Tuesday, November 25, 2014

Exponential Trend Failure of the Day: Motor Vehicle Loans vs. Wages

The following chart shows the 10-year moving average of motor vehicle loans owned and securitized divided by wages and salary accruals.

Click to enlarge.

If we want any kind of long-term financial stability, then there should be no growth in this chart at all, much less exponential growth. This is just insanity.

I therefore claim that someday this unsustainable trend channel must fail and we'll have a hell of a time getting back into it and staying there. Someday.

November 24, 2014
We're in an auto bubble: Here's how to play it

Brad Lamensdorf, portfolio manager at Ranger Alternative Management, tells Yahoo Finance that we’re absolutely in another bubble. He points to low quality loan exposure and artificially high auto sales because of easy credit.

I am a complete believer in the bubble theory. For what it is worth, I shall not be playing it though. I never play these things. I am content in long-term inflation protected treasuries and I-Bonds held to maturity, just like I was heading into the subprime housing bust. Been there, done that.

This is not investment advice. It is depressing though, I'll give it that. Don't worry, it could be worse.

August 4, 2008
The Onion: Nation To Try Its Luck Out West

Leaving behind the woes of their bustling cities, small mining towns, large auto-manufacturing towns, suburbs of auto-manufacturing towns, and the economically stagnant state of Nebraska, the pioneers will set out across the vast Western expanse with nothing but the promise of opportunity and a few old resum├ęs. Although it remains unclear what they might find in that savage territory, some sources indicate the move may bring a significant boost in self-employment, prevent thousands of bankruptcies, and allow settlers an opportunity to learn agricultural techniques from the Mexican folk who sometimes wander over the border.

Source Data:
St. Louis Fed: Custom Chart


Anonymous said...

I'm not sure "we want any kind of long term financial stability", or ever did. Having "financial stability" just isn't natural. A natural financial system would be much closer to what we've got now: one which allows the higher evolved predators to eat the less evolved dumbasses.

Stability would hinder the predators. The predators in various societies might decided (for various reasons) that they don't want to feast off their own dumbasses (perhaps, because they need these dumbasses as defense against foreign predators and dumbasses) but American predators haven't need American dumbasses for generations now (except as financial food).

So, I think we should be grateful we've got just a natural system (well, grateful unless you're predator food, of course).

Stagflationary Mark said...


When I was little, we found a man. He looked like - like, butchered. The old woman in the village crossed themselves... and whispered crazy things, strange things. "El Diablo cazador de hombres." Only in the hottest years this happens. And this year, it grows hot. We begin finding our men. We found them sometimes without their skins... and sometimes much, much worse. "El cazador trofeo de los hombres" means the demon who makes trophies of men. - Anna, Predator (1987)

Is it just me, or is the economy starting to heat up again? D'oh! ;)

Rob Dawg said...

I always thought the sequel to Predator should have been "Mom & Dad Come Looking for Their Baby Who Disappeared While Camping."

"Draco Dormiens Nunquam Titillandus"

Anonymous said...

One of the best "first view" movies.

They should "remake" Predator and cast Putin as R-nold. Still wouldn't be "first view" anymore tho.

Stagflationary Mark said...

Rob Dawg,

"Mom & Dad Come Looking for Their Baby Who Disappeared While Camping."

And would it be their only baby? Need to get them emotionally involved of course.

As a ballpark guess, wouldn't that put the height of mom and dad at about 24' or so? So there would be two of them? Both invisible? Both more than a bit angered?

Yeah, that seems like it would have been a fairly intense action movie, lol.

Stagflationary Mark said...


...cast Putin as R-nold.

Putin's bare chest causes a stir in Russia

The resulting images, prominently enshrined on the presidential Web site, inspired admiration, criticism and some racing pulses among his admirers.

The mud scene would make the movie for some, lol.