If it makes you feel any better, according to Trader Dan, the Fed didn't really start QE3 when they first announced it:
Originally Posted by Nov. 10
As you all know by now, the Federal Reserve boldly announced plans "to boldly go where no man has gone before" and purchase each and every month, the tidy sum of $40 BILLION in US Mortgage Backed Securities (MBS ) to "aid the recovery". This was supposed to begin in September of this year and continue on out as far as the eye can see, into infinity, as my friend Jim Sinclair has stated, or until economic conditions warrant a cessation of the program.
Here is the problem however. I have been closely monitoring the balance sheet of the Fed each and every week and I simply do not see it! Take a look at the following chart I have constructed of the overall balance sheet but detailing also the sum of mortgage backed securities contained therein.
Can you see how both lines have basically flatlined since the cessation of QE2 last year? Does anyone out there see a climbing MBS line on this chart especially to the tune of $40 billion higher each month? I sure don't!
After questioning last week where the Fed's QE3 had gone, it seems as if we got an answer this week. This afternoon's report on the Fed Balance Sheet shows a sharp increase in Mortgage-Backed Securities holdings on their Balance Sheet, $37 Billion to be exact.
If it makes you feel any worse, the Fed is likely to announce in just a couple of days the effective doubling of QE stimulous from the current $40B in mortgage backed securities to ~$85B in MBS and Treasuries: