Lots of Red Ink at the Fed

[Doc7505]

Lots of Red Ink at the Fed​

Lots of Red Ink at the Fed | Mises Institute

The Fed wants you to believe that neither its negative capital nor its giant losses matter because it is the Fed and can print money. But it does matter because

mises.org

12 Sep 2023 ~~ By Alex J. Pollock

The Federal Reserve has officially reported a loss of $57 billion for the first six months of 2023. Quite a number! So the “Federal Reserve Banks Combined Quarterly Financial Report as of June 30, 2023” (CQFR)—a little-known document—is especially notable for its red ink. We can anticipate an annual loss of over $100 billion for 2023 and for the losses to continue into 2024. 1

How does a central bank, especially the world’s greatest and most important central bank, lose tens of billions of dollars in six months? An average person, influenced by the mystique of the Fed, might understandably be baffled by this fact.
To understand what is happening, we need to recall that in addition to being a media star as the manipulator of the world’s dominant currency, the Federal Reserve is a bank—well, actually 12 Federal Reserve Banks (FRBs), covering districts across the United States. Added together they are huge, with total assets of $8.3 trillion (with a T). The FRBs have loans, investments, deposits and borrowings, interest income and interest expense, and profit or loss like other banks do. They also have private shareholders: the commercial banks which are “Fed member banks,” and the FRBs have over them the Washington Federal Reserve Board, which charges them for its expenses.
~Snip~
But does it matter that the Fed’s losses will cost not only it, but also the Treasury and the taxpayers, over $100 billion this year and more in the future? Does it matter that on a combined basis its accumulated losses are greater than its private stockholders’ paid-in capital? Does it matter that with negative equity under standard accounting, it is technically insolvent? All of these can be debated, but the numbers certainly do get one’s attention.
We conclude with a simple question: Did the leaders of the Fed intend to lose $57 billion in six months? Did they intend to be looking at a loss of more than $100 billion for this year? Did they intend to have a mark to market loss of more than $1 trillion? It is impossible to believe they did. The liberal supply of red ink they have delivered certainly does not help the Fed’s reputation for knowing what it is doing.


Commentary:
A billion here and a billion there, pretty soon your talking real money. 10% goes a long way.
To the Federal Reserve this is just a rounding number error.

 

[LuckyDuck]

The first income tax on the public was implemented in 1861 to help pay for the Civil War. This tax was repealed in 1872. However, as is the addiction of access to money is the cornerstone of our federal government, it implemented the federal income tax as we know it, in 1913. Since them our government bent on getting more and more money from the working populace, has only balanced the budget a couple of times and always prefers to spend more than it has on pet projects and massive monetary giveaways to foreign countries. So, expect to continue seeing us drown in debt to cover politicians greed.

 

[Toddsterpatriot]

Lots of Red Ink at the Fed​

Lots of Red Ink at the Fed | Mises Institute

The Fed wants you to believe that neither its negative capital nor its giant losses matter because it is the Fed and can print money. But it does matter because

mises.org

12 Sep 2023 ~~ By Alex J. Pollock

The Federal Reserve has officially reported a loss of $57 billion for the first six months of 2023. Quite a number! So the “Federal Reserve Banks Combined Quarterly Financial Report as of June 30, 2023” (CQFR)—a little-known document—is especially notable for its red ink. We can anticipate an annual loss of over $100 billion for 2023 and for the losses to continue into 2024. 1

How does a central bank, especially the world’s greatest and most important central bank, lose tens of billions of dollars in six months? An average person, influenced by the mystique of the Fed, might understandably be baffled by this fact.
To understand what is happening, we need to recall that in addition to being a media star as the manipulator of the world’s dominant currency, the Federal Reserve is a bank—well, actually 12 Federal Reserve Banks (FRBs), covering districts across the United States. Added together they are huge, with total assets of $8.3 trillion (with a T). The FRBs have loans, investments, deposits and borrowings, interest income and interest expense, and profit or loss like other banks do. They also have private shareholders: the commercial banks which are “Fed member banks,” and the FRBs have over them the Washington Federal Reserve Board, which charges them for its expenses.
~Snip~
But does it matter that the Fed’s losses will cost not only it, but also the Treasury and the taxpayers, over $100 billion this year and more in the future? Does it matter that on a combined basis its accumulated losses are greater than its private stockholders’ paid-in capital? Does it matter that with negative equity under standard accounting, it is technically insolvent? All of these can be debated, but the numbers certainly do get one’s attention.
We conclude with a simple question: Did the leaders of the Fed intend to lose $57 billion in six months? Did they intend to be looking at a loss of more than $100 billion for this year? Did they intend to have a mark to market loss of more than $1 trillion? It is impossible to believe they did. The liberal supply of red ink they have delivered certainly does not help the Fed’s reputation for knowing what it is doing.


Commentary:
A billion here and a billion there, pretty soon your talking real money. 10% goes a long way.
To the Federal Reserve this is just a rounding number error.

How does a central bank, especially the world’s greatest and most important central bank, lose tens of billions of dollars in six months?

When you buy long-term debt financed with short-term loans, it's easy.
That's what killed Bear Stearns and Lehman.

But does it matter that the Fed’s losses will cost not only it, but also the Treasury and the taxpayers, over $100 billion this year and more in the future? Does it matter that on a combined basis its accumulated losses are greater than its private stockholders’ paid-in capital? Does it matter that with negative equity under standard accounting, it is technically insolvent?

Doesn't really matter.

 

[1srelluc]

So that's how Uncle RICO Biden got five estates.