More Bidenomics! Bank Bailout Fund Usage Soars To Another Record High As Fed Losses Exceed $130 Billion

Confounded Interest ^ | 12/29/2023 | Anthony B. Sanders

[Kaiser8408a]

Nobody but Biden could so handicap an economy with horrible fiscal policies, massive debt, inflation and open borders. And then go to the Virgin Islands for yet another taxpayer paid vacation. Biden has spent 40% of his Presidency on vacations.

Bidenomics is a disaster for the US middle class. And Bidenomics with its inflation has led The Fed to counterattack and raises interest rates, leading to losses for The Federal Reserve (which is paid for by US Treasury) of over $130 billion.

The Fed’s balance sheet shrank by $11.3BN last week to its lowest level since March 2021, but still remains elevated.

Source: Bloomberg

Usage of The Fed’s bank bailout facility rose by another $4.5BN last week to a new record high of $136BN…

Source: Bloomberg

The BTFP-Fed Arb continues to offer ‘free-money’ (and usage of the BTFP has risen by $26.7BN since the arb existed):

The rate on the Fed’s Bank Term Funding Program – which allows banks and credit unions to borrow funds for up to one year, pledging US Treasuries and agency debt as collateral valued at par – is the one-year overnight index swap rate plus 10 basis points.

That figure is currently 4.83%, down from 5.59% in September.

For institutions that have an account at the Fed, they can borrow from the BTFP at 4.83% and park that at the central bank to earn 5.40% – the interest on reserve balances.

Source: Bloomberg

The 57bp spread is the widest level since the Fed introduced the facility to support a struggling banking system after the collapse of California’s Silicon Valley Bank and Signature Bank in New York.

Nobody but Biden!

[Nateman]

I've heard in the financial markets laws have been rewritten to make certain large banks the ultimate owners. An impending crisis similar to the resulting chaos due to bundling toxic loans. To quote a well known villain: ‘You will own nothing and be happy’. This fits well with the cut back of the money supply guaranteed to cause a Recession. Now that the enemy is calling us Confederates maybe they have a Civil War brewing for us.

[Red Badger]

“It’s only paper.” - Sam Walton....................

[econjack]

The loss is passed on to member banks but the Fed has the ability to use some smoke and mirrors to convert the loss into a deferred asset. However, if you want to see how badly the Fed has been managed during the Biden administration:

Part of this slide is due to Yellen's mismanagement of the US Treasury and the way the Fed monetizes the Federal deficit. For more details, see:

https://www.aier.org/article/federal-reserve-operating-losses-and-the-federal-budget-deficit/

[Liz]

Official 2024 candidate campaign photos.

Guess who’s going to win...snx?