How is money created?

[g5000]

Most americans have absolutely no idea.
I wonder what you guys know?
Here's the truth:
- Loans create new money, this shows up in the form of deposits.
- The federal government creates new money through deficit spending. The central bank also plays an important role.

I expect many posters to take an issue with my assertion that Loans create deposits.
Banks do not lend out deposits or multiply up central bank money.

http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf

This article explains how the majority of money in the modern economy is created by commercial banks making loans. • Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits. • The amount of money created in the economy ultimately depends on the monetary policy of the central bank. In normal times, this is carried out by setting interest rates. The central bank can also affect the amount of money directly through purchasing assets or ‘quantitative easing’.

Government doesn't create money through deficit spending. Rather, the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages... Both of the items are about as valuable. Then the banking sector can loan out that completely sound money and the process multiplies.

the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages...

The Fed doesn't buy toxic mortgages. Only guaranteed ones.

Both of the items are about as valuable.

Yes, guaranteed bonds are valuable. An important part of every portfolio.

I would seriously like to see FED try exit out of their trash of a position. They could never pull it of, because they got trash.

Yeah, those mortgages were so highly valued, that is exactly why the FED bought them. Even though it was basically called bail out. Holy hell these people are dumb.

Well, what they are really holding are assets (bonds) that are in a massive bubble. When the bubble collapses (interest rates rise), those assets will be upside down. The Fed will not be able to soak up as much cash as they put in for liquidity. And so we will begin to see rising inflation as the velocity of money increases. Inflation which the Fed will probably not be able to slow very much as their assets will be of considerable less value than they paid for them.

In short, "trash".

It all depends on how catastrophically the bubble pops. A "soft landing" or a "hard landing".

 

[bripat9643]

Most americans have absolutely no idea.
I wonder what you guys know?
Here's the truth:
- Loans create new money, this shows up in the form of deposits.
- The federal government creates new money through deficit spending. The central bank also plays an important role.

I expect many posters to take an issue with my assertion that Loans create deposits.
Banks do not lend out deposits or multiply up central bank money.

http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf

This article explains how the majority of money in the modern economy is created by commercial banks making loans. • Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits. • The amount of money created in the economy ultimately depends on the monetary policy of the central bank. In normal times, this is carried out by setting interest rates. The central bank can also affect the amount of money directly through purchasing assets or ‘quantitative easing’.

That's how things work now, but that doesn't mean that's how they have to work. Before the Federal Reserve was created gold was money. The quantity of money remained fixed except for when new gold deposits were discovered. Under the gold standard the value of the dollar in 1914 was greater than when the Constitution was ratified in 1789. Since that time the value of the dollar has decreased by a factor of 20. A modern dollar is worth only 5% of what an 1914 dollar was worth.

You can be the judge of which system is better.

The quantity of money remained fixed except for when new gold deposits were discovered.

Bank loans under the gold standard also increased the money supply.

Only to a certain point. The the banks had to stop making new loans or they might have a run on the bank. So paper currency could be some fixed multiple of gold deposits. It couldn't increase indefinitely. However, under today's system, the Federal Reserve can increase the money supply ad infinitum.

Only to a certain point.

Glad you agree, the quantity of money did not remain fixed.

Over the long term, yes it did.

 

[Votto]

How is money created? Unicorns.

 

[Toddsterpatriot]

Most americans have absolutely no idea.
I wonder what you guys know?
Here's the truth:
- Loans create new money, this shows up in the form of deposits.
- The federal government creates new money through deficit spending. The central bank also plays an important role.

I expect many posters to take an issue with my assertion that Loans create deposits.
Banks do not lend out deposits or multiply up central bank money.

http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf

Government doesn't create money through deficit spending. Rather, the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages... Both of the items are about as valuable. Then the banking sector can loan out that completely sound money and the process multiplies.

the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages...

The Fed doesn't buy toxic mortgages. Only guaranteed ones.

Both of the items are about as valuable.

Yes, guaranteed bonds are valuable. An important part of every portfolio.

I would seriously like to see FED exit out of their trash of a position. They could never pull it of, because they got trash.

They don't have trash. Guaranteed bonds, trading over par. See here......

Mortgage-Backed Securities, CMOs - Markets Data Center - WSJ.com

I hope that helps you sleep at night.

It's trash. The value is only there because fed has influenced the market so much. It's like me paying billions for apartments and "see of course they are valuable, I just paid a billion!"

The mortgages were always trash to begin with, which is exactly why they were bought - to bail out banks. Not to make sound portfolio. That has never been the purpose of FED. It's a clusterfuck of an organization.

I hope that helps you sleep at night.

The Fed's guaranteed bonds keep you awake at night? LOL!

