Fed's balance sheet starts to look like Bear Stearns'
This is the Fed's balance sheet. This is the Fed's balance sheet on junk securities. It's hard to read, but the gist is that the gray area represents Treasury securities -- debt owed by the U.S. government, which has been the Fed's traditional asset. The non-gray stuff, which as you can see began to teem and fester in December, is risky, private-sector debt that the Fed took on in return for swapped Treasury securities to financial companies that needed propping up. Note the vertical scale -- we're measuring in terms of hundreds of billions of dollars. Sometimes it's easy for forget how extraordinary the last six months has been. This is a reminder. The chart is via Calculated Risk.