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Perhaps many of you will call this outfit crazy! I call it crazy good:). This puffer coat is my "new"vintage find and beside the fact that is perfect for this weather, I love the color too! I got to wear it a few days ago paired with a bright green cropped trousers ( thanks to Sheinside.com) and a striking turquoise top. As accessories, I added this statement necklace just because everything else is plain, and a little bit of patterns/textures is required.
And now I will like to know your opinion!


                                                       
                                                                         Coat: vintage/ similar style Here
                                                                         Pants: thanks to Sheinside.com/Here
                                                                         Bag: vintage/ option Here
                                                                         Sunglasses: Nine West
                                                                         Shoes: Aldo
                                                                         Necklace: from Portland Museum of Art shop/ a great option Here 
                                                                         Top: vintage
         

I figure every amateur economic blog should have its own economic index that tracks the health of the economy. I therefore present the Illusion of Prosperity's Working Man Index.


Click to enlarge.

I won't go into the gory details of how my index is constructed (you are free to look in the "source data" link below). I will simply say that it factors in hourly wages, inflation, and nonfarm payrolls as a percent of the population.

Check out that trend line in blue. Can't you just feel the illusion of prosperity leaking out?

Kudos to the government for giving us a temporary reprieve in 2007. (The key word is temporary.)

Would anyone like to make a gentleman's bet that we won't eventually return to the red trend line? I think the odds are fairly high that we will. I might even go double or nothing on the notion that we'll overshoot it.

But what would you expect? I'm a permabear. Sigh.



Update:

I've made a slight improvement to the index. The upper end of the base period has been extended to December of 1995 (previously December of 1992).

Source Data:
St. Louis Fed: Custom Chart

Click to enlarge.

We continue to grind. The long-term trend is not our long-term friend.

The first version of this chart was inspired by the CFNAI Yellow Alert as seen at Dollar Death $piral.

This version of the chart was inspired by the CFNAI Red Alert as seen at Dollar Death $piral.

Source Data:
St. Louis Fed: Chicago Fed National Activity Index

Click to enlarge.

After seeing the boost to Japan's real GDP per capita due to the creation of their housing bubble, we decided to try it too.

One wonders if we'll meet up again on the red trend line now that both bubbles have popped.

Source Data:
St. Louis Fed: Custom Chart

by: Les Carpenter
Rational Nation USA
Liberty -vs- Tyranny

True 18th century Classical Liberalism, the basis of a limited central government, individualism, and property rights is at great odds with modern liberalism. The following from reason.com points up the essential differences quite well.

In The Future of Liberalism (2009), Alan Wolfe writes that the true heirs to the liberalism of John Locke, Adam Smith, and Thomas Jefferson are not today’s classical liberals (libertarians (emphasis mine)), but rather the other kind of liberals, those who would use government power to assure autonomy and equality for all. Such “modern liberalism,” for Wolfe, is simply an updating of the original: In the eighteenth century, political power crushed autonomy and equality, requiring a free market as the antidote; now private corporate power under capitalism does the same, but this time the remedy is active government.

Early in his book Wolfe writes:

The core substantive principle of liberalism is this: As many people as possible should have as much say as is feasible over the direction their lives will take. Expressed in this form, liberalism, as in the days of John Locke, is committed both to liberty and to equality. . . . [Emphasis in original.]

With respect to liberty, liberals want for the person what Thomas Jefferson wanted for the country: independence. Dependency, for liberals, cripples. . . . When we have no choice but to accept someone else’s power over us, we fail to think for ourselves, are confined to conditions of existence resembling an endless struggle for survival, are unable to plan for the future, and cannot posses elementary human dignity. The autonomous life is therefore the best life. We have the potential, and are therefore responsible for realizing it, to be masters of our own destiny.

This sounds pretty good, no? Being subject to another’s arbitrary will clashes with the liberal spirit, which projects the ideal of mastery of one’s destiny even as one cooperates with others for mutual benefit.