The mortgages were always trash to begin with, which is exactly why they were bought -

They've traded above par since before the Fed started buying them. Not trash.

to bail out banks

How does selling guaranteed bonds, paying 3%-5%, in exchange for cash paying 0.25%, help a bank?

 

[Toddsterpatriot]

Most americans have absolutely no idea.
I wonder what you guys know?
Here's the truth:
- Loans create new money, this shows up in the form of deposits.
- The federal government creates new money through deficit spending. The central bank also plays an important role.

I expect many posters to take an issue with my assertion that Loans create deposits.
Banks do not lend out deposits or multiply up central bank money.

http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf

This article explains how the majority of money in the modern economy is created by commercial banks making loans. • Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits. • The amount of money created in the economy ultimately depends on the monetary policy of the central bank. In normal times, this is carried out by setting interest rates. The central bank can also affect the amount of money directly through purchasing assets or ‘quantitative easing’.

Government doesn't create money through deficit spending. Rather, the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages... Both of the items are about as valuable. Then the banking sector can loan out that completely sound money and the process multiplies.

the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages...

The Fed doesn't buy toxic mortgages. Only guaranteed ones.

Both of the items are about as valuable.

Yes, guaranteed bonds are valuable. An important part of every portfolio.

I would seriously like to see FED try exit out of their trash of a position. They could never pull it of, because they got trash.

Yeah, those mortgages were so highly valued, that is exactly why the FED bought them. Even though it was basically called bail out. Holy hell these people are dumb.

Well, what they are really holding are assets (bonds) that are in a massive bubble. When the bubble collapses (interest rates rise), those assets will be upside down. The Fed will not be able to soak up as much cash as they put in for liquidity. And so we will begin to see rising inflation as the velocity of money increases. Inflation which the Fed will probably not be able to slow very much as their assets will be of considerable less value than they paid for them.

In short, "trash".

It all depends on how catastrophically the bubble pops. A "soft landing" or a "hard landing".

The Fed will not be able to soak up as much cash as they put in for liquidity.

Why do you feel that?

 

[Norman]

Government doesn't create money through deficit spending. Rather, the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages... Both of the items are about as valuable. Then the banking sector can loan out that completely sound money and the process multiplies.

the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages...

The Fed doesn't buy toxic mortgages. Only guaranteed ones.

Both of the items are about as valuable.

Yes, guaranteed bonds are valuable. An important part of every portfolio.

I would seriously like to see FED exit out of their trash of a position. They could never pull it of, because they got trash.

They don't have trash. Guaranteed bonds, trading over par. See here......

Mortgage-Backed Securities, CMOs - Markets Data Center - WSJ.com

I hope that helps you sleep at night.

It's trash. The value is only there because fed has influenced the market so much. It's like me paying billions for apartments and "see of course they are valuable, I just paid a billion!"

The mortgages were always trash to begin with, which is exactly why they were bought - to bail out banks. Not to make sound portfolio. That has never been the purpose of FED. It's a clusterfuck of an organization.

I hope that helps you sleep at night.

The Fed's guaranteed bonds keep you awake at night? LOL!

The mortgages were always trash to begin with, which is exactly why they were bought -

They've traded above par since before the Fed started buying them. Not trash.

to bail out banks

How does selling guaranteed bonds, paying 3%-5%, in exchange for cash paying 0.25%, help a bank?

I am talking about the mortgages that were bought in the wake of 2008. Are you mentally challenged?

Besides that, are you trying to say that the banks are selling something at a loss to FED. That would be a new development. The banks aren't idiots, like yourself.

Fed is always the one that buys things that makes no sense at all. It's a socialist institution, that should tell it all. It's not even supposed to be concerned with economic realities. After all, it's mandates are only employment and inflation. Not "making some sense".

 

[Toddsterpatriot]

Most americans have absolutely no idea.
I wonder what you guys know?
Here's the truth:
- Loans create new money, this shows up in the form of deposits.
- The federal government creates new money through deficit spending. The central bank also plays an important role.

I expect many posters to take an issue with my assertion that Loans create deposits.
Banks do not lend out deposits or multiply up central bank money.

http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf

That's how things work now, but that doesn't mean that's how they have to work. Before the Federal Reserve was created gold was money. The quantity of money remained fixed except for when new gold deposits were discovered. Under the gold standard the value of the dollar in 1914 was greater than when the Constitution was ratified in 1789. Since that time the value of the dollar has decreased by a factor of 20. A modern dollar is worth only 5% of what an 1914 dollar was worth.

You can be the judge of which system is better.

The quantity of money remained fixed except for when new gold deposits were discovered.

Bank loans under the gold standard also increased the money supply.

