NY Fed Loses $180 Million On Hilton Deal

A very interesting piece in the FT about the Federal Reserve's purchase of toxic assets. From Dow Jones
The Federal Reserve Bank of New York lost about $180 million on a debt restructuring that held off financial problems at hotel group Hilton, owned by Blackstone Group (BX), the Financial Times reported Wednesday on its website, citing unnamed people close to the situation.

However, the people said the Fed and other lenders could still recoup losses as the deal left them with better terms on other parts of the debt, the report said.

The central bank picked up $4 billion of $20 billion in loans used for the leveraged buyout of Hilton in 2007, when it took on $29 billion in troubled assets from Bear Stearns, the report said.

It said the Fed, Blackstone and BlackRock, which manages the Bear portfolio on behalf of the Fed, declined to comment.

But don't you worry about the Fed,  it is earning record profits on its portfolio financied with printed money. We seem to be reaching a point where the Fed owns every type of asset possible. All part of Bernanke's attempt to steal your money through inflation. Robert Mugabe of Zimbabwe would be proud.

Black Swan Insights


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