Monday, July 4, 2016

Parabolic Trend Failure of the Independence Day: Equities / Deposits

The following chart shows the 5-year moving average of nonfinancial corporate business equities divided by deposits at all commercial banks.

Click to enlarge.

Put a fork in that unsustainable trend. It's done.

In honor of the 4th of July, I tried to find a chart that everyone in this deeply polarized country could finally agree on. So, here it is. No matter which side of the political and/or economic fence you find yourself on, the 1980s and 1990s are over! Hurray!

The parabolic dotcom bubble is the monetary gift that just keeps on giving. Isn't that awesome? Who knows what will happen next.

No matter what happens, deposits almost always grow. That we know. Further, thanks to big depositors depositing big money and earning small money in a low real growth environment, it's never been easier for small depositors to make even smaller money depositing small money. Dizzying.

Stocks sometimes grow too. Just depends on how much this country's many heavily indebted companies are willing to bid for this country's many heavily indebted companies. Stock buybacks, mergers, and/or acquisitions don't always come cheap.

Few seem to want to talk about subprime corporate borrowers. Perhaps all future subprime pain has been permanently contained, much like it almost was heading into the housing crisis? Oops. I didn't mean to say subprime corporate borrowers. My bad. I meant to say heavily leveraged companies. Oh, that sounds much better! Who doesn't love leverage?

This will probably be my last post for a while. Taking a break. Have no fear. I'll probably start right back up when something related to this economy breaks again and/or continues to break.

May things blow up real good for you this evening! Happy 4th! :)

Source Data:
St. Louis Fed: Custom Chart


Anonymous said...

Bonus points for SCTV reference.

John Candy, the real JC.


Stagflationary Mark said...


Bonus points? Sign me up! Yes!

Eugene's Levy ;)

Unknown said...

It may be a very short break. Sigh.

Stagflationary Mark said...

Yeah, feels a bit like trying to head to the concession stand at a baseball game in the 7th inning, 2 outs, 2 strikes, bases loaded, down by 4. Hey, at least there might not be a long line. ;)

Unknown said...

Enjoy the break.