Saturday, December 7, 2013

A Tale of Three Exponential Trend Failures

Click to enlarge.

1. Although we cannot see it in all its grandeur, we can infer that there was a failure during the dotcom bust. Note the decline heading into 2002.

2. We can clearly see the failure during the housing bust. The data stopped following the blue line.

3. We now have something new. The data no longer follows the red line and it seems extremely unlikely that it will return to it. Those expecting a surge in growth from here may soon be very disappointed.

I'm repeatedly told that there will be no unhappy ending this time though. So we've got that going for us, which is nice.

Quits and openings are only part of the picture of course. I'm not looking at hires or other separations. I think quits offer a fairly interesting take on how optimistic workers can be. I'd say they are way too optimistic right now. That's especially true of recent retirees who became convinced that recent stock market performance can be extrapolated well into the distant future. Good luck on that theory!

This is not investment advice.

Source Data:
St. Louis Fed: Custom Chart


fried said...

No unhappy endings?? Gee, I've become a cranky outlier then.I fail to see how the market matters much with an increasingly marginalized lower 3 quintiles, recent grads carrying unpayable levels of student loan debt, and the jobs available often without benefits and pegged at minimum wage.And a Congress that thinks destroying what is left of the social contract is the way to go.
David Simon of the Wire fame gave a great speech at the Symposium on Dangerous Ideas held in Sydney, an excerpt published here.

Stagflationary Mark said...


From your link:

From this moment forward unless we reverse course, the average human being is worth less on planet Earth.

For what it is worth, I offered the same thought yesterday as seen in the comments here.

Machines are getting faster, cheaper, and smarter at a rate faster than humans are getting faster, cheaper, and smarter.

I will admit that we're doing our "best" to make humans cheaper though. Sigh.

Emphasis added.

Troy said...

So Krugman made really happy recently finally mentioning the CMDEBT thesis of how last decade got so good.

Then he pissed me off today by referencing CBO's debt / GDP projections as if the denominator was reality-based.

So to save my sanity I've graphed real GDP -- 2013 dollars, from 1990 to 2013 and 2014 to 2030.

Kids on the internet have a saying: "I see what you did there . . ."

Troy said...

Looking at the population projection data out to 2050, I see the working age population (16-64) is going to grow by 4.5% by 2030.

But real per-working age GDP is scheduled to grow 45% by 2030, up from $79,000 to $115,000, a 2% pa annual productivity increase.

Troy said...

Looking at the population projection, the demographics are curious.

Adding the age 62 to 67 cohort and subtracting the 18 to 23 cohort gives a rough measure of the space the upcoming generation will inherit from those moving off into retirement.

But that formula stands at NEGATIVE SEVEN MILLION right now! I had to check it since I didn't believe it . . . there are 19M seniors in that cohort and 27M" juniors" . . .

On the intake side, things are stabilized right around 27M young adults for the next 30 years, and on the outflow side, this soon-to-retire cohort will peak at 24.9M in 2026, closer to parity with the youngsters (25.9M).

Then, oddly, things quickly get worse again with the imbalance rising to 5-6M by 2035 onwards.

So if I'm doing the math right, young people are going to have to find their own place at the table for the most part.

This is visible here:

where we see Gen Y so much bigger than the original boomers.

Also, the spreadsheet goes out to age 100 so we can calculate the dependency ratio. It's 5:1 (working age to 65+) now and will fall to 4:1 by 2020 and stay at 3:1 from the 2030s on.

I tend to like the Japanese demographics better for some reason. Less Soylent Green vibe with their population:

'course, how they can possibly honestly monetize their 1 quadrillion yen national debt, 'it is a mystery' . . .

Troy said...

heh, playing with the future projections of my particular cohort (age 45 in 2012), and assuming no net immigration, I see I have a ~50% chance of making it to the year 2050 and there's a ~25% chance my life isn't half over yet.

if my theory that sleeping a lot delays aging, I should make it to 2100, easy. I have been waking up when I damn well wanted for the past 30 years.

Stagflationary Mark said...


Then he pissed me off today by referencing CBO's debt / GDP projections as if the denominator was reality-based.

Illusion of prosperity denominators for the projected win! ;)

if my theory that sleeping a lot delays aging...

As a life-long insomniac I suspect you are right. I tend to get more hours per day to do things but as said in Blade Runner, "The light that burns twice as bright burns half as long."

In no way am I trying to imply that I feel brighter when I'm sleep deprived though. I spread that IQ evenly throughout the day. More day, less IQ per hour, lol. Sigh.

I have another theory. Working for "The Man" can reduce lifespan too, assuming the job turns into the same morale burning sinkhole that my last job was. So hey, I got that going for me too, which is nice, lol.

In all seriousness, that job had a serious negative impact on both my mental and physical health. Some small part of it still lingers to this day (14 years later). My ability to cope with stress has been permanently reduced.