What are the statistical gaps in the US?

[william the wie]

i haven't read through the whole thread, does anyone want an official M3 back?

pending validation from the latest round of QE, i'd like to see money supply stats account for street money independent from all of this shit the fed makes. what is that? it certainly cant be accessed by normal americans... not even 'normal' banks.

M3 should be shrinking rapidly due to the write off of bad debts.

 

[loosecannon]

fwiw, Money Supply Charts

 

[loosecannon]

 

[loosecannon]

Monetary Base and Money Supply

a whole page of em.

 

[loosecannon]

So William and Antagon, why does M3 data help you determine money on the street?

 

[antagon]

i haven't read through the whole thread, does anyone want an official M3 back?

pending validation from the latest round of QE, i'd like to see money supply stats account for street money independent from all of this shit the fed makes. what is that? it certainly cant be accessed by normal americans... not even 'normal' banks.

M3 should be shrinking rapidly due to the write off of bad debts.

this part of economics seems like a dr. seuss landscape. it's clear-cut with unsecured debts. if there is a foreclosure, however, how is the bad debt disposed? against a market value of the home? despite that?

what if the fed assumed the 'toxic' asset. what happens to derivatives built around a mixed bag of souring debt and healthy assets?

 

[loosecannon]

this part of economics seems like a dr. seuss landscape. it's clear-cut with unsecured debts. if there is a foreclosure, however, how is the bad debt disposed? against a market value of the home? despite that?

what if the fed assumed the 'toxic' asset. what happens to derivatives built around a mixed bag of souring debt and healthy assets?

I think that depends on who owns the mortgage. If it was a bank they are required to write off bad loans which means they sell them to collection agencies and write off the whole principle and interest perhaps minus the sale price of the debt.

Derivatives are two party contracts so if there are defaults one party pays for losses. But you were probably referring to CDO's. Clearly the non bank owners of CDO's are not required to write off bad bank loans. But they would want to for tax purposes. But if they can't collect that chunk of money supply does indeed vanish.

It seems as if money supply destruction occurs no matter what the path if loans default.

But I am no expert at all, just tackling the question head on.

IMO it seems as if money supply destruction is a hard and fast fact whereas the means to measure it are sketchy.

 

[william the wie]

i haven't read through the whole thread, does anyone want an official M3 back?

pending validation from the latest round of QE, i'd like to see money supply stats account for street money independent from all of this shit the fed makes. what is that? it certainly cant be accessed by normal americans... not even 'normal' banks.

M3 should be shrinking rapidly due to the write off of bad debts.

this part of economics seems like a dr. seuss landscape. it's clear-cut with unsecured debts. if there is a foreclosure, however, how is the bad debt disposed? against a market value of the home? despite that?

what if the fed assumed the 'toxic' asset. what happens to derivatives built around a mixed bag of souring debt and healthy assets?

With synthetic CDOs there are two or more claimants to 100% of the foreclosure proceeds. Then there are putbacks, when bond covenants are fraudulent the money must be put back in the wallets of the bondholders. I have no idea how putbacks work with synthetic CDOs but I would be surprised the amount of legally bad paper was less than 200% of GDP. (Synthetics, student loans, car loans and many other debts were marketed by the CDO machines.) Buying CDSs on just about any financial institution would be a good idea about now, assuming you can find a solvent issuer.

 

[william the wie]

It seems as if money supply destruction occurs no matter what the path if loans default.

But I am no expert at all, just tackling the question head on.

IMO it seems as if money supply destruction is a hard and fast fact whereas the means to measure it are sketchy.

To be more exact publishing such data is a criminal offense dating back to civil war era legislation.

 

[antagon]

IMO it seems as if money supply destruction is a hard and fast fact whereas the means to measure it are sketchy.

thanks for that explanation. now its like a dr seuss piece with fewer splashes of pink. i still get the impression that value's not getting accounted for in the write-off, or that it was double-accounted in the write-on, CDOs-wise. (vis versa?) i could care less about the issue, but it gives me a headache thinking about it.

the above makes me want an official M3 or at least a separate value for x in M2 + x = M3.

...more stuff i dont really care about but really want to know.

