Monday, January 26, 2009

Fed's balance sheet is shrinking

In the latest release of its weekly statement (Jan 22) the Fed's balance sheet is down about $200 billion ($2.1 trillion) from the peak back on January 2 ($2.3 trillion). About $130 billion of that reduction came from the Fed's foreign currency position, which is marked to the market. Are those currency losses? Where are the journalists, lawmakers, economists and other screaming about this? They only scream about help to American businesses and households, I guess. When it comes to losses on loans to foreign entities, nobody says anything.


googleheim said...

Can you please update us on the FDIC vat of money available for dispersement ?

If it is less than 100 billion, then is that not a little precarious ?

In other words, if we are hit with wave after wave of bank and corporate bankruptcies and people start pulling their funds out and OR banks go under more then it will be a matter of waiting for FDIC money to be issued and or printed.

That kind of bottleneck, though FDIC insured, is called a run on the banks if not at least an attempt if there is no money to pick up.

Argentina 2001 with Population 30 million

USA 2009 with population 300 million

order of magnitude : 1 x 10

googleheim said...

I forgot my obligatory " ? ? ? "

at the end ...