M3 @ 17% !

[Mega]

Oh My
http://www.shadowstats.com/alternate_data
Mike

[idianov]

Re: M3 @ 17% !

Mega,

The possible explanation of exploding M3 growth is that SIVs, CDOs, VIEs etc. hidden off financial institution's balance sheets for some time, are coming back home on the books. As they come back, the 'M3' money supply figure will be showing an inflation in the amount of credit being provided to the economy.

The M3 measure becomes meaningless to use as an economic indicator because the growth is mostly bad debt.

It is however, a good indicator of currency devaluation, since all "printed" and hidden currency units are creating a tsunami of inflation in the real economy by CBs efforts to monetize bad debts.

Igor

[qwerty]

What do SIV's bring to M3?

Igor,

Can you explain that a bit more please?

Which part of M3 do the SIVs, CDOs et alia show up in, and what does the money actually comprise? What are the SIVs holding? I thought they would have assets such as securitized debt and liabilities such as short-term borrowings - thus monetary liabilities rather than assets. What's really happening?

And I assume whatever you tell me they do bring to M3, they bring to it purely by dint of previously being booked to some Caribbean or other off-shore entity.

The money hasn't moved it has just shown up as being in the US now.

Can you explain, please?

[metalman]

Re: M3 @ 17% !

Mega,

The possible explanation of exploding M3 growth is that SIVs, CDOs, VIEs etc. hidden off financial institution's balance sheets for some time, are coming back home on the books. As they come back, the 'M3' money supply figure will be showing an inflation in the amount of credit being provided to the economy.

The M3 measure becomes meaningless to use as an economic indicator because the growth is mostly bad debt.

It is however, a good indicator of currency devaluation, since all "printed" and hidden currency units are creating a tsunami of inflation in the real economy by CBs efforts to monetize bad debts.

Igor

been watching for "poom" since 2006. is this it? in real life?

sure looks that way.

[blazespinnaker]

Re: M3 @ 17% !

been watching for "poom" since 2006. is this it? in real life?

sure looks that way.

I thought poom was what happens after the fed cuts deep in order to deal with the current crisis.

[Jim Nickerson]

Re: M3 @ 17% !

I thought poom was what happens after the fed cuts deep in order to deal with the current crisis.

If anyone actually knows exactly where we are in Ka-Poom, they are unwilling to state it. Even metalman prefaces his guess with questions. I'm of the opinion that at some point in the future a committee will meet, sift through the past data and declare such-and-such a time was Ka, and such-and-such time was Poom--you know like whoever it is that defines recessions after the fact.

[Guest]

Re: M3 @ 17% !

been watching for "poom" since 2006. is this it? in real life?

There is a flood of news articles streaming in from world wide that inflation has gone global. It's already difficult to put entrenched inflation back in the bottle when it's only one country - have we ever seen a world where inflation is going truly global? Did that happen in the 1970's? No!

"Is it KA or is it POOM" is too much damn script following. If one can dig up fifty articles documenting surging inflation worldwide in early 2008, those still doing soul searching about "is it KA or is it POOM" could long ago have concluded it was POOM merely by the sheer quantity of anecdotal reports streaming in from all over the world if they simply put their faith in their own news reading.

This quandary has a hint in it of the possibility that by dint of reading on these pages every single day, people are getting stuck on a bit of a rail, as to where global events must fit into the "iTulip calendar" in order to be interpretable. Inflation is surging worldwide, and it's plastered all over the news stories in every corner of the world. Maybe "watching for Poom" to appear according to some strict iTulip formula is too synthetic an exercise.

[idianov]

Re: What do SIV's bring to M3?

Igor,

Can you explain that a bit more please?

Which part of M3 do the SIVs, CDOs et alia show up in, and what does the money actually comprise? What are the SIVs holding? I thought they would have assets such as securitized debt and liabilities such as short-term borrowings - thus monetary liabilities rather than assets. What's really happening?

And I assume whatever you tell me they do bring to M3, they bring to it purely by dint of previously being booked to some Caribbean or other off-shore entity.

The money hasn't moved it has just shown up as being in the US now.

Can you explain, please?

Qwerty,

My speculation is that the credit is showing as Euro dollar part (dollars held in foreign accounts) of M3 as these entities get moved from offshore to foreign financial institution's balance sheets.

