The following chart shows the annual change in the semiannual average of new one family homes sold in the West Census Region.Click to enlarge.What's the worst that could happen from here? Okay, sure. The growth rate is currently negative and has been falling for 18 months. That's just this winter's East Coast's polar vortex temporarily rippling back through space and time though. Any rational optimist can see that.Further,...
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Free Advice for Fed: Raise Rates When Furniture Sales Fully Recover
The Fed isn't quite sure what threshold it should be using to determine when to raise interest rates. Can't say I blame them. I therefore thought I'd offer some free (deflationary) advice.Furniture sales and new home sales go hand in hand. Right? So simply raise rates when furniture store sales (as a percentage of disposable personal income) reach "normal" levels again. What could be easier? Transparent. Clean. Consistent.Click...
The Pause That Depresses
The following chart shows the average of new private housing units authorized by building permits and new privately owned housing units started.Click to enlarge.If cold weather is responsible for the exponential trend failure then, as seen in the chart, it sure has been cold over the past year.Source Data:St. Louis Fed: Custom Cha...
Annual Housing Starts per Civilian Employed
Click to enlarge.What's Plan B?See Also:Real Yields: Why They Are Falling (Musical Tribute)Source Data:St. Louis Fed: Custom Cha...
Real Yields: Why They Are Falling (Musical Tribute)
The following chart shows real GDP.Click to enlarge.Four exponential trend lines and their growth rates have been added.Note that each time an exponential trend fails, it is replaced with an exponential trend of lesser quality. What doesn't kill us, doesn't make us stronger. Go figure.The next chart shows the long-term trend of those growth rates. I'm using the midpoint of my hand-picked expansions as the x-axis.Click...
ZIRP: Great Depression vs. Great Recession
The following chart compares the 3-month treasury bill yield in the aftermath of the Great Depression to the 3-month treasury bill yield in the aftermath of the Great Recession.Click to enlarge.For the record, I am not predicting World War III (nor would I expect it to even remotely solve our long-term ZIRP problem as effectively as World War II did).I know not with what weapons World War III will be fought, but World...
The Sarcasm Report v.185
Click to enlarge.The blue line shows the annual average of the St. Louis Fed Financial Stress Index and the Kansas City Financial Stress Index.The red line shows the negative of the annual average of the real S&P 500 Index (December 2013 dollars).1. The key to maintaining the stock market's currently lofty level is to keep the financial stress at a near record low. That's right. Keep it there permanently. Just say...
The Fed's 10-1 Leverage Has Paid Off! (Musical Tribute)
The following chart compares the trillions of dollars the monetary base has grown (in blue) to the trillions of dollars household net worth has grown (in red) since the first quarter of 2009.Click to enlarge.Each dollar the Fed spends gets us back ten! Why on earth is the Fed tapering the sure thing? We need even moar leverage! Not less!Crazy TheoryLet's cash out $10.8 trillion of household net worth (just half of the...
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