Equality as Core Value

I also agree with Wolfe that equality is a core value of classical liberalism, but not as he means it. True liberal equality is not income equality; nor is it merely equality of liberty or equality under the law. The first would require continuous violent state interference with voluntary exchange, while the other two are inadequate in themselves. By equality, I mean what Roderick Long calls, per Locke, “equality of authority.” For Locke a state of equality is one in which “all the power and jurisdiction is reciprocal, no one having more than another, there being nothing more evident than that creatures of the same species and rank . . . should also be equal one amongst another, without subordination or subjection . . . .”

But now I must part ways with Wolfe because he has an utterly self-defeating idea of how to secure everyone’s mastery over his or her own one’s destiny: the welfare state. Judging by the history and nature of the state, we must conclude that Wolfe’s program would lead not to liberation but rather to subjugation of the individual. Wolfe has things turned topsy-turvy:

To advocate today what Smith advocated yesterday—a free market unregulated by government—is to foster greater, rather than lesser, dependency and less, rather than more, equality. . . . [I]n the highly organized and concentrated forms taken by capitalism in the contemporary world, removing government from the marketplace does not allow large numbers of people to become entrepreneurs in ways that enable them to set the terms by which their lives will be led; it instead allows firms to reduce their obligations to their employees and thereby make them more dependent on the vagaries of the market.

Impersonal Market Forces

The latter part of the quote has some validity, but before I get to that, let’s look at the general point. I take Wolfe to be saying—and he reinforces the point in this discussion with Russ Roberts—that one is less autonomous when subject to impersonal market forces than when subject to political forces ostensibly designed to ensure autonomy and equality. This strikes me as entirely wrong.

Admittedly, in a freed economy no one person or group would control the market forces (the law of supply and demand, and so on) to which we all must adjust as we carry out our plans. That would seem to impinge on our autonomy. But these forces are called impersonal precisely because they are not the product of any single will or directed at any chosen objective. Rather the term market forces simply refers to the spontaneous, orderly, and essential process (the price system) generated by other people’s freedom to choose what to buy and sell. In other words, each individual’s autonomy is bounded by each other individual’s autonomy. While we all must take prices and other people’s choices into account as we make our plans, we each have great leeway in the marketplace through which we can minimize our vulnerability to the arbitrary will of others. If one person won’t deal with you, someone else most likely will, so the prospect of being victimized by, say, invidious discrimination shrinks. {Read More}

Click to enlarge.

If you believe inflation adjusted housing prices will rise over the long-term then you better believe inflation adjusted wages per capita will also rise over the long-term. Call me skeptical.

Women participated more and more in the workforce during this period. That drove real wages per capita higher. They're here. Now what?

Note: I set the y-intercept at zero for this chart's trend line (Zero Wages = Zero House Prices). It helped the trend fit the data much better in my opinion.

Source Data:
St. Louis Fed: Custom Chart

"The shirt"is a label that I used since I started this blog. Now it is time to dedicate a post to it. This is the most versatile piece in my closet and I have to confess that , this is a "mini" obsession. Wether I wore it with jeans/pants or a skirt, the shirt gives a dash of chicness to any look. Today I will display some of the shirts that are ready to be worn during this season, together with some of others details like hats, DIY jewelry, bags...some are new to you and some you might have already seen them.
Have a wonderful Sunday everyone !

M-m-m-monster Kill


On that note I present the following unreal chart. This one is going to require some explanation. It's one of the most complicated charts yet.


Click to enlarge.

1. GDP represents the goods and services produced during a quarter. Total credit market debt owed is how much total debt there is at the end of a quarter. I made an adjustment to align the two series. For any given quarter's GDP, I averaged the debt at the end of the given quarter with the debt at the end of the previous quarter.

2. Using that data, I then created two series. The first was a 10-year average of GDP and the second was a 10-year average of total credit market debt owed.

3. I plotted that data on the scatter chart you see above. Note that using the long-term moving averages has virtually eliminated all short-term cyclical noise.

4. For the bulls, I offer a linear trend line in red based on the data since the start of the great recession. Note that the correlation of the trend line is an amazingly precise 0.999. Most bulls no doubt feel very confident that the path will continue.

