Friday, April 6, 2012

2012's Bondmageddon

Click to enlarge.

Your children may now be safely released back out onto the streets (presumably to find jobs). Thanks to a miserable employment report, the bond market crisis has been averted.

See Also:
Bondmageddon Is Here!
Bondmageddon Update
The Bond Market Anti-Vigilantes
MaxedOutMama: A Bit Cross


Troy said...

The 30 years of 1982-2012 was a good ride on the productivity train. was AT&T's predictions from 1993-94.

Pretty good effort, the 6th ad is still something we need, though I don't know how much productivity better machine translation will actually give us. . .

I can't quantify it, but I suspect much of our productivity gains of 1995-now have come from just offshoring our work and calling the cheaper imports we get instead production while ignoring the follow-on costs of trade deficit we've eventually got to pay.

Looking at the hard goods trade, I see that since 1996 we've given them $665B of stuff and they've given us $3.2T stuff in return, a $2.5T account deficit and a wealth multiplier of ~5X.

This trade may be only 2.7% of our economy, but it's the only sector we've seen productivity gains in.

Our dominant expenses -- food (1/12th of spending), housing (1/6th of spending per that article) and health care (1/5th) are becoming less productive in dollar terms.

Without a bigger wealth pie in the future we won't be able to give the skimmers their piece so easily.

And they want a big piece!

explores the relationship between notoional systemic interest burden (blue, currently 20% of wages) vs the prime rate (red, ~3.3%).

The prime rate rising to 8% would push the interest burden to close to 50% of wages.

That way is either Greece or 1923, dunno which really. Maybe both, as we've said.

Troy said...


YOY nominal GDP growth / trade deficit with China, 1996 - 2011


Troy said...

^ oops, trade deficit with China / YOY nominal GDP growth

Stagflationary Mark said...


AT&T's predictions from 1993-94

Woah! I just saw that video a few days ago when I was looking for something to post! No joke. I settled on Time Life's Mystic Places.

We must share a Daisenryaku gene and/or were separated at birth, lol.

Stagflationary Mark said...

That's an interesting way to look at the trade deficit by the way. I would say it was disturbing but nearly every way of looking at the trade deficit is disturbing. So what's new? Sigh.

Stagflationary Mark said...

Annualized Imports from China as a % of Wage and Salary Disbursements