It's All About Wall Street, Not Main Street!

 I have been posting for quite sometime about the true intent of quantitative easing (QE) by the FED was to benefit Wall Street and not Main Street.  Well, in today's Wall Street Journal, a former Fed official, Andrew Huszar had this to say: "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." 

Wow.  What a confession!  But, wait, he goes on to say: "It wasn't long before my old doubts resurfaced. Despite the Fed's rhetoric, my program wasn't helping to make credit any more accessible for the average American. The banks were only issuing fewer and fewer loans. More insidiously, whatever credit they were extending wasn't getting much cheaper. QE may have been driving down the wholesale cost for banks to make loans, but Wall Street was pocketing most of the extra cash."

And, the impact to date of all this QE to the tune of the Fed's $4 trillion investment.  Well, the Fed's ROI has been to increase GDP by a mere 0.25%, or $40 billion.  But, the stock prices of those Wall Street banks have seen their stock prices more than "triple" since March 2009.  These institutions are the so-called "Too-Big-Too-Fail" money center banks.  These banks, which are only .2% of all the banks in the U.S., control in excess of 70% of all U.S. Bank assets.  To say the least, the Fed has accomplished its mission of enhancing the wealth of Wall Street Banks at the direct expense of Main Street.