Zero Hedge – Federal Reserve Loses $2.4 Billion In Taxpayer Money In Most Recent QE2 POMO Interval
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Submitted by Tyler Durden on 12/10/2010
With the Federal Reserve now actively participating in capital markets, it should be noted that just like every other asset manager, the Fed has to be held accountable for its trading efficacy. After all, the Treasury takes every opportunity to remind the US public how courtesy of record amounts of new government debt, it has managed to make “profits” on its assorted investments, which are merely transfers of risk from one entity to another, and the “another” being the US taxpayer, although not directly, but indirectly via the now ludicrous amount of US debt which will never be repaid. Which is why the US taxpayer may want to know that in just the most recent POMO schedule – that from early November to December – the Federal Reserve has lost $2.4 billion in taxpayer capital by its mistimed market operations, primarily due to the recent rise in interest rates. This is $2.4 billion that has not evaporated, but instead has been transferred to Primary Dealers under the “profit on trade” category. This is also money that will be used to determine, and fund, banker bonuses.