Winehole23
12-06-2015, 11:35 AM
Researchers at Duke University and the University of California at Berkeley point to quantitative evidence that the U.S. Fed consistently leaks (http://www.valuewalk.com/2015/10/goldman-sachs-fed-leak/) non-public information about its meetings, driving an investment pattern (http://www.valuewalk.com/2015/10/insider-trading-fed-leak/) that has led to market gains.
http://www.valuewalk.com/wp-content/uploads/2015/12/Fed-leaks-2.png (http://www.valuewalk.com/wp-content/uploads/2015/12/Fed-leaks-2.png)
Pattern of Fed leaks and market gains established The study (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2687614), first reported by The Daily Californian (http://www.dailycal.org/2015/11/30/uc-berkeley-professor-research-team-find-evidence-information-leaks-fed/), considers historical patterns in stock prices relative to the distribution of non-public Fed information (http://www.valuewalk.com/2015/10/goldman-fed-leak/). "The Fed uses 'informal communication channels' on even-numbered weeks after FOMC meetings," the report said, pointing to leaks (http://www.valuewalk.com/2015/10/fed-leak-scandal-holds-up-seth-carpenters-charmed-career/) making it into media stories such as the Wall Street Journal as well as showing up in private financial advice.
To support their claims, researchers point to private advice (http://www.valuewalk.com/2015/03/fed-leak-investigation-2/) received by financial investors and news reports (http://www.valuewalk.com/2015/08/fed-minutes-leaked/) that contained non-public information discussed in FOMC meetings. “The informal communication can steer market expectations by engaging with private forecasters and newsletters that influence market inference of current and future policy,” the report stated, citing the goal of managing market expectations. “Informal communication facilitates learning by the Fed from the financial sector about how the Fed’s assessment of the economy compares to that of the financial sector and about how markets are likely to react to a particular policy decision.”
“The data collection exercise was extensive, but it served our goal to understand how the Fed processes information internally and how it communicates with the public and the financial markets in particular,” researchers Vissing-Jorgensen, Duke University assistant professor, Anna Cieslak and UC Berkeley assistant professor Adair Morse were quoted as saying. The report specifically points to leaks by a variety of Fed officials, including then New York Fed Vice Chairman Timothy Geithner leading information about the Fed’s plans regarding the discount facility to then Bank of America CEO Ken Lewis.
http://www.valuewalk.com/2015/12/fed-leak-to-insiders/
http://www.valuewalk.com/wp-content/uploads/2015/12/Fed-leaks-2.png (http://www.valuewalk.com/wp-content/uploads/2015/12/Fed-leaks-2.png)
Pattern of Fed leaks and market gains established The study (http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2687614), first reported by The Daily Californian (http://www.dailycal.org/2015/11/30/uc-berkeley-professor-research-team-find-evidence-information-leaks-fed/), considers historical patterns in stock prices relative to the distribution of non-public Fed information (http://www.valuewalk.com/2015/10/goldman-fed-leak/). "The Fed uses 'informal communication channels' on even-numbered weeks after FOMC meetings," the report said, pointing to leaks (http://www.valuewalk.com/2015/10/fed-leak-scandal-holds-up-seth-carpenters-charmed-career/) making it into media stories such as the Wall Street Journal as well as showing up in private financial advice.
To support their claims, researchers point to private advice (http://www.valuewalk.com/2015/03/fed-leak-investigation-2/) received by financial investors and news reports (http://www.valuewalk.com/2015/08/fed-minutes-leaked/) that contained non-public information discussed in FOMC meetings. “The informal communication can steer market expectations by engaging with private forecasters and newsletters that influence market inference of current and future policy,” the report stated, citing the goal of managing market expectations. “Informal communication facilitates learning by the Fed from the financial sector about how the Fed’s assessment of the economy compares to that of the financial sector and about how markets are likely to react to a particular policy decision.”
“The data collection exercise was extensive, but it served our goal to understand how the Fed processes information internally and how it communicates with the public and the financial markets in particular,” researchers Vissing-Jorgensen, Duke University assistant professor, Anna Cieslak and UC Berkeley assistant professor Adair Morse were quoted as saying. The report specifically points to leaks by a variety of Fed officials, including then New York Fed Vice Chairman Timothy Geithner leading information about the Fed’s plans regarding the discount facility to then Bank of America CEO Ken Lewis.
http://www.valuewalk.com/2015/12/fed-leak-to-insiders/