 

[editec]

fwiw, Money Supply Charts

A very illuminating website, LC.

Thanks for the link.

 

[loosecannon]

IMO it seems as if money supply destruction is a hard and fast fact whereas the means to measure it are sketchy.

thanks for that explanation. now its like a dr seuss piece with fewer splashes of pink. i still get the impression that value's not getting accounted for in the write-off, or that it was double-accounted in the write-on, CDOs-wise. (vis versa?) i could care less about the issue, but it gives me a headache thinking about it.

the above makes me want an official M3 or at least a separate value for x in M2 + x = M3.

...more stuff i dont really care about but really want to know.

I think you are asking exactly the right question. For a long time I believed that the money supply should be backed by real estate via the mortgage mechanism. In effect that is what is happening to M3, M1, M2. Increasingly substitutes for actual money are being counted as part of the money supply including as commercial banks primary reserves and Fed Reserves.

That is where the whole securitization process gets opaque, because the transition toward a synthetic economy is largely secret and informal.

I think the change in standards or evolution of standards is why M3 was discontinued, and why the break down of the credit system revolves around these very securities that were becoming the backbone of the banking system. You notice the strong reluctance of the fed to disclose specifics about the bad assets it is buying and even the sound assets it is holding and accepting as reserves.

Hence the audit the fed movement.

 

[william the wie]

The writedowns when as they come will create lower costs for real assets and this has happened before. The expansion of car and radio ownership in the 1930s is one of those things that is ignored about the Great depression. The expansion of real assets and durable consumer goods owned by the lower 40% of the economy is underreported in modern histories of that era. The Kondraitiev wave is a huge potlatch of monetary wealth at the top being converted to real wealth at the bottom through writedowns.

 

[topspin]

let me guess william has fake boobs and no degree?

 

[william the wie]

let me guess william has fake boobs and no degree?

Sorry vice versa.

 

[antagon]

how about a GTP index -- gross thug product. are we really accounting fully for the US economy without gray and black markets in the mix? these are adjuncts to the US economy which supplement above-the-board activity, justify employment and effect the creation of wealth just like anything else.

 

[editec]

I'll tell ya a STAT I'd like to see...

The breakdown of incomes and net worth for the top 1%.


Break that down into quintiles and I'm guessing we'd be shocked to see that the income inequity that we see in the total numbers are equally inequitable in the top 1%.

Yeah, that's right, that's what I'm saying.

Even among the truly wealthiest 1%, income inequity and net worth inequity is HUGE.

If anybody can find those numbers for incomesI'd appreciate the link.

But I suspect when it comes to net worth, once we get into the 1% category, determining actual net worth gets pretty dicy.

So much of their net assets only have a theoretical value, and those market estimates of value can only be guesses.

 

[loosecannon]

how about a GTP index -- gross thug product. are we really accounting fully for the US economy without gray and black markets in the mix? these are adjuncts to the US economy which supplement above-the-board activity, justify employment and effect the creation of wealth just like anything else.

those household surveys should be a blast!

 

[antagon]

how about a GTP index -- gross thug product. are we really accounting fully for the US economy without gray and black markets in the mix? these are adjuncts to the US economy which supplement above-the-board activity, justify employment and effect the creation of wealth just like anything else.

those household surveys should be a blast!

 

[antagon]

I'll tell ya a STAT I'd like to see...

The breakdown of incomes and net worth for the top 1%.


Break that down into quintiles and I'm guessing we'd be shocked to see that the income inequity that we see in the total numbers are equally inequitable in the top 1%.

Yeah, that's right, that's what I'm saying.

Even among the truly wealthiest 1%, income inequity and net worth inequity is HUGE.

If anybody can find those numbers for incomesI'd appreciate the link.

But I suspect when it comes to net worth, once we get into the 1% category, determining actual net worth gets pretty dicy.

So much of their net assets only have a theoretical value, and those market estimates of value can only be guesses.

i guess all value is theoretical. i'd agree that there's a big split between folks who have $2-3 million and those who have $20-30 billion. all are likely in that top 1%.

as for me, i'd like to learn what average incomes and produce looks like if exceptional earners were removed from the picture. then one could assess how america is really doing.