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« Process versus Outcome in Investing | Main | Election 2008 »

October 16, 2007



Re: interpretation, let me take a shot -- the least noisy metric is YoY change which is 11.8% from 10/06 to 10/07.

Zero Beta

I checked this out under your recommendation. Let me see if I have what it takes to model CDO's.

1. Last day of a four week interval ending at day x.

2. Last day of a four week interval ending at day y.

3. The annualized rate of change in MZM, as measured by the difference between the average MZM level in interval X, and the avearge MZM level in interval Y.

4. Most possibilities are not that, they are not possible. They are essentially creating different moving averages. They therefore need at least 4 week intervals between the data points.

In the case of January and February, I don't know why they leave the data points, but I venture to guess it has something to do with the leap year Since you can't go backwards, the upper echelon is blank.

5. 8/6/07 to 9/4/07

6. (1+[(Y-X)/X/(12/n)])^ (12/n)
X: average MLM level over interval X

Y: average MLM level over interval Y

n: number of 4 week periods in the interval

7. This is useful to determine how quickly money supply is growing as well as any seasonal effects. If you look at the latest date on the Y axis you can see the growth in MZM supply going up until that date. The bottom left is a 1 year average, whereas the bottom right is one month average. It is speeding up. In our case, it has sped up considerably. Since this is smoothed, big changes are noteworthy because they are most likely understated.

8. I'll sell you my dollars for a nickel.

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