Looks like the job market is finally turning around – there’s another opening at the Fed, as Ben’s Vice Chairman, Donald Kohn, announced his retirement this morning. When he leaves at the end of his term in June, that will be three vacancies on the board of governors, which means your chances for landing the most awesome* job in finance just increased 50%. Why does no one want to work with Ben?

Before we go any further, I’d like to take issue with the linked article’s title: Fed’s No. 2 Plans to Retire, Leaving 3 Vacancies on Board. This makes Kohn sound like the only piece of doody at the Fed, and that can’t be right. Either they’re all #2 or none of them are.

So who is dis guy?

Mr. Kohn, 67, began his career as a financial economist at the Federal Reserve Bank of Kansas City in 1970, before he completed his Ph.D. in economics the next year at the University of Michigan.

Right, so he’s a guy who took advantage of the KC Fed’s generous continuing education program. It was either a Ph.D. in economics or a correspondence course in medical transcription, and while medical transcription is an exciting field with unlimited growth potential that allows you to work and home and set your own schedule, it was probably the decent thing to do to take the economics track if the company was paying his tuition.

Before joining the Fed board, Mr. Kohn was adviser to the board for monetary policy in 2001 and 2002; director of the division of monetary affairs, from 1987 to 2001; and deputy staff director for monetary and financial policy, 1983 to 1987.

He previously served the Federal Reserve’s division of research and statistics as associate director, 1981 to 1983; chief of capital markets, 1978 to 1981; and staff economist, 1975 to 1978. He was a financial economist in the Kansas City Fed from 1970 to 1975.

Isn’t that something? Forty years of kissing ass, fetching coffee, walking dogs and whatever else a “staff economist” does in the Federal Reserve system, all to reach the top (or right next to the top; you don’t want to reach the top because that’s nothing but a hassle) and only stay there for four years. Now he’s 67, and there is no way his aging fingers are going to be able to keep up with the new breed of snot-nosed punks that have taken over the medical transcription game. I really don’t know what he’s going to do with himself.

Before you go burning up your keyboards updating your resumés, keep in mind that the most awesome job* in finance may become a little less awesome as Congress might or might not** pass a regulatory reform bill that would strip some of the Fed’s powers from it, which means that as a newly-named governor you might find yourself fetching coffee for the Deputy Secretary of the Treasury or sweeping up Ben’s beard trimmins.

Still-interested parties should send letters of interest, a 200-word essay on why you should be a governor, a notarized copy of your Barista Certification, and three (3) tastefully-lit nude photographs to:

Employment
United States Federal Reserve
20th Street Northwest & C Sts NW
Washington, DC 20551

*Not even close to most awesome.
**Who are we kidding, totally will not .

So as not to ruin what passes for jokes around here, yesterday evening I might have said that the Fed did nothing, which is true as far as interest rates go but that is not actually all that crowd does, and not all it did yesterday. The bigger news coming out of the FOMC crew was its announcement that it’s slowing down its buying of US debt, which doesn’t sound sexy when I put it that way, but it is extremely hot.

“To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October,” the FOMC said in a statement.

Way back in March, the Fed had agreed to buy $300b in Treasurys, mostly 10-year notes, and it’s bought about $250b of them so far.  Originally, the program was scheduled to last six months, but it was extended a month into October to give the program some more time to slowly ramp down, thinking that just going cold-turkey would work about as well as when your boss quits smoking cold-turkey and resorts to actually hitting you about the head and neck when your weekly status report is three minutes late. Yields rejoiced, a little.

But just the fact that the Fed didn’t say it was going to keep on buying stuff is itself a sign that it’s calling a bottom. While it doesn’t plan on touching its key interest rate for at least another year, the bank’s actions yesterday do seem to indicate it thinks the worst is behind us. Ben has been all, “Yeah, everything we did stopped FINANCIAL ARMAGEDDON,” and patting himself on the back, with an implied request that Ron Paul go get stuffed.

After all this is said and done, the Fed will have over $5t (trillion!) in US debt on its books, close to half of the total amount of the public debt. For all the talk of how China has us by the short and curlies in that regard, it’s really not quite that bad. Here’s a chart showing who owns what percentage of the national debt, as of December 2008 – the last quarter for which I could get numbers across the board. China holds about 25% of the “Foreign Entities” slice which, okay, that’s still a lot (around $800b as of last month), but not so much that we all need to be brushing up on our Mandarin just yet.

