Banks like B of A have tons of bad mortgages on their books. There is a big push to modify these loans. Once modified, the banks sell the paper, which will still be worthless by the way, to the Fed, thus cleansing their balance sheets and putting them in position to make business loans or real mortgages. Sadly the benefits of this round of QE3 is to the banks, not the general economy. Ben believes if the stock market, i.e. bank stocks are doing well, this will trickle down to the regular economy. Unfortunately, banks aren't stupid, and they care about themselves first, and will do what it takes to protect their bottom lines. In this economy, that means taking the easy money (borrow from the fed at 0.025%) and buying safe bonds. Very little true investing by the banks is going on these days.
I do not think that buying MBS will create jobs. I like Ben but this is a bummer! Actually, this process may create jobs in the same way as the tickle down economics of the republicans. Ben will push people to dig for gold and Romney will create jobs to attend on people like him in the mansions Same old, same old.