QE: the greatest wall street bailout of all time

EdBEdB Senior MemberPosts: 2,924 Senior Member
A Federal Reserve guy with a conscience.

http://investmentwatchblog.com/federal-reserve-whistleblower-tells-america-the-real-reason-for-quantitative-easing/

From 2009 to 2010, Huszar was responsible for managing the Fed’s purchase of approximately $1.25 trillion worth of mortgage-backed securities. At the time, he thought that it was a dream job, but now he is apologizing to the rest of the country for what happened…

I can only say: I’m sorry, America. As a former Federal Reserve official, I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing. The central bank continues to spin QE as a tool for helping Main Street. But I’ve come to recognize the program for what it really is: the greatest backdoor Wall Street bailout of all time.

Replies

  • There's little or no doubt that QE1 (the implementation of which Huszar was apparently responsible) was designed to save the system. I'm pretty sure it benefited every one, simply by helping to keep a recession from possibly turning into a recession. QE1 bailed out everybody.

    QE2 and QE3 may or may not be a waste (my guess it probably has been a waste) and has undoubtedly been a major contributor to the rise in financial and housing assets, while doing little for the economy and hurting fixed income savers such as the elderly. As to timing, QE2 or QE3 didn't bail out "Wall Street." The Street was doing quite fine by then.

    In the Fed's defense, I'd quote Nobel prize winning economist (and Cal grad!) Thomas Sargent: "Monetary policy cannot be coherent unless fiscal policy is."
  • BuffcoBuffco Senior Member Posts: 10,237 Senior Member
    Well, I accept your apology.
  • HextallHextall Senior Member Posts: 9,520 Senior Member
    Buffco wrote: »
    Well, I accept your apology.

    You are a bigger man than me.
  • creekguycreekguy Senior Member Posts: 3,905 Senior Member
    The guy could de-stress by joining the Air Force Drone program.

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