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Thread: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487:681]

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q

    Quote Originally Posted by Demon of Light View Post
    The central banks and governments of the world just showered the Earth with money to prevent a rapid collapse of the financial system. It was a crisis delayed rather than a crisis averted.
    No responsible central bank or government deliberately allows its financial system to collapse and a long-duration Depression with possible 20%-30% unemployment to unfold if it has the capacity to try to prevent such an outcome.

    On the point of the mortgage-related "junk," some of those securities have regained quite a bit of value since they hit bottom during and just after the financial crisis. Not surprisingly, the Fed has actually making a profit on some of the instruments it acquired during its emergency measures. Those profits are returned to the U.S. Treasury.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by donsutherland1 View Post
    No responsible central bank or government deliberately allows its financial system to collapse and a long-duration Depression with possible 20%-30% unemployment to unfold if it has the capacity to try to prevent such an outcome.

    On the point of the mortgage-related "junk," some of those securities have regained quite a bit of value since they hit bottom during and just after the financial crisis. Not surprisingly, the Fed has actually making a profit on some of the instruments it acquired during its emergency measures. Those profits are returned to the U.S. Treasury.
    The FED has NOT made a " Profit " from buying Fannie and Freddies trash securities.

    Thats ridiculous.

    They are on target to expose themselves to 1.5 Trillion dollars in the GSEs SubPrime debt.

    Let me know when they've actually received ALL their principle back plus profit.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by Fenton View Post
    The FED has NOT made a " Profit " from buying Fannie and Freddies trash securities.

    Thats ridiculous.

    They are on target to expose themselves to 1.5 Trillion dollars in the GSEs SubPrime debt.

    Let me know when they've actually received ALL their principle back plus profit.
    The Fed has not unloaded its entire portfolio. Notice that I referred to "some" of the securities it acquired. The reference to profit refers only to the limited number of securities e.g., some of those associated with the Maiden Lane (Bear Stearns) vehicle, that it has sold off. The process of reducing its balance sheet will take many more years, as much faster action would create a fire sale-type situation, which would reduce their prices. The Fed is just in the very early stages of that process. Once the tapering process ends and if economic conditions permit, it could begin to accelerate its balance sheet reduction.

    From the Fed:

    2012:

    The Federal Reserve Banks' 2012 estimated net income of $91.0 billion was derived primarily from $80.5 billion in interest income on securities acquired through open market operations (U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities). Additional earnings were derived primarily from net realized gains on the sale of U.S. Treasury securities of $13.3 billion, net income of $6.1 billion attributable to the consolidated limited liability companies that were created in response to the financial crisis, and income from services of $450 million, offset by losses of $1.1 billion that result from the daily revaluation of foreign currency denominated asset holdings at current exchange rates. The Reserve Banks had interest expense of $3.9 billion on depository institutions' reserve balances.

    http://www.federalreserve.gov/newsev.../20130110a.htm

    2013:

    The Federal Reserve Banks' 2013 estimated net income of $79.5 billion was derived primarily from $90.4 billion in interest income on securities acquired through open market operations (U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities).

    http://www.federalreserve.gov/newsev.../20140110a.htm
    Last edited by donsutherland1; 07-03-14 at 09:18 AM.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by imagep View Post
    What I am saying is that it is rediculous to claim that Bush only had 7 budget years when he served 8 years as POTUS.
    One doesn't have to be a liberal to see that you are a partisan hack.
    Take a civics class and stop making a fool of yourself. Bush had 8 budget years but only 7 budgets passed. Obama knew the low information voter would buy the claim that it was the Bush deficit when the reality is the Bush budget was never signed or passed by Congress. You obviously believe that if someone proposes spending of your money but that spending request is never passed by you then any deficit you generate is the person with the proposal, never mind they never spent the money. Makes it easy for you to claim it was their deficit, doesn't it?

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by donsutherland1 View Post
    The Fed has not unloaded its entire portfolio. Notice that I referred to "some" of the securities it acquired. The reference to profit refers only to the limited number of securities e.g., some of those associated with the Maiden Lane (Bear Stearns) vehicle, that it has sold off. The process of reducing its balance sheet will take many more years, as much faster action would create a fire sale-type situation, which would reduce their prices. The Fed is just in the very early stages of that process. Once the tapering process ends and if economic conditions permit, it could begin to accelerate its balance sheet reduction.

