Posted on 03/18/2008 11:14:20 AM PDT by Aristotelian
The Federal Open Market Committee decided today to lower its target for the federal funds rate 75 basis points to 2.25 percent.
(Excerpt) Read more at federalreserve.gov ...
Neither do I, but I watched that short Youtube clip from the link that was provided in the post and it was clear that Cramer was talking about deposits and accounts, not the stock. He was clearly responding to a question about "run on the bank" scenario, though I wish the clip would include the question itself to avoid the confusion. Trading BSC and trading with Bear Stearns are obviously two different things and another poster was not getting your point.
I can't stand to watch Cramer's clown-act show, but from way before current show his straight commentary I know that he is very sharp and knowledgeable about the market and financial system and the machinery that makes it work, and have seen him deliver that knowledge in a very clear, understandable and often concise manner. I am sure his book shares the insights and can open the eyes of many uninitiated to the details of the ways of Wall Street and since Cramer was one of the active practitioners, then reading his book - one of the few that open the Street's curtains - would be of a tremendous value to understanding its "wickedness" and what goes on behind the scenes.
Yes, Fed is making some creative moves trying to inject or unlock (guarantee) liquidity stream and stave off a crisis of confidence in financial and trading system and prevent "run on the bank" rumors and speculation which could become self-fulfilling prophecy, not bail out a particular institution, and I must say the transfer of BSC balance sheet assets and liabilities to much stronger hands for nominal price (similarly to transfer of CFC into the hands of BAC) goes a long way towards traders' confidence factor. To me, BSC transfer was done cleaner and smoother than New York's Fed unwinding of LTCM ten years ago, though it's not the same situation. Interestingly, Jim Cayne / Bear Stearns was the only one at the time that refused to participate in unwinding of LTCM. I guess, what goes around...
True, Fed is "pushing on the string" but, in the end, that's all they can do and eventually market should work itself out like it did in the previous times. Bernanke is also pretty transparent and unassuming, for a Fed chairman, and doesn't try to keep market guessing too much, which is probably for the better in times of crisis.
If the Fed was that smart we wouldn't be trillions in debt. My wager is that it is another loser. Time will tell.
The Federal Reserve is not the Treasury.
My wager is that it is another loser.
Another loser? What were the earlier losers?
Time will tell.
Yup.
Right, they never heard of each other. Sort like the FDA and the AMA.
Was my explanation too simple? What don’t you understand?
You tend to insult when you can't say anything.
The Fed giveth, the Market taketh away.
Wall Street no longer depends on capitalism but on Government. Just like the government to government greedy lobbyist fleece trade deals that brought on this mess.
I try to give you a simple explanation and you get all touchy. I’m glad you finally got straightened out about the Federal Reserve giving their profit to the Treasury. Let me know if you’re confused about anything else. I’m always glad to help.
What profit? The whole charade is taxpayer financed as it is, right down to the printing press.
The profit they earn on the bonds they hold.
The whole charade is taxpayer financed as it is, right down to the printing press.
Just change the word taxpayer to the word self and you'll be correct.
The government don't hold bonds, they sell them to finance more debt, to suckers like you apparently.
The Federal Reserve holds bonds.
Oh that makes me feel better. The government buying government bonds. And as usual, you have proof to back it up. I am getting a little bored with you.
On the Fed's own position, you can't really add the successive actions they've announced because many are so short term the funds have come back and the collateral has been returned before the next lot goes out. But it is a quibble.
The Fed publishes its accounts every week, you can see it online or in the pages of Barrons, the financial weekly. As of the March 17 edition, there is $817 billion of currency in circulation, and the Fed holds $709 billion in US treasury securities from the proceeds. There are various other line items on both sides of the balance sheet in the $40 billion range, but those dominate its operations.
Then they also have a line item for their gold, book value $11 billion, but that is based on valuing it at its original cost to them of $35 an ounce, and its is really worth more like $300 billion today. The treasuries (and long ago, the gold) are the assets raised when the Fed paid dollars to buy things, and the currency reflects the liability thereby created, circulating among the successor counterparties of those it bought things from.
In the last year, incidentally, the Fed has sold $72 billion worth of treasuries, net. Currency in circulation has increased $10 billion, with other smaller factors compensating, and the treasury portion of their whole portfolio falling slightly.
It is trivial to get all the actual facts on these things, we don't need to make up wild stories about them.
Your feelings and lack of understanding do not change the truth.
And as usual, you have proof to back it up.
Of course.
Release Date: January 10, 2008
For immediate release
The Federal Reserve Board on Thursday announced that the Federal Reserve Banks distributed approximately $34.437 billion of their $41.941 billion total income to the U.S. Treasury during 2007.
Federal Reserve System income is derived primarily from interest earned on U.S. government securities that the Federal Reserve has acquired through open market operations. This income amounted to $40.298 billion in 2007. Additionally, income from fees for the provision of priced services to depository institutions totaled $878 million. The remaining income of $765 million includes earnings on foreign currencies, earnings from loans, and other income.
Net operating expenses of the twelve Reserve Banks totaled $2.608 billion in 2007. In addition, the cost of earnings credits granted to depository institutions amounted to $242 million. The Reserve Banks were assessed for Board expenditures totaling $296 million and for the cost of currency totaling $576 million.
Net additions to income amounted to $198 million, primarily representing unrealized gains on assets denominated in foreign currencies that are revalued to reflect current market exchange rates, which is offset, in part, by interest expense on reverse repurchase agreements.
Net income for the Federal Reserve Banks in 2007 amounted to $38.551 billion. Under the Board’s policy, each Reserve Bank’s net income was transferred to the U.S. Treasury, after providing for $992 million in statutory dividends to member banks and $3.121 billion to equate surplus to paid-in capital.
I am getting a little bored with you.
Yeah, the truth is boring compared to ignorant conspiracy theories, but it remains the truth.
Did you make that up all by yourself or did some of your shill friends help you out with that lie.
Once agian, is the U.S. Goverment in debt and going to deeper in debt? Care to post any info on that?
I would like to know where you copied and pasted that.
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