Maybe if we're lucky, inflation will really kick in and after a few hundred years the Fed will make a profit from these beasts. If nothing else it does make me think of all of the Republicans who talked about what a great deal AIG was for America. They calculated the payments with interest and convinced themselves this was the deal of the century. It was, but not for the taxpayers. This explains why they were so incompetent with running the economy and driving up the overwhelming majority of the deficit that the US is burdened with now and for years to come.
The Federal Reserve lost $5.25 billion in the first quarter on the securities it acquired with last year's bailouts of Bear Stearns and insurer American International Group, according to a report issued Wednesday.
The loss on the holdings, which include mortgage-backed securities, reflected a decline in their value as the recession carried over into the first three months of this year. The cumulative loss on the Bear and AIG holdings come to $16.46 billion since they were taken over last year.
The Fed is hoping that if it holds onto the securities long enough, they will eventually rise in value once the economy returns to full health again, the housing market heals and the financial and credit crises are past.
Main & gay blog