Last year was a tough one for investors. Gold was down 10 percent. The Dow Industrials fell 2.5 percent, and most bond indexes finished down by at least that much.
One institution that performed remarkably well in 2015 was the Federal Reserve. It just finished its most profitable year on record. The $100 billion in net income earned last year was a slight improvement over the previous year. That total was also roughly three times higher than the Fed’s income from 2007, the last year before it initiated its Quantitative Easing programs in the wake of the financial crisis.
Submitted by David Howden via The Mises Institute, Last year was a tough one for investors. Gold was down 10 percent. The Dow Industrials fell 2.5 percent, and most bond indexes finished down by at least that much.
As of 2:48 PM EST, Fannie Mae (OTCBB:FNMA) is trading up by around 23.64%, while the Freddie Mac (OTCBB:FMCC) is trading up by around 23.94%. The buying spree on the mortgage companies come as a result of a New York Times article, accusing the US Department of Justice (DoJ) of not making around 150,000 pages of documents public.
We know its not Paulson, Ackman, or SAC; is it Dalio's Bridgewater? No, the world's most profitable private entity that is in business to generate profits via speculation in financial markets is, drum roll please, the Federal Reserve. Stone & McCarthy (SMRA) estimates the Fed will make around $90bn profits in 2012. Of this around $87.5bn will be remitted to the US Treasury - a new record high (quite helpful when one is trying to avoid a debt ceiling using 'extraordinary measures' though we assume this is already penciled in due to its consistency).
A key player in the financial crisis was insurance giant AIG, which sold a huge volume of credit default swaps supposedly protecting buyers of mortgage-backed securities from losses due to default. But AIG had nowhere near the capital necessary to honor these guarantees when things went bad, and much of AIG's liabilities ended up being picked up by the Fed and the Treasury. On Tuesday the U.S.
This story was funny. The Federal Reserve plans to "Twist" its balance sheet.Translating into English, the Federal Reserve plans to sell some short term Treasury debt and buy longer term Treasury debt. They will still keep the Fed Funds Rate at 0%-0.25%.What's the point? Who benefits? Duh! I'm not even going to bother with spoiler space.