Good catch! I just found the FRB statement on it:
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Discontinuance of M3
On March 23, 2006, the Board of Governors of the Federal Reserve System will cease publication of the M3 monetary aggregate. The Board will also cease publishing the following components: large-denomination time deposits, repurchase agreements (RPs), and Eurodollars. The Board will continue to publish institutional money market mutual funds as a memorandum item in this release.
Measures of large-denomination time deposits will continue to be published by the Board in the Flow of Funds Accounts (Z.1 release) on a quarterly basis and in the H.8 release on a weekly basis (for commercial banks).
M3 does not appear to convey any additional information about economic activity that is not already embodied in M2 and has not played a role in the monetary policy process for many years. Consequently, the Board judged that the costs of collecting the underlying data and publishing M3 outweigh the benefits.
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As far as the whole "creating money out of thin air" conspiracy thing, my thoughts on that are that it's very overblown. The first people who came up with the idea of money back in prehistory had to "create it out of thin air" too, since there was obviously no money at all in existence before then. I know how repos and reverse repos work; there's noting mysterious or ominous about the process.
I'm not really plugging anything into any formulas so I should be OK with M1 or M2. All I want to know at first is if there are correlations between the changes in those values and other variables. A lot of economic data is like that; it's technically incomplete because it depends on surveys or sampling or whatever. The ISM report that just came out is a good example; that's just the result of a survey of a bunch of companies I think. But that doesn't mean the number isn't meaningful.
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