A decade after the crisis, The Fed plans to shrink its bond holdings
Color me completely skeptical - not that it won&#x27;t happen (though it might not) but that it will mean what the WSJ seems to say.<p>One of the things about the &quot;winding&quot; which started all this was that it involved bailing out institutions considered too-back-to-fail.<p>And that bailing out altogether meant that such institutions had the &quot;full faith and credit of the US government&quot;, just like what&#x27;s printed on dollar bills and these institutions could effectively print money more or less like the Fed.<p>So the Fed itself has said it will start selling it&#x27;s particular portfolio, with the proviso that it will stop if anything seems to be going wrong. Which is to say that this is &quot;privatizing the bubble&quot; since the too-big-to-fail institutions can effectively &quot;print&quot; any money that leaves via the Fed&#x27;s action. Obviously, there are micro ways that this will play out, this will change the color and emphasis of the &quot;Greenspan Put&quot; or it&#x27;s many latter-day equivalents but those are small adjustments, not fundamental shifts - ie, we&#x27;re still in bubble-nomics, well, unless the Fed really fumbles this.