I think with recent events the shares in the Fed are more expensive than shares in Berkshine Hathaway. I read the MSNBC story about who owns the fed, and it's funny, because congress is supposed to control the issuance and printing of money, yet the Fed was setup in such a way as to have maximum independance from congress, things that make you go hmmmm. Actually it's not that hard when you see the member banks and board members! Controlled by private bankers.
hope that you're better than I am. I spent over 100k in tuition(losses) before I learned the important things.
So... where has the Federal Reserve found 1.3 trillion USD to buy these securities? And who is on the hook for the interest plus principle? " the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, " http://www.federalreserve.gov/newsevents/press/monetary/20091216a.htm And, while we talk trillions, any news on the "missing" 9 trillion? "At a hearing in early May, Federal Reserve Inspector General Elizabeth Coleman was asked by Congressman Alan Grayson (D-FL) to account for the $9 trillion in off-balance sheet transactions ($30,000 for each man, woman and child in the U.S.) plus a $1 trillion expansion of the Fedâs balance sheet since last September. Her answer is that no one at the Fed knows or is keeping track of where the money has gone" http://moneynews.com/FinanceNews/feds-lost-nine-trillion/2009/05/12/id/330048 And ofc, who is responsible for the interest and principle on that 9 trillion?
Where is the $9 trillion number coming from? The reps only talk about the $1 trillion number - only the article author mention $9 trillion, but provides no information on where it comes from, other than sticking in the headline and leading with it. It does grab eyeballs though, eh? =) Back to the 1.3 trillion number - they likely used a combination of their balance sheet and the printing press. Nothing wrong with that, it's their job. The last numbers I saw in 06 put their balance sheet at 1.7-ish trillion USD. For some perspective, the US treasury has around 13-14 trillion USD in the tax-payer coffers as of early 2009. I wouldn't be surprised if the Fed redeemed some of the tbills back to the treasury to fund part that 1.3T.
I have been a financial analyst for quite time now and I did not see a simple case of a dividend to be paid out of anything else than ... profits.
No doubt they can use tricks, like any other corporation. In general what you can do with your net profit is: (i) keep it as retained earnings (that increase your equity), (ii) pay out as a dividend, (iii) both of the above. The FED consolidated statements show their solvency ratio is below 3% (which is dangerously low for a company of this type). They should not pay dividend untill they reach +7%. Just my two cents.