March 2010

Federal Debt Feeds the Wall Street Machine

No.: 
73

A contradictory investment climate exists because the Fed is feeding Wall Street with so much money. Hedge funds and investment banks don’t care that short-term Treasuries pay next to nothing. They buy Treasuries as collateral in up-leveraging speculative plays, especially in commodities. Wall Street elites expect to recoup the losses of 2008 as well as to grasp massive new profits, even if major indexes top out short of their former highs later this year or next year.