The Wall Street Journal publishes an important column by Andrew Huszar. Huszar had worked at the Fed for seven years, until early 2008, when he left for Wall Street. He was recruited in the spring of 2009 to return to the Fed from Wall Street to execute what turned out to be “an unprecedented shopping spree.” He took the job “managing what was at the heart of QE’s bond-buying spree–a wild attempt to buy $1.25 trillion in mortgage bonds in 12 months.” It turned out to be only the first round of massive bond purchases in the name of “quantitative easing.” QE abides.
Quotable quote: “We were working feverishly to preserve the impression that the Fed knew what it was doing.” It sounds like a parable. At the least it can be said that there is a lot of that going around.