Only to a certain point. The the banks had to stop making new loans or they might have a run on the bank. So paper currency could be some fixed multiple of gold deposits. It couldn't increase indefinitely. However, under today's system, the Federal Reserve can increase the money supply ad infinitum.

Only to a certain point.

Glad you agree, the quantity of money did not remain fixed.

Over the long term, yes it did.

You said the quantity was fixed. Then you admitted bank loans could increase the quantity.

So which is it?

 

[Norman]

That's how things work now, but that doesn't mean that's how they have to work. Before the Federal Reserve was created gold was money. The quantity of money remained fixed except for when new gold deposits were discovered. Under the gold standard the value of the dollar in 1914 was greater than when the Constitution was ratified in 1789. Since that time the value of the dollar has decreased by a factor of 20. A modern dollar is worth only 5% of what an 1914 dollar was worth.

You can be the judge of which system is better.

The quantity of money remained fixed except for when new gold deposits were discovered.

Bank loans under the gold standard also increased the money supply.

Only to a certain point. The the banks had to stop making new loans or they might have a run on the bank. So paper currency could be some fixed multiple of gold deposits. It couldn't increase indefinitely. However, under today's system, the Federal Reserve can increase the money supply ad infinitum.

Only to a certain point.

Glad you agree, the quantity of money did not remain fixed.

Over the long term, yes it did.

You said the quantity was fixed. Then you admitted bank loans could increase the quantity.

So which is it?

The quantity of BASE money remained almost fixed.

F*** with the "gotchas".

 

[Toddsterpatriot]

the FED buys bonds of the government creating new money as payment. They also buy toxic mortgages...

The Fed doesn't buy toxic mortgages. Only guaranteed ones.

Both of the items are about as valuable.

Yes, guaranteed bonds are valuable. An important part of every portfolio.

I would seriously like to see FED exit out of their trash of a position. They could never pull it of, because they got trash.

They don't have trash. Guaranteed bonds, trading over par. See here......

Mortgage-Backed Securities, CMOs - Markets Data Center - WSJ.com

I hope that helps you sleep at night.

It's trash. The value is only there because fed has influenced the market so much. It's like me paying billions for apartments and "see of course they are valuable, I just paid a billion!"

The mortgages were always trash to begin with, which is exactly why they were bought - to bail out banks. Not to make sound portfolio. That has never been the purpose of FED. It's a clusterfuck of an organization.

I hope that helps you sleep at night.

The Fed's guaranteed bonds keep you awake at night? LOL!

The mortgages were always trash to begin with, which is exactly why they were bought -

They've traded above par since before the Fed started buying them. Not trash.

to bail out banks

How does selling guaranteed bonds, paying 3%-5%, in exchange for cash paying 0.25%, help a bank?

I am talking about the mortgages that were bought in the wake of 2008. Are you mentally challenged?

Besides that, are you trying to say that the banks are selling something at a loss to FED. That would be a new development. The banks aren't idiots, like yourself.

Fed is always the one that buys things that makes no sense at all. It's a socialist institution, that should tell it all. It's not even supposed to be concerned with economic realities. After all, it's mandates are only employment and inflation. Not "making some sense".

I am talking about the mortgages that were bought in the wake of 2008.

Since the Fed never bought mortgage bonds before 2008, what else would we be talking about?

Are you mentally challenged?

Because I keep pointing out your confusion? LOL!

Besides that, are you trying to say that the banks are selling something at a loss to FED.

It was your claim that the Fed's purchase of high quality bonds was somehow a bailout for the banks.
Realize your error?

Fed is always the one that buys things that makes no sense at all.

Buying Treasuries and guaranteed MBS makes no sense? Please explain further.

 

[Toddsterpatriot]

The quantity of money remained fixed except for when new gold deposits were discovered.

Bank loans under the gold standard also increased the money supply.

Only to a certain point. The the banks had to stop making new loans or they might have a run on the bank. So paper currency could be some fixed multiple of gold deposits. It couldn't increase indefinitely. However, under today's system, the Federal Reserve can increase the money supply ad infinitum.

Only to a certain point.

Glad you agree, the quantity of money did not remain fixed.

Over the long term, yes it did.

You said the quantity was fixed. Then you admitted bank loans could increase the quantity.

So which is it?

The quantity of BASE money remained almost fixed.

F*** with the "gotchas".

The quantity of BASE money remained almost fixed.

If he had said "base money" instead of "quantity of money", it would have made more sense.

 

[Norman]

I would seriously like to see FED exit out of their trash of a position. They could never pull it of, because they got trash.

They don't have trash. Guaranteed bonds, trading over par. See here......

Mortgage-Backed Securities, CMOs - Markets Data Center - WSJ.com

I hope that helps you sleep at night.

