Posts filed under “Data Analysis”

Can M3 be Saved?

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.   

M2_v_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:

Ron Paul
Washington, DC
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 . . .

022806

>

Related links:

US FED discontinues reporting M3 data    http://en.wikipedia.org/wiki/Petroeuro#US_FED_discontinues_reporting_M3_data

The End of M3 Reporting?
http://bigpicture.typepad.com/comments/2005/11/the_end_of_m3_r.html

M3 DEATHWATCH
http://www.capitalspectator.com/archives/2006/02/m3_deathwatch.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

M3 Reporting: Whats The Big Deal?
http://www.safehaven.com/article-4170.htm

Category: Data Analysis, Federal Reserve, Politics

A Healthy Dose of Skepticism

Category: Apprenticed Investor, Data Analysis, Psychology

The Backward Business of Short Selling

If you haven’t already, I strongly admonish you to go read Jesse Eisinger’s column today:

It’s a Tough Job, So Why Do They Do It?  The Backward Business of Short Selling

Here’s the money quote:

Short_interest
"The shorting life is nasty and brutish. It’s a wonder anyone does
it at all.

Shorts make a bet that a stock will sink, and nobody else wants
that: Not company executives, employees, investment banks nor most investors.
That’s why most manipulation is on the other side; fewer people object when
share prices are being pumped up. For most on Wall Street, the debate is whether
shorts are anti-American or merely un-American.

Yet in all the paranoia about evil short-sellers badmouthing
companies, what is lost is how agonizingly difficult their business is. They
borrow stock and sell it, hoping to replace the borrowed shares with cheaper
ones bought later so they can pocket the price difference as profit. It’s a
chronologically backward version of the typical long trade: sell high and then
buy low."

Go forth and read . . .

>

 

Source:
It’s a Tough Job, So Why Do They Do It?
The Backward Business of Short
Selling

Jesse Eisinger
WSJ, March 1, 2006; Page C1
http://online.wsj.com/article/SB114118313441386192.html

>

UPDATE March 2, 2006 10:32am: 

See below for more text

>

Read More

Category: Data Analysis, Financial Press, Trading

Home Foreclosure Surge

Category: Consumer Spending, Data Analysis, Economy, Real Estate

Greg Ip Discovers Data Manipulation

Category: Data Analysis, Real Estate

Gaming the Blog Ecosystem

Category: Data Analysis, Weblogs

Fed: Stagnant Net Worth for Typical US Family

Category: Consumer Spending, Data Analysis, Economy, Federal Reserve, Inflation, Psychology

Connect the Retail Sales Dots

Category: Data Analysis, Economy, Federal Reserve, Retail

Dark Matter Revisited

Category: Data Analysis, Economy, Science, UnScience

Misunderstanding Savings Rate: Still Negative

Category: Data Analysis, Economy