Friday, May 27, 2011

Port Traffic Shows Consumption Austerity

You probably won't find these charts anywhere but here. I have once again seasonally adjusted the port traffic data of Los Angeles and Long Beach. They allow you to see what's going on in nearly real-time.

I was looking for more evidence of consumption austerity. I found what I was looking for.



It appears that the consumption recovery is stalling.



It appears that exports have peaked.



It appears that total port traffic is stagnating.

May 26, 2011
Recession Forecasts? Yield Curve Says No Way: Caroline Baum

In the real world, things don’t change that quickly. The past seven expansions lasted 71 months, on average. The current one is not quite two years old. And by some metrics, it has yet to get going.

So if you think the U.S. economy is headed into recession in a matter of months, then I have some Greek debt to sell you.


I don't want Caroline Baum's Greek debt. She'll have to find someone else to take it from her.

Using her logic, the Fed can permanently prevent further recessions by simply keeping short-term interest rates really low. It seems like such a simple and easy fix. Somebody needs to inform Japan. They've been trying that very same technique ever since their housing bubble popped. They just need more patience! It is bound to work someday.

May 20, 2011
Japan Keeps Interest Rates Near Zero As It Veers Back Into Recession

The Bank of Japan's nine-member policy board voted unanimously at a meeting to keep the overnight call rate target at zero to 0.1 percent. The decision was widely expected.

Lost Decade (Japan)

Despite the economic recovery in the 2000s, most of the conspicuous consumption of the 1980s, such as spending on whiskey and cars, had not returned. This was due to the traditional Japanese emphasis on frugality and saving, and also because Japanese firms that had dominated the 1980s, such as Sony and Toyota, were fending off heavy competition from rival companies based in South Korea and Taiwan. Most Japanese companies began to replace their permanent work force with temporary workers who had no job security and fewer benefits, and these non-traditional employees now make up over a third of Japan’s labor force.

That could never happen here of course.

May 26, 2011
Local Demand Up for Temporary Workers

YOUNGSTOWN, Ohio -- Because so many companies in the Mahoning Valley remain wary of hiring full-time employees, more and more are turning to temporary employee agencies to fill their staffing needs.

Source Data:
Port of Long Beach: Statistics
Port of Los Angeles: Statistics
The X-12-ARIMA Seasonal Adjustment Program

7 comments:

Troy said...

>The past seven expansions lasted 71 months, on average. The current one is not quite two years old.

FFS.

Unemployment is 9% and 50% higher than the worst of the tech recession (6%).

Here's a cool graph:

http://research.stlouisfed.org/fred2/graph/?g=CR

that plots unemployment rate (red) with stimulus effort (deficit / GDP, blue).

This makes it clear how the heroic measures in 2009-2010 have "saved" things, but the intervention is still twice that of previous interventions.

Lemme add private debt growth (green) to show how the 1980s recovery was also driven by that . . .

http://research.stlouisfed.org/fred2/graph/?g=CS

you can see how the mid-1980s had the same 10% debt growth rate as the mid-2000s bubble debt take-on.

Clearly we need more debt to bring that red line down.

Stagflationary Mark said...

Troy,

I looked long and hard at your charts.

Here's a hard link to your first chart.

Your second chart has CMDEBT as "change" instead of "change from year ago". Unless I am mistaken, I don't think that's what you intended. Here's the corrected chart.

The conclusions remain the same though.

In my opinion, we're addicted to debt growth to fuel our economy just like a person who has lost their job might be addicted to credit card growth. It does not bode well for our long-term future.

I don't see how we get out of this trap. As you say, "Clearly we need more debt to bring that red line down."

If I lost my job and I had no money, I'd certainly borrow money to buy food. In a way, I think that this is the trap we are currently in. Unfortunately, the solution that works so well in the short-term doesn't work so well in the long-term.

Stagflationary Mark said...

April 10, 2011
Dr. Housing Bubble: The education of the housing market – Student loan debt and falling birth rates slow demand for the first time buyer market. The consequences of keeping young professional priced out of the housing market.

Many Americans looking to buy can only afford cheaper priced housing. Saddled with large amounts of debt already, they may not qualify or want to buy a more expensive home. Unlike the baby boomers who had limited debt prior to buying their first home and also entering a healthy economy, we are in a very different situation here.

Teri said...

Ah, I don't buy that "baby boomers" entering a healthy economy. Yes, we had lower debt because college costs were more realistic. If you look at charts, wages started sliding in the 70s. I've been through several periods where there just weren't any jobs to be had (I'm sure some of that was regional, but it's not like the country has been recession free.)

The major difference is that there were still manufacturing jobs to be had. Much easier to buy a home when prices around down around $25,000. That's what the house I'm in cost in the 70s. It's supposedly worth $150,000 today.

getyourselfconnected said...

Your charts are wrong, please stop publishing such things. Besides the Russell 2000 is way higher, thus all is well.

Ben Bernanke

Stagflationary Mark said...

Teri,

It certainly would be hard to argue that the economy of the 1970s was healthy! Agreed.

Stagflationary Mark said...

GYSC (and/or Ben Bernanke),

Please stop impersonating each other. I can barely tell you two apart, lol. ;)