It's trash. The value is only there because fed has influenced the market so much. It's like me paying billions for apartments and "see of course they are valuable, I just paid a billion!"

The mortgages were always trash to begin with, which is exactly why they were bought - to bail out banks. Not to make sound portfolio. That has never been the purpose of FED. It's a clusterfuck of an organization.

I hope that helps you sleep at night.

The Fed's guaranteed bonds keep you awake at night? LOL!

The mortgages were always trash to begin with, which is exactly why they were bought -

They've traded above par since before the Fed started buying them. Not trash.

to bail out banks

How does selling guaranteed bonds, paying 3%-5%, in exchange for cash paying 0.25%, help a bank?

I am talking about the mortgages that were bought in the wake of 2008. Are you mentally challenged?

Besides that, are you trying to say that the banks are selling something at a loss to FED. That would be a new development. The banks aren't idiots, like yourself.

Fed is always the one that buys things that makes no sense at all. It's a socialist institution, that should tell it all. It's not even supposed to be concerned with economic realities. After all, it's mandates are only employment and inflation. Not "making some sense".

I am talking about the mortgages that were bought in the wake of 2008.

Since the Fed never bought mortgage bonds before 2008, what else would we be talking about?

Are you mentally challenged?

Because I keep pointing out your confusion? LOL!

Besides that, are you trying to say that the banks are selling something at a loss to FED.

It was your claim that the Fed's purchase of high quality bonds was somehow a bailout for the banks.
Realize your error?

Fed is always the one that buys things that makes no sense at all.

Buying Treasuries and guaranteed MBS makes no sense? Please explain further.

No, I was saying buying the mortgages was the bail out. You must be at best "idiot", since that was my entire point in the last message and it still ain't ringing no bells.

And no, buying trash mortgages makes no sense. That's why the lehman brothers went under, remember?

 

[Norman]

Only to a certain point. The the banks had to stop making new loans or they might have a run on the bank. So paper currency could be some fixed multiple of gold deposits. It couldn't increase indefinitely. However, under today's system, the Federal Reserve can increase the money supply ad infinitum.

Only to a certain point.

Glad you agree, the quantity of money did not remain fixed.

Over the long term, yes it did.

You said the quantity was fixed. Then you admitted bank loans could increase the quantity.

So which is it?

The quantity of BASE money remained almost fixed.

F*** with the "gotchas".

The quantity of BASE money remained almost fixed.

If he had said "base money" instead of "quantity of money", it would have made more sense.

To an idiot who has absolutely no ability to read efficiently through the lines, yes.

 

[deltex1]

Most americans have absolutely no idea.
I wonder what you guys know?
Here's the truth:
- Loans create new money, this shows up in the form of deposits.
- The federal government creates new money through deficit spending. The central bank also plays an important role.

I expect many posters to take an issue with my assertion that Loans create deposits.
Banks do not lend out deposits or multiply up central bank money.

http://www.bankofengland.co.uk/publ...lletin/2014/qb14q1prereleasemoneycreation.pdf

This article explains how the majority of money in the modern economy is created by commercial banks making loans. • Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits. • The amount of money created in the economy ultimately depends on the monetary policy of the central bank. In normal times, this is carried out by setting interest rates. The central bank can also affect the amount of money directly through purchasing assets or ‘quantitative easing’.

The Brooklyn Jewess shits it out her ass.

 

[Toddsterpatriot]

They don't have trash. Guaranteed bonds, trading over par. See here......

Mortgage-Backed Securities, CMOs - Markets Data Center - WSJ.com

I hope that helps you sleep at night.

It's trash. The value is only there because fed has influenced the market so much. It's like me paying billions for apartments and "see of course they are valuable, I just paid a billion!"

The mortgages were always trash to begin with, which is exactly why they were bought - to bail out banks. Not to make sound portfolio. That has never been the purpose of FED. It's a clusterfuck of an organization.

I hope that helps you sleep at night.

The Fed's guaranteed bonds keep you awake at night? LOL!

The mortgages were always trash to begin with, which is exactly why they were bought -

They've traded above par since before the Fed started buying them. Not trash.

to bail out banks

How does selling guaranteed bonds, paying 3%-5%, in exchange for cash paying 0.25%, help a bank?

I am talking about the mortgages that were bought in the wake of 2008. Are you mentally challenged?

Besides that, are you trying to say that the banks are selling something at a loss to FED. That would be a new development. The banks aren't idiots, like yourself.

Fed is always the one that buys things that makes no sense at all. It's a socialist institution, that should tell it all. It's not even supposed to be concerned with economic realities. After all, it's mandates are only employment and inflation. Not "making some sense".