5. For the bears, I offer a 2nd order polynomial in orange based on the data heading into the great recession. Note that the correlation of the trend line is an amazingly precise 0.997. Most bears no doubt feel very confident that the path will continue. The data's been rolling over for decades. It's a bit hard to believe that the great recession permanently put a stop to it. Right?

6. Clearly the bulls and/or bears must be wrong to be so confident. They both can't be right. It's not possible to follow both trend lines simultaneously. That's why I added the zone of uncertainty to the chart. In my opinion, that's probably where the truth lies. Think of it as a consensus of those who are neither overly bullish nor overly bearish.

7. I've also added a "You Are Here" point in purple to show where we are right now. It does not use 10-year moving averages. Think of it is an indication of where the 10-year moving averages are currently being pulled. We're being pulled above the red trend line but that makes sense. It's what we would expect to see in an economic expansion. It probably won't continue when the next recession hits.

Here's where it gets really interesting to me. I became a permabear in 2004. I'm still a permabear. I think that it is likely that we'll fall somewhere in the yellow zone in the distant future. That said, I'd be bearish even if we stuck to the bull's trend line in red. Why? It's all in the bull's equation. To put it bluntly, that equation sucks.

GDP = 0.171 x TCMDO + 5.622

Our current GDP is $15.8 trillion. In order to double our nominal GDP to $31.6 trillion then our total credit market debt owed would have to roughly triple from $55 trillion to $152 trillion?

That's the best case? Seriously? Good luck on that theory!

I think things are going to get really dicey during our next recession. I can't say when that will be with any certainty, but I'm a very patient permabear. Unless you think the Fed has permanently put a stop to recessions, at some point initial claims will bottom and start heading back up again. We might already be there. Sigh.

I consider this post to be a rebuttal to this article. Bill McBride of Calculated Risk is not a doomer. I clearly am. One of us is wrong. I really hope it is me. In any event, I'm not about to swing for the fences with my nest egg. I have yet to have a single regret about any "doomer" decision I've made since the party ended in 2000.

1. I started buying I-Bonds in 2000 and I've been buying them in every year since then. Any regrets? Not even close!
2. I bought gold and silver in 2004. Any regrets? The only regret I could possibly have is that I wasn't enough of a doomer. They went parabolic in 2006. I sold for a nice profit. In hindsight, I could have done even better.
3. Any regrets over building a TIPS ladder instead of a stock portfolio? Definitely not!
4. Any regrets over going all in on one TIPS bond for my IRA in 2011 ? Definitely not!

And yet, here I am being thought a fool for being a permadoomer? I just don't get it. How much more evidence of long-term economic structural issues does the world need to see? It's just not physically possible for us to grow like we once did. How many more long-term exponential trend failures must I post? Sigh.

Source Data:
St. Louis Fed: GDP
St. Louis Fed: Total Credit Market Debt Owed

by: Les Carpenter
Rational Nation USA
Liberty -vs- Tranny

On why religion has no place in governance. And why the wise recognized it 227years ago. Note: All emphasis is mine.

James Madison [1785] - To the Honorable the General Assembly of the Commonwealth of Virginia --- A Memorial and Remonstrance Against Religious Assessments

We the subscribers , citizens of the said Commonwealth, having taken into serious consideration, a Bill printed by order of the last Session of General Assembly, entitled "A Bill establishing a provision for Teachers of the Christian Religion," and conceiving that the same if finally armed with the sanctions of a law, will be a dangerous abuse of power, are bound as faithful members of a free State to remonstrate against it, and to declare the reasons by which we are determined. We remonstrate against the said Bill,

