Federal Reserve Banks make a record profit.

SteamWake · 01-12-10, 03:10 PM

File this under things that make you say Hrmm ...

Federal Reserve Banks turn a record profit in 2009

http://www.foxnews.com/politics/2010...illion-profit/

So thats where that stimulus money ended up.

mookiemookie · 01-12-10, 03:27 PM

Apparently they earned a lot of interest on the toxic assets they took off the banks' hands. The question is what is the true market value of that garbage they have on their books? I suspect a lot of that "profit" would be wiped out if they had to mark to market.

CaptainHaplo · 01-13-10, 07:23 AM

"...bigger profit was primarily due to increased income from the securities it held last year.
Such income went up as the Fed's holdings of securities mushroomed."

Like any stockholder, they are due the dividend that is paid. On bonds - they are paid the interest on the bond, just as you or I would be. Nothing suprising here, since the amount of holdings they had increased dramatically, the payments they recieved would increase as well. Simple math.

Had this been inrelation to the "toxic assets", there would have been no interest. The assets were toxic because there were no payments being made - no payments mean no interest profit....

Lt.Fillipidis · 01-13-10, 12:22 PM

In addition to all that, lets not forget that a huge percentage of that sum is only in electronic form and not on cash.
Personally i cant rely on electronics.

mookiemookie · 01-13-10, 12:32 PM

Quote:

Originally Posted by CaptainHaplo

Had this been inrelation to the "toxic assets", there would have been no interest. The assets were toxic because there were no payments being made - no payments mean no interest profit....

Not necessarily. Some of the "toxic assets" in MBS land have performed better than expected.

01-12-10, 03:10 PM	#1
SteamWake Rear Admiral Join Date: Mar 2005 Posts: 13,224 Downloads: 5 Uploads: 0	Federal Reserve Banks make a record profit. File this under things that make you say Hrmm ... Federal Reserve Banks turn a record profit in 2009 http://www.foxnews.com/politics/2010...illion-profit/ So thats where that stimulus money ended up. __________________ Follow the progress of Mr. Mulligan : http://www.subsim.com/radioroom/showthread.php?t=147648

01-12-10, 03:27 PM	#2
mookiemookie Navy Seal Join Date: Nov 2005 Location: Houston, TX Posts: 9,404 Downloads: 105 Uploads: 1	Apparently they earned a lot of interest on the toxic assets they took off the banks' hands. The question is what is the true market value of that garbage they have on their books? I suspect a lot of that "profit" would be wiped out if they had to mark to market. __________________ They don’t think it be like it is, but it do. Want more U-boat Kaleun portraits for your SH3 Commander Profiles? Download the SH3 Commander Portrait Pack here.

01-13-10, 07:23 AM	#3
CaptainHaplo Silent Hunter Join Date: Apr 2007 Posts: 4,404 Downloads: 29 Uploads: 0	"...bigger profit was primarily due to increased income from the securities it held last year. Such income went up as the Fed's holdings of securities mushroomed." Like any stockholder, they are due the dividend that is paid. On bonds - they are paid the interest on the bond, just as you or I would be. Nothing suprising here, since the amount of holdings they had increased dramatically, the payments they recieved would increase as well. Simple math. Had this been inrelation to the "toxic assets", there would have been no interest. The assets were toxic because there were no payments being made - no payments mean no interest profit.... __________________ Good Hunting! Captain Haplo

01-13-10, 12:22 PM	#4
Lt.Fillipidis Weps Join Date: Oct 2008 Location: Veria, Greece Posts: 365 Downloads: 44 Uploads: 0	In addition to all that, lets not forget that a huge percentage of that sum is only in electronic form and not on cash. Personally i cant rely on electronics.