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Comment by rgbrenner | Hacker News Reader

A whole 2.7% of assets? How will they ever survive. Hopefully the fed is readying a bailout soon. /s

It's worse than it seems - they are levered on average at 10-1. So they've lost almost 30% of their equity in aggregate.

Put another way - if they lose 10%, they are finished.

> they are finished

You think the US government is gonna go "whoops, our central bank failed, and we aren't willing to pay a fraction of the cost of the F-35 program to bail them out"?

Not central bank. The article is about banks, the assets and losses are on the balance sheet of the banks. The comment is about banks, not the fed.

The Fed is 42 billion in the hole. Rather alarming if one takes a moment to think about it.

$120 per American, really alarming?

A fine morning at Starbucks for the family!

It isn't alarming that the institution in charge of money is in the hole by a huge amount? The dollar amount isn't the real issue; but rather that they've done such a poor job at it.

It's only concerning if you (incorrectly) think the Fed's primary purpose is to make a profit.

They sent $109B to the Treasury in 2021, and $58B in 2022. Some years being a down year isn't shocking.

No, because that amount isn't huge at all.

Oh no, we’d have to add 0.13% to the national debt to bail them out.

But then if you take another moment to think about it a bit more, it turns out that financial services is 20% of the market cap of the s&p500; 20% of all corporate income; and 7.5% of total GDP in a $20+ trillion economy.. so maybe 42B isn't as much money as it seems.

Can you explain why it’s bad if a central bank is in the hole? Like, what bad practical effects does it have?

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