Eideard

Count it if you don’t believe me!
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The Federal Reserve said on Tuesday that it contributed $76.9 billion in profits to the Treasury Department last year, slightly less than its record 2010 transfer but much more than in any other previous year.

The Fed is required by law to turn over its profits to the Treasury each year, a highly lucrative byproduct of the central bank’s continuing campaign to stimulate economic growth.

Almost 97 percent of the Fed’s income was generated by interest payments on its investment portfolio, including $2.5 trillion in Treasury securities and mortgage-backed securities, which it has amassed in an effort to decrease borrowing costs for businesses and consumers by reducing long-term interest rates…

But Fed officials note that this cycle — payments flowing from Treasury to the Fed and then back to the Treasury — still saves money for taxpayers because those interest payments otherwise would be made to other investors.

“It’s interest that the Treasury didn’t have to pay to the Chinese,” the Fed’s chairman, Ben S. Bernanke, half-jokingly told Congress last year.

The scale of the transfers grew rapidly after the financial crisis.

RTFA. Always gives me a chuckle to see nutballs from the Kool Aid Party to preachers of the Gold Bar religion like Ron Paul forced to confront a Fed which functions smoothly – even with double the tasks, say, of any European Central Bank.

Add to that the profits taken from the Evil Socialist Stimulus Plan which – yes, once again – gave Keynes another victory over Hayek and genetically-restricted Bears.

The US treasury expects to net $312.2m on Monday when it sells the rest of its stake in Citigroup. The government holds 465.1m warrants in Citi that entitle it to purchase common shares in the banking group. The warrants, which it is auctioning, represent the remaining part of the US government’s $45bn investment in Citi during the financial crisis.

Taxpayers are expected to end up with a $12.3bn profit on the bailout, made under the troubled asset relief programme (TARP). The treasury sold its 34% stake of common shares of Citi last year.

“As we exit our investments in private companies and recover taxpayer dollars, it’s clear that the cost of the Tarp programme will be a fraction of what many had once feared during the depths of the crisis,” said Tim Massad, the treasury’s acting assistant secretary for financial stability.

The Tarp bailout is proving to be less expensive to taxpayers than first feared. The US government made $13.5bn selling its stake in General Motors. Last week the government chose four Wall Street banks to sell its stake in American Insurance Group (AIG), recipient of $180bn in bailout funds. The sale could be the largest in US history. AIG has already paid back significant chunks of the debt…

In his latest quarterly report, Neil Barofsky said “on the financial side, Tarp’s outlook has never been better. Not only did Tarp funds help head off a catastrophic financial collapse, but estimates of Tarp’s ultimate direct financial cost to the taxpayer have fallen substantially,” from $341bn in August 2009 to $25bn in November 2010.

Save a copy of this post for the next time your friendly neighborhood Tea Party nutball starts raving and ranting about how the socialist policies of the bailout were bankrupting the United States.

Of course, you’ll have to point out 14 more sources for the information on repayment and the resulting profits. There isn’t anyone in the KoolAid Party who knows what actually is happening in the world of commerce.

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The US Treasury has sold its remaining stake in Citigroup, in a deal which it says will make a $12 billion profit on its overall investment.

Citigroup was one of the worst victims of the financial crisis, and the US government stepped in with $45 billion of bail-out cash in 2008 and 2009. The money was part of the $700 billion Troubled Asset Relief Program (TARP).

On Monday, the government sold off its remaining shares in the bank for $4.35 each.

“By selling all the remaining Citigroup shares today, we had an opportunity to lock in substantial profits for the taxpayer,” said Tim Massad, acting assistant secretary for financial stability.

“We have advanced our goals of recovering Tarp funds, protecting the taxpayer and getting the government out of the business of owning stakes in private companies,” Mr. Massad said in a statement…

The US government is in line for further earnings from Citi through the sale of warrants and preferred securities it holds.

In parallel to Citi paying off its debts, carmaker General Motors is likewise shedding itself of government control.

And the US Treasury is expected to begin selling off its stake in insurance giant AIG next year.

It is now estimated that the cost of the Troubled Asset Relief Program will cost the US taxpayer $25 billion, much less than earlier estimates.

$25 billion = the approximate cost of 2 months of our glorious wars for freedom and democracy in the Middle East.

All hail the conquering heroes. All hail Caesar!

The new coalition government was plunged into its first crisis as the Liberal Democrat cabinet minister charged with cutting the £156 billion deficit resigned following revelations about his expenses.

David Laws, appointed chief secretary to the Treasury less than three weeks ago, stood down saying that he no longer believed his position was tenable after it was revealed that he had claimed more than £40,000 to live in his partner’s house. Commons rules introduced in 2006 barred such claims by MPs.

His decision marked a sudden and dramatic end to the brief honeymoon enjoyed by David Cameron’s and Nick Clegg’s new government. It also brought to an end one of the briefest cabinet careers in recent history…

The chancellor, George Osborne, expressed sadness at Laws’s resignation. It was “as if he had been put on earth” to do the job of Treasury chief secretary…

Uh, who was running that lift?

