The news is incomplete.  Treasury's Monthly Statement of Receipts and Outlays of the U.S. Government (Monthly Treasury Statement) reflects the ESF's gains or losses on transactions, net interest earnings, and valuation gains or losses. These are reflected in Table 5, in the Exchange Stabilization Fund item under Department of the Treasury.

                                                 STAR - TREASURY FINANCIAL DATABASE

                                        TABLE 5.  OUTLAYS OF THE U.S. GOVERNMENT (IN MILLIONS)

                                                        ACCOUNTING DATE:  08/08

                                                                         THIS MONTH            THIS MONTH            THIS MONTH

  CLASSIFICATION                                                        GROSS OUTLAYS      APPLICABLE RECEIPTS         OUTLAYS

+ ______________________ ________ _______ _______

    DEPARTMENTAL OFFICES:

      EXCHANGE STABILIZATION FUND                                                  ......                   101                  -101

      OTHER                                                                            92                ......                    92

Table 6 shows as an asset item the ESF's holdings of SDRs and as liabilities the SDR Certificates issued to the Federal Reserve.

      SPECIAL DRAWING RIGHTS:

        TOTAL HOLDINGS                                                              9,301                 9,772                 9,494

        SDR CERTIFICATES ISSUED TO FEDERAL RESERVE BANKS                           -2,200                -2,200                -2,200

          ;ABALANCE                                                                 7,101                 7,572                 7,294

      RESERVE POSITION ON THE U.S. QUOTA IN THE IMF:

        U.S. SUBSCRIPTION TO INTERNATIONAL MONETARY FUND:

          DIRECT QUOTA PAYMENTS                                                    46,525                46,525                46,525

          MAINTENANCE OF VALUE ADJUSTMENTS                                         11,304                13,690                11,795

        LETTER OF CREDIT ISSUED TO IMF                                            -52,101               -51,825               -51,826

        DOLLAR DEPOSITS WITH THE IMF                                                 -153                  -136                  -140

        RECEIVABLE/PAYABLE (-) FOR INTERIM MAINTENANCE

         OF VALUE ADJUSTMENTS                                                      -1,111                -3,320                -1,579

          ;ABALANCE                                                                 4,464                 4,933                 4,775

      LOANS TO INTERNATIONAL MONETARY FUND                                         ......                ......                ......

      OTHER CASH AND MONETARY ASSETS                                               25,168                26,387                26,211

        ;CTOTAL CASH AND MONETARY ASSETS                                          111,969               100,449                45,152

I must be reading the accounts incorrectly. It seems to me that Treasury has insufficient funds to borrow from the ESF. And, if the news is to believe, intends to swap $50B of "non-marketable Treasury short-term securities" with the IMF. Except, according to Treasury Bulletin (Aug 2008) the SDR balance a/o 31 March 2008 was $9,892,018. Total assets of the ESF were $51,888,567, net income balance ~$42M. (cf Treasury MPSD; FRBNY FAQ re: 2007 ESF balance.)

Anyway, Exchange Stabilization Fund use is supposedly limited to short-term, ForEx lending. The proposed financing for domestic "Troubled Asset Relief Fund" is entirely extraordinary. It implies some of the funding is for foreign domiciled financial firms or central banks.

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