In a message dated 5/4/2006 7:22:40 P.M. Eastern Daylight Time, [EMAIL PROTECTED] writes: While M3 is largely endogenous, it is possible for the Fed to control it. This might be indirectly, as with imposing larger margin requirements on the stock market.
Most of M 3 is not really related to the stock market but to financial institutions intermediation in the form of derivatives and the continuous, nonstop creation of other credit instruments such as CDO's., Mortgage Backs, CDS's,Repos of different kinds and the securitization of just about anything, etc, all of which are alien to the concept of margin requirements. All of these instruments are basically capitalist's money only. This why the Fed doesn't want to report M3 or M4 anymore At the present stage of financial arbitrage capitalism, it is the last thing in the minds of the Fed to reign in the dominant financial class .Besides, the system thrives through excess liquidity creation which is also widely supported by foreign central banks and private investors, and which, in turn, is the base for low interests rates that support runaway consumption and GDP growth; it keeps USers happy and voting Republican in increasing numbers. Only when this system of easy finance crumbles things will start to change. Cristobal
