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Some Facts about QE3's size from the Feds website

bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭
in Precious Metals

Something seems to be wrong with the numbers. Starting on sept 13th the Fed was going to buy 40 billion per month in mortgage backed securities but the number appears to be more like 66 billion as its averaging 17 billion a week . The total from sept 13th until jan 2nd is 265 billion net. I got this from adding up the weekly net MBS purchase amounts that I found on the Fed's website as I couldn't find a running total posted or even a monthly total.


Now what about QE4 ? I'm assuming they will get around to posting treasury purchase data but if its true and it does equal 40 billion then we will be at 106 billion a month in purchases not 85 billion, which is the number thats being quoted generally .

Of course they could buy less treasuries to make it equal the 85 billion they claim or quietly expand it like they apparently did QE3 by more than 50% and get us to 130 billion image


Now maybe I'm just wrong as the site is pretty confusing but heres a link to the the MBS purchases archive by week



Fed data


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    piecesofmepiecesofme Posts: 6,669 ✭✭✭
    Using the words Fed and facts in the same sentence is an oxymoron.
    To forgive is to free a prisoner, and to discover that prisoner was you.
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    bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭


    Nobody feels like spending an hour or two browsing the fed website to check my math ? image



    Seriously though, it looks to me like QE3 is 65% bigger than they said it was going to be , I find that at least mildly alarming
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    DrBusterDrBuster Posts: 5,314 ✭✭✭✭✭
    It's probably bigger than that too.
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    tneigtneig Posts: 1,505 ✭✭✭
    Wasn't this one "Open Ended"? Do what you want as needed sort of thing?




    COA
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    bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭

    It was widely publicized as 40 billion a month with an open ended duration , 66 billion a month is a big bump up almost immediately. Then in December they said they were going to buy 45 billion a month in treasuries.


    If you realize within 2 months that the "40 billion" which is really 66 billion isn't enough then that means something strange is going on. They already knew they weren't doing 40 billion so the december statement means they really want at least 105 billion a month of QE on an open ended basis.


    The plan is to acquire treasuries in as many as 17 auctions per month here is the January schedule . january schedule

    On the 31st they will publish February's schedule and tell us what they actually bought in January. If they publish ID numbers of the treasuries in question perhaps someone can look them up and tell where they came from. Are they buying back treasuries from china? If the data was a little less deliberately obscure maybe you could see where these things are flowing in from.


    Another mystery in the balance sheet is that while within QE3 they have added 265 billion in mortgage backed securities according to the data on the balance sheet the Fed-wide holdings of those securities has only increased by 84 billion. If they are shoveling them in at 66 billion a month through the front door they appear to be shoveling them out the back door at about 45 billion a month



    image
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    DoubleEagle59DoubleEagle59 Posts: 8,203 ✭✭✭✭✭


    << <i>Using the words Fed and facts in the same sentence is an oxymoron. >>



    Good one!
    "Gold is money, and nothing else" (JP Morgan, 1912)

    "“Those who sacrifice liberty for security/safety deserve neither.“(Benjamin Franklin)

    "I only golf on days that end in 'Y'" (DE59)
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    bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭


    After all this buying year over year the Fed's balance sheet actually declined in 2012. How do you do QE 3 and not add a dime to the balance sheet???

    The figures show net buying week over week but no expansion whatsoever to the bottom line compared to Jan 2012








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    VanHalenVanHalen Posts: 3,826 ✭✭✭✭✭


    << <i>After all this buying year over year the Fed's balance sheet actually declined in 2012. How do you do QE 3 and not add a dime to the balance sheet???

    The figures show net buying week over week but no expansion whatsoever to the bottom line compared to Jan 2012 >>



    If the sheeple really knew what was on The Feds balance sheet, the revolution would have already started. They acknowledge what? $3T or so. That is a small fraction of the real number IMHO. I believe there is at least double that amount, and likely triple, on the books (or off!image). What it is composed of would be scary to know. The banks own the U.S. Gov't AND the U.S. Gov't owns the banks. It is not pretty and those of us alive 10 to 15 years down the road stand a good chance of seeing the truth come out...........
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    bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭


    How do you buy 400 billion over a year and yet have the total amount of MBS only increase only 84 billion for the year?

    The footnote for the MBS category says

    4. Guaranteed by Fannie Mae, Freddie Mac, and Ginnie Mae. Current face value of the securities, which
    is the remaining principal balance of the underlying mortgages.


    image

    Ok so the face value of a MBS can decline as the principal balances go down. They don't pop like balloons but they deflate , I'm not sure how foreclosures are handled but nothing good will happen to the security as mortgages go bad within it .

    Chance are the MBS that people offer to the Fed aren't exactly top of the line .

    The face values of the ones already on the books shrank by a few hundred billion possibly ?


    image
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