FEDERAL RESERVE DEFAULTS: THE FED IS UNABLE TO SATISFY MERE $30 IN NOTES

Mentioned earlier, Tom Cryer and Dee Dee were in Philadelphia for the TA Mini-Sem recently conducted there.  After sharing the obligatory Philly cheese steak sandwich in the Farmer's Market and visiting Independence Hall and the Liberty Bell it was too early to go to dinner and too late to go to their other targets.  So, what to do?  Perhaps a little mischief?  Like bringing down the entire financial structure of the country?  That sounds like a worthwhile adventure, doesn’t it?

Just two blocks away from the Philadelphia branch of the Federal Reserve, Tom and Dee Dee strolled down to the Fed and paid them a visit.  They were surprised to see such a small and austere lobby with nothing but a bullet proof glass booth attended by a single guard.  Tom pulled two 1930’s vintage bills, a 20 and a 10, from his billfold and asked the guard who he should see about redeeming a couple of Federal Reserve notes.  The guard dug through some papers and handed out a sheet of instructions for exchanging mutilated bills.

Tom explained that he did not have any mutilated bills and did not want to exchange anything.  He was there to redeem two Federal Reserve notes totaling $30.  He showed the guard the two notes and pointed out that they were “redeemable in lawful money at the United States Treasury or at any Federal Reserve Bank.”  He showed him that the note was from the Federal Reserve and the United States of America who “will pay to the bearer on demand” 10 and 20 DOLLARS, not notes.  The guard said that the Federal Reserve does not exchange bills.

Tom took another stab at it explaining that he does not want any bills.  He showed the guard a silver dollar and said “See this?  This is a DOLLAR, just like the notes say they are redeemable in and the notes say they will pay the face amount to the bearer in DOLLARS", again showing him what a DOLLAR looks like.  “I’m calling these notes in, not exchanging them for another promise, I’m redeeming them for thirty of THESE”, again holding up the silver dollar.  The guard said he was sorry, but that the Federal Reserve does not redeem those there.

Dee Dee couldn't resist joining in the fun and injected "Are you telling me that the Federal Reserve Bank doesn't have $30?  That it is dishonoring its note?"  The guard grinned sheepishly (he really was a good sport) and said the Fed wasn't dishonoring the notes, but that they would have to redeem them somewhere else.  He then suggested that maybe they should try the U.S. Mint just a block over.

Tom said they couldn't do that because the U.S. Mint would only give them one silver dollar for the $30 in FRN's and Dee Dee piled on, saying "Do you mean to tell me that the U.S. Treasury has so little faith in the Federal Reserve Bank that it will only pay three cents on the dollar for its notes?"  By this time the guard was wanting to hide.  After a few more exchanges during which the guard admitted that the Fed was not only privately owned but that half of the principal owners were foreign, Tom and Dee Dee noticed a lady was waiting, so they made their exit.  As they were heading for the door, though, they heard the lady ask "Where can I get silver and gold for these?"

http://www.truthattack.org/jml/index.php?option=com_content&view=article&id=76:federal-reserve-defaults&catid=26:news-from-the-front-march-2009&Itemid=51

Citigroup CEO awarded $10.8 million

Mon Mar 16, 2009

By Jonathan Stempel and Dan Wilchins

NEW YORK (Reuters) - Citigroup Inc awarded Chief Executive Vikram Pandit $10.82 million of compensation in 2008, a year when the government propped up the bank with $45 billion of capital.

Citigroup also nominated four new independent directors to bolster the banking and financial expertise on its board, including Anthony Santomero, 62, a former president of the Federal Reserve Bank of Philadelphia.

The bank faces increased government pressure to right itself after more than $85 billion of writedowns and credit losses since the middle of 2007.

Pandit said in February he will accept a $1 annual salary and no incentive pay until the bank is profitable. His nearly $11 million of 2008 compensation included $7.73 million of sign-on and retention awards last January, the month after he took over.

"If I were a shareholder, $11 million would be hard to justify for a year where the company's shares fell almost 80 percent," said Walter Todd, a portfolio manager at Greenwood Capital Associates LLC in Greenwood, South Carolina. "But if he signed a contract, I guess it's hard to argue."

In 2008, the 52-year-old Pandit was awarded a $958,333 salary, $9.84 million of stock and option awards and $16,193 of other compensation, according to a summary compensation table included in a Monday proxy filing with the U.S. Securities and Exchange Commission.

Some pay consultants and governance experts tabulate executive pay differently, saying the summary total may be imperfect because it counts options and stock as part of pay when they vest rather than when they are awarded.

The value of shares and options as recorded in the summary table of a company's proxy filing typically reflects their value at the time they were granted. Their actual value now may be substantially lower, given that Citigroup's shares, for example, dropped nearly 80 percent last year.

Wall Street compensation has come under intense scrutiny, especially at banks that, like Citigroup, received money under the government's Troubled Asset Relief Program.

Citigroup got a $45 billion injection from TARP and the government agreed to share losses on $300.8 billion of troubled assets.

Pandit's compensation was higher than the $9.96 million that Bank of America Corp, which has also received $45 billion of TARP money, awarded its CEO, Kenneth Lewis.

NEW DIRECTORS

The other nominated directors are Jerry Grundhofer, 64, a former CEO of U.S. Bancorp; Michael O'Neill, 62, a former CEO of Bank of Hawaii Corp and chief financial officer of a Bank of America predecessor; and William Thompson, 63, a former co-CEO of bond fund manager Pacific Investment Management Co.

If the nominations are approved, Citigroup's board would have 14 members. Three of its 15 current members are not standing for reelection and two have reached retirement age.

"Hopefully, this will provide better oversight," said Marshall Front, chairman of Front Barnett Associates LLC in Chicago, which invests $500 million. "The board had to become more knowledgeable, rather than the prior board, which was largely a rubber stamp for management." 

The three directors stepping down are former Citigroup senior counselor and U.S. Treasury Secretary Robert Rubin; former Chairman Sir Win Bischoff; and Roberto Hernandez Ramirez, who chairs Citigroup's Mexican unit Banamex.

Kenneth Derr and Franklin Thomas are leaving because of the retirement age.

Richard Parsons, Citigroup's chairman, is the bank's only outside director with top-level financial services experience, having once run Dime Savings Bank of New York. He is better known as Time Warner Inc's former CEO.

Shareholders are expected to vote on the director nominations at Citigroup's annual meeting on April 21.

In afternoon trading, Citigroup shares were up 73 cents, or 41 percent, at $2.51 on the New York Stock Exchange. The shares bottomed at 97 cents on March 5.

(Reporting by Dan Wilchins and Jonathan Stempel; editing by John Wallace and Andre Grenon)

http://www.reuters.com/article/newsOne/idUSTRE52F3MP20090316

Citi, Morgan Stanley look to sidestep bonus caps: report 17 Mar 2009 Anticipating restrictions on bonuses, officials at Citigroup Inc and Morgan Stanley are exploring ways to sidestep tough new federal caps on compensation, the Wall Street Journal said. Executives at these banks and other financial institutions that received government aid are discussing increasing base salaries for some executives and other top-producing employees, the paper said, citing people familiar with the situation.