All we need is to watch M3 growth and the dollar as the crisis unfolds.

Igor

[GRG55]

Re: M3 @ 17% !

If anyone actually knows exactly where we are in Ka-Poom, they are unwilling to state it. Even metalman prefaces his guess with questions. I'm of the opinion that at some point in the future a committee will meet, sift through the past data and declare such-and-such a time was Ka, and such-and-such time was Poom--you know like whoever it is that defines recessions after the fact.

You mean the NBER?

"...Two consecutive quarters of decline in real GDP is commonly taken to be a recession. The National Bureau of Economic Research, a private organization, effectively decides when recessions occur, however, and the actual dating process is determined by judgment rather than a formal rule..."

Given nobody here seems to think we are in a dis-inflation phase, which I understand is the defining characteristic of a "Ka", then it makes the choice rather easy, n'est-ce pas?

Or does it? Maybe the cyclical Ka-Poom, dis-inflation followed by monetary asset reflation needs to be modified to accomodate the fact that we are in an inflationary recession, instead of the dis-inflationary recessions we have been accustomed to over the past quarter century (the same 25 years that EJ recently hoped we had enjoyed, 'cause dem days is over...) :eek:

[touchring]

Re: M3 @ 17% !

Or does it? Maybe the cyclical Ka-Poom, dis-inflation followed by monetary asset reflation needs to be modified to accomodate the fact that we are in an inflationary recession, instead of the dis-inflationary recessions we have been accustomed to over the past quarter century (the same 25 years that EJ recently hoped we had enjoyed, 'cause dem days is over...) :eek:

How about this?

Financials and real estate have been dropping last 6 months, so the 'ka' has happened. The 'poom' in gold and commodities is also in progress with interest rate cuts, which is in progress.

:confused:

[bart]

Re: M3 @ 17% !

Oh My
http://www.shadowstats.com/alternate_data
Mike

Mine tends to lead John Williams reconstruction because its weekly instead of monthly, has been running over 18% for a while and also tends to come in about .5% higher than his due to differences in our formulas.
http://www.nowandfutures.com/key_stats.html#m3b

Also note this comment I added to the page last year:
11/30/2007 - Note that much of the large growth in M3 lately has been in flows into CDs and Money Market Funds, a normal occurrence during financial turmoil.

As someone else noted, Eurodollars is also part of the reason and the high oil prices affect Eurodollar balances.

[Jim Nickerson]

Re: M3 @ 17% !

There is a flood of news articles streaming in from world wide that inflation has gone global. It's already difficult to put entrenched inflation back in the bottle when it's only one country - have we ever seen a world where inflation is going truly global? Did that happen in the 1970's? No!

"Is it KA or is it POOM" is too much damn script following. If one can dig up fifty articles documenting surging inflation worldwide in early 2008, those still doing soul searching about "is it KA or is it POOM" could long ago have concluded it was POOM merely by the sheer quantity of anecdotal reports streaming in from all over the world if they simply put their faith in their own news reading.

This quandary has a hint in it of the possibility that by dint of reading on these pages every single day, people are getting stuck on a bit of a rail, as to where global events must fit into the "iTulip calendar" in order to be interpretable. Inflation is surging worldwide, and it's plastered all over the news stories in every corner of the world. Maybe "watching for Poom" to appear according to some strict iTulip formula is too synthetic an exercise.

Pure genius, Luke.

[Jim Nickerson]

Re: M3 @ 17% !

There is a flood of news articles streaming in from world wide that inflation has gone global. It's already difficult to put entrenched inflation back in the bottle when it's only one country - have we ever seen a world where inflation is going truly global? Did that happen in the 1970's? No!

"Is it KA or is it POOM" is too much damn script following. If one can dig up fifty articles documenting surging inflation worldwide in early 2008, those still doing soul searching about "is it KA or is it POOM" could long ago have concluded it was POOM merely by the sheer quantity of anecdotal reports streaming in from all over the world if they simply put their faith in their own news reading.

This quandary has a hint in it of the possibility that by dint of reading on these pages every single day, people are getting stuck on a bit of a rail, as to where global events must fit into the "iTulip calendar" in order to be interpretable. Inflation is surging worldwide, and it's plastered all over the news stories in every corner of the world. Maybe "watching for Poom" to appear according to some strict iTulip formula is too synthetic an exercise.

Pure genius, Luke.