What the Fed owns

The Federal Reserve, and by that I mean you and me, owns quite a bit of interesting things these days. Most of it is worth pennies on the dollars that the Fed bought it for.

As part of the bailouts of AIG and Bear Stearns, the Federal Reserve Bank of New York spent more than $70 billion to buy toxic assets the companies owned. Last week, prompted by a lawsuit filed by Bloomberg News, the Fed finally told the world exactly what it bought.
The Fed now owns loans to Hilton hotels in Hawaii, Puerto Rico, Malaysia and Trinidad. It owns loans to the Miami airport, and the Civic Opera House in Chicago.
It also owned a loan to Crossroads Mall in Oklahoma City. Then, when the owners of the mall couldn't make the payments, the Fed foreclosed. So now it owns the mall, which includes a Chick-fil-A and an AMC theater.
The mall's for sale — cheap! "This lender owned distressed asset ... can be purchased at far below replacement cost," the listing says.
The Fed also owns credit-default swaps — basically, insurance policies that pay off if a borrower defaults on a loan. It holds swaps on the debt of Florida schools, and on debt owed by California and Nevada. So the Fed would profit if one of those states defaulted on its debt.

It's bad enough that the Fed owns all these toxic assets, but I find it especially disturbing that it owns credit default swaps that would allow it to profit on the failure of certain state governments.

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that's just great

any info on what they are going to do with these swaps? Esp. the sovereign/state ones?

Currency Swaps?

I'm baffled by the Fed's sleight of hand these days. It won't stand still so we can see what it is doing -- until after the deal is done, and maybe not even then. Their releases make it sound like these currency swaps are totally riskless. Maybe someone can explain it (plain English) to those of us "laymen" in whom Greenspan had so little confidence.

Will the Fed wind up owning the Parthenon?

Frank T.

Bloomberg & Missing Articles

After the meltdown in Fall 2008. Bloomberg posted a series of news blurbs that said over $9 trillion was unaccounted for on the Fed books - missing. Those articles are no longer online but they are referenced all over. ZeroHedge etc.

When ever something is removed from the web I know the powers to be are at work.

We have no idea what is going on with 'our' money supply. It is in the hands of con men.


how CT. While Zero Hedge has reported things very useful, I always need to watch it with them for I have them out many of their posts have been dead ass wrong. No surprise, blogging away at lightening speed, but I'd verify that to find out what it's all about.

That said, I mean the SIGTARP has put the real liabilities of all of the bail outs at $27 trillion (EP's most popular post), so, what's really on the Fed's books in terms of purchasing toxic crap. ....

midtowng just pointed out the Fed literally bought state based default swaps. i.e. they will be worth something if and only if a state defaults on it's debt. Why would they "buy" that and instead just plain cancel it? They cancel/nullify trades, why can't they cancel/nullify absurd derivatives?

Too Much Going On

There is a video on Youtube showing Alan Grayson grilling a Fed inspector about what happened to this money and they just can't or won't answer those questions.

Bloomberg has changed the links now rather than print the original allegations. I haven't checked these in quite some time but I am not imagining these actions either. During the fall of 2008 I followed all these stories with tremendous interest.

This is now all part of the Bloomberg FOIA court case which no doubt will be appealed all the way to SCOTUS who will rule this a national security issue and squash the request.

Remember, 25 to life for stealing golf clubs. So what does a man walking out of Walmart with $9 trillion in cash get? Immunity.

Federal Reserve Cannot Account for $9 Trillion in Off-Balance Sheets Transactions

Who Owns the Fed?

Its a quasi government agency meaning its privately held with government powers.

Who actually owns the Fed? Do the owners have control over the Feds decisions?

ever read Secrets of the Temple?

I'm really not a Ron Paul fan, assuredly not a "libertarian" (faux pas, amazing some things are free, yet another areas are not, such as a woman being free over her own body?)

But Greider is an uber leftie, hence you can get the story on the history and structure, minus the conspiracy theory slant.

I don't know who owns the Fed. I'd have to go look it up! I do know that the only controls seem to be during the confirmation hearings. That is just too friggin' scary for me and while I get the plan was to not turn it into a political device, seems to me the GAO has a better model for isolation on that score.

Ron Paul Minus Social Views

Would be a peoples candidate for sure. I think Grayson may be the closest thing to him with some lighter social views.

I see all over the web claims that the Fed is owned in part by foreign banks which would explain their desire to bail out foreign banks at the expense of US interests.

yet another reason to delve into the details

strange things can come from the strangest places. Grayson is, IMHO, a rabble rousing Populist and a great voice trying to raise hell. Bernie Sanders is one of my favorite reps. But check this out. Chuck Grassley, of all people, is a defender of U.S. professional workers, strange but true. Here we have corporate notorious, Blanche Lincoln introducing the best derivatives reform to date.

After watching all of this for a while I've concluded, one needs to just focus in on legislation, per issue. Although there are certain Congressional reps. where if it's a corporate lobbyist agenda item, they will be sure fire in a floor speech working to get whatever that item is passed.

I think we have Ron Paul fans on this site and it's so often he does have insight and policies, legislation that do make economic sense.

But EP isn't about social issues per say, unless they involve money (which many do!)