Monday, September 27, 2010

Marginal Revolution: How Much Has the Fed Lost?

The Fed has been a financial empath, it has taken on other people's financial pain and put it on its own books.  But all of this shuffling of losses--perhaps not coincidentally from more to less transparent forms--has obscured the fact that when the shuffling stops it's the taxpayers who are the ultimate empaths, whether they volunteered or not.  The taxpayers deserve more than a shell game, they deserve a proper financial accounting which explains where the losses came from and how much ended up on different books, including those of the Federal Reserve.

An interesting question from Alex Tabarrok, I doubt a clear answer will be available any time soon.

Posted via email from rhymeswithclown's posterous


Dad29 said...


TARP was and is NOT 'profitable,' because the toxics are still sitting on FRB's books.

D said...


That was the whole point. Put bad, government-created loans where they can never be questioned and the cost can merely be monetized.

It is also the whole point of central banking, along with inflation.