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"Federal Reserve made $14 billion on turmoil loans: report"

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Clio the Leo Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-31-09 07:44 AM
Original message
"Federal Reserve made $14 billion on turmoil loans: report"
Who wants to bet this gets TOTALLY ignored on the MSM?

LONDON (Reuters) – The Federal Reserve has made $14 billion in profits on loans made in the last two years, The Financial Times reported on Monday, citing officials close to the matter.

The U.S. central bank also earned about $19 billion from interest and fees charged to institutions that tapped liquidity facilities during the global financial crisis, the report said.

If the Fed had invested the same amounted loaned out in three-month Treasury bills since August 2007, it would have earned $5 billion in interest, the FT said.

This estimate excludes company bailouts and purchases of long-term assets as well as unrealized gains or losses on the Fed's portfolio of mortgage-backed securities and Treasuries purchased as part of the $1.75 trillion asset purchase program.

The Fed was not immediately available for comment on the report.

http://news.yahoo.com/s/nm/20090831/bs_nm/us_fed_profitpickup



A ha! So THIS is how he's paying for our ponies! ;)
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napi21 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-31-09 08:06 AM
Response to Original message
1. So, how does this affect the Fed. Debt, or doen't it show up there?
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HamdenRice Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 06:00 AM
Response to Reply #1
10. The Fed is profitable most years & contributes all its profits to the US Treasury as general revenue
Edited on Tue Sep-01-09 06:01 AM by HamdenRice
That's why the anti-Fed nuts who think that the Fed is not government owned are wrong.

The Fed is owned by the Federal government, so it simply turns over its profits to the US government via the Treasury.

So, to answer your more specific question, Fed profits help lower the deficit.
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notesdev Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 11:01 PM
Response to Reply #10
15. It's not government owned
The Fed is a wholly private institution. Its shareholders are not disclosed but are believed to be all the major banks. All its employees and board members are privately chosen; even the one appointment made by the President (Fed Chairman) is done so from a list of candidates provided by the Fed itself.

What the Federal Reserve is is the lobbying arm of the banking industry. It's no problem at all for them to turn over $14B, when those they lobby for get trillions from the Treasury; even if the Treasury wasn't being openly looted, $14B is a small price to pay for control over the money supply. If the Fed wants another $14B all it has to do is add an entry to an accounting ledger.
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SpartanDem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 11:18 PM
Response to Reply #15
16. It is not wholly private
the stocks in the 12 regional banks held privatey, but overall governance is by the U.S government. The president appoints more than the Fed Chairman he appoint all the Board of Governors so there seven appointment in total and I never seen any requirement that appoint from a list. It's subject congressional oversight like any other agency.
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notesdev Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 11:28 PM
Response to Reply #16
17. It is in fact private
The pay for Fed employees is not the same as the schedule used for federal employees. As far as being subject to Congressional oversight, they have threatened to destroy the economy if any actually effective oversight is conducted, which begs the question of who gives orders to who.

The Fed likes to claim it is a government agency when that is to its advantage, but exerts all the privileges of a private corporation when it is in its interest to do so.

As you acknowledge, the regional banks are privately held - what government agency do you know of for which this is true?
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Odin2005 Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-31-09 08:35 AM
Response to Original message
2. The "Let it Fail" people can go suck it.
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rockymountaindem Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 08:17 AM
Response to Reply #2
12. Well I don't think their main concern was the profit/loss of the fed
I think the "let it fail" crowd, or at least a good part of them, hoped "it" would fail so as to bring about a radical restructuring of the economy in the aftermath. I don't think their position was based simply on the idea that it was bad fiscal policy.
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HamdenRice Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 08:48 AM
Response to Reply #12
13. Aw Mom! I can't come upstairs to get my Hot Pockets now! I'm bringing down international capitalism!
Yeah, I agree. They thought they were going to being down international capitalism by posting "let it fail" on a message board.
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ProSense Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-31-09 11:31 PM
Response to Original message
3. Why is this sinking? n/t
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Alcibiades Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Aug-31-09 11:54 PM
Response to Original message
4. It's too early to celebrate
"This estimate excludes company bailouts and purchases of long-term assets as well as unrealized gains or losses on the Fed's portfolio of mortgage-backed securities and Treasuries purchased as part of the $1.75 trillion asset purchase program."

This is tiny compared to the amount at risk. It is waaay too early to speculate on the net effect, but I would guess that Wall Street makes a bundle, the big banks come out even and the public fisc loses.
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burrowowl Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 12:11 AM
Response to Original message
5. Nationalize the Eed!
which is owned by private banks!
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Zynx Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 06:16 AM
Response to Reply #5
11. The Fed gives its profits to the Treasury Department at the end of the year.
It's officials are appointed by the President and confirmed by the Senate. It is not a private institution.
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girl gone mad Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 12:40 AM
Response to Original message
6. Not this bullshit, again.
I wish these "journalists" would learn some finance, math, economics or even current events.
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NecklyTyler Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 04:39 AM
Response to Original message
7. The Main $tream Media will not report anything along these subject lines
The powers behind the scenes who want the Obama Administration to fail only report bad news
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pampango Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 05:51 AM
Response to Reply #7
9. ABC had a piece on the news last night.
http://abcnews.go.com/video/playerIndex?id=8457730
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NecklyTyler Donating Member (1000+ posts) Send PM | Profile | Ignore Tue Sep-01-09 05:06 PM
Response to Reply #9
14. At least they did not give accolades for a "brilliant program" to the former president. n/t
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Krakowiak Donating Member (295 posts) Send PM | Profile | Ignore Tue Sep-01-09 05:39 AM
Response to Original message
8. except for the ......
This estimate excludes company bailouts and purchases of long-term assets as well as unrealized gains or losses on the Fed's portfolio of mortgage-backed securities and Treasuries purchased as part of the $1.75 trillion asset purchase program.
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