The Fed broke with $45 billion?

The photo has nothing to do with anything.

The other day I wrote that the Fed is broke, then the next day they announced a record profit. What gives?

What gives is I'm unimpressed with their measly $45 billion. Take a look at what analyst Mike Shedlock wrote about it:

“Yesterday the Washington Post reported Federal Reserve earned $45 billion in 2009.

I have a few questions.

Really?!

Does that count the $185 billion the NY Fed crammed down taxpayers throats over AIG?
Does that count the real cost of any of its other inane off-balance-sheet recommendations approved by Congress at taxpayer expense?
Does that include a marked-to-market accounting of Mortgage Backed Securities on its balance sheet?
Does that include a marked-to-market accounting of anything other than specific items the Fed wanted marked-to-market?
The Fed conveniently ignores all of its recommendations that cost taxpayers hundreds of billions of dollars, some done illegally, and then has the self-serving, selective-myopia gall to talk about "gains".Bloomberg argues that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money. Anyone thinking clearly has to agree.”
By Mike "Mish" Shedlock, Jan. 13, 2010http://globaleconomicanalysis.blogspot.com/


The comment above is what I was talking about the other day. Among other things (many), the Fed has $1.25 trillion of mortgage backed securities on its books. That is those garbage home loans. Experience so far tells us they're worth at least 30% less than the original value. That implies a loss of around $400 billion just on those securities.

I'm supposed to be impressed with a $45 billion surplus?

'If you don't read the newspaper you are uninformed, if you do read the newspaper you are misinformed.' -Mark Twain