FED Balance Sheet - Slow Unroll

As we end 2018 and we now look at an active FED we should be watching both the Yield Curve and the Balance Sheet. We benchmark it here.

As shown above it is now dropping, some $400 billion is unwound already. To dump this garbage they have to discount greatly. As a note, the FED BS if marked to market is now well in insolvency, they are making Sears look fantastic. Just wait till folks understand this one.

The FED still holds a ton of MBS, those old junk notes on bad home loans. Even market to market they are worthless or close to it.

The above combined Treasury obligations where the FED was borrower of last resort. They are dropping but even if marked to market are underwater.

The above is the total. As we have argued for a decade this is as critical as the Yield Curve and so far no one has downloaded from the FED.