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Albert Sung is the author of the Katchum Macro-Economic Blog, monitoring breaking economic news from a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at... More
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  • Start Of QE3 Is A Fact 0 comments
    Dec 7, 2012 6:07 AM

    It seems that the Federal Reserve has finally jump-started the QE3 program.

    Mortgage backed securities went up from $852 billion to $893 billion in the month of November 2012. That's a $40 billion increase, precisely right on schedule according to its press release in September 2012, where it stated to buy $40 billion in MBS's each month.

    (click to enlarge)

    Chart 1: Federal Reserve Balance Sheet

    (click to enlarge)

    Chart 2: S&P 500

    If we put together Chart 1 and Chart 2, we can find a significant correlation.

    (click to enlarge)

    Chart 3: Federal Reserve Balance Sheet Vs. S&P

    You know what this means, start to buy equities and gold as the correlation between stocks/gold and the federal reserve balance sheet is a fact.

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