No F_O_M_C LEAKS

Remember last week 7 minutes before 2 p.m. on Wednesday when the F_O_M_C statement was released, gold jumped $11 just like that?

Even today I mentioned the amount of distribution in to the knee-jerk reaction and said words to the effect of and half kiddingly, "The F_E_D would rather give them the money via the market than have to bail them out with their own money later".

Well, this is a long known phenomena, the BLS is particularly susceptible as they admitted it and are building a new media center to prevent leaks. Those of you around for a while may remember how often we found leaks in the EIA weekly petroleum report. A lot of these are because as I mentioned, Jon Hilsenrath was able to write about 600 words and publish it only 11 minutes after 2 p.m., that's take in the entire statement, write about it and publish it with really less than 11 minutes, this is because the media gets all of this information before anyone else, but embargoed (not for release) so they can write their stories, but the F_O_M_C? You bet, here's someone who says it's so...


I knew of the Fed decision and growth forecasts around 5-6 minutes before 2 pm last Wednesday, even though I was not there. I work at a news organization represented at the Fed statement “lockup” and the Bernanke press conference last week. This was in no way secure the way the Labor and Commerce Department lockups are. Those in the Fed statement lockup were able to communicate by text message and email after they received the statements and before 2 pm. Those in the room awaiting the press conference also were able to communicate electronically after the received the statement, several minutes before 2 pm. Everything was honor-based, but anyone in their respective newsrooms could have gotten the information early from them and passed it on. Given the large number of reporters involved, there are many ways the decision could have gotten into the market several minutes before the announcement. I am truly surprised it was only seen in gold trade. The fact is, though, the Fed made it possible for many people to leak it.

I can't think of too many reasons that are smarter than following underlying trade and this is just another reason why.

My update will be out a little later as I want to see how some strange activity in futures pans out.