Because we hold it for a fundamental and undeniable truth, "that religion or the duty which we owe to our Creator and the manner of discharging it, can be directed only by reason and conviction, not by force or violence." The Religion then of every man must be left to the conviction and conscience of every man; and it is the right of every man to exercise it as these may dictate. This right is in its nature an unalienable right. It is unalienable, because the opinions of men, depending only on the evidence contemplated by their own minds cannot follow the dictates of other men: It is unalienable also, because what is here a right towards men, is a duty towards the Creator. It is the duty of every man to render to the Creator such homage and such only as he believes to be acceptable to him. This duty is precedent, both in order of time and in degree of obligation, to the claims of Civil Society. Before any man can be considerd as a member of Civil Society, he must be considered as a subject of the Governour of the Universe: And if a member of Civil Society, do it with a saving of his allegiance to the Universal Sovereign. We maintain therefore that in matters of Religion, no man's right is abridged by the institution of Civil Society and that Religion is wholly exempt from its cognizance. True it is, that no other rule exists, by which any question which may divide a Society, can be ultimately determined, but the will of the majority; but it is also true that the majority may trespass on the rights of the minority.

Because Religion be exempt from the authority of the Society at large, still less can it be subject to that of the Legislative Body. The latter are but the creatures and vicegerents of the former. Their jurisdiction is both derivative and limited: it is limited with regard to the co-ordinate departments, more necessarily is it limited with regard to the constituents. The preservation of a free Government requires not merely, that the metes and bounds which separate each department of power be invariably maintained; but more especially that neither of them be suffered to overleap the great Barrier which defends the rights of the people. The Rulers who are guilty of such an encroachment, exceed the commission from which they derive their authority, and are Tyrants. The People who submit to it are governed by laws made neither by themselves nor by an authority derived from them, and are slaves.

Because it is proper to take alarm at the first experiment on our liberties. We hold this prudent jealousy to be the first duty of Citizens, and one of the noblest characteristics of the late Revolution. The free men of America did not wait till usurped power had strengthened itself by exercise, and entagled the question in precedents. They saw all the consequences in the principle, and they avoided the consequences by denying the principle. We revere this lesson too much soon to forget it. Who does not see that the same authority which can establish Christianity, in exclusion of all other Religions, may establish with the same ease any particular sect of Christians, in exclusion of all other Sects? that the same authority which can force a citizen to contribute three pence only of his property for the support of any one establishment, may force him to conform to any other establishment in all cases whatsoever?

Because the Bill violates the equality which ought to be the basis of every law, and which is more indispensible, in proportion as the validity or expediency of any law is more liable to be impeached. If "all men are by nature equally free and independent," all men are to be considered as entering into Society on equal conditions; as relinquishing no more, and therefore retaining no less, one than another, of their natural rights. Above all are they to be considered as retaining an "equal title to the free exercise of Religion according to the dictates of Conscience." Whilst we assert for ourselves a freedom to embrace, to profess and to observe the Religion which we believe to be of divine origin, we cannot deny an equal freedom to those whose minds have not yet yielded to the evidence which has convinced us. If this freedom be abused, it is an offence against God, not against man: To God, therefore, not to man, must an account of it be rendered. As the Bill violates equality by subjecting some to peculiar burdens, so it violates the same principle, by granting to others peculiar exemptions. Are the quakers and Menonists the only sects who think a compulsive support of their Religions unnecessary and unwarrantable? can their piety alone be entrusted with the care of public worship? Ought their Religions to be endowed above all others with extraordinary privileges by which proselytes may be enticed from all others? We think too favorably of the justice and good sense of these demoninations to believe that they either covet pre-eminences over their fellow citizens or that they will be seduced by them from the common opposition to the measure. {Please Continue Reading}

Reinforcing right so as to ensure continued enlightenment...

    Hello everyone!
Electric colors, layering patterns, high heels + mirrored sunglasses are my "ingredients" that spice up today's outfit. Once again I chose to wear striped sleeves ( thanks to ch-armz.com) with my yellow mellow coat, bordeaux accessories and this vivid silk shirt .Voila`!
What do you think about this bold combination?
P.S. If you like this pair of sunglasses, enter HERE to win 4 pairs of your choice!




