Andrew Huszar, a former Morgan Stanley managing director, managed the Federal Reserve’s $1.25 trillion agency mortgage-backed security purchase program from 2009 to 2010, wrote this recent op-ed in The Wall Street Journal. As the Dow stayed above 16,000 today, we thought it worth reprinting once again. You don’t hear this kind of mea-culpa from a Federal Reserve official everyday.

“I’m sorry, America,” writes Andrew Huszar, the quarterback of the largest bond-buying spree in American history, who claims U.S. taxpayers are on the hook for more than $4 trillion in government bond-buying debt. “I was responsible for executing the centerpiece program of the Fed’s first plunge into the bond-buying experiment known as quantitative easing (QE). 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.”

Writing in The Wall Street Journal last week, Huszar continues his mea culpa: “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.”

Huszar claims that quantitative easing, or QE, isn’t working. He worries it could end badly for U.S. taxpayers. But QE is great for Wall Street, he claims.

“Trading for the first round of QE ended on March 31, 2010,” writes Huszar. “The final results confirmed that, while there had been only trivial relief for Main Street, the U.S. central bank’s bond purchases had been an absolute coup for Wall Street. The banks hadn’t just benefited from the lower cost of making loans. They’d also enjoyed huge capital gains on the rising values of their securities holdings and fat commissions from brokering most of the Fed’s QE transactions. Wall Street had experienced its most profitable year ever in 2009, and 2010 was starting off in much the same way.”

By 2010, Huszar started to question the wisdom of QE-1, but the bond-buying party was just getting started. QE infinity seemed to be the new policy.

“You’d think the Fed would have finally stopped to question the wisdom of QE,” he argues. “Think again. Only a few months later — after a 14 percent drop in the U.S. stock market and renewed weakening in the banking sector — the Fed announced a new round of bond buying: QE2.”

Where are we today? The Fed keeps buying roughly $85 billion in bonds a month, chronically delaying so much as a minor QE taper. Over five years, its bond purchases have come to more than $4 trillion. Amazingly, in a supposedly free-market nation, QE has become the largest financial-markets intervention by any government in world history.

Huszar ends his public confession with a warning and some advice.

“As for the rest of America, good luck,” writes Huszar, a senior fellow at Rutgers Business School. “Because QE was relentlessly pumping money into the financial markets during the past five years, it killed the urgency for Washington to confront a real crisis: that of a structurally unsound U.S. economy. Yes, those financial markets have rallied spectacularly, breathing much-needed life back into 401(k)s, but for how long? Experts like Larry Fink at the BlackRock investment firm are suggesting that conditions are again “bubble-like.” Meanwhile, the country remains overly dependent on Wall Street to drive economic growth.

The Dow Jones industrial average closed above 16,000 for the first time Thursday as the blue-chip index races toward its best year in a decade. The Dow has been propelled by the easy-money policies from the Federal Reserve. Since the start of the year, the Dow is up 22 per cent and has now topped three 1,000 point milestones in 10 months. It eclipsed 14,000 in February and 15,000 in May. If it holds onto its gains, it would notch its strongest performance since 2003.

Even when acknowledging QE’s shortcomings, Chairman Bernanke argues that some action by the Fed is better than none (a position that his likely successor, Fed Vice Chairwoman Janet Yellen, also embraces). The implication is that the Fed is dutifully compensating for the rest of Washington’s dysfunction. But the Fed is at the center of that dysfunction. Case in point: It has allowed QE to become Wall Street’s new “too big to fail” policy.”

For full story go to The Wall Street Journal.

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Real Estate Daily News Buzz is designed to give news snippets to readers that our (yet to be award winning) editors thought you could use to start your day. They come from various business perspectives, real estate, government, the Fed, local news, and the stock markets to save you time. Here you will find the headlines and what the news buzz for the day will be.

The Dow Jones industrial average rose 109.17 points, or 0.7%, to close at 16,009.99 Thursday. The Standard & Poor’s 500 rose 14.48 points, or 0.8%, to 1,795.85. The NASDAQ composite rose 47.88 points, or 1.2%, to 3,969.15. Benchmark U.S. crude for January delivery gained $1.59 to close at $95.44 a barrel on the New York Mercantile Exchange.

