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The following chart shows industrial capacity per capita (industrial production index adjusted for capacity utilization and population).Click to enlarge.That's a 0.998 correlation over 27 years of data (Jan 1967 to Jan 1994). And then... Boom! Trend broken big time. That has to be one of the most impressive trend failures I've ever posted on this blog. It was so incredibly consistent and predictable right up until it...

The following chart shows the US trade deficit with China divided by the price of crude oil (annualized billions of barrels).Click to enlarge.It shows the amount of oil China could buy if they were to use their entire trade surplus with us to do so. That's assuming the price of oil would not be driven even higher in response to increased purchases of course, which is no doubt a bad assumption.The next chart plots the...

Click to enlarge.The line in black shows real net corporate dividends.The line in blue shows the real trade deficit (same scale).The red line shows the exponential trend in real dividends from 1947:Q1 to 1987:Q1. Note the exponential trend failure (to the upside).Will real dividends stay permanently elevated? Will profit margins stay permanently elevated? Can we be assured that the worst is behind us? Can we expect...

The following chart shows the natural log of imports from China divided by disposable personal income. When using natural logs, constant exponential growth is seen as a straight line.Click to enlarge.Can you say market saturation?Source Data:St. Louis Fed: Custom Cha...

The following chart shows the natural log of real disposable personal income per capita. Once again, constant exponential growth shows up as a straight line when using natural logs.Click to enlarge.There are at least a few things worth considering.1. Due to rising income inequality, the typical person isn't doing nearly as well as this chart would suggest.2. As automation takes on more and more human work, how will...

Click to enlarge.I wonder if the financial experts telling us all to invest in China were factoring in the price of toys.November 20, 2013Walmart's Black Friday, Thanksgiving Plans Try to Control Crowds: Will They Work?Over 100 toys will be a part of the pre-Black Friday deals that begin on Friday. Among the deals are Hot Wheels cars, which are Walmart's biggest unit mover in its toy department, on sale for 60 cents...

The following chart shows annual production and nonsupervisory logging employee hours worked.Click to enlarge.That dog don't hunt.Unless the long-term trend changes, it would seem that about the only logging we'll be doing in the distant future will require a username and password.October 9, 2013Here’s the Report That May Have Prompted The Lumber Liquidators RaidConservation groups say forests in Russia’s far east are...

The following chart shows the 12-month moving average of annualized production and nonsupervisory apparel (nondurable goods) employee hours worked per capita.Click to enlarge.I wear your granddad's clothesI look incredibleI'm in this big ass coatFrom that thrift shop down the roadSource Data:BLS: EmploymentSt. Louis Fed: Populati...