Thursday, July 17, 2014

Exponential Employment Trend Failure of the Day (Musical Tribute)

Click to enlarge.

What a day?
Seconds, minutes, and hours spill over
There's no time here in space

What a day?
I see beauty in everything
But the world is still fading away

Source Data:
St. Louis Fed: Employment Level - 25 to 54 Years


Anonymous said...

Hey Mark - great to see you back in the saddle. Hope you feel a lot better.

By the way, didn't Yellen say the job situation was getting better?


Stagflationary Mark said...


The pain level has fallen to high and annoying, which is definitely an improvement. Woohoo! :)

I believe Yellen meant to say that the job situation is getting butter.

ZIRP - Zero Interest Rotisserie Policy

1. Cook forever.
2. Enjoy!

Getting to that 2nd step takes a lot of patience. Forever can last a long time, lol. Sigh.

In all seriousness, I believe that if we do actually make it out of ZIRP, then it won't take very long before we're right back in it again. Not holding my breath for long-term real yields to return to historical levels. This economy is perma-sluggish (at best). Just a long-term opinion of course.

Joseph Constable said...

How does the employment level of 25 to 54 year olds compare to the population level of 25 to 54 year olds?

Stagflationary Mark said...

Joseph Constable,

The ratio peaked in 2000.

Employment Level of 25 to 54 / Civilian Noninstitutional Population of 25 to 54

EconomicDisconnect said...

Love me some Lacuna Coil!

Stagflationary Mark said...

EconomicDisconnect (GYSC),

Me too!! :)

Troy said...

real total wages

1990s were very nice!

# full-time employees, not quite recovered from the 2008 top . . .

real government spending per FTE

Troy said...

Oops last one is

Stagflationary Mark said...


real government spending per FTE

To infinity and beyond!

Nathan said...

Yield curve is getting mighty flat lately.

Sustainable Gains said...

Hey, just wanted to say that we miss you...

Sustainable Gains said...

How are the docs treating your symptoms now? I'm assuming the rash is long since over with, and you're suffering from ongoing nerve pain, aka postherpetic neuralgia? Did you get the Zostavax vaccine? Are you working with a neurologist? Do ice packs or heat help at all?

Sorry if this is all old stuff, I just got interested when I realized how long it had been that you'd been suffering. I've been battling my own extended medical issue and am finally getting better after a year. I had a damaged nerve about a decade ago that also took a long time to heal. It seems like once the nerves get agitated you have to do everything possible to calm them down.

Stagflationary Mark said...

Sustainable Gains,

The rash is gone but you can see where it was since there is some minor red scarring (looks a bit like mild acne from a distance).

The nerve pain continues but is bearable without pain killers. I no longer feel pain in my left elbow (felt like a combo of hitting my funny bone and a bed rash).

There is a section that is still dead to the touch.

Ice helped. A bath was even better (there was never any pain when submerged, even at its worst). I can't even begin to explain how important baths were to my sanity.

The good news is that I can take showers now and I'm back to working out regularly (although sweat and shirts are not good together, so workouts are shirtless).

It's taking a long time to heal but improvement continues. I could live with this level of pain for the rest of my life if need be, not that I think I will need to do it. I do expect for it to linger for the rest of the year though.

I'm not seeing doctors for it any longer. I did not get the vaccine.

In other nerve news, I damaged the nerves in my left foot by sitting on my foot as a habit. I'd been doing it all my life and about a decade ago half my foot went numb. I then stopped sitting on my foot. Go figure, lol.

I recently noticed that the feeling is starting to come back. Fortunately, it was neither uncomfortable when numb nor is it uncomfortable now. My nerves certainly take a long time to heal, but hey, at least I know for sure they can. Whew!

Heat is not a friend of Shingles. It hit 97 here in Seattle a few days ago and cloud cover came in just as the sun was setting to lock in some heat overnight. It was not enjoyable, but I was thankful that my Shingles started in April and not July!!

Thanks for the kind words. Apologies for not posting much. I'm behind on many things now. Can't seem to get properly motivated yet. My spirits are fairly high though, all things considered. :)

Teri said...

Just had to check in and see how you were doing. I think the heat has broken and we are back to standard PNW weather. expecting an early fall. I think of you as I stash toilet paper :)

Stagflationary Mark said...


I think of you as I stash toilet paper :)

It's nice to be thought of, lol.

In all seriousness, I'm told ZIRP may end in a few years. At least they're consistent. It's been a few years away for more than 5 years so far.

I suspect ZIRP may eventually be replaced with NZIRP (Nearly ZIRP) and then ZIRPA (ZIRP Again). That's assuming this "strong" and "resilient" economy can't tolerate high and/or higher real interest rates again in my lifetime of course.

