Daily news sites

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, we already knew that the East Coast's weather would carry over to existing home sales in the West. To think otherwise is just crazy talk!

In all seriousness, the housing optimists better hope we not only stay in the channel but move back above 0% soon, or speculators may someday wish that they had embraced their fistfuls of dollars instead.



Source Data:
St. Louis Fed: Custom Chart

The following chart shows the natural log of annual light auto sales divided by civilian employment. I'm using a natural log so that constant exponential growth (or in this case decay) can be seen as a straight line.


Click to enlarge.

Behold the two trend channel failures. The first was a massive failure to the downside and the next was a massive failure to the upside. Slow and steady recovery my @$$.

And on that note, I'll leave the exact date of the next auto industry bailout as an exercise for the reader. Sigh.

This is not investment advice.

Source Data:
St. Louis Fed: Custom Chart

The first chart shows the annual change in new privately-owned housing units authorized by building permits for 1-unit structures. I'm using quarterly averages to smooth out the noise a bit.


Click to enlarge.

Can't we just blame it the weather and call it good?

The next chart shows just the data for Florida, Nevada, and Arizona (three of the previous housing bubble's largest hotspots).


Click to enlarge.

I guess it all depends on how much annual polar vortex activity there was in Florida, Nevada, and Arizona. As seen in the chart, the growth trend has been decelerating at a consistent pace for a full year. We'll therefore need a whole year's worth of polar vortex activity in three of the warmest states. Totally doable with the right spin!

Further, just look at all that volatility in the data since 2005. I can't even begin to tell you how much that fills me with confidence. Slow and steady is so overrated. Anarchy! Random profits and losses! That's what makes the casino life right for me!

This is not investment advice (especially that part about casino life being right for me).

Source Data:
St. Louis Fed: Building Permits for 1-Unit Structures (National)
St. Louis Fed: Building Permits for 1-Unit Structures (Florida + Nevada + Arizona)

The following chart shows the real home equity loans at all commercial banks per civilian employed (December 2013 dollars).


Click to enlarge.

A linear trend failure *and* an exponential trend failure? All in the same chart? I think I just died and went to trend failure heaven!

October 27, 2005
Bernanke: There's No Housing Bubble to Go Bust


Wikipedia: Good cop/bad cop


If credit is the lifeblood of this economy, then we just need to work through this "soft patch" and all will be well again. Right?

Investopedia: Soft Patch


Two quick questions and I'll let you go.

1. Where the @#$% is the good Fed?
2. Is it normal for a soft patch to last more than 5 years?

Source Data:
St. Louis Fed: Custom Chart

Click to enlarge.

The low points are following a linear trend, implying that growth is slowing over time. If it took 30 years for real net worth per capita to roughly double from 1982 to 2012, then it will take 60 years for it to roughly double again. That's assuming we even should extrapolate past history into the distant future of course. I for one am skeptical, especially now that we've entered a "QE Trap".


The high points are following an exponential trend, implying that the bubbles are growing exponentially over time (relative to the linear base line). I expect an epic failure that even mainstream economists can see coming if we get anywhere near that blue trend line again. Note that the data only goes through June of 2013. The stock market's up another 7% since then. To the moon, Alice!

This chart is more disturbing if one factors in that the federal, state, and local debts are not included in the household net worth as calculated by our government. That's not quite true. We get credit for owning them as households, just not as owing them. Win win. Perhaps we'll someday find an alien species that we can bill instead of American households. That must be the thinking.

If my net worth is $10,000 and I loan it all to the government then the government would claim my net worth is still $10,000. If the government then spends the $10,000 to keep the government running then my net worth is still $10,000. I'd only be in big trouble if the government actually taxed me $10,000 to pay me off. But why do that? Stick with what works! Deficit spending for the win!

The chart is even more disturbing if one factors in rising wealth inequality. I doubt that real median net worth would make such an optimistic looking chart. That's just my way of saying that there are parts of this economy that were financially subprime heading into the Great Recession and they remain financially subprime. In fact, there were 34% more households on SNAP in July 2013 than were on SNAP in October 2009. How's that for a recovery!

And lastly, who would have thought that the Fed could make the average household so much richer simply by helping us earn even less interest on our savings. Genius! And sustainable? Well, who can really say for sure?

Sarcasm abounds. To the moon! Alien species! Government running! Optimistic! Sustainable! Beware, it's a bungle out there. Seriously.

Source Data:
St. Louis Fed: Custom Chart

Click to enlarge.

Monthly retail and food services sales per capita is shown in blue.
Annual median household income is shown in red.

Please factor in that neither series is adjusted for inflation. You are therefore looking at the raw data in all its grandeur.

We must be incredibly optimistic as a society. I say this because the following is what Google offers me as search results.

1. 8,870,000 search results for "Pent-Up Demand"
2. 230 search results for "Pent-Down Demand"

As for the latter, my blog currently holds the top search result. Hurray! And with this post, I'm looking to expand my dominance of the "Pent-Down Demand" analysis market! Most excellent! Sigh.



If you're happy and you know it, pent demand!
If you're happy and you know it, pent demand!
If you're happy and you know it
And you really want to show it
If you're happy and you know it, pent demand!

Next up... Stomping our feet and turning around! Woohoo!

September 5, 2013
August Retail Sales Shy of Hopes


Where have we heard that before?

"The reason those guys don't want to report same-store sales is because they're in a lot of trouble. They have a broken business model, and they would sorely wish analysts would pay less attention to what they're doing. They're trying to hide." - Peter Morici, 2008

And on that note, I am officially reducing my short-term inflation outlook (as seen in the upper left corner of my blog) to boringly flat just in time for the 2013 Christmas season. It's just a gut feel, nothing more.

This is not investment advice.

Source Data:
St. Louis Fed: Custom Chart

Click to enlarge.

BLOW IT DOWN... BUT, MAKE IT LOOK LIKE AN ACCIDENT.

Source Data:
St. Louis Fed: Custom Chart

November 21, 2012
Macau grapples with booming casino economy


Good thing we know better!