed lawyers say. Some especially high-profile former Fed officials now have their own shops, too: Former Fed Chairman Alan Greenspan's Greenspan Associates offers policy consulting to Pimco, the world's biggest bond fund.

(*SMIRK*)