Federal Reserve reports record profit of $81.7 billion in 2010

[tsai3904]

http://thehill.com/blogs/on-the-mone...profit-in-2010

The Federal Reserve turned a record $81.7 billion profit in 2010, up 53 percent from 2009, the central bank reported Tuesday.

The vast majority of the Fed's profit — $79.3 billion — will be turned over to the Treasury Department, with the rest being paid out to member banks in dividends.


So the Federal Reserve prints money to buy toxic assets from banks at probably inflated prices, the banks receive newly printed money and badly needed capital, and when those assets turn around and increase in value leading to profits at the Fed, the banks receive a dividend...great business model for the banks.

[HOLLYWOOD]

I'd like to know where all the money came from for THE FED to buy assets and then resell them? Did they pay Taxes on the Profits? Federal, State, Local, etc taxes?

So where can you print up your own money out of thin air and buy assets. I just created $1 Trillion and would like to buy all the foreclosures in Las Vegas, Silicon Valley, Palm Beach.

Nice doing business with Y'ALL!

[Zippyjuan]

I would say that giving nearly $80 billlion to the Treasury would count as paying taxes.

The Member Banks receive dividends each year equal to six percent of the price of the shares they have (they are not allowed to sell or trade the shares). They do not get a share of the profits or losses the Fed makes every year. Just like holding any other dividend paying stock- you get a certain amount every so often (quarterly usually for publically traded stocks) based on how many shares you own- not based on the profits of the company.

The Federal Reserve Act on Fed shares:
http://www.federalreserve.gov/aboutthefed/section5.htm

Section 5. Stock Issues; Increase and Decrease of Capital

1. Amount of Shares; Increase and Decrease of Capital; Surrender and Cancellation of Stock
The capital stock of each Federal reserve bank shall be divided into shares of $100 each. The outstanding capital stock shall be increased from time to time as member banks increase their capital stock and surplus or as additional banks become members, and may be decreased as member banks reduce their capital stock or surplus or cease to be members. Shares of the capital stock of Federal reserve banks owned by member banks shall not be transferred or hypothecated. When a member bank increases its capital stock or surplus, it shall thereupon subscribe for an additional amount of capital stock of the Federal reserve bank of its district equal to 6 per centum of the said increase, one-half of said subscription to be paid in the manner hereinbefore provided for original subscription, and one-half subject to call of the Board of Governors of the Federal Reserve System. A bank applying for stock in a Federal reserve bank at any time after the organization thereof must subscribe for an amount of the capital stock of the Federal reserve bank equal to 6 per centum of the paid-up capital stock and surplus of said applicant bank, paying therefor its par value plus one-half of 1 per centum a month from the period of the last dividend. When a member bank reduces its capital stock or surplus it shall surrender a proportionate amount of its holdings in the capital stock of said Federal Reserve bank. Any member bank which holds capital stock of a Federal Reserve bank in excess of the amount required on the basis of 6 per centum of its paid-up capital stock and surplus shall surrender such excess stock. When a member bank voluntarily liquidates it shall surrender all of its holdings of the capital stock of said Federal Reserve bank and be released from its stock subscription not previously called. In any such case the shares surrendered shall be canceled and the member bank shall receive in payment therefor, under regulations to be prescribed by the Board of Governors of the Federal Reserve System, a sum equal to its cash-paid subscriptions on the shares surrendered and one-half of 1 per centum a month from the period of the last dividend, not to exceed the book value thereof, less any liability of such member bank to the Federal Reserve bank.
[12 USC 287. As amended by act of Aug. 23, 1935 (49 Stat. 713).]

http://www.federalreserve.gov/aboutthefed/section7.htm

Dividends and Surplus Fund of Reserve Banks
(a)

1.
A.After all necessary expenses of a Federal reserve bank have been paid or provided for, the stockholders of the bank shall be entitled to receive an annual dividend of 6 percent on paid-in capital stock.
B.The entitlement to dividends under subparagraph (A) shall be cumulative.

It is technically true that they are not taxed but it would be silly to tax a government entity.

Exemption from Taxation
(c) Federal reserve banks, including the capital stock and surplus therein, and the income derived therefrom shall be exempt from Federal, State, and local taxation, except taxes upon real estate.

[12 USC 531. Part of original Federal Reserve Act; but see 31 USC 3124(a), which reads as follows:

"(a) Stocks and obligations of the United States Government are exempt from taxation by a State or political subdivision of a State. The exemption applies to each form of taxation that would require the obligation, the interest on the obligation, or both, to be considered in computing a tax, except--

(1) a nondiscriminatory franchise tax or another nonproperty tax instead of a franchise tax, imposed on a corporation; and

(2) an estate or inheritance tax."

[hugolp]

I'd like to know where all the money came from for THE FED to buy assets and then resell them? Did they pay Taxes on the Profits? Federal, State, Local, etc taxes?

So where can you print up your own money out of thin air and buy assets. I just created $1 Trillion and would like to buy all the foreclosures in Las Vegas, Silicon Valley, Palm Beach.

Nice doing business with Y'ALL!

The money should come mainly from the interest on tresuries, but now there is the mortgage $#@! they bought from the banks. The important thing is what you mention: they print the money to buy assets that earns interests. Its impossible to not have benefits that way (although they are going to stop giving benefits for a while because of the loses on the mortgage $#@! and treasuries).

In reality the benefits of the Fed is just giving the money back to the Treasury department.

[HOLLYWOOD]

Where THE FED get the money to buy all these so-called assets?

I can go down i the wine cellar and print up $2 Trillion in counterfeit paper and buy assets... Oh, yeah, I'd be glad to share a a $79 Billion crumb for propaganda sakes. Hell, let me print up $10 Trillion and buy stocks off wall st... I'd be glad to pay capital gains taxes on the profits!

The whole FIAT counterfeiting racketeering Debt-Based monetary system, nothing but lies and bull$#@!.

The money should come mainly from the interest on tresuries, but now there is the mortgage $#@! they bought from the banks. The important thing is what you mention: they print the money to buy assets that earns interests. Its impossible to not have benefits that way (although they are going to stop giving benefits for a while because of the loses on the mortgage $#@! and treasuries).

In reality the benefits of the Fed is just giving the money back to the Treasury department.

[ILUVRP]

w/o the federal researve the goverment could have had it all , who needs them ?