                                                                          Coat: vintage / another favorite of mine Here
                                                                          Shirt: vintage/anther great option Here 
                                                           Jeans: H&M/ similar Here 
                                                                          Heels: Nine West/ similar Here 
                                                                          Bag: Innue/ similar Here
                                                                          Stripped sleeves: thanks to ch-armz.com/ Here
                                                                          Sunglasses: thanks to zeroUV/Here 

Click to enlarge.

For at least 16 years (1980 through 1995) one could very accurately predict what the 10-year average of real median home prices would be simply by knowing the 10-year average of total vehicle miles driven.

Welcome to the new era of wiggle.



Be patient with the song. Just like the chart (and the bridge), it really picks up in the 2nd half, lol.

Gallows humor. Sigh.

Update:


Click to enlarge.

This chart shows where we currently are (without the 10-year moving averages). The red dot is September 2012. We are well below the peak miles driven and the peak real median house price.

Source Data:
St. Louis Fed: Custom Chart

by: Les Carpenter
Rational Nation USA
Liberty -vs- Tyranny

Continuing on the individual -vs- collectivism struggle if you will, I found the following most interesting. Hopefully you will as well.

By Ray Thomas - People think the basic conflict today is between liberals and conservatives. It’s not. It’s between believers in collectivism and those who believe in individualism. They think that it is the difference between simply their own definition of “compassion” and “mean-spiritedness.” It isn’t that. at all. It’s the difference between collectivism and individualism.

Collectivism is really pretty simple, no matter how much collectivists want to complicate it so you will not understand what they’re trying to put over on you. It is defined thusly by one of the best known collectivists, Karl Marx, author of communism, in his “tome,” the “Communist Manifesto:” “From each according to his ability, and to each according to his need.” Meaning it is okay to :take from one who earned it and give that taken to those who did not. This gave permission for government to steal from one and give to another to gain power over both.

They want you to think the fight is between “right and left.” It is not. The real fight is, while it is still between right and left, on the left, counter to common belief, is always a despotic government, in complete control of its populace while on the right, contrary to what they want you to think, is not fascism or Nazism, but complete freedom, which is sometimes called anarchism.

Neither is something we want to have, for different reasons. We need to be somewhere in the middle, with just enough government to keep us from each other’s throats, but only that much.

It has always been thus: remember back when every country was ruled by a king or queen, who had a bunch of “lesser” officials called many things such as “barons” and such? The king or queen was a liberal who thought he/she was better, smarter than the “commoner.” The “barons” and such, too. They lived off the work and sweat of the “commoner.” They thought they had “the divine right of kings” to do that. They didn’t. Robin Hood has always gotten a “bad rap,” being pictured as “stealing from the rich and giving to the poor.” Not true, as is so with most of the “changed history” that has been written by those rulers. What he did was take back what was stolen by the king in the form of excessive taxes and give that to its rightful owners, the “commoners.”

Crisis Government

One of the most oft used methods, used to this day by those who would run your lives is taking advantage of any “crisis” that comes along, and if one doesn’t come along, creating one. Have you ever wondered why it seems like there is a new “crisis” announced just about every day? President Obama’s chief of staff, Rahm Emmanuel, is famously quoted as saying, “Never let a good crisis go to waste.” That’s because to “cure” a crisis, those who wish to control you can get laws passed that they could not have hoped to pass without that “crisis.”

Massive Conspiracy

Some think there is some kind of a “massive conspiracy” to control the world, run by the international bankers. They’re wrong. But there are conspiracies, and that is one of them. A single conspiracy would soon collapse under the weight of individual egos. Many conspiracies based on a philosophy do not. Most of today’s conspiracies are based on the philosophy of collectivism. Which is the reason why they look like a “single conspiracy to many. But it doesn’t matter who is right. The answer is investigation and exposure. These conspiracies can’t stand the “light of day.” {Read More}

Philosophy, does it really matter?

by: Les Carpenter
Rational Nation USA
Liberty -vs- Tyranny

Herbert Hoover - 31st President of the United States

Herbert Hoover, perhaps one of America's least understood yet most maligned presidents of the early 20th century. While thinking about, or perhaps better said reflecting on our history I came across the following short article on President Hoover.

