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Ahead of Ben Bernanke's testimony to Congress, MSCI calculates that the bank could take...

Ahead of Ben Bernanke's testimony to Congress, MSCI calculates that the bank could take mark-to-market losses of $547B on its holdings within three years if GDP contracts and rates rise sharply along with inflation. The Fed's losses would be $216B if the economy performs in line with consensus. It might be worth noting, though, that the Fed doesn’t mark its portfolio to market.
Comments (3)
  • And what would the economy look like in the Depression if the Fed hadn't
    stepped up....Couple more trillion in economic losses?? but why let that thought get in the way of some good ole' Fed Bashing??
    26 Feb 2013, 04:57 AM Reply Like
  • That's an easy one: the "Depression" would have been long since in the rear view mirror.

     

    We would have had a sharp, short correction, and by now we would be sailing merrily on our way once again. We would be shed of the likes of AIG, CitBank, Bank of America, and probably most of GE, and instead we would have smaller, leaner, less beaucratic companies better able to adjust to changing economic conditions. The Feb would be a much smaller outfit, housing would be recovered, employment would be back to growth levels, and we wouldn't be faced with the plague of debt, derivatives and mortgage loans which have been conveniently tucked away out of site...but never addressed.

     

    In short, the 'system' would be cleansed and prosperity would be the order of the day. Don't forget, Europe almost did it, and at the last second Geithner ran over there and sold them the idea that WE would take their crap too--just so they didn't mark things to zero and do that necessary cleansing which would have made OUR solution look pretty dumb....not to mention bankruping the already zombie banks here in America. We were that close...twice...to doing the right thing....but instead, we have malaise for as far into the future as man can see...and now a stock market bubble to go along with everything else.

     

    What would it have cost? A few trillion. What have we spent? A few trillion. What's the differecne?> We go nothing in terms of shedding our problems with the trillions we spent.
    26 Feb 2013, 07:31 AM Reply Like
  • Talking now that Fed's over 3 trillion balance sheet and climbing is like a rock in a hard place. Now the projected rate increases should the Fed cut back will put Fed losses near 1/2 trillion.. Or more !

     

    Thus,the sword is sharp on both sides..

     

    Ben will need all his political skills and make sure the next Fed chair gets to do the tuff stuff.....

     

    PS.. What the Fed is doing in preventing the so called depression is the same thing all the Central bankers are doing. This currency war hides inflation ,but, it's a MEGA tax on the billions of folks who struggle to survive an feed themselve. All so a hanful of banksters can keep the market averages up. Look at the US $ value in 2007 and what it buys in 2013.. The DOW needs to be near 16,000 to be or equal value.
    26 Feb 2013, 05:16 AM Reply Like
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