Fed Says Bear Stearns, AIG Assets Drop $10 Billion

Discussion in 'Wall St. News' started by ASusilovic, May 7, 2009.

  1. May 7 (Bloomberg) -- The Federal Reserve said the value of mortgage securities and loans acquired in last year’s rescues of Bear Stearns Cos. and American International Group Inc. tumbled by $10 billion, or 14 percent, adding to potential taxpayer losses.

    Net holdings of Maiden Lane LLC, the unit formed to hold a portfolio of Bear Stearns assets to ease the firm’s sale to JPMorgan Chase & Co., fell $830 million from last week to $25.7 billion, reflecting a new quarterly revaluation of underlying assets, the Fed said today. Holdings of the two companies formed in the AIG bailout declined $9.4 billion, or 21 percent, to $36.4 billion.

    The markdown may add billions of dollars to unrealized losses. Last month the Fed released its most detailed breakdown on the types of assets accepted from Bear Stearns, showing that the biggest losses had come from commercial and residential mortgages.

    The central bank has said it doesn’t expect taxpayer losses on the portfolios in part because the Fed has as long as 10 years to sell the assets. Today’s release reflects values of assets as of March 31.

    Separately, the total size of the Fed’s balance sheet rose $13.1 billion, or 0.6 percent, to $2.08 trillion.


    Ha, ha, ha...maybe the FED should tap TARP ?:D :D :D