Sunday, November 2, 2014

Billion-Dollar Bond Fund Manager: QE was a ‘Nonevent’

John Lekas, CEO and senior portfolio manager at Leader Capital, gets it.

"I frankly think QE3 was a complete waste of time," he told CNBC.

"During all the QE programs, [the Fed] bought $2.64 trillion worth of Treasurys. If you look at excess reserves, meaning that the bank just took that money and put it into the Fed—it's $2.67 trillion," Lekas said. "Meaning it was a nonevent, it never mattered, and I don't know why everyone thought it was so important."

Very true. Of course, the real problem starts if banks start to pull the money out of excess reserves and pumping them into the economy.

This is what the exercise really looked like. The spike in excess reserves started when the Fed launched its first quantitative easing:


  1. It sure was a complete waste of time for wages/earnings and mortgage purchase applications.

    Give Me An F … Fiat Currency (QE) Did Absolutely Nothing For Wages Or Employment In US And Japan

  2. I'm thinking inflation will pick up in a few years. We will probably have a mild recession first though. That is if rates are allowed to rise.