FOMC: This Is The Beginning Of “The Big Print” – Unlimited QE !

• FOMC:  This Is The Beginning Of “The Big Print” – Unlimited QE! 
  by http://truthingold.blogspot.ca/ 
  The fact that enough people still listen to Cramer is the perfect indicator of just how stupid part of our population is and it explains how we – the people – let our country lapse into systemic collapse.  At it’s base level, Government intervention in our lives prevents the Darwinian mechanism of natural selection from doing what it’s supposed to do.  That Cramer still sells his crap and that CNBC is still on the air is a perfect testament to that…Dave in Denver
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  For the first time since QE first started, today’s FOMC announcement stunned me.  Not because I was expecting something other than what was announced, but because of what was actually announced and the timing of the announcement.  I have been expecting eventual global QE to infinity since like 2003.  Seriously.  I didn’t think we would get the first indication that it’s coming today, two and a half months ahead of a Presidential election, and I didn’t think it would come first in the form of a direct attempt to reflate the housing market with subprime mortgage paper.
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  Let me explain.  Here’s the only important part of today’s announcement (the low-rate extension to mid-2015 was highly telegraphed and is about as useless as the new iPhone 5 on Mars):
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  The New York Fed said it will start buying agency mortgage-backed  securities on Friday, at a rate that is expected to total $23 billion  over the remainder of September. It will then purchase securities at a  clip of $40 billion each month. The New York Fed said it will  concentrate its purchases in newly-issued agency MBS in the  to-be-announced market, although it may purchase other agency MBS if  market conditions warrant (LINK)
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  Furthermore, the Fed said it will add to its purchases if the labor market doesn’t improve, it will keep its policy stimulative for a “considerable time,”  and it left the duration of the mortgage purchase program open-ended.  De facto QE to infinity.
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  The question is why?  The Fed is specifically targeting the monetization of new mortgage issuance by the GSE’s.  But we’ve been told up and down Wall Street and from the industry promoters – Nat’l Association of Realtors and Nat’l Association of Home Builders – that the housing market is bottomed and moving higher. I have heard countless TV economists get on CNBC/Bloomberg/Fox Biz and tell us that now is a great time to buy a home (see the cover of last Friday’s “Barron’s”).
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  So why target housing specifically?  We lose manufacturing jobs in this country every single month.  Why not target that?  The two biggest problems with housing are 1) the massive shadow inventory, as detailed on this blog; and 2) the rapid decline in the average weekly income of the middle class, which means there are less people who can afford to buy a home or stay in the one they own.   A mortgage purchase program will not address either issue. 
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  What makes this specific QE program frightening is that to the extent that there is growth in housing mortgage finance, it’s coming from the FHA.  The FHA, as I’ve detailed on this blog recently, is a  subprime lender disguised as a GSE.  It requires only 3.5% down to purchase and someone who refinances can take down a mortgage that exceeds the value of their home and receives mortgage payment insurance at a rate that is heavily subsidized by the Taxpayer.
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