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The following chart shows the 20 year moving average of annual miles traveled per capita. A trend line in red has been added.Click to enlarge.This is definitely the most impressive "sure thing" failure yet. 0.9997! Sis boom bah!Sis boom bah.Describe the sound made when a sheep explodes.January 12, 2014Toyota Sees Auto Industry Growth Slowing in 2014Continued sales growth will be more a result of economic gains rather...

The following chart shows the natural log of annual change in the CPI less food and energy. When using logs, exponential growth (or in this case, decay) is seen as a straight line.Click to enlarge.No matter how hard the Fed tries, it cannot seem to break through the top of the decaying trend channel. So what's the latest tactic? Taper! Good luck on that. Maybe it works. Maybe it doesn't.As seen in the following chart,...

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 personal income divided by personal consumption expenditures.Click to enlarge.No matter how important you think income is, consumption is always more important!Show of hands: Who thinks this can end well?January 31, 2014Consumers spent more than expected last month despite flat incomesWASHINGTON -- Consumers opened their wallets more than expected last month even though their incomes failed...

Q&A: What to Expect From Janet Yellen's FedBeyond that, I wouldn't be surprised if the Fed under Yellen lowers the unemployment-rate threshold that could trigger an increase in interest rates. A number of years ago, the Fed introduced this idea of a 6.5% unemployment threshold for considering rate hikes. But that threshold is almost certainly out of date. That's because the unemployment rate continues to drop for...

Click to enlarge.The Fed wants 2% inflation per year. If real household median income and real household debt per capita can't get us there, then oil will have to do.Here's the good news. If real household median income starts to fall again, then the Fed may help raise the price of oil to compensate again. In fact, the lower real median income goes, the more help they may offer! Genius!Put another way, the less you...