I am talking about the mortgages that were bought in the wake of 2008.

Since the Fed never bought mortgage bonds before 2008, what else would we be talking about?

Are you mentally challenged?

Because I keep pointing out your confusion? LOL!

Besides that, are you trying to say that the banks are selling something at a loss to FED.

It was your claim that the Fed's purchase of high quality bonds was somehow a bailout for the banks.
Realize your error?

Fed is always the one that buys things that makes no sense at all.

Buying Treasuries and guaranteed MBS makes no sense? Please explain further.

No, I was saying buying the mortgages was the bail out. You must be at best "idiot", since that was my entire point in the last message and it still ain't ringing no bells.

And no, buying trash mortgages makes no sense. That's why the lehman brothers went under, remember?

No, I was saying buying the mortgages was the bail out.

Now if only you could prove your claim.

And no, buying trash mortgages makes no sense.

The Fed didn't buy trash mortgages. You're batting .000

 

[Norman]

I hope that helps you sleep at night.

It's trash. The value is only there because fed has influenced the market so much. It's like me paying billions for apartments and "see of course they are valuable, I just paid a billion!"

The mortgages were always trash to begin with, which is exactly why they were bought - to bail out banks. Not to make sound portfolio. That has never been the purpose of FED. It's a clusterfuck of an organization.

I hope that helps you sleep at night.

The Fed's guaranteed bonds keep you awake at night? LOL!

The mortgages were always trash to begin with, which is exactly why they were bought -

They've traded above par since before the Fed started buying them. Not trash.

to bail out banks

How does selling guaranteed bonds, paying 3%-5%, in exchange for cash paying 0.25%, help a bank?

I am talking about the mortgages that were bought in the wake of 2008. Are you mentally challenged?

Besides that, are you trying to say that the banks are selling something at a loss to FED. That would be a new development. The banks aren't idiots, like yourself.

Fed is always the one that buys things that makes no sense at all. It's a socialist institution, that should tell it all. It's not even supposed to be concerned with economic realities. After all, it's mandates are only employment and inflation. Not "making some sense".

I am talking about the mortgages that were bought in the wake of 2008.

Since the Fed never bought mortgage bonds before 2008, what else would we be talking about?

Are you mentally challenged?

Because I keep pointing out your confusion? LOL!

Besides that, are you trying to say that the banks are selling something at a loss to FED.

It was your claim that the Fed's purchase of high quality bonds was somehow a bailout for the banks.
Realize your error?

Fed is always the one that buys things that makes no sense at all.

Buying Treasuries and guaranteed MBS makes no sense? Please explain further.

No, I was saying buying the mortgages was the bail out. You must be at best "idiot", since that was my entire point in the last message and it still ain't ringing no bells.

And no, buying trash mortgages makes no sense. That's why the lehman brothers went under, remember?

No, I was saying buying the mortgages was the bail out.

Now if only you could prove your claim.

And no, buying trash mortgages makes no sense.

The Fed didn't buy trash mortgages. You're batting .000

To be honest I can't recall if the FED bought the truly toxic stuff or not. But I can tell you that their investing decisions aren't sound.

Just reading by the FAQ about the MBS program:

"
What was the policy objective of the Federal Reserve's program to purchase agency mortgage-backed securities?
The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally."

Basically "theses investments suck so we buy them". Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal, and my whole point was, it's not even their mission to invest effectively, so no surprise.

 

[Toddsterpatriot]

I hope that helps you sleep at night.

The Fed's guaranteed bonds keep you awake at night? LOL!

The mortgages were always trash to begin with, which is exactly why they were bought -

They've traded above par since before the Fed started buying them. Not trash.

to bail out banks

How does selling guaranteed bonds, paying 3%-5%, in exchange for cash paying 0.25%, help a bank?

I am talking about the mortgages that were bought in the wake of 2008. Are you mentally challenged?

Besides that, are you trying to say that the banks are selling something at a loss to FED. That would be a new development. The banks aren't idiots, like yourself.

Fed is always the one that buys things that makes no sense at all. It's a socialist institution, that should tell it all. It's not even supposed to be concerned with economic realities. After all, it's mandates are only employment and inflation. Not "making some sense".

I am talking about the mortgages that were bought in the wake of 2008.

Since the Fed never bought mortgage bonds before 2008, what else would we be talking about?

Are you mentally challenged?

Because I keep pointing out your confusion? LOL!

Besides that, are you trying to say that the banks are selling something at a loss to FED.

It was your claim that the Fed's purchase of high quality bonds was somehow a bailout for the banks.
Realize your error?

Fed is always the one that buys things that makes no sense at all.

Buying Treasuries and guaranteed MBS makes no sense? Please explain further.

