Fed Losing $200 Billion On Treasury Holdings

[Mercor]

Quote from pspr:



Granted, the Bernanke & Co. does not value its massive bond portfolio on a mark-to-market basis. But the surge in interest rates has already erased almost $200 billion in the Federal Reserve’s capital. But that’s not all.

If interest rates continue to head higher, the value of the Fed’s liquid assets that it could sell would decline and further undermine its capital cushion. And if the velocity of rate increases intensifies, the Fed, with only $62 billion in capital, could see its entire capital base completely wiped out.

This could have a serious domino effect. It could paralyze the Fed’s ability to defend the dollar’s purchasing power, causing Treasury prices (NYSEARCA:TLT) to fall further and thereby push interest rates even higher. Just imagine the unimaginable; a weakened and impotent Fed. ."

http://www.etfguide.com/commentary/1095/Bond-Losses-at-Federal-Reserve-Top-$192-Billion/

The Fed could lose its entire capitol base.....
hmmm....Could the market try to short squeeze the FED. Run rates higher

 

[pspr]

Quote from Mercor:

The Fed could lose its entire capitol base.....
hmmm....Could the market try to short squeeze the FED. Run rates higher

With a new Fed Chair appointed by Obama coming in next year and Obamacare about to give the economy a real kick in the teeth could we see Super QE next year?

Remember when Bush gave everyone a thousand bucks or so several years ago? I don't recall if it was taxpayers or home owners then but Obama could do the same on steroids with the Fed's help.

 

[Tsing Tao]

Depends who it is. If it's Yellen, a new QE could be in the cards. If Summers, he's being a bit vocal about how he doesn't see the benefits of QE anymore. Either way, if they just gave everyone $1000, it'd be cheaper and would hit the greater economy instead of the banks. Not that I support that, but it'd be better than the idiocy the Fed is running currently.

Which is why it won't happen. The Fed exists to serve the banking cartel. It could give a shit about main street.

 

[pspr]

Quote from Tsing Tao:

Depends who it is. If it's Yellen, a new QE could be in the cards. If Summers, he's being a bit vocal about how he doesn't see the benefits of QE anymore. Either way, if they just gave everyone $1000, it'd be cheaper and would hit the greater economy instead of the banks. Not that I support that, but it'd be better than the idiocy the Fed is running currently.

Which is why it won't happen. The Fed exists to serve the banking cartel. It could give a shit about main street.

That's one reason Summers is a longshot.

I feel that Obama has a tendency to make his appointments for people who have answered some specific questions about pushing a policy he wants implemented to the affirmative. One reason I think we get appointments with low personal moral/integrity issues, IMO.