Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: Perspective who wrote (247483)	6/27/2003 2:23:27 PM
From: benwood	Respond to of 436258

I suspect it shows up in official budget reports as a loss. I remember a couple years ago when the gubbament reported a 'surplus' but the GAO document to congress reported something like a 500 billion dollar deficit (somebody posted a link here and I found that actual entry in the doc). Funny accounting... can't imagine what it will look like for this year. But it certainly won't be publicized. If anything, it will be blamed on revisionist historians.

To: Perspective who wrote (247483)	6/27/2003 4:14:24 PM
From: TobagoJack	Read Replies (1) \| Respond to of 436258

<<What are the implications of that? ... Are they legally required to actually maintain some capital themselves?>> Bank of Japan is now finding that whenever it itself does not bid for its own paper, the interest rate go up, because investors got used to the moral hazard. On the capital requirement rules, if any, do not matter, because they help to make the rules. I would imagine that before all is done, FED will be investigated and reformed.

To: Perspective who wrote (247483)	7/12/2003 8:23:14 PM
From: EL KABONG!!!	Read Replies (2) \| Respond to of 436258

bobcor, "This leads us to a third point: the Fed is almost guaranteed to take a capital loss on its portfolio. If the strategy works, the economy picks up, interest rates go up, bond prices go down, and the value of the Fed?s holdings of longer-term Treasuries falls." What are the implications of that? Of course there gonna get whacked if they pursue something as stupid as buying up long-dated T-bonds. Are they legally required to actually maintain some capital themselves? I may be way off base here, but so what if the Fed takes a big loss? Can't they just monetize the loss over a period of time (of their own choosing) so as to minimize any obvious effects on the domestic and global economies? They can (effectively) print as much money as they want (over time) and in essence, mitigate the losses by passing them on slowly to future generations, which is not too unlike the actions of the Fed of the 1930s... But maybe I'm just pissing into the wind here. It's possible that I'm missing something in the bigger picture... KJC