No, I was saying buying the mortgages was the bail out. You must be at best "idiot", since that was my entire point in the last message and it still ain't ringing no bells.

And no, buying trash mortgages makes no sense. That's why the lehman brothers went under, remember?

No, I was saying buying the mortgages was the bail out.

Now if only you could prove your claim.

And no, buying trash mortgages makes no sense.

The Fed didn't buy trash mortgages. You're batting .000

To be honest I can't recall if the FED bought the truly toxic stuff or not. But I can tell you that their investing decisions aren't sound.

Just reading by the FAQ about the MBS program:

"
What was the policy objective of the Federal Reserve's program to purchase agency mortgage-backed securities?
The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally."

Basically "theses investments suck so we buy them". Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal, and my whole point was, it's not even their mission to invest effectively, so no surprise.

To be honest I can't recall if the FED bought the truly toxic stuff or not.

FAQs: MBS Purchase Program


The following frequently asked questions (FAQs) provide further information about the Federal Reserve’s $1.25 trillion program to purchase agency mortgage-backed securities (agency MBS). The MBS program completed its purchases on March 31, 2010, but will continue to settle transactions over the coming months. In connection with this activity, the Federal Reserve continues to use dollar roll and coupon swap transactions to facilitate an orderly settlement of the program’s purchases.

This agency MBS program is managed by the Federal Reserve Bank of New York at the direction of the Federal Open Market Committee (FOMC). The New York Fed will continue to work with two investment managers to support the implementation of the program.

Effective August 20, 2010

FAQs: MBS Purchase Program

Basically "theses investments suck so we buy them".

Why do you feel they suck? Is it because they're guaranteed?
Because they never miss an interest or principal payment?
Because they're a huge, liquid market?
Or is it something else? Maybe something you can't explain?

Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal,

Are you basing this claim on the hundreds of billions in profits they've turned over to the US Treasury since 2008?

 

[Norman]

I am talking about the mortgages that were bought in the wake of 2008. Are you mentally challenged?

Besides that, are you trying to say that the banks are selling something at a loss to FED. That would be a new development. The banks aren't idiots, like yourself.

Fed is always the one that buys things that makes no sense at all. It's a socialist institution, that should tell it all. It's not even supposed to be concerned with economic realities. After all, it's mandates are only employment and inflation. Not "making some sense".

I am talking about the mortgages that were bought in the wake of 2008.

Since the Fed never bought mortgage bonds before 2008, what else would we be talking about?

Are you mentally challenged?

Because I keep pointing out your confusion? LOL!

Besides that, are you trying to say that the banks are selling something at a loss to FED.

It was your claim that the Fed's purchase of high quality bonds was somehow a bailout for the banks.
Realize your error?

Fed is always the one that buys things that makes no sense at all.

Buying Treasuries and guaranteed MBS makes no sense? Please explain further.

No, I was saying buying the mortgages was the bail out. You must be at best "idiot", since that was my entire point in the last message and it still ain't ringing no bells.

And no, buying trash mortgages makes no sense. That's why the lehman brothers went under, remember?

No, I was saying buying the mortgages was the bail out.

Now if only you could prove your claim.

And no, buying trash mortgages makes no sense.

The Fed didn't buy trash mortgages. You're batting .000

To be honest I can't recall if the FED bought the truly toxic stuff or not. But I can tell you that their investing decisions aren't sound.

Just reading by the FAQ about the MBS program:

"
What was the policy objective of the Federal Reserve's program to purchase agency mortgage-backed securities?
The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally."

Basically "theses investments suck so we buy them". Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal, and my whole point was, it's not even their mission to invest effectively, so no surprise.

To be honest I can't recall if the FED bought the truly toxic stuff or not.

FAQs: MBS Purchase Program


The following frequently asked questions (FAQs) provide further information about the Federal Reserve’s $1.25 trillion program to purchase agency mortgage-backed securities (agency MBS). The MBS program completed its purchases on March 31, 2010, but will continue to settle transactions over the coming months. In connection with this activity, the Federal Reserve continues to use dollar roll and coupon swap transactions to facilitate an orderly settlement of the program’s purchases.

This agency MBS program is managed by the Federal Reserve Bank of New York at the direction of the Federal Open Market Committee (FOMC). The New York Fed will continue to work with two investment managers to support the implementation of the program.

Effective August 20, 2010

FAQs: MBS Purchase Program

Basically "theses investments suck so we buy them".

Why do you feel they suck? Is it because they're guaranteed?
Because they never miss an interest or principal payment?
Because they're a huge, liquid market?
Or is it something else? Maybe something you can't explain?

Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal,

Are you basing this claim on the hundreds of billions in profits they've turned over to the US Treasury since 2008?

