MUTUAL ADMIRATION

If you don't know who Andrew Huszer is, read the following:

Andrew Huszar is a Fed veteran who served as the "quarterback" for the world's largest stimulus program by managing the purchase of more than $1 trillion worth of mortgage-backed bonds — only to renounce his support for the entire effort in a 2013 public apology. In a recent interview with CNBC, Huszar insisted the excess liquidity created by the Fed has done more to enrich Wall Street than the average citizen. 

Here's two more quotes from Huszar from a Time interview he gave in late 2013.

TIME: You argue that QE helps Wall Street banks but not the real economy. How does QE help Wall Street banks?
Huszar: QE had two goals, but one of them was originally highlighted as the primary goal by Fed Chairman Ben Bernanke: to make credit more accessible to more Americans. QE aimed to achieve this through lowering the wholesale cost for banks to make loans, and we were actually successful at doing this. For example, my program – which was buying mortgage backed securities – drove down the cost for banks to make mortgage loans. But the banks weren’t fully passing on the benefits to their customers — they were pocketing a lot of the extra profit.

In addition, though we lowered the cost for banks to make mortgages, the banks didn’t actually start making more mortgages. If you look at the first day of trading in my program which was in January of 2009, and you look at the last day of trading fifteen months later, the overall amount of U.S. mortgage lending had actually decreased despite the fact that the Fed had spent $1.25 trillion trying to stimulate mortgage lending. In fact, if you look as late as 2012, U.S. mortgage lending was at a fifteen year low. The banks weren’t making more loans. Instead, they were often investing their extra money into securities to take advantage of the rising tide of asset prices in the market.

The third point to make is that the Fed was actually buying and continues to buy all of these mortgage bonds through the network of primary dealers – banks. The commissions that the banks were generating off these purchases were also significant.

If this smacks of a blatant bailout of big banks, institutions that contributed mightily to the meltdown in the first place, under the phony twin banners of Fed transparency and independence, you realize what this really is--a mutual admiration society.

cnbc.com/2015/11/28/qe-quarterback-fed-sees-through-wall-streets-eyes