Beware of Headline Analysts

There's a lot of detail to follow when you analyze the economy, and sometimes it's tempting to just offer analysis off of the headline of a story without digging into the details. But you have to dig, always.

Barry Ritholz over at The Big Picture writes:

While the Federal Reserve continues to pump money into the system at an unprecedented rate, less and less of it is finding its way to consumers and commercial borrowers. Instead, its being used to prop up speculators and financial firms.

This is headline analysis. He sees all the headlines re:bailouts and simply assumes that the Fed is pumping money at "unprecedented rate[s]", when in fact the Fed has been sterilizing its bailout activities by using its portfolio of Treasury securities, rather than printing new money. Money supply growth, in fact, over the last three months has been barely detectable. Through August 7, three month M2 annualized money growth has been at a dismal 1.2%. No "unprecedented rate[s]" here