Arguments about whether or not Hoover was responsible for the Great Depression aside (he actually wasn't and much of The New Deal of FDR was merely an extension of policies Hoover had started) Hoover was correct when he warned of a collectivist government of business.

THE MORAL LIBERAL - Herbert Hoover was born AUGUST 10, 1874. The son of a Quaker blacksmith, he studied at Stanford and became a world renowned engineer.

Trapped in China when the Boxer Rebellion broke out in 1900, Herbert Hoover directed the building of barricades under heavy fire while his wife worked in the hospital. In World War I, at the request of the AmericanConsul, Hoover helped 120,000Americans stranded in Europe return home

He directed the feeding of Belgium after Kaiser Wilhelm II overran it and orchestrated feeding the Allied nations while avoiding rationing at home. After the war, Herbert Hoover arranged the feeding of millions starving in Central Europe and Russia.

He served as Secretary of Commerce for Presidents Harding and Coolidge. When the Mississippi River flooded in 1927,leaving 1.5 million people displaced from their homes, Herbert Hoover mobilized state and local authorities, militia, army engineers, the Coast Guard, and the American Red Cross, and set up health units which stamped out malaria, pellagra and typhoid, gaining him nation appreciation.

In 1929, Herbert Hoover became the 31st U.S. President. In his Inaugural, March 4, 1929, President Herbert Hoover entreated:

“Ill-considered remedies for our faults brings only penalties after them. But if we hold the faith of the men in our mighty past who created these ideals, we shall leave them heightened and strengthened for our children

Skip

Less than eight months later, the Stock Market crashed due to domestic and international conditions. Though implementing a volunteerism plan of aid through the States, political opposition tended to prolong recovery, thereby sabotaging his reelection.

Hoover warned in a speech at Madison Square Garden, NY, October 31, 1932, against his opponent’s collectivist “New Deal” plans of the government taking control of businesses:

“To enter upon a series of deep changes . . . would be to undermine and destroy our American system . . . No man who has not occupied my position in Washington can fully realize the constant battle which must be carried on against incompetence, corruption, tyranny of government expanded into business activities . . . Free speech does not live many hours after free industry and free commerce die.” Read More

President Hoover, like most of our national leaders was a deeply devout Christian whose values and principles were formed my his sincere belief in the Almighty. For those who are devout I encourage you to read the balance of the article. You will find many things that will ring true for you.

For those not unlike myself who abide deeply by our founding principles and the documents our Republic was founded on it is enough for us to know they are ethical and moral based on criteria other than religious faith. Ayn Rand's philosophy of Objectivism and her belief in laissez faire capitalism, individual rights, limited role of federal government, and her faith in the United States Constitution is one shining example of which I speak.

Perhaps President Hoover was prophetic. Fast forward to now as we hear our now President in his own words on August 8, 1995, 13 years before becoming our President.



Without the need to run for reelection the progressive tendencies are undoubtedly going to become stronger and want to push to the fore in the Presidents thinking. In as much as the nation is tired of gridlock and contentious government, maybe it is a good thing we still have "divided government" in the structural sense of it's current make up.

Much needs to be addressed as our nation deals with debt, deficits, the looming fiscal crises, and the myriad of other issues both domestic and internationally the leader(s) of the free world has to address. Lets hope the President and Congress does so with a clear eye to the Constitution, the benefits of capitalism, and with the understanding that individual and property rights are two of the hallmarks of of our Republic.

Click to enlarge.

That turkey don't hunt.



Source Data:
St. Louis Fed: Custom Chart

by: Les Carpenter
Rational Nation USA
Liberty -vs- Tyranny

The foregoing quote by Oscar Wild sums up democracy quite well. Of course this is precisely why our founders established a representative democracy and provided for the rule of law. Indeed we have much to thank them for. It remains to be seen however whether we will keep our republic for much longer, given the political and government proclivities of both major political parties.

by: Les Carpenter
Rational Nation USA
Liberty -vs-Tyranny

Something to consider. Especially for those who only see black or white. Or, for those who might be offended buy the black and white reference, agonist or antagonist.