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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: bond_bubble who wrote (71448)	10/8/2006 10:56:05 PM
From: bart13	Respond to of 110194

For a list of reasons (some noted in this CBB), I suggest that it is today basically impractical to identify, aggregate, or model contemporary “money” dynamics. There is no definitive “money supply.” Credit instruments change and the nature of Credit intermediation changes. Perceptions change - and do so subtly over time, as well as abruptly in real time. Importantly, during periods of rapid Credit growth and asset inflation, it will be the nature of the ebullient marketplace to accept an ever broadening scope (and risk profile) of Credit instruments and intermediation as “money-like.” “Repos” and asset-backed securities are these days some of the most coveted “money” in a way unthinkable just a decade ago. Good points and I even agree with Doug Noland on many of them, most especially about defining "money supply" - its a major rat's nest, much like trying to measure inflation. But I still think its worthwhile to review and look at what is actually available in all the various "money measures", including credit and most especially repos, TIOs and other "hot" money. Seeing a broader picture and having a broader scope/perspective with the various key money stats in year over year change rates helps me some from getting lost in the forest of vested interests and other "fun".

To: bond_bubble who wrote (71448)	10/8/2006 10:56:43 PM
From: mishedlo	Respond to of 110194

..As long as Credit expands sufficiently to sustain the boom (which it is clearly doing), analysis of “money” needn’t take up much of our time or attention. We don’t have to be concerned with the Fed covertly “printing” M3, as the jettisoned components are all financial sector liabilities. And we can remain quite confident that financial sector liability expansion continues in earnest. Inflating asset prices and asset markets - through heightened speculative leveraging - create their own source of liquidity. "clearly doing"? I guess that is debatable unless the sole measure is the stock market. Oops - I see that was written right near the May peak I wonder if he feel differently about "clearly" Mish