SENATE PANEL ADVANCES YELLEN’S BID TO LEAD FED
WASHINGTON (AP) — A Senate panel on Thursday advanced Janet Yellen’s nomination to lead the Federal Reserve, setting up a final vote in the full Senate after lawmakers return from a two-week Thanksgiving break. Yellen’s path to confirmation also became easier on Thursday when the full Senate voted to change its rules for approving all presidential nominees other than Supreme Court selections. Now a simple majority will be required, instead of 60 votes. Yellen was nominated by President Barack Obama in October to succeed Ben Bernanke, whose second four-year term as chairman will end Jan. 31. She would be the first woman to lead the Fed and the first Democrat to do so since Paul Volcker stepped down in 1987.

GOV’T EXPECTS TO FINISH GM STOCK SALE BY YEAR END
DETROIT (AP) — The U.S. government expects to sell the last of its stake in General Motors by the end of the year, bringing an end to a sad chapter in the 105-year-old auto giant’s history. The Treasury Department said Thursday that it still owns 31.1 million shares of the auto giant, less than 2 per cent. It plans to sell them by Dec. 31, as long as the price holds up. The government received 912 million shares in exchange for a $49.5 billion bailout during the financial crisis in 2008 and 2009. So far it has recovered $38.4 billion of the money, but selling the remaining shares at Wednesday’s $37.69 closing price gets the government $1.17 billion, leaving taxpayers short by roughly $10 billion. The government says the bailouts of GM and Chrysler were needed five years ago to save the American auto industry and more than a million jobs. It never expected to get all of the money back.

BEAUJOLAIS VINEYARDS AIM TO BE MORE THAN ‘NOUVEAU’
PARIS (AP) — The wine world’s best-known party is beginning — the ritual uncorking of Beaujolais Nouveau every November. That’s both a curse and a blessing for the famed French region and its lesser-known yet finer wines. Beaujolais Nouveau is easy to drink, but everything a fine wine is not: young, poor in tannins and not suited to storage. It’s partially because new wines could never hope to stir the imagination the way that the great wines of Bordeaux or Champagne do that the makers of Beaujolais Nouveau resorted to what has become a hugely successful marketing campaign. And so, as they do every year, bars and wine shops the world over uncorked the first bottles of the 2013 Beaujolais Nouveau at midnight on Wednesday. What started as the very first chance to taste a given year’s wine in Paris years ago has led to parties as far away as Japan and the United States.

JURY ORDERS SAMSUNG TO PAY APPLE $290 MILLION
SAN JOSE, Calif. (AP) — A Silicon Valley jury on Thursday ordered Samsung Electronics to pay Apple $290 million for copying vital iPhone and iPad features. The verdict covers 13 older Samsung devices that a previous jury found were among 26 Samsung products that infringed Apple patents. The previous jury awarded Apple $1.05 billion. But U.S. District Judge Lucy Koh ordered the new trial and tossed out $450 million of the damages after concluding the previous jury miscalculated the amount Samsung owed. Samsung appealed that verdict and is expected to appeal the latest verdict.

US UNEMPLOYMENT BENEFIT APPLICATIONS DROP TO 32K
WASHINGTON (AP) — The number of people applying for U.S. unemployment benefits fell 21,000 to a seasonally adjusted 323,000 last week, the lowest since late September and further evidence of an improving job market. The Labor Department said Thursday that the less volatile four-week average fell for the third straight week to 338,500. Both figures are near pre-recession levels. Applications are a proxy for layoffs. They had spiked in early October because of the partial government shutdown and processing backlogs in California. But first-time applications have now fallen in five of the past six weeks. The decline indicates that employers are laying off fewer workers.

US WHOLSALE PRICES DIP FOR 2ND MONTH ON CHEAP GAS
WASHINGTON (AP) — U.S. wholesale prices fell in October for the second straight month, driven down again by cheaper gasoline costs. The Labor Department said Thursday that the producer price index, which measures prices before they reach the consumer, dropped 0.2% in October. That followed a 0.1% decline in September. The cost of gas plunged 3.8% last month, lowering the index. Over the past 12 months, energy costs have kept inflation weak. Prices have increased just 0.3% in that stretch.

