Reuters has a terrific scoop about how big investors are paying former Federal Reserve employees to get the news about what happens at meetings of the Federal Open Market Committee before the news is announced to the general public. The wire service says, "This selective dissemination of information gives big investors a competitive edge in the market."
The wire also quotes Haag Sherman, "chief investment officer of Salient Partners, a Houston-based money management firm that oversees around $8 billion in assets": "The fact is that government today is driving the markets more than any time in recent history and having insight into near-term and long-term plans provides a money manager with a significant competitive advantage," Sherman said.
Fed board staffers who retire even get to keep their pass for the central bank's building, which boasts fitness facilities, a barber and a dining room.
Though their identification badges designate their "retired" status, they are not restricted to where they can go once inside the building -- even if they now work in the private sector.
Congress or the Fed will probably react to these disclosures by calling either for better secrecy or more transparency. There's also a third option: reducing the power of the Fed or eliminating it entirely so that information about what it is up to is less valuable.