Ben Bernanke Capital May P&L: ($115) Billion

Tyler Durden's picture


For all the attention paid to the 1.9% drop in PIMCO's $293 billion Total Return Fund in the month of May following one of the worst months for bonds in a long while, perhaps a far more important question is what happens when one mixes the world's largest actively managed, fixed income portfolio, that of the $3.4 trillion hedge fund located at 33 Liberty Street, and its DV01 of over $2.5 billion, with the 46 bps move in the 10 year in the month of May, and gets a P&L of ($115) billion, or double the said hedge fund's total capital.

The hedge fund in question is of course the Federal Reserve Bank.

While no LPs, aka taxpayers will be concerned at the biggest ever monthly "loss" of 3.5% just yet, because it is simply on "paper", at what point will that most precious of central bank commodities - fiath that the bald man behind the curtain knows what he is doing - start running in short supply? And, even worse, how long before the Fed has to start paying ever more and more reserve interest to the same banks (the majority of which are foreign) so reviled for being bailed out in the first place, until one day, it goes cash flow negative and has to request a bailout from the US Treasury and thus, the US people?

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Fri, 05/31/2013 - 20:08 | 3615677 sysin3
sysin3's picture

I would share this post, but it needs some editing and some elucidation.

Fri, 05/31/2013 - 20:20 | 3615711 max2205
max2205's picture

Corzine will hepl...and poof, its gone

Fri, 05/31/2013 - 20:24 | 3615722 nmewn
nmewn's picture

Poof, its gone.

Me & Spitzer got zapped...that was

Fri, 05/31/2013 - 20:28 | 3615735 Spitzer
Spitzer's picture

Holy fuck..

I was first.

Fri, 05/31/2013 - 20:34 | 3615747 nmewn
nmewn's picture

I saw it...and I was second.

Probably one of the Ty's thinking its absolutely crucial that everyone understand Benny & The Inkjets are holding up this sham of a

Fri, 05/31/2013 - 20:54 | 3615795 Spitzer
Spitzer's picture

yeah I was just being a jackass cuz what else is there to do at this point ?

Fri, 05/31/2013 - 21:12 | 3615823 nmewn
nmewn's picture

Thats about it, in this casino.

Sat, 06/01/2013 - 00:50 | 3616133 lasvegaspersona
lasvegaspersona's picture

I noticed if you make an edit you move down in position.

Sat, 06/01/2013 - 10:28 | 3616431 PiltdownMan
Fri, 05/31/2013 - 20:12 | 3615689 Everybodys All ...
Everybodys All American's picture

game set match

Fri, 05/31/2013 - 20:25 | 3615724 Atomizer
Atomizer's picture

We'll Kill the Dollar!


The social media [iAPPS] contingency program is to create new laws to silence combative motives in protecting the Free Republic and the Constitution of the United States.

Revolution Come

Fri, 05/31/2013 - 20:25 | 3615725 Hedgetard55
Hedgetard55's picture

All FED "losses" are nominal, not real, as it cost them nothing to print the mioney to buy the assets. But since there is no free lunch, someone has to pick up the tab. (Hint: look in the mirror).

Sat, 06/01/2013 - 02:08 | 3616175 Muppet
Muppet's picture

Recall: FED losses are now termed "deferred assets".... meaning they're still assets, just underwater right now.   LoL

Fri, 05/31/2013 - 20:33 | 3615745 SaveTheGreenback
SaveTheGreenback's picture

If Bennie really was running a hedge fund he'd go long on TBT.

Fri, 05/31/2013 - 20:41 | 3615761 ultimate warrior
ultimate warrior's picture

What's the difference between a bucket of shit and Bernanke?????

The Bucket.

Fri, 05/31/2013 - 21:07 | 3615819 Smuckers
Smuckers's picture

One is an asset....

Fri, 05/31/2013 - 23:36 | 3616063 alphamentalist
alphamentalist's picture

Suggested fix....

You should use one to fertilize your garden. The other should be dumped out and disinfected because buckets will be useful during the hyperinflation.

Fri, 05/31/2013 - 20:59 | 3615800 101 years and c...
101 years and counting's picture

Ben needs to better allocate OUR portfolio by buying higher quality debt. such as Greek, Italian and Spanish bonds. afterall, then the ecb would have ben's back who has the ecbs back in the best circle jerk ever concocted.

Fri, 05/31/2013 - 21:25 | 3615839 Atomizer
Atomizer's picture

As posted before, Central Planning Policy is approaching a diploma of multi complexity breakdown. Who'd of thought the hatched plans can be often destroyed by commonsense and math concepts?

Chaos Theory

Fri, 05/31/2013 - 23:20 | 3616039 Carp Flounderson
Carp Flounderson's picture

you idiots still think the fed operates like a hedge fund?  come on, that's soooo 2009

Sat, 06/01/2013 - 00:10 | 3616096 Augustus
Augustus's picture

Let me try to recall, Dimon loses $4 bln in a quarter, while other wise generting $6 bln, net is only $2 bln.  Congress moonbats go crazy and want to hear why his bank is nor ready to fail.

Bernacke loses $115 bln in one month and no one asks if his bank can fail.

I don't understand Greek.

Sat, 06/01/2013 - 00:33 | 3616116 Clint Liquor
Clint Liquor's picture

The FED's exit strategy is to let the Treasuries mature. How ironic that the FED only has 'paper losses'.

Sat, 06/01/2013 - 01:49 | 3616169 Nikola
Nikola's picture

in related news: astro scientists name giant asteroid that may wipe out earth "QE2"!!


Sat, 06/01/2013 - 06:22 | 3616249 Downtoolong
Downtoolong's picture

How long before the Fed has to start paying ever more and more reserve interest to the same banks (the majority of which are foreign) so reviled for being bailed out in the first place, until one day, it goes cash flow negative and has to request a bailout from the US Treasury and thus, the US people?

Also known as Privatizing Profits and Socializing Losses - Part Nine. I wonder if Hank Paulson will return for a cameo role in this episode as the old curmudgeon with experience who seeks to guide the newly appointed Treasury Secretary on their quest. Maybe we’ll have a female TS by then with some T&A too. Then they can play to the audience with a side story of a father-daughter relationship, or perhaps  a May-September affair. Those are always big sellers, not to mention good distractions from the fact that the main line isn’t really a drama but a horror story.

Sat, 06/01/2013 - 07:09 | 3616267 Obadiah
Obadiah's picture

These satanic assholes are truely OFF THE FUCKIN HOOK!! 

"Time for honoring themselves shall soon be at its end"

    - General Maximus Decimus Meridius"   - 10B.C.

The Devil's a tricky motherfucker, brother"

    - Richard Pryor  - 1978

Sat, 06/01/2013 - 07:34 | 3616278 i8emallup
i8emallup's picture

MARGIN CALL!¡!¡?¿?¿= SELLOUT!¡!¡!¡

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