Sustainable Gains said...

Hi Mark -

Thanks for the update, and I'm glad to hear you're gazing into the light at the end of the tunnel. Even if it's 97 (!) in Seattle (?!!?!).

We made it up from the Bay Area as far as Mount Saint Helens this summer, but had to defer the full Washington experience until a future trip.

My old nerve pain was like your left foot. I had a bad pair of shoes (aggravated by playing soccer) and rubbed the nerve on one of my toes. It went tingly, then later went numb. Then I started wearing sandals for a year. The feeling eventually came back, just as you're experiencing. To this day I still wear only mesh-front running shoes except on very special occasions (weddings, funerals). Going numb is an experience to be avoided. But it sounds like your arm will recover in due time.

Good luck getting caught up. We need a few more sane voices on hoocoodanode, picking out the oversights in CR's commentary.

Stagflationary Mark said...

Sustainable Gains,

It went tingly, then later went numb.

My hands tend to fall asleep if I exercise on the stairclimber for extended periods (30+ minutes). I'm clearly pinching nerves as I hold on. I can fix it by shaking my hands for a bit.

Heaven help me if the "fix" doesn't work someday. A numb foot is not a big deal for the most part (especially if only the top is numb and not the bottom). Numb hands would be serious trouble.

In a separate nerve story, I once woke up in my college days thinking I'd had a stroke. I couldn't feel half my body. Freaked me out big time. Once I regained my mental senses I realized that I had rolled out of the bed partly onto my desk. The edge of the desk made a good nerve pincher. All feeling came back in a few minutes thankfully! That was 30 years ago. I cringe just thinking about it, lol.

And lastly, a friend of mine in college got really drunk one night. I then put one of his shoes under his thin dorm mattress as a practical joke. The next morning he came to my room and had two complaints. He said his back hurt and he couldn't find one of his shoes. I replied (with a straight face) that perhaps those two facts were correlated. He instantly realized what I'd done, lol.

Princess and the Pea! Hahaha! :)

(I did not really expect him to sleep on it. The lump was huge, but perhaps proportional to the amount of alcohol in his system.)

A_Nonny_Mouse said...

OK, I'll give you my "moment of terror":
My bedroom was situated so that the window was right above my bed. I was awakened out of a sound sleep one night by a sudden crash-flash of thunder and lightning, followed by a gust of wind and rain. Reached up to close the window and --horror! some big heavy floppy thing fell RIGHT ON MY FACE!!! I was scared half to death! WHAT THE HECK ?!?

Turns out I'd slept on my arm --which was TOTALLY numb and useless. After 5 min's of agonizing pins-and-needles the feeling finally came back.

An indelible memory, yessirree.

Stagflationary Mark said...


Hahaha! Thanks for sharing that story, lol.

Your story sounds about as terrifying as my sleeping on the desk story. Tough call!

The phone rang one day and neither my girlfriend nor me felt all that inclined to answer it. That is, until the 3rd ring (the answering machine would kick in at ring #4). My girlfriend bolted to her feet and ran for the phone. One of her feet complied much less than the other though. She'd been sitting on it and it too had become "TOTALLY numb and useless", as you say.

That is how one can break an ankle answering the phone. No joke. It happened a few years ago. The emergency room was the next stop!

As an introvert by nature, I never really did trust that phone all that much, lol.

And speaking of terror, the phone's now become a nonstop telemarketing nightmare device. Ring, ring, ring, ring. Behold the power of automated technology to make all of our lives so much better.

Illusion of prosperity for the win! You too can get rich pestering thousands of homes on the hope that a few will want what you're selling! Behold the innovative modern economy!

In all seriousness, when I was a kid, the phone was worth running to. It was important. These days, not so much. Sigh.

D. said...

Once upon a time, answering machines could pick up before the ring so a friend had his outgoing message set to the old "The number you have dialled is disconnected" message. I miss those answering machines. We never pick up the phone before the machine unless we're expecting a call.

Stagflationary Mark said...


We never pick up the phone before the machine unless we're expecting a call.

I hear you. We use Caller ID and only pick up if we recognize the number. Some of the more prolific callers get blocked. Comcast allows up to 12 numbers at a time to be blocked. That's assuming they haven't spoofed the Caller ID to present me with a bogus number though.

It's a telemarketing war. I wish everyone would stop buying what they're selling (including political messages during elections). It's ridiculous how much aggregate time has been wasted by Americans since the invention of the robo dialer. It's definitely not progress overall!

Stagflationary Mark said...

