Bear, AIG Dumped $74 Billion in Subprime, CDOs on Fed |

Bear, AIG Dumped $74 Billion in Subprime, CDOs on Fed

April 24 (Bloomberg) — The Federal Reserve took on more than $74 billion in subprime mortgages, depreciating commercial leases and other assets after Bear Stearns Cos. and American International Group Inc. collapsed.

In its biggest disclosure of the securities accepted to stabilize capital markets, the Fed said yesterday it had unrealized losses of $9.6 billion on the assets as of Dec. 31. The bonds, swaps and notes were taken in from Bear Stearns, once the fifth-biggest Wall Street firm by capitalization, and AIG, which had been the world’s largest insurer.

The losses on securities backed by assets such as home loans in Florida and California signal that U.S. taxpayers may be forced to reimburse the central bank through the Troubled Asset Relief Program, according to Christopher Whalen, managing director of Torrance, California-based Institutional Risk Analytics.

“The numbers basically confirm that Treasury is going to have to take some TARP money and reimburse the Fed,” said Whalen, whose financial-services research company analyzes banks for investors. “It is essentially up to the Treasury to get the Fed out of this.”

http://bloomberg.com/apps/news?pid=20601109&sid=aP2XyOHiRSGI&refer=home

Last 5 posts by MacroMan

Thiel: Still heading toward deflationary endgame - August 4th, 2010
Around the markets in 6 charts or less - May 6th, 2010
Quotable - May 5th, 2010
Quoteable - April 29th, 2010
Pimco Warns of Deflation Risk as Central Banks to Cool Stimulus - April 21st, 2010