Derivatives: Darth Vader's Revenge Message Board

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Non-Tech : Derivatives: Darth Vader's Revenge

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To: ahhaha who wrote (179)	9/25/1998 4:56:00 AM
From: Frodo Baxter	Read Replies (1) of 2794

>I suggest you take a look at the M2 numbers and tell me what you annualize the rate to be. The average weekly increase in the last eight weeks has been $13 billion. That's 100 billion on a base of 4000. 2.5% per 2 months and rising incrementally. Trailing 15%. Exponentiating to at least 20% given the recent increments. It's silly to take 8 weeks worth of data and draw conclusions from them. I prefer to look at actual year-over-year money growth rather than annualizing a small period, cause the results are incredibly volatile and misleading. But just to humor you: M2 week average, not seasonally adjusted 7-20 4207.6 7-27 4187.8 8-3 4224.5 8-10 4256.3 8-17 4253.1 8-24 4233.9 8-31 4240.8 9-7 4303.5 9-14 4308.4 (4308.4-4207.6)/4207.6 = 2.4% increase in 8 weeks. Simple compounding: 52/8 * 2.4% = 15.6% But, let me add a couple more weeks of data: 7-6 4242.3 7-13 4221.5 (4308.4-4242.3)/4242.3 = 1.56% increase in 10 weeks. Simple compounding: 52/10 * 1.56% = 8.1% In any case, using actual year-over-year money growth, the number is 7.2%.

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