Been There, Done That

The following chart shows the natural log of total business inventories. When using natural logs, constant exponential growth is seen as a straight line. I have added a long-term trend channel in red.

Massive Economic Uncertainty Continues

So many consumer surveys, but none of them ask the key questions for the next year:
- How much did you accumulate in savings during the pandemic?
- How much do you have left?
- How much of that do you intend to spend?
Without the answers, forecast margins of error are *massive.*

Twitter: Ian Shepherdson

Great questions. Too bad the Fed Chairman can't see the answers.

Jerome “The Earl” Powell

The following chart shows the unemployment rate minus the 12-month percentage change in the median CPI. I have added long-term trend lines in red and a short-term arrow in green.

I looked at Earl and his eyes was wide
His lip was curled, and his leg was fried
And his hand was froze to the wheel
Like a tongue to a sled in the middle of a blizzard

I says, Earl, "I'm not the type to complain
But the time has come for me to explain
That if you don't apply some brake real soon
They're gonna have to pick us up with a stick and a spoon"

Net Worth to Total Debt Ratio

The following chart shows household and nonprofit organization net worth divided by total debt in all sectors.

As seen using the red channel, this 60-year linear trend has failed by a large amount in the aftermath of the Great Recession. Epic failure, actually. Should have more of them. Never before has so much additional prosperity been generated by so little additional debt.

Of course, not everyone believes that fairy tales always have happy endings. Here's a scary fable involving bears that's just in time for Halloween.

Net worth has been falling rapidly lately, thanks to the stock and bond markets. We'd be back in the channel if it were to fall another 30% or so, assuming it were to continue to happen rather quickly. And what would be quicker than rapidly rising mortgage rates combined with million dollar homes?

Of course, there's another way to get back in the trend channel. Total credit market debt outstanding is only $91.2 trillion. Yes, only $91.2 trillion. A pittance, really. If we were to quickly increase it by 40% then back in the "safety" of the declining channel we would be. Think what we could do with all that free money! Here's an idea. A $36 trillion Halloween party in the name of world peace! Everyone on the planet could be invited. Nobody goes home empty handed. Woohoo!

Please don't confuse my love of gallows humor for sarcasm, nor my love of sarcasm for gallows humor. It's both. It's almost always both these days, lol. Sigh.

Whip Inflation Now!

The following chart shows the natural log of the 30-year Treasury yield. When using natural logs, constant exponential growth (or decay) is seen as a straight line. I have added long-term trend lines in red and a short-term trend arrow in green.

Will the long-term trend ultimately prevail? Trapped in a world of nearly permanent ZIRP?

Will the short-term trend break everything? Housing! Stocks! Bonds! Employment!

Will it be a combination of both? Or neither?

Stay tuned for the next exciting and terrifying episode of...

Global Devolution!

Job Openings Per Capita

Pop goes the weasel.

This Is Why

Now you know.

But seriously, this song was just released and I love it! Thought I'd share. :)

Soft Landing?

The following is a chart of QQQ using a log scale. I have added a long-term trend channel in red.

Chart courtesy of StockCharts.com.

THIS IS YOUR CAPTAIN!!

BRACE FOR EMERGENCY SOFT LANDING!!!