    From the Fed:

    2012:

    The Federal Reserve Banks' 2012 estimated net income of $91.0 billion was derived primarily from $80.5 billion in interest income on securities acquired through open market operations (U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities). Additional earnings were derived primarily from net realized gains on the sale of U.S. Treasury securities of $13.3 billion, net income of $6.1 billion attributable to the consolidated limited liability companies that were created in response to the financial crisis, and income from services of $450 million, offset by losses of $1.1 billion that result from the daily revaluation of foreign currency denominated asset holdings at current exchange rates. The Reserve Banks had interest expense of $3.9 billion on depository institutions' reserve balances.

    FRB: Press Release--Reserve Bank income and expense data and transfers to the Treasury for 2012--January 10, 2013

    2013:

    The Federal Reserve Banks' 2013 estimated net income of $79.5 billion was derived primarily from $90.4 billion in interest income on securities acquired through open market operations (U.S. Treasury securities, federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities).

    FRB: Press Release--Reserve Bank income and expense data and transfers to the Treasury for 2013--January 10, 2014
    Of-course they haven't disclosed their entire portfolio.

    They NEVER will.

    They're buying hundreds of billions of dollars of Fannies and Freddies trash debt in a effort to cover for the massive Democrat fed and defended corruption that went on at the two GSEs.

    And they may have recouped a fraction of their losses but by no means have they made a " profit ".

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by Fenton View Post
    Of-course they haven't disclosed their entire portfolio.

    They NEVER will.

    They're buying hundreds of billions of dollars of Fannies and Freddies trash debt in a effort to cover for the massive Democrat fed and defended corruption that went on at the two GSEs.

    And they may have recouped a fraction of their losses but by no means have they made a " profit ".
    Profits or losses are not realized until securities are sold. Hence, the Fed has not counted profits or losses for the securities it continues to hold.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by donsutherland1 View Post
    Profits or losses are not realized until securities are sold. Hence, the Fed has not counted profits or losses for the securities it continues to hold.

    Oh BS

    In reference to their decision to expose themselves to 1. 5 Trillion dollars in GSE debt, the FED has not made a " Profit ".

    Nor will they.

    They're buying trash and they know it.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by Fenton View Post
    Oh BS

    In reference to their decision to expose themselves to 1. 5 Trillion dollars in GSE debt, the FED has not made a " Profit ".

    Nor will they.

    They're buying trash and they know it.
    The Fed's reports on its annual income indicate that it has made profits, in part, from "federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities."

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by donsutherland1 View Post
    The Fed's reports on its annual income indicate that it has made profits, in part, from "federal agency and government-sponsored enterprise (GSE) mortgage-backed securities (MBS), and GSE debt securities."

    Look, all you're going to do is attempt to mitigate away the failures of this administration and their policies.

    Its all you've ever done.

    I'm more interested in the truth, a comprehensive evaluation of our economic situation and the effectiveness of policies which include QE.

    There's another poster who continues to post ridiculous threads about Fannie and Freddies recent " profits ", as they sit on Trillions in subprime debt.

    He also desperately tries to define down the entirety of the Subprime mortgage crisis into 2 years, starting in 2004 and ending in 2006.

    You're no different.

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    Re: U.S. Economy Shrinks By Most Since Great Recession in 1Q[W:487]

    Quote Originally Posted by Fenton View Post
    Look, all you're going to do is attempt to mitigate away the failures of this administration and their policies.
    Again, I have to note that monetary policy and fiscal policy are not the same thing and that the Fed and Obama Administration are not synonymous. The Fed is responsible for monetary policy. The President is responsible for fiscal policy. The Fed's successes and failures cannot be attributed to the Administration.

    The discussion of the nation's fiscal (tax and spending) and regulatory policy are separate matters from the Fed's monetary policy, extraordinary facilities e.g., TAF, and QE. The distinction is important.

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