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Be careful out there. Might not be the safest time in all of recorded history to swing for the fences.
Not investment advice.
Update: The Art of the Soft Landing
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Back in June, I wrote: The Art of the Soft Landing
A few excerpts and an updated graph ...
The "Art of the Soft Landing" requires that the Fed reduce rates...
2 hours ago
9 comments:
I'm sure the Fed will correct that blue channel.
The blue channel needs to be corrected, if you don’t mind me saying so.
“He needs to be corrected, if you don't mind me saying so. He needs a good talking-to, and perhaps a bit more. My own girls, sir, didn't care for the Overlook at first. One of them actually stole a pack of my matches and tried to burn it down. I corrected them. I corrected them most harshly. And when my wife tried to stop me from doing my duty, I corrected her.”. - Stephen King (The Shining)
Job numbers looked fine to me.
here's a comment I made on reddit:
Payrolls needed to grow ~+2% in the 1960s-90s to just keep up with the boomers turning 18:
https://fred.stlouisfed.org/graph/?g=1rc8I
Also, from 1970 to 2000 the participation rate for women expanded from 45% to 60%:
https://fred.stlouisfed.org/series/LNS11300002
which also pushed up demand in the economy for new jobs.
So from 1970 - 2000, if the economy didn't add 4 million jobs each year, the hindmost were f---ed:
https://fred.stlouisfed.org/graph/?g=1rca1
(raw job # expansion, YOY)
and if jobs LOSSES hit like in the recessionary periods, people were doubly-f---ed.
We're in a very different dynamic now with the boomers all retiring.
https://fred.stlouisfed.org/graph/?g=1rcaB
is an estimate of the % adult population age 65+
it's up from 1 in 7 in the 1970s, 1 in 6 in the 90s, to over 1 in 5 now and will probably peak at 1 in 4.
All these gov't pension checks is going to be countercyclical (in a good way) this decade and next I think!
https://fred.stlouisfed.org/graph/?g=1rcc1
is an estimate of social security income diffusion into the wider economy – it's real (2024 dollars) per-capita (age 15-64) social security payments, showing how the economy is going to be supported by 2X more monthly SS checks vs. 30 years ago.
Worth noting that the only one demographic has reached pre-pandemic labor force participation rates. Thanks to the pandemic plunge, the various unemployment measures aren't all that good as gauges of labor market tightness.
Also worth noting that income per capita is 27% below pre-pandemic trend. Real income has been essentially flat since 2020: the wage gains have been wiped out by inflationary losses. I don't imagine that feels good for fixed income retirees either.
Here is what AI thinks of the trend lines:
Comparative Analysis:
Direction and Slope: If the recent trend (blue lines) deviates significantly from the long-term trend (red line), it may indicate an emerging economic issue or recovery phase. For instance, a sharp increase or decrease in the blue trend line could signal rapid economic changes.
Convergence/Divergence: The convergence of the blue lines toward the red line may suggest a return to long-term stability, whereas divergence could imply a new economic trajectory.
Implications:
Policy Response: Policymakers might use this data to decide whether to intervene with stimulus measures or to adjust interest rates.
Economic Forecasting: Economists can use the intersection and divergence points to predict future economic conditions and to identify the need for adjustments in economic strategies.
“If the recent trend (blue lines) deviates significantly from the long-term trend (red line), it may indicate an emerging economic issue…”
If it does, it most certainly will indicate an emerging economic issue. Big if though. It’s way too soon to know.
I’m fairly impressed that the AI almost seems like a real person analyzing it. However, it said a lot without really saying much. Humans can do that too, especially long-winded economists. Ha! :)
AI gets more impressive every month. All I gave it was a URL link to the chart and asked it to comment on the trend lines regarding US unemployment. They grow more like people with every iteration.
I don't think we're headed for the age of Ultron, but I always invite AI to the table when working on a new problem.
That’s amazing.
I don’t know if I would feel comfortable inviting AI to the table though, especially if the table only seats 4 and the AI is self-replicating. We’d be just 2 iterations away from a serious problem. Pretty sure it wouldn’t end well for me, the human, lol.
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