Friday, July 9, 2010

The $4 Trillion Federal Reserve Reclassification: Yes, $4 Trillion!

The Federal Reserve has re-classified 40% of the mortgages in the United States.

They have taken them out of the category “Mortgage Pools and Trusts” and put them on the individual Agency’s balance sheet(s).  It is unclear why the Fed is doing this at this time.

Bruce Krasting spotted the move and explains the entire accounting, here.


  1. This news leaves me very alarmed. I don't understand this move and most importantly, $4,400,000,000,000 is a LOT to move around.

  2. Do keep in mind that it is "just" an accounting move and no real money is changing hands.

    But, yes, it is alarming and curious--suggesting the possibility of another shoe to drop.