- The Big Picture - http://www.ritholtz.com/blog -
Can M3 be Saved?
Posted By Barry Ritholtz On March 6, 2006 @ 7:33 am In Data Analysis,Federal Reserve,Politics | Comments Disabled
I always find it curious when a good source of public data gets cancelled by an administrative source.
Mass layoffs were the first victim, killed by the White House in 2003 .
Next came the proposed ending of funding for a Census Bureau survey on the economic well-being of U.S. residents  — a move decried by both the left and the right.
But the most egregious and unwarranted cancellation  of a data source has been the Federal Reserve plan  to end M3 reporting. It struck me that Ben Bernanke’s defense of this was the first blot on his tenure as new Fed Chair.
Its a clean historical data series. Its accurate, not seasonally adjusted, not hedonically altered. There is really no good reason to cancel this.
For a nation that is capable of scrapping together 100s of millions of dollars for an Alaskan bridge to nowhere, it is ridiculous that an important measure of money supply will no longer be reported, ostensibly as a cost cutting measure.
Puh-leeze. That’s tough to believe, especially when we look at M3.
Its no coincidence that M3 has been soaring in advance of its impending death: Jim Picerno observes  that "The broadest measure of U.S. money supply — the so-called M3 — has less
than a month to live, but its swan song continues to be one of growth,
and growth that’s notably higher relative to that of M2, the official
replacement for the doomed series."
As the Federal Reserve data  makes clear, M3 is growing at a much faster pace than M2 — which has a time-lag and contains no "electronic" money.
Given the current account deficit, and any structural risks to the US dollar, as a fund manager, I want access to more and not less information.
Its not too late to save M3: Congressman Ron Paul is
sponsoring a bill that will require the Fed to continue to monitor and
report M3. This bill will need your support.
You can contact the congressman at:
203 Cannon House Office Building
Washington, DC 20515
Phone Number: (202) 225-2831
A historically clean, accurate data source is a terrible thing to waste . . .
US FED discontinues reporting M3 data  http://en.wikipedia.org/wiki/Petroeuro#US_FED_discontinues_reporting_M3_data
The End of M3 Reporting? 
M3 DEATHWATCH 
Where Do All Those Numbers Come From?  http://www.econbrowser.com/archives/2006/03/where_do_all_th.html
Money Supply and the End of M3 
Historical M2 vs M3 
Chart of the Week: M1, M2, M3 Money Supply Components 
DOES M3 MATTER? 
M3–THE FINALS DAYS 
M3 Reporting: Whats The Big Deal?
Article printed from The Big Picture: http://www.ritholtz.com/blog
URL to article: http://www.ritholtz.com/blog/2006/03/can-m3-be-saved/
URLs in this post:
 killed by the White House in 2003: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2003/01/03/MN120712.DTL&nl=fix
 Census Bureau survey on the economic well-being of U.S. residents: http://www.washingtonpost.com/wp-dyn/content/article/2006/02/28/AR2006022801334.html
 cancellation: http://en.wikipedia.org/wiki/Petroeuro#US_FED_discontinues_reporting_M3_data
 Federal Reserve plan: http://www.federalreserve.gov/releases/h6/discm3.htm
 Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/m2_v_m3.png
 Jim Picerno observes: http://www.capitalspectator.com/archives/2006/02/m3_deathwatch.html
 Federal Reserve data: http://www.federalreserve.gov/releases/h6/Current/
 Image: http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/022806.GIF
 The End of M3 Reporting?: http://bigpicture.typepad.com/comments/2005/11/the_end_of_m3_r.html
 Where Do All Those Numbers Come From?: http://www.econbrowser.com/archives/2006/03/where_do_all_th.html
 Money Supply and the End of M3: http://bigpicture.typepad.com/comments/2005/11/money_supply_an.html
 Historical M2 vs M3: http://bigpicture.typepad.com/comments/2005/11/historical_m2_v.html
 Chart of the Week: M1, M2, M3 Money Supply Components: http://bigpicture.typepad.com/comments/2005/11/chart_of_the_we_2.html
 DOES M3 MATTER?: http://www.capitalspectator.com/archives/2005/11/does_m3_matter.html
 M3–THE FINALS DAYS: http://www.capitalspectator.com/archives/2006/01/m3--the_finals.html
Copyright © 2008 The Big Picture. All rights reserved.