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Five Things You Need to Know for Thursday


What you need to know (and what it means).


Five things you need to know to stay ahead of the pack on Wall Street.

1. Goodbye, M3!

As of today, and with notably very little fanfare, the Federal Reserve Bank will no longer report M3 monetary aggregate.

  • There are varying measures of money supply. From narrowest, to most broad, they are:
    M0 - The total of all physical currency, plus accounts at the central bank which can be exchanged for physical currency.
    M1 - M0 + the amount in demand accounts ("checking" or "current" accounts).
    M2 - M1 + most savings accounts, money market accounts, and certificate of deposit accounts under $100,000.
    M3 - M2 + all other CDs, deposits of eurodollars and repurchase agreements.
  • Why is the Fed discontinuing M3? The official reason is "the costs of collecting the underlying data and publishing M3 outweigh the benefits," and because "M3 does not appear to convey any additional information about economic activity that is not already embodied in M2."
  • Some, however, believe the discontinuance of M3 reporting will simply make it easier for the Fed to disguise how many dollars are being created.
  • Why would the Fed care about disguising dollar creation? By disguising the creation of dollars, the Fed might hope to prolong the dollar's value since increasing the supply of dollars also devalues them.
  • Still, because the Fed will not cease publishing the other, more narrow monetary measures, they point out that you will be free to construct your own M3 by using math!.
  • Since 2000, the U.S. Dollar Index has declined by 11.9%.
  • Meanwhile, M3 is up 50% since 2000, and has doubled since 1997.

Chart courtesy

2. Japan Imports Gain Most in a Decade, Property Prices Increase!

Japan's imports rose the most in almost a decade in February and land prices increased in the three biggest cities for the first time since 1990.

  • Imports jumped 30 percent from a year earlier, as exports surged 21 percent, the Ministry of Finance said.
  • Japan's economy grew at an annualized 5.4 percent in the fourth quarter, faster than both the U.S. and Europe.
  • The data suggests that this recovery is being driven by domestic demand.
  • In the past, economic recovery in Japan has been driven by an increase in exports to faster-growing economies.
  • Japan's central bank has announced plans to end their quantitative easing program.
  • A continued pace of recovery may cause the Bank of Japan to raise interest rates as soon as October, some economists say.

3. China, Russia seen sitting together at lunch, looking over at U.S. every now and then and whispering, laughing.

A day after Russian President Vladimir Putin left Beijing, China said it is siding with Russia in Iran's nuclear standoff with the West.

  • After more than two weeks of discussions, the five members of the UN Security Council - China, Russia, United States, Britain and France - have been unable to agree on a draft statement that tells Iran to stop enriching uranium.
  • Iran insists it has the right to atomic research.
  • The U.S. believes Iran is seeking the ability to make nuclear weapons.
  • China's Foreign Ministry spokesman Qin Gang said China supported a Russian compromise proposal that would allow Iran to use nuclear fuel enriched in an internationally monitored plant on Russian soil.

4. "I knew President Nixon. President Nixon was a friend of mine. You, sir, are no President Nixon."

The Standard & Poor's 500 Index is down 2.8 percent since President Bush took office, the worst performance during this stage of any two-term administration in the past half century... except for Richard M. Nixon.

  • The S&P 500 index during the past half-century has risen on average 8.1 percent a year.
  • The S&P 500 grew 153.6 percent at this point during the presidency of Bill Clinton.
  • The S&P 500 grew 79.7 percent for Ronald Reagan.
  • The S&P 500 grew 61.9 percent under Dwight D. Eisenhower.
  • At this point in President Nixon's administrations, the S&P 500 had declined by 4.1%.
  • This suggests President Bush is at least 140 basis points better than President Nixon as measured by stock market performance!

5. Five Things You Need to Know about "Five Things You Need to Know..."

If you've said it once, you've said it three (perhaps even four) times, "How does Minyanville Staff put together this incredible and timely early a.m. summary? Also, who is "Minyanville Staff" anyway?"

  • The Minyanville feature series "Five Things You Need to Know..." was the brainchild of a team of professional writers known, collectively, as The Minyan Prolapse.
  • While the Minyan Prolapse was responsible for early versions of "Five Things You Need to Know," this professional writing collective eventually turned the project over to Minyanville Staff (thanks!).
  • The topics covered in "Five Things You Need to Know..." are selected each day through a scientific process we call the Minyanville Sifting Scheme.
  • Yes, it is proprietary.
  • Below, a photo of Minyanville Staff assembling the daily "Five Things You Need to Know..." summary.

A typical morning for Minyanville Staff preparing daily content for

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