House Committee on Financial Services - on Bernard Madoff's Ponzi scheme

Found this website of US’s House Committee on Financial Services.
website
This committee oversees all components of the nation's housing and financial services sectors including banking, insurance, real estate, public and assisted housing, and securities.
(refer to "Who we are" for more details)

US House Committee on Financial Services had a meeting to discuss and assess Bernard Madoff’s Ponzi scheme and the need for regulatory reform.

link

Quite a good read. There are testimonies from representatives from SEC, Securities Investor Protection Corporation (SIPC), Bernard Madoff’s investor and some academics.

Some info from the opening statement:
red flags raised by others on Bernard’s investment:
1. outsiders like Mr. Markopolos could not create a model that matched the results of Mr. Madoff’s purported strategy
2. Others published articles as early as 2001 raising questions about Mr. Madoff’s firm.
3. unrealistically steady investment returns
4. auditor the size of a mouse examining a fund the size of an elephant.

agency’s enforcement unit is chronically understaffed:
1. 433 people in the office of compliance and examinations looking at 8,000 advisers two years ago, today it has 400 people looking at 11,000 advisers and thousands of mutual funds:
2. number of investment advisers subject to the Commission’s oversight has doubled since 1997
How will they "restructure the regulatory system for the financial services industry and enhance investor protection" ?

US Congressional Oversight Panel

US Congressional Oversight Panel
website

From the website, it was said that:
The Congressional Oversight Panel was created to
1. oversee the expenditure of Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA).
2. review the "current state of the market and the regulatory system"
3. provide reports to Congress and the American public on the effectiveness of the Treasury Department's management of the Troubled Asset Relief Program (TARP)
4. offer recommendations for regulatory reform.

It was mentioned that "Future reports will be released every 30 days".

The 1st report (10 questions from Congressional Oversight Panel):
PDF file
These are the question list for the previous post. Good read. We can get a glimpse of their "worries" on great power giving to TARP.

US Treasury’s responses to questions of the 1st report of the Congressional Oversight Panel for Economic Stabilization

US Treasury’s responses to questions of the 1st report of the Congressional Oversight Panel for Economic Stabilization
PDF file
The response is dated 30 December 2008.

It’s informative. A summary of actions happening in US’s Economic Stabilization.
Refer to the link for details.

Critical objectives:
1. Stabilize financial markets and reduce systemic risk
2. Support the housing market by avoiding preventable foreclosures and supporting
mortgage finance
3. Protect taxpayers.

Legal Act:
Emergency Economic stabilization Act (EESA)

Parties involved:
Treasury, Federal Reserve,FDIC, OTS, and the OCC; Finance Ministries and major Central Banks around the world

(I put in organizations responsible for the actions.)

Actions to Stabilize Financial Markets
1. Term Asset-Backed Securities Loan Facility (TALF) (by Fed)
2. Term Auction Facility (TAF) (by Fed)
3. Term Securities Lending Facility (TSLF) (by Fed)
4. Primary Dealer Credit Facility (PDCF) (by Fed)
5. Money Market Investor Funding Facility (MMIFF) (by Federal Reserve Bank of New York (FRBNY))
6. Temporary Guarantee Program for Money Market Mutual Funds (by Treasury)
7. Commercial Paper Funding Facility (CPFF) (by Fed)
8. Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (by Fed)
9. Swap Lines with Foreign Central Banks (by Fed)

Actions to Strengthen U.S. Financial Institutions
1. Temporary Increase in Deposit Insurance (by FDIC)
2. Temporary Liquidity Guarantee Program (TLGP) - Debt Guarantee Program (DGP) and Transaction Account Guarantee Program ; (both by FDIC)
3. Capital Purchase Program (CPP) (by Treasury)
4. Systemically Significant Failing Institutions Program (SSFI) (by Treasury)

Initiatives to Support the U.S. Housing Market
1. FHASecure (by HUD)
2. HOPE NOW (by HOPE NOW Alliance)
3. Stabilizing Fannie Mae and Freddie Mac (by Treasury)
4. Hope for Homeowners (by HUD)
5. Streamlined Loan Modification Program (Treasury joined
with the FHFA, the GSEs, and HOPE NOW)
6. Subprime Fast-Track Loan Modification Framework (Treasury worked with the
American Securitization Forum)

(Sigh)..very much like Great Depression’s time "Alphabet Agencies" organizations under New Deal. The document also mention on progress of Economic Stabilization. This is interesting read too.

Will these actions be able to stabilize US economy ?

EPFR Global – global fund flows and allocations data

Where does the money flow to ? Sometimes I ponder about this question.

EPFR Global provides fund flows and asset allocation data.
EPFR Global website
However, (sigh) this data is not free.

We can still find some useful data from the website’s headlines.
For examples,
look at "Weekly Fund Flows" headlines:
… US and China equity funds favored while pressure on bond funds ease.
…. Some signs of risk appetite as flows into EM equity funds hit a 20-week high.
… Europe Equity and Money Market Funds extend wining runs in early December.

We can also look at "EPFR Daily – fund flow alerts" news flash.
This will be a more updated (daily) news on fund flows.
Anybody is subscribing to the service ?

Note: If you like to invest in different countries, you may wish to take a look on my other posts on countries such as United States of America, China, Singapore and Malaysia.

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