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Was it paid back? Or was it "paid back" in the same way that a father might let his deadbeat son roll a loan so he can lie to his golf buddies about it? https:
by jjoonathan 4y ago
Was it paid back? Or was it "paid back" in the same way that a father might let his deadbeat son roll a loan so he can lie to his golf buddies about it?
https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL
It sure seems to me that at least $1T stayed printed. Of course, that amount seems positively quaint now.
- comte7092 4y agoThat graph isn’t a graph of TARP assets…
- jjoonathan 4y agoThat's my point. It's misleading to zoom in on TARP because TARP is only part of the story. Swapping one asset for another without reducing the net position is a dumb trick and it's embarrassing that so many people fall for it. Looking at the Fed's balance sheet is a simple way to track the big picture.
- comte7092 4y agoThose were different program that frankly had nothing to do with each other policy wise. In one instance, the fed took over assets to backstop troubled banks, in the other, it sought to increase the monetary base. It’s not a “dumb trick” it’s basic monetary policy.
- jjoonathan 4y agoIt stops being a dumb trick the moment the Fed manages to wind down the balance sheet (i.e. never). Until then, the Fed is just the bagholder of last resort, and talk of a money printer is more accurate than talk about backstops and the monetary base.
- comte7092 4y agoThey’ve literally been winding down the balance sheet for the last ten months.