Here's a thought. I should record the sound of a typical fax machine (what you hear on the phone if you call one) and then play it back when I get a call from telemarketers. It couldn't hurt. Might even get humans and/or robo dialers to delete me from their lists, lol.

I'm only 10% joking. Mwuhahaha! :)

Mr Slippery said...

Ground control to major Tom.

Radio silence for almost two months. How are things going?

itulip is over 9 months of radio silence. Eerie, and a shame for those annual subscribers who got their years worth of content in January.

Maybe there isn't much to say in the roaring 10s.

Stagflationary Mark said...

Things are going well.

The Shingles pain continues to fall (and most days I don't even think about it).

I can't seem to find the motivation to post though. I figure that will change when the bottom falls out of the economy again, lol. Sigh.

Here's a chart (nonfarm payrolls divided by initial claims) that tells me that it is just a matter of time. There's no possibility (in my opinion) of that unsustainable upward trend to continue forever (just like it didn't in 2000 and 2007).

What comes around goes around. Sigh.

jeff said...

A couple of post ideas
- How about a post on the rising real yields. 5 year tip yield is at highest level since 2011. Why are they rising (is wall street buying the recovery story). This might be a "last chance" to lock on some real yields before the downturn.

Can you explain the mechanics of tips. For example is the coupon fixed or adjusted to match the real yield. That is, when real yields rise or fall, do you earn the coupon or the current real yield.

- And as far fetched as it is. What would have to happen to make you "bullish"? I think for example rising real disposable wages.

Stagflationary Mark said...


- The 30 year TIPS yield is well below 2011 levels. For what it is worth, I see the 5 year TIPS yield as short term noise (since it is a short term security). Further, I have nothing left I can lock in. I went "all in" in on long-term TIPS in 2011. In hindsight, no complaints! :)

- The TIPS coupon is fixed. When you buy, you know exactly what you'll be getting for the life of the bond (plus inflation of course). The real yield remains constant for you. If real yields rise or fall it won't change a thing for you unless you sell the bond to others before it matures. For example, real yields have fallen since I bought TIPS. If I sold these bonds now investors would pay me more than I paid. Although my real yield remained constant while I owned them, their real yield would fall as they paid me a premium to buy my bonds.

I intend to hold to maturity though. I am not becoming better off as real yields fall. I'm just sighing in relief that I bought TIPS (against the advice of Jeremy Siegel) before real yields fell further.

- What would it take me to turn bullish over the long-term? A miracle! We could start with a growing middle class (income and wealth inequality), putting an end to the idea that we can *borrow* our way to prosperity (leveraged debt), an end to shows like Mad Money and Fast Money (gambling signs of the times), and/or Mr. Fusion ($90 oil is a serious drag on our suburban white picket fence economy).

Not holding my breath, lol. Sigh. :(

P.S. I continue to believe that *all* of these things will make it harder and harder to generate real prosperity for the median American, temporary CNBC euphoria notwithstanding.

jeff said...

Thanks for the reply and I think I'm getting it. The current real yield is the market estimate of the growth rate of the economy (after inflation). In the long run, the real economy (real GDP, real profits growth, real housing and stock returns) can't grow faster then the real yield (unless economy is improving with real wages matching those gains).

When the real return on the stock market, or housing or profits are larger then real yield that is a good sign of a bubble forming. That is, when real corporate profit growth or real housing returns are greater then the real yield then debt (rather then middle class wealth and wages) is fueling those "unsustainable returns"

If the above is correct, then on average the real yields should track real returns of home prices, real returns on stocks, real growth in GDP or profits. Because of debt bubbles I presume the scatter plot of real yields vs real GDP (or real profits, real stock returns or real housing returns) will have dispersion at times like in 2000 and 2007. I'm curious have you ever plotted that?

And thinking this through, it implies in a healthy economy that the growth rate of debt should more closely match growth rate of inflation and the real yield should more match the true economic growth (real GDP growth).

Stagflationary Mark said...


The only item I might differ with you on is the rate of debt growth vs. inflation. I think it would be perfectly fine to have debt grow with 0% inflation *if* wages were growing. Picture an automated world where there was no price inflation (due to the automation), wages were growing at 5% per year, and so was debt. That seems fairly sustainable to me. On the other hand, that's certainly not our world. Sigh.

I'm curious have you ever plotted that?

TIPS data doesn't go back all that far so I doubt it. That said, I do believe the theory is sound.

Real GDP Growth

"These healthy rates were not a surprise, since economic theory predicted that real yields should approximate real gross domestic product growth, which averaged between 3 per cent and 4 per cent at that time." - Jeremy Siegel

These low long-term real yields are certainly not a surprise to those who felt the economy's growth would slow over the long-term (such as myself but *not* Jeremy Siegel!).