Wednesday, November 7, 2012

That Dog Don't Hunt

Click to enlarge.

The chart shows net corporate dividends divided by GDP.

The exponential trend channel implies that dividends will exceed GDP at some point in the distant future. Good luck on that theory!

Urban Dictionary: That Dog Don't Hunt

An obviously faulty endeavor; also as ~ /won't hunt/, predictive of failure.

Source Data:
St. Louis Fed: Custom Chart


Stagflationary Mark said...

The exponential trend will work forward in time no better than it worked backward in time.

It isn't an opinion. It is a mathematical certainty.

Stagflationary Mark said...

We might be able to sneak back into the channel temporarily, but it is absolutely impossible for us to remain there permanently.

All exponential trends fail eventually. This one has already failed once. Over the long-term, it must continue to fail.

That said, there's nothing stopping it from staying elevated at 5% or so.

Then again, there's also nothing stopping it from returning to the median at some point (or worse).

The latter could be seriously disappointing to today's stock market investors.

Fatboy said...

"..implies that dividends will exceed GDP at some point in the distant future."

They will and you're going to like it Prosperity Illusion boy.

Stagflationary Mark said...


I'm not going to accept that claim unless you follow it up with a Mwuhahaha. ;)