The above chart shows retail sales per capita adjusted for inflation. It excludes food and beverage stores, food service and drinking places, and gasoline station sales in order to strip out the ever popular "food and energy" that is all the rage these days. The trend line is a 4th order polynomial.
I need a quote to do the "core" justice. Perhaps a quote from a horror movie would work here, based on what I'm seeing in the chart.
All right, sweethearts, what are you waiting for? Breakfast in bed? Another glorious day in the corps! A day in the Marine Corps is like a day on the farm. Every meal's a banquet! Every paycheck a fortune! Every formation a parade! I love the corps! - Apone, Aliens (1986)
See Also:
Slowing Growth + Rising Inflation = Stagflation
Trend Line Disclaimer
Source Data:
St. Louis Fed: Consumer Price Index For All Urban Consumers: All Items
St. Louis Fed: Population: Mid-Month
U.S. Census Bureau: Monthly Retail Sales
This comment has been removed by a blog administrator.
ReplyDeleteKazilar,
ReplyDeleteYou left me a link that tried to virus scan me (or so it claimed).
I am not thankful to say the least.
Mark,
ReplyDeletecheck this out, chart at the top of the page.
http://interestrateroundup.blogspot.com/
Kevin
Kevin,
ReplyDeleteI watch that chart daily. You may recall that I recently reduced my T-Bill exposure dramatically in favor of the 20-Year TIPS! Hindsight is being relatively kind to me.
I guess one might say I'm not a believer in the shallow, mild, and short-lived downturn theory (now that Goldilocks is in the ER with a serious head wound).
I am also preparing to post another fear vs. greed chart soon (showing the difference between 30 year fixed mortgages and the three month treasury bill). You can probably picture it anyway. Fear is clearly winning. I'm seeing more Buffett like advice telling us to be greedy when others are fearful. There's only one problem. Buffett recently stated that despite the selloff, stocks aren't cheap. D'oh!
And lastly, one more look at the retail chart above. The red line represents the business cycle to me. See how it started to turn higher in late 2002. In hindsight that was a great time to buy stocks (not that it would have been easy to know then, as the red line is influenced by ALL of the data, even the data after that point, unlike a moving average which only looks backwards). The stock market hits its bottom then. I look at the current trajectory of the red line these days and find it hard to believe we are at the same point in the business cycle. In fact, I might even argue that the pain might just be getting started. Who knows!
Who knows!
ReplyDeleteNot me that's for damn sure Mark, I dump enough silver last week to recover my initial investment and still have 75% of what I bought in 2003, it drops to 11 I'll dump the rest. Batten down the hatches the waters is getting choppy captain.
Kevin
Kevin,
ReplyDeleteIt is probably a good thing that I'm not the Fed Chairman. About the only reassuring thing I could say with a straight face is...
The first iceberg hasn't quite sunk us yet.
Stag,
ReplyDeleteI see four very large spikes in the chart - 2001, 2003, 2005 & 2007. I'm assuming 2001 & 2005 were related to September 11th & Katrina. Any idea what caused the spike in 2003? Was it the Bush tax rebates and/or tax cuts?
Oh yeah, that big downward spike at the end of 2007 is the economy hitting a brick wall. Ouch!
MAB,
ReplyDeleteI think the downward spike in 2003 was due to rising gasoline prices and the spike back up was due to falling gasoline prices giving us a collective short-term sigh of relief. What caused the spike in gasoline prices in early 2003 I do not recall.
http://illusionofprosperity.blogspot.com/2007/09/gasoline-prices-and-busines-cycle-v2.html