Anyway, the point of the Fed ending its Treasury buyup program is that it feels there is now sufficient capital in the market that investors private and public, domestic and, yes, foreign, are now able to handle the purchasing of our growing debt on their own. So that’s a pretty major vote of confidence in the economy.

As Federal Reserve Chairman, Ben Bernanke rakes in a salary of $191, 300, a number which we can only hope includes performance bonuses. He heads up an agency that happens to be the largest bank in the world. It issues currency, is a bank for both the government and for giant commercial banks (acting as a lender of last resort), influences the nation’s – and arguably, the world’s – monetary policy more heavily and directly than any other institution in existence, and pretty much behaves as the axle around which the financial world turns. It’s a lot of responsibility to put on just a handful of individuals, and even more to put on the one person that’s the public face of the central bank. And the sad fact is, most of that happens behind the scenes, involving very advanced magic and incantations in Lovecraftian tongues, so the general public really lacks a grasp on what, exactly, the Fed does every day.

As a result, when news headlines read something along the lines of “Fed Does Nothing” it’s easy to say, hey, what are we paying these people for, and then imagine a meeting of the board of governors resembling a morning after scene in a frathouse, with everyone kind of shambling around in bathrobes after having woken up at one in the afternoon, unwilling to do anything more strenuous than watch Spongebob until someone looks at the clock and reminds everyone else that they’re supposed to decide on overnight lending rates in the next ten minutes and Ben pauses his bong hit long enough to say “Let’s leave it at like, zero, man,” and the other governors make some guttural noises vaguely resembling “Aye,” before passing out on the pee-stained mattress in the corner. Or at least that’s what I imagine.

Anyway, Fed Did Nothing, opting to leave interest rates at next-to-zero, which will help bolster either the economy or Paul Krugman’s blog. The markets rejoiced.

WSJ tells us this morning that the executive board of the New York Fed is beginning to chafe at the bit, as rules and pressure impair their ability to rule the world from that post – and occasionally even impair their inability to do the job in question.

First, Timmay was a way total bitch about picking his replacement:

[William] Dudley, a 56-year-old former Goldman Sachs Group Inc. economist who ran the New York Fed’s markets division, got the top job after a two-month search, succeeding new Treasury Secretary Timothy Geithner.

Behind the scenes, the hiring process triggered concerns with some New York Fed directors, including General Electric Co. Chief Executive Jeff Immelt and PepsiCo Inc. CEO Indra Nooyi, according to people familiar with the situation. 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.

It’s your Geithner. He… interferes.

Other drama:

JP Morgan Chase & Co. CEO James Dimon, for instance, aired frustrations to associates that New York Fed rules curbing directors’ political activities stymied his backing of Barack Obama for president.

The lack of clout upsets some directors. Ms. Nooyi was critical during an audit-committee meeting late last year where she and other directors were briefed, after the fact, on how the New York Fed handled the bailout of American International Group Inc.

James Dimon. That’s what hardasses they are. They wouldn’t even let him campaign as ‘Jamie’.

Man, with all the populist outrage, TARP restrictions, etc, it’s already hard out there for a Master of the Universe. And it’s harder, apparently, when you sit on the NYFed’s board.

FOMC looks under the bed, sees fail, sticks with the ZIRP, surprises no one:

The Federal Open Market Committee decided today to keep its target range for the federal funds rate at 0 to 1/4 percent. The Committee continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for some time.

Information received since the Committee met in December suggests that the economy has weakened further. Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending. Furthermore, global demand appears to be slowing significantly. Conditions in some financial markets have improved, in part reflecting government efforts to provide liquidity and strengthen financial institutions; nevertheless, credit conditions for households and firms remain extremely tight. The Committee anticipates that a gradual recovery in economic activity will begin later this year, but the downside risks to that outlook are significant.

In light of the declines in the prices of energy and other commodities in recent months and the prospects for considerable economic slack, the Committee expects that inflation pressures will remain subdued in coming quarters. Moreover, the Committee sees some risk that inflation could persist for a time below rates that best foster economic growth and price stability in the longer term.

They also voted to continue purchasing “large quantities of agency debt and mortgage-backed securities”, natch. Jeffrey Lacker, the lone dissenter, wanted to buy Treasuries instead of buying more crap through the TALF, and was prompty laughed out of the room.