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re: Fed balance sheet - a question

Posted on 8/17/10 at 3:05 pm to
Posted by RaysGoodLiquor
Deep Dark Dirty
Member since Aug 2010
297 posts
Posted on 8/17/10 at 3:05 pm to
quote:

quote:
Let's say they buy $1,000,000,000,000 worth of home mortgages and they turn out to be worth $1,000,000,000 instead. How do they make up the difference?

They don't.


So what incentive does the fed have to buy safe assets? Why don't they just buy up junk bonds instead?
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