Geithner Meddles? -  Fissures Appear at the New York Fed – By KATE KELLY – … One reason: Mr. Geithner took an active role in recommending his successor, lobbying hard for Mr. Dudley and against other candidates, attendees said.  It isn’t unusual for outgoing Fed presidents to provide such input. But Mr. Dudley’s case is different, some observers said, because Mr. Geithner was a political nominee at the time. Injecting a White House appointee’s views into the process, they suggested, may have meddled. … – Wall Street Journal

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Fed’s Yellen Says Rates May Stay Near Zero for Years – By Vivien Lou Chen – Federal Reserve Bank of San Francisco President Janet Yellen said the prospect that policy makers will leave the benchmark U.S. interest rate near zero for the next several years is “not outside the realm of possibility. – Bloomberg

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AIG Sells Shares to Fed: Papa’s Little Dividend? – The New York Fed has agreed to get involved in the life insurance business by investing $25 billion in two special-purpose vehicles. … Asked why the company chose to structure the arrangement by means of the much stigmatized method of setting up SPVs, AIG spokesperson Christina Pretto told CFO that since the vehicles were on-balance-sheet entities they wouldn’t be the target of disapproval.   … – David M. Katz – CFO.com
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F.D.I.C. to Issue Rules for Private Equity Deals – By EDMUND L. ANDREWS – The Federal Deposit Insurance Corporation plans to issue new rules that could make it slightly easier for private equity firms to buy failed banks, according to people familiar with the agency’s deliberations. – NY Times

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Let’s Be Objective about the Increase in the Fed’s Balance Sheet -  Paul Kasriel @ Northern Trust

Asks and answers 2 questions:
1. Is Fed balance sheet growth inflationary? (not necessarily)
2. Do Banks Need to Cleanse Their Balance Sheets to Start Lending? (no)
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Ron Paul Strikes Gold – By Chadwick.Matlin – The Big Money – Reuters

He has rallied the majority of the House to support his new cause: an audit of the Federal Reserve…. To the 244 co-sponsors—74 of them Democrats … Obama’s proposal is to make the Fed a super-regulator … Obama finds himself in a difficult spot. He needs Congress on his side for a host of other legislation, so he may need to appease them here. But if he makes the Fed more accountable, the agency becomes even more a part of the government than it already is. … But something has to give. Paul’s Gang of 244 is fed up. They’re ready to kill something. It will probably be Obama’s regulatory plan