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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

2 comments:

Dad29 said...

Yup.

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

D said...

Dad,

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.