Did you read my post. The reason for buying them is to help a COLLAPSING ECONOMY.

Do you think this sounds like a sound investment? Me neither. What was their track record again?

Getting tired of repeating myself.

Their profits are tiny compared to their investment capital of 4 trillion.

 

[Toddsterpatriot]

I am talking about the mortgages that were bought in the wake of 2008.

Since the Fed never bought mortgage bonds before 2008, what else would we be talking about?

Are you mentally challenged?

Because I keep pointing out your confusion? LOL!

Besides that, are you trying to say that the banks are selling something at a loss to FED.

It was your claim that the Fed's purchase of high quality bonds was somehow a bailout for the banks.
Realize your error?

Fed is always the one that buys things that makes no sense at all.

Buying Treasuries and guaranteed MBS makes no sense? Please explain further.

No, I was saying buying the mortgages was the bail out. You must be at best "idiot", since that was my entire point in the last message and it still ain't ringing no bells.

And no, buying trash mortgages makes no sense. That's why the lehman brothers went under, remember?

No, I was saying buying the mortgages was the bail out.

Now if only you could prove your claim.

And no, buying trash mortgages makes no sense.

The Fed didn't buy trash mortgages. You're batting .000

To be honest I can't recall if the FED bought the truly toxic stuff or not. But I can tell you that their investing decisions aren't sound.

Just reading by the FAQ about the MBS program:

"
What was the policy objective of the Federal Reserve's program to purchase agency mortgage-backed securities?
The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally."

Basically "theses investments suck so we buy them". Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal, and my whole point was, it's not even their mission to invest effectively, so no surprise.

To be honest I can't recall if the FED bought the truly toxic stuff or not.

FAQs: MBS Purchase Program


The following frequently asked questions (FAQs) provide further information about the Federal Reserve’s $1.25 trillion program to purchase agency mortgage-backed securities (agency MBS). The MBS program completed its purchases on March 31, 2010, but will continue to settle transactions over the coming months. In connection with this activity, the Federal Reserve continues to use dollar roll and coupon swap transactions to facilitate an orderly settlement of the program’s purchases.

This agency MBS program is managed by the Federal Reserve Bank of New York at the direction of the Federal Open Market Committee (FOMC). The New York Fed will continue to work with two investment managers to support the implementation of the program.

Effective August 20, 2010

FAQs: MBS Purchase Program

Basically "theses investments suck so we buy them".

Why do you feel they suck? Is it because they're guaranteed?
Because they never miss an interest or principal payment?
Because they're a huge, liquid market?
Or is it something else? Maybe something you can't explain?

Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal,

Are you basing this claim on the hundreds of billions in profits they've turned over to the US Treasury since 2008?

Did you read my post. The reason for buying them is to help a COLLAPSING ECONOMY.

Do you think this sounds like a sound investment? Me neither. What was their track record again?

Getting tired of repeating myself.

Their profits are tiny compared to their investment capital of 4 trillion.

The reason for buying them is to help a COLLAPSING ECONOMY.

Looks like it worked.

Do you think this sounds like a sound investment?

How is it unsound?

What was their track record again?

They gave the Treasury about $98 billion in 2015, $99 billion in 2014, $80 billion in 2013, $88 billion in 2012, $75 billion in 2011, $79 billion in 2010 and $47 billion in 2009.
Doesn't look like they've been losing money on their guaranteed bonds. What do you think?

Their profits are tiny compared to their investment capital of 4 trillion.

How high should their profits be?

 

[Norman]

No, I was saying buying the mortgages was the bail out. You must be at best "idiot", since that was my entire point in the last message and it still ain't ringing no bells.

And no, buying trash mortgages makes no sense. That's why the lehman brothers went under, remember?

No, I was saying buying the mortgages was the bail out.

Now if only you could prove your claim.

And no, buying trash mortgages makes no sense.

The Fed didn't buy trash mortgages. You're batting .000

To be honest I can't recall if the FED bought the truly toxic stuff or not. But I can tell you that their investing decisions aren't sound.

Just reading by the FAQ about the MBS program:

"
What was the policy objective of the Federal Reserve's program to purchase agency mortgage-backed securities?
The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally."

Basically "theses investments suck so we buy them". Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal, and my whole point was, it's not even their mission to invest effectively, so no surprise.

To be honest I can't recall if the FED bought the truly toxic stuff or not.

FAQs: MBS Purchase Program


The following frequently asked questions (FAQs) provide further information about the Federal Reserve’s $1.25 trillion program to purchase agency mortgage-backed securities (agency MBS). The MBS program completed its purchases on March 31, 2010, but will continue to settle transactions over the coming months. In connection with this activity, the Federal Reserve continues to use dollar roll and coupon swap transactions to facilitate an orderly settlement of the program’s purchases.

