4 ms·

Does this also include the whole buying toxic assets thing? Not sure where that fits in your 3 options, but it’s definitely something they’ve been doing, to the

Does this also include the whole buying toxic assets thing? Not sure where that fits in your 3 options, but it’s definitely something they’ve been doing, to the tune of trillions of dollars.

cs702 4y ago
Anyone can see the current composition of the Fed's balance at https://www.federalreserve.gov/monetarypolicy/bst_fedsbalancesheet.htm https://www.federalreserve.gov/monetarypolicy/bst_fedsbalanc... -- the latest balance sheet is here: https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1 https://www.federalreserve.gov/releases/h41/current/h41.htm#... As anyone can easily confirm, US treasury bonds and agency-backed bonds constitute the vast majority of the ~$9T owned by the Fed today. During the global financial crisis, I believe the Fed was given permission (by the executive and legislative branches) to purchase other kinds of bonds, so it coulld maintain financial and monetary stability.
- bradleyjg 4y ago
  I think there was a fallen angel fund at the start of Covid (corporates that had been highly rated but lost those ratings during the brief crash before the bubble).
arcticbull 4y ago
> Does this also include the whole buying toxic assets thing? Common misconception. The 2008 bail-outs weren't run by the Fed but by Treasury, and they weren't grants, they were loans that have been repaid yielding a $110B profit so far, with more to come. [1] > Not sure where that fits in your 3 options, but it’s definitely something they’ve been doing, to the tune of trillions of dollars. As you can see from the composition, 'toxic assets' amounted to a grand total of just 2.9% of the bail-out package ($18.6B). It was a one-off, it wasn't 'trillions of dollars' and it wasn't the Fed. [1] https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/
- pjmorris 4y ago
  'toxic assets' may have been a misleading phrase here, but I think there is a component of federal Reserve assets you are overlooking that the poster rightly identifies, namely the amount of mortgage-backed securities currently on the balance sheet that weren't there pre-2008, about 2.7 Trillion worth [0]. Given that the entire Fed balance sheet was less than 1 Trillion at the end of 2007 [1], and composed mostly of US Treasuries at the time, it seems like it would have an effect on asset prices. [0] https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1 https://www.federalreserve.gov/releases/h41/current/h41.htm#... [1] https://www.federalreserve.gov/releases/h41/20071227/ https://www.federalreserve.gov/releases/h41/20071227/

Does this also include the whole buying toxic assets thing? Not sure where that fits in your 3 options, but it’s definitely something they’ve been doing, to the tune of trillions of dollars.

cs702 4y ago

Anyone can see the current composition of the Fed's balance at https://www.federalreserve.gov/monetarypolicy/bst_fedsbalancesheet.htm https://www.federalreserve.gov/monetarypolicy/bst_fedsbalanc... -- the latest balance sheet is here: https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1 https://www.federalreserve.gov/releases/h41/current/h41.htm#... As anyone can easily confirm, US treasury bonds and agency-backed bonds constitute the vast majority of the ~$9T owned by the Fed today. During the global financial crisis, I believe the Fed was given permission (by the executive and legislative branches) to purchase other kinds of bonds, so it coulld maintain financial and monetary stability.

bradleyjg 4y ago
I think there was a fallen angel fund at the start of Covid (corporates that had been highly rated but lost those ratings during the brief crash before the bubble).

arcticbull 4y ago

> Does this also include the whole buying toxic assets thing? Common misconception. The 2008 bail-outs weren't run by the Fed but by Treasury, and they weren't grants, they were loans that have been repaid yielding a $110B profit so far, with more to come. [1] > Not sure where that fits in your 3 options, but it’s definitely something they’ve been doing, to the tune of trillions of dollars. As you can see from the composition, 'toxic assets' amounted to a grand total of just 2.9% of the bail-out package ($18.6B). It was a one-off, it wasn't 'trillions of dollars' and it wasn't the Fed. [1] https://projects.propublica.org/bailout/ https://projects.propublica.org/bailout/

pjmorris 4y ago
'toxic assets' may have been a misleading phrase here, but I think there is a component of federal Reserve assets you are overlooking that the poster rightly identifies, namely the amount of mortgage-backed securities currently on the balance sheet that weren't there pre-2008, about 2.7 Trillion worth [0]. Given that the entire Fed balance sheet was less than 1 Trillion at the end of 2007 [1], and composed mostly of US Treasuries at the time, it seems like it would have an effect on asset prices. [0] https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1 https://www.federalreserve.gov/releases/h41/current/h41.htm#... [1] https://www.federalreserve.gov/releases/h41/20071227/ https://www.federalreserve.gov/releases/h41/20071227/