AVERAGE US RATE ON 30-YEAR MORTGAGE AT 4.22%.
WASHINGTON (AP) — Average U.S. rates on fixed mortgages declined this week after two weeks of increases, keeping home-buying affordable. Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan fell to 4.22% from to 4.35% last week. The average on the 15-year fixed mortgage dipped to 3.27% from 3.35%. Rates had spiked over the summer and reached a two-year high in July on speculation that the Federal Reserve would slow its bond purchases later this year. But the Fed held off in September and now appears poised to wait at least a few more months to see how the economy performs. The bond purchases are intended to keep long-term interest rates low.

NJ BECOMING 3RD STATE TO OFFER INTERNET GAMBLING
ATLANTIC CITY, N.J. (AP) — New Jersey is poised to allow adults in the state to click a mouse or swipe a screen for a chance to win money, making it only the third state to offer online gambling. A five-day trial period of Internet gambling begins Thursday night when players invited by casinos to test their systems make real-money bets online. If all goes well, Internet gambling will be available to gamblers in New Jersey starting Tuesday. The only other states with online gambling are Nevada and Delaware.

SUN LINK STREETCAR NEAR U OF A REACHES MILESTONE TUCSON
TUCSON – For the first time since July 2, 2012, the Warren Avenue Underpass will reopen to pedestrians this Friday. The Warren Avenue Underpass will be a pedestrian-only and walk-your-bike area so that everyone can safely share the space with the Sun Link Tucson Streetcar. The Tucson Modern Streetcar is currently in testing and is expected to begin service for the public this summer.

PIMA ANIMAL CARE CENTER EXPANDING
TUCSON – Construction is underway on an expansion of the Pima Animal Care Center (PACC), allowing temporary space for more than 100 dogs. The huge tent at the facility will have heating and air conditioning. The expansion comes as PACC is overcrowded and animals are susceptible to many diseases.

GREEN PARTY NO LONGER ON THE BALLOT IN AZ ELECTIONS
TUCSON – The Green Party no longer will be recognized in statewide elections due to a lack of registered voters identifying themselves as party members. Elections officials said Wednesday that all state-recognized political parties in Arizona must have at least 21,499 electors, or 5 percent of voters in the last election, to qualify for continued representation on the ballot. At last count, the Green Party in Arizona had about 5,600 registered voters on its rolls, said Matt Roberts, a spokesman for the Arizona Secretary of State’s Office. The party is circulating petitions to help regain official recognition in 2014. To do that, the party must file 23,041 valid signatures with the Secretary of State by Feb. 27.

Real Estate Daily News is sponsored by Stewart Title and Trust – The only title company named one of

“AMERICA’S MOST TRUSTWORTHY COMPANIES” in 2012 by Forbes®.

Contact Stewart Title & Trust of Tucson at (520) 327-7373 for your next closing.

CBRE has negotiated the sale of a 4.25-acre lot at 340 W Mariposa at the Mariposa Mall Shopping Center in Nogales, AZ. The commercial retail zoned parcel commanded a sale price of $1.4 million.

Built in 1989, Mariposa Mall Shopping Center is located on Mariposa Road and is approximately three miles north of the US-Mexico border. The open-air destination retail center features a JC Penny, Boot Barn and Foot Locker, among others. There are a number of other national retailers in the area as well, including a Super Wal-Mart, Home Depot and Safeway.

The out-parcel, which totals approximately 184,684 square feet or 4.25 acres, is adjacent to major tenants, Ross Dress for Less and a Kmart Supercenter. Plans for the property include further retail development.

Peter Villaescusa and Jesse Peron with CBRE’s Tucson office represented the seller, Phoenix, Ariz.-based HGC/MW Development LTD Partnership. The buyer, SBX Holding Company of Scottsdale, Ariz. was represented by Chip Thor with Velocity Retail in Phoenix.

“This sale reaffirms Nogales’ position as a strong retail market,” said CBRE’s Villaescusa. “Mexico’s economy is healthy and the border market reflects that.”

Villaescusa and Peron should be reached for more information at (520) 323-5100 in CBRE’s Tucson office. Thor can be contacted at (602) 682-8100 in Phoenix.