How can we buy shares of the Fed ?

[Renegen]

I think with recent events the shares in the Fed are more expensive than shares in Berkshine Hathaway.

I read the MSNBC story about who owns the fed, and it's funny, because congress is supposed to control the issuance and printing of money, yet the Fed was setup in such a way as to have maximum independance from congress, things that make you go hmmmm.
Actually it's not that hard when you see the member banks and board members! Controlled by private bankers.

 

[krazykarl]

Quote from SNBthetrue:

Dear krazykarl,

Thank you ! When I read this message, I can read that the America that I love is still there !

To the ones with their torch, I hope, that they stopped just one second to think about the Golden Rules and the PEACE concept... I know it's hard for them when they are inside the march with all the sound and excitement... However if they are really looking for the truth it will be easy...

On personnal note, I hope that I will too be able to trade doing what you do...

hope that you're better than I am. I spent over 100k in tuition(losses) before I learned the important things.

 

[SNBthetrue]

Quote from forsalenyc:

overpay your taxes and write this on the side: "i wish to buy some Fed shares."

LoL

Quote from krazykarl:

hope that you're better than I am. I spent over 100k in tuition(losses) before I learned the important things.

LoL^2 I don't have much hope on that subject

 

[krazykarl]

Quote from SNBthetrue:





LoL^2 I don't have much hope on that subject

hey now - you may laugh but that's hair i won't ever get back.

 

[sharkbites]

So... where has the Federal Reserve found 1.3 trillion USD to buy these securities? And who is on the hook for the interest plus principle?

" the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, "
http://www.federalreserve.gov/newsevents/press/monetary/20091216a.htm

And, while we talk trillions, any news on the "missing" 9 trillion?

"At a hearing in early May, Federal Reserve Inspector General Elizabeth Coleman was asked by Congressman Alan Grayson (D-FL) to account for the $9 trillion in off-balance sheet transactions ($30,000 for each man, woman and child in the U.S.) plus a $1 trillion expansion of the Fed’s balance sheet since last September. Her answer is that no one at the Fed knows or is keeping track of where the money has gone"
http://moneynews.com/FinanceNews/feds-lost-nine-trillion/2009/05/12/id/330048

And ofc, who is responsible for the interest and principle on that 9 trillion?

 

[krazykarl]

Quote from sharkbites:

So... where has the Federal Reserve found 1.3 trillion USD to buy these securities? And who is on the hook for the interest plus principle?

" the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, "
http://www.federalreserve.gov/newsevents/press/monetary/20091216a.htm

And, while we talk trillions, any news on the "missing" 9 trillion?

"At a hearing in early May, Federal Reserve Inspector General Elizabeth Coleman was asked by Congressman Alan Grayson (D-FL) to account for the $9 trillion in off-balance sheet transactions ($30,000 for each man, woman and child in the U.S.) plus a $1 trillion expansion of the Fed’s balance sheet since last September. Her answer is that no one at the Fed knows or is keeping track of where the money has gone"
http://moneynews.com/FinanceNews/feds-lost-nine-trillion/2009/05/12/id/330048

And ofc, who is responsible for the interest and principle on that 9 trillion?

Where is the $9 trillion number coming from? The reps only talk about the $1 trillion number - only the article author mention $9 trillion, but provides no information on where it comes from, other than sticking in the headline and leading with it. It does grab eyeballs though, eh? =)

Back to the 1.3 trillion number - they likely used a combination of their balance sheet and the printing press. Nothing wrong with that, it's their job. The last numbers I saw in 06 put their balance sheet at 1.7-ish trillion USD. For some perspective, the US treasury has around 13-14 trillion USD in the tax-payer coffers as of early 2009. I wouldn't be surprised if the Fed redeemed some of the tbills back to the treasury to fund part that 1.3T.

 

[Tresor]

Quote from krazykarl:

You're just uneducated. The dividends are not profits

I have been a financial analyst for quite time now and I did not see a simple case of a dividend to be paid out of anything else than ... profits.

 

[SNBthetrue]

Quote from Tresor:

a simple case of a dividend to be paid out of anything else than ... profits.

I am sure that they are certain accounting tactics which permit smart tricks... intution only...

 

[Tresor]

Quote from Mom0/pH0x:

HAHAHAHAHAH

Including three years as a senior financial analyst at a triple-A rated bank.

 

[Tresor]

Quote from SNBthetrue:

I am sure that they are certain accounting tactics which permit smart tricks... intution only...

No doubt they can use tricks, like any other corporation. In general what you can do with your net profit is:
(i) keep it as retained earnings (that increase your equity),
(ii) pay out as a dividend,
(iii) both of the above.

The FED consolidated statements show their solvency ratio is below 3% (which is dangerously low for a company of this type). They should not pay dividend untill they reach +7%.

Just my two cents.