From the Wall Street Journal:
“There’s a real question as to whether the massive bond-buying program known as quantitative easing was worth the cost, former Federal Reserve official Andrew Huszar said Tuesday. Huszar, a senior fellow at Rutgers Business School and a former managing director at Morgan Stanley, noted a few of the program’s unintended effects.
Huszar apologized for his role in QE in a Wall Street Journal op-ed published Monday.
‘I can only say: I’m sorry, America,” he wrote. “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.’”
It was also a back door bailout of the Blue State political machine. Quantitative Easing was intended to bail out the insolvent Blue State public pension funds which require high rates of return from Wall Street in order to pay otherwise unsustainable benefits to public union pensioners and Democrat politicians. The stock market as it now exists has absolutely nothing to do with the “real” economy of goods, services and most importantly, jobs and income.”
A Center reporter recently spent some time with a friend from high school who had gone to Columbia University and from there to Wall Street and, ultimately, to management of a hedge fund. The hedge fund manager had retired “early” as a multi-millionaire “master of the universe.”
Strangely, after a couple of days of somewhat intense political/business discussions, it was apparent to our reporter that his Wall Street friend had no more idea as to what stock or company would do well than the reporter or anyone else. What our “master of the universe” did know, however, was the phone numbers of his Ivy League friends and classmates who were high officers in government and business and who had access to inside information the rest of us lack.
And so we see a hedge fund financial wizard who engineered billions in profits from the issuance of collateralized debt obligations (CDO’s) testify in federal court that he is “not sure” what the industry-wide acronym CDO stands for.
And the Fed continues to pump $85 billion a month into this sewer.
“Just over half of Americans, 52%, now say they personally, or jointly with a spouse, have stock market investments. That is one percentage point below last year’s figure, making it the lowest in Gallup’s 15-year trend.”
The Gallup survey shows stock ownership by individual Americans at a 15 year low. The market is a rigged game dominated by two factors: Insider-information based instantaneous electronic trading and massive unfunded “purchases” of US Treasury bonds and Fannie Mae mortgage-backed securities by the Federal Reserve which simply prints money for the “purchases.”
A primary purpose of the Fed’s Wall Street purchases is to iflate market returns to allow the various States’ retirement system investments to meet public employee (union) pension payout obligations. The end-game won’t be pretty!