Click to enlarge. This chart is especially large and will be much easier to read if you click on it.
On the off chance the details within this chart disturb you and/or you are a believer in mean reversion theories then I do have some advice to reduce your future layoff risk.
Layoff Risk Management
1. If you do not currently have a job, then do not get one. Only people with jobs can someday be laid off.
2. If you are a deceased registered voter in the Chicago area, then do not get a job.
3. If you are a toddler, never grow up. Nobody expects toddlers to get jobs.
4. If you are in college and don't have a job, then stay in college. Escalating student loan debt is a small price to pay for job security.
5. If you are retired and looking at CD rates, avoid the temptation to get a job.
6. If you do have a job, then do not get another one. That just doubles your chances!
Too much sarcasm? Really? Well, that's too bad because I don't think I'm done yet.
The next chart shows nonfinancial corporate equities divided by GDP.
Click to enlarge.
On the off chance this chart looks a lot like the previous one to you and/or you are a believer in mean reversion theories then I do have some advice to reduce your stock market risk.
Stock Market Risk Management
1. Keep hovering your finger over the sell button.
2. That's especially true if you are carrying extremely high margin debt.
3. Never, under any circumstances, take a bathroom break.
4. Test your backup electrical power supply daily.
5. Remember that you are not alone.
6. Be more than ordinary. Be extraordinary!
High-frequency trading
The success of high-frequency trading strategies is largely driven by their ability to simultaneously process large volumes of information, something ordinary human traders cannot do.
Too much sarcasm? Really? Guilty as charged.
This is not investment advice.
Source Data:
St. Louis Fed: Custom Chart #1
St. Louis Fed: Custom Chart #2
Layoff Odds: 1134 to 1
ReplyDeleteIf it was a horse race and you were betting on Layoff (the 3 legged horse), just think of the money you'd make if it did win!
Job security! That's what I'm talking about!
Of course, one has to wonder how long this weakened economy can keep it up. If that one is me, one wonders it a lot.
Stay tuned for Layoff (the much improved automated four legged bionic horse). I fear that it will become an odds on favorite someday. Perhaps even soon. Sigh.
Thank you for including your FRED charts. Those help me understand.
ReplyDeleteHaving lived through the dot com bust, seeing corp. liabilities to GDP made me laugh. I am not very sarcastic but I am fairly cynical.
Joseph Constable,
ReplyDeleteI'm thankful that you find the FRED charts useful. They are trivial to add. Wish more people would do it.
Further, linking to FRED allows us all to play with the data a bit.
Cynical humor (as seen on the Internet):
"The journey of a thousand miles begins with a squeaking fan belt and a leaky tire."
That's probably why I don't drive much. ;)
Joseph Constable,
ReplyDeletecorp. liabilities to GDP
I've done liabilities in the past, but this chart is equities (stock market valuation) to GDP. I just want to be clear here.
How exactly do they calculate "layoff odds"?
ReplyDeleteeah,
ReplyDeleteAre you asking how I calculated layoff odds? That I can explain.
Put 10 people in a room. If you lay one of them off then the odds of being laid off would be 9-1. (Nine people aren't being laid off to each 1 person who is.)
For my layoff thought experiment, I throw all Americans in the room (workers, babies, retirees, you name it). Some might have jobs. Some might not. My chart shows the odds of each one of them being laid off. (Clearly the ones without jobs cannot be laid off but that's okay for this thought experiment.)
As for others "they" calculating layoff odds, I would hope that there aren't people in the back rooms of Vegas doing this with real money. But then again, nothing would surprise me about our addiction with gambling these days. Sigh.