Posted on 06/10/2009 1:02:31 PM PDT by FromLori
he Federal Reserve lost $5.25 billion in the first quarter on the securities it acquired with last year's bailouts of Bear Stearns and insurer American International Group Inc., according to a report issued Wednesday.
The loss on the holdings, which include mortgage-backed securities, reflected a decline in their value as the recession carried over into the first three months of this year. The cumulative loss on the Bear and AIG holdings come to $16.46 billion since they were taken over last year.
The Fed is hoping that if it holds onto the securities long enough, they will eventually rise in value once the economy returns to full health again, the housing market heals and the financial and credit crises are past.
The Fed's new report, which will be issued monthly, comes as lawmakers have demanded more information about the bailouts, and a slew of other programs intended to spur lending and stabilize the banking system.
The monthly report provides some details beyond the Fed's weekly snapshot of loan and debt-buying programs on its balance sheet. Those details include collateral pledged by borrowers, ratings on collateral, and the number of borrowers for some programs.
However, the Fed did not budge on lawmakers' requests that it identify borrowers for emergency and other loans. Fed Chairman Ben Bernanke has repeatedly argued that doing so would risk a run on a bank or other financial institution, undermining the purpose of the program.
As lender of last resort, the Fed's programs are intended to bolster the financial system, a key ingredient to lifting the country out of recession.
The monthly report showed that the Fed's commercial paper program reported net income of $2.14 billion in the first quarter.
(Excerpt) Read more at finance.yahoo.com ...
Hope Dope, Nope!
The list, ping
Well, it’s only dollars...it’s not like we lost Pesos.
Just wait a while and it may be like the Zim.
AIG has been a sleazy, running the margins, and insolvent for a decade company. It’s dead.
The Fed is just justifying it’s existence with other people’s money. No different than the Dept of Edjamacation paper shufflers, WOD Security Hamster Wheel or any of tens of thousands of government clerks, lawyers, administrators, janitors,..........
The important thing is that the Fed bureaucracy is growing in staff, money and power. ( Everybody move up one GS )
I do believe that was the impossible plan of the CEO of Bear Stearns as well. Chin up, Ben, as they say on CNBC, it isn't really a loss until you sell!
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