The die had been cast when the Daily Telegraph made the revelations on Friday night about Laws’s expenses claims, paid to his partner, James Lundie.

Laws had said he deeply regretted the situation. “My motivation throughout has not been to maximise profit but to simply protect our privacy and my wish not to reveal my sexuality,” he said…

Laws’s resignation is a massive blow to the coalition, which has made cutting the deficit its priority in office. A former investment banker with JP Morgan, Laws was seen as the man to bridge the divide between Tory and Liberal Democrat visions of how to bring the nation’s finance into better shape. His resignation will complicate already hurried preparations for the government’s emergency budget on 22 June.

Laws also came under pressure to resign from gay equality campaigners. Ben Summerskill, chief executive of Stonewall, writing in today’s Observer, says: “Pious political parties (that is, all of them) whisper privately that there are more gay MPs than the public imagines. But how can anyone ‘represent’ a community of interest if they’re entirely unable ever to admit that they belong to it? Some of us hope for a Britain where one day Westminster is grownup enough to select and promote politicians from all sorts of backgrounds.”

Gay Rights campaigners are perfectly correct. The parallel in the U.S. with statements from Civil Rights activists condemning Black members of Congress like William Jefferson who stashed ill-gotten thousand$ in his freezer.

Ask a Family Values’ Republican. Oh.

I think he’d also rather be out of the spotlight more often
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Treasury Secretary Timothy Geithner doesn’t like the fact that he’s so often associated with being a creature of Wall Street when nearly his whole career has been in public service.

In an interview on CNN’s “GPS” program on Sunday, Geithner responded sharply when asked how he felt about being portrayed as “somehow in bed with Wall Street firms” while he spearheads the Obama administration’s financial reform efforts.

“It is part of a narrative that hardened, which is that people came to view the judgments we were making through the prism of a myth,” Geithner said, adding it was untrue that he had a background that left him beholden to industry.

“So I think it’s actually very damaging,” he said. “It’s completely false, of course, and it, you know, should have been corrected a long time ago…”

Geithner was president of the New York Federal Reserve Bank before being nominated by President Barack Obama to head Treasury and that is about as close as he came to Wall Street.

He joked that he has never had “a real job” in the private sector.

“You know, basically, almost right out of graduate school, I came and worked as a very junior public servant at the Treasury, and spent my entire professional life since in some form of, you know, policy job,” Geithner said.

Most Americans have little or no understanding of the general role of the Federal Reserve. But, then, most Americans have little or no understanding of history and politics, either.

I’ve been as aware – all my life – of how unproductive a task it is to explain to the public at large the realities of history, nature, science, economics, etc..

Democracy manages to slip into the U.S. Senate

Lael Brainard won Senate confirmation today as the Treasury Department’s top financial diplomat, giving her a key role in U.S. efforts to persuade China to adopt a more flexible currency.

The Senate approved President Barack Obama’s nominee in a bipartisan 78-19 vote that was stalled more than a year by Republican concerns over Brainard’s tax payments.

That’s a year of stalling, hemming and hawing by crap moralists like Jim Bunning of Kentucky. One of the Republican thugs who specialized in blocking unemployment checks.

Nineteen Senate Republicans joined 57 Democrats and two independents in confirming Brainard Treasury Department under secretary for international affairs…

The timing of the confirmation vote is significant as it occurs before meetings this week of the Group of 20, the smaller Group of Seven and the International Monetary Fund and World Bank…

As well as holding a key position in talks with China, Brainard would help shepherd U.S. official positions through the global lending agencies that are being urged to take on a stronger role in monitoring global currency policies.

The Party of NO continues their favorite folk dance – Blocking the Road.

U.S. federal regulators, in a dramatic move highlighting the tenuous state of global credit markets, have outlined a takeover of Fannie Mae and Freddie Mac including giving control of the firms to their regulator and allowing the Treasury Department to purchase billions of dollars of the firms’ senior preferred stock.

The plan, offered jointly by the Treasury Department and Federal Housing Finance Agency, also gives the Treasury authority to purchase mortgage-backed securities from the firms in the open market and a lending facility through the Treasury from its general fund held at the Federal Reserve Bank of New York.

Treasury Secretary Paulson acknowledged that the radical proposal does pose risks for U.S. taxpayers, giving the U.S. government a “large stake in the future value of these entities.”

“In the end, the ultimate cost to the taxpayer will depend on the business results of the GSEs going forward,” Mr. Paulson said. “To that end, the steps we have taken…will together improve the housing market, the U.S. economy, and the GSEs’ business outlook.”

The takeover bounced Fannie’s CEO Daniel Mudd and Freddie Chairman CEO Richard Syron. A couple of winners whose combined take exceeds the GNP of most nations.
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