This agency MBS program is managed by the Federal Reserve Bank of New York at the direction of the Federal Open Market Committee (FOMC). The New York Fed will continue to work with two investment managers to support the implementation of the program.

Effective August 20, 2010

FAQs: MBS Purchase Program

Basically "theses investments suck so we buy them".

Why do you feel they suck? Is it because they're guaranteed?
Because they never miss an interest or principal payment?
Because they're a huge, liquid market?
Or is it something else? Maybe something you can't explain?

Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal,

Are you basing this claim on the hundreds of billions in profits they've turned over to the US Treasury since 2008?

Did you read my post. The reason for buying them is to help a COLLAPSING ECONOMY.

Do you think this sounds like a sound investment? Me neither. What was their track record again?

Getting tired of repeating myself.

Their profits are tiny compared to their investment capital of 4 trillion.

The reason for buying them is to help a COLLAPSING ECONOMY.

Looks like it worked.

Do you think this sounds like a sound investment?

How is it unsound?

What was their track record again?

They gave the Treasury about $98 billion in 2015, $99 billion in 2014, $80 billion in 2013, $88 billion in 2012, $75 billion in 2011, $79 billion in 2010 and $47 billion in 2009.
Doesn't look like they've been losing money on their guaranteed bonds. What do you think?

Their profits are tiny compared to their investment capital of 4 trillion.

How high should their profits be?

All right, we are dealing with a class idiot, thanks for making it clear.

Please go and invest all your money into collapsing markets in order to boost their value. Invest the rest into US government bonds.

I am sure you will do extremely well.

 

[Toddsterpatriot]

No, I was saying buying the mortgages was the bail out.

Now if only you could prove your claim.

And no, buying trash mortgages makes no sense.

The Fed didn't buy trash mortgages. You're batting .000

To be honest I can't recall if the FED bought the truly toxic stuff or not. But I can tell you that their investing decisions aren't sound.

Just reading by the FAQ about the MBS program:

"
What was the policy objective of the Federal Reserve's program to purchase agency mortgage-backed securities?
The goal of the program was to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally."

Basically "theses investments suck so we buy them". Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal, and my whole point was, it's not even their mission to invest effectively, so no surprise.

To be honest I can't recall if the FED bought the truly toxic stuff or not.

FAQs: MBS Purchase Program


The following frequently asked questions (FAQs) provide further information about the Federal Reserve’s $1.25 trillion program to purchase agency mortgage-backed securities (agency MBS). The MBS program completed its purchases on March 31, 2010, but will continue to settle transactions over the coming months. In connection with this activity, the Federal Reserve continues to use dollar roll and coupon swap transactions to facilitate an orderly settlement of the program’s purchases.

This agency MBS program is managed by the Federal Reserve Bank of New York at the direction of the Federal Open Market Committee (FOMC). The New York Fed will continue to work with two investment managers to support the implementation of the program.

Effective August 20, 2010

FAQs: MBS Purchase Program

Basically "theses investments suck so we buy them".

Why do you feel they suck? Is it because they're guaranteed?
Because they never miss an interest or principal payment?
Because they're a huge, liquid market?
Or is it something else? Maybe something you can't explain?

Yeah, I doubt this kind of thing could ever lead to sound investments. FED's track record is abysmal,

Are you basing this claim on the hundreds of billions in profits they've turned over to the US Treasury since 2008?

Did you read my post. The reason for buying them is to help a COLLAPSING ECONOMY.

Do you think this sounds like a sound investment? Me neither. What was their track record again?

Getting tired of repeating myself.

Their profits are tiny compared to their investment capital of 4 trillion.

The reason for buying them is to help a COLLAPSING ECONOMY.

Looks like it worked.

Do you think this sounds like a sound investment?

How is it unsound?

What was their track record again?

They gave the Treasury about $98 billion in 2015, $99 billion in 2014, $80 billion in 2013, $88 billion in 2012, $75 billion in 2011, $79 billion in 2010 and $47 billion in 2009.
Doesn't look like they've been losing money on their guaranteed bonds. What do you think?

Their profits are tiny compared to their investment capital of 4 trillion.

How high should their profits be?

All right, we are dealing with a class idiot, thanks for making it clear.

Please go and invest all your money into collapsing markets in order to boost their value. Invest the rest into US government bonds.

I am sure you will do extremely well.

All right, we are dealing with a class idiot,

I'm the only one dealing with your idiocy.

I am sure you will do extremely well.

I wish I could do as well as the Fed. Over half a trillion dollars turned over to the Treasury since the crisis.

If you ever figure out how their investments were unsound, come back y'all. LOL!