It has reached the point where conventional methods aren't working. What if we take snapshots of when the economy appeared to be functioning normally and then repeatedly loop them forward in time?
December 5, 2005
Bush: 'This Economy Is Strong'
"This economy is strong and the best days are yet to come for the American economy," Mr. Bush said.
Okay, now loop it!
This economy is strong and the best days are yet to come for the American economy and this economy is strong and the best days are yet to come for the American economy and this economy is strong and the best days are yet to come for the American economy...
Genius!!
Stag
ReplyDeletehttp://research.stlouisfed.org/fred2/series/CP?cid=109
At the rate profits were growing in 2005, they would have exceeded sales in 2010! Now THAT is a strong eCONomy.
Fear the parabola.
mab,
ReplyDeleteMemory Lane leads to Candy Mountain profits!
December 7, 2007
http://illusionofprosperity.blogspot.com/2007/12/corporate-profits.html
How long will it be before we return to the red trend line? Or is this a new permanent era of prosperity? Note that the long-term trend is down. I believe I can offer a simple explanation for that. I would think that in a capitalistic society, competition would eventually squeeze the life out of all profits.
Please Don't Squeeze the Charmin
http://www.youtube.com/watch?v=8m62J3Q8Ng0
How much softer is new lush, plush Charmin? Watch. Two fragile eggs. Old Charmin was soft but new Charmin's a whole lot softer. Watch closely. It's so lush, so plush...
I knew there was a reason I hoarded toilet paper.
Squeezing's not enough anymore, you've got to hug it.
mab,
ReplyDeleteThat journey to Candy Mountain is worth yet another look. Hindsight is a wonderful thing.
I'm nominating you for the 2007 Understatement of the Year Award.
December 3, 2007
Flow of Funds Fun! v.8
http://illusionofprosperity.blogspot.com/2007/12/flow-of-funds-fun-v8.html
Also, that S&P 500 p/e stress test I mentioned gets really ugly if financials over shoot on the downside. - mab
Citigroup vs. S&P 500
http://finance.yahoo.com/q/bc?s=C&t=2y&l=off&z=m&q=l&c=%5EGSPC
One more thought to everyone.
ReplyDeleteWatch at least 30 seconds of the video before deciding if you like it. It's amazing!
The Mozart is wonderful.
ReplyDeletedearieme,
ReplyDeleteOver 1000 cuts. 6 hours of guitar tabbing. 1 hour of shooting. God knows how much editing.
It shows!
Stag,
ReplyDeleteSome interesting data from Japan:
http://www.stat.go.jp/english/index/official/213.htm#2
Falling consumer prices as well as declining real incomes.
Not a bad situation if you have no debt and a lifetime of savings.
mab,
ReplyDeleteNot a bad situation if you have no debt and a lifetime of savings.
Preserve Your Savings for Life
http://www.kiplinger.com/features/archives/2008/06/nest_egg_savings.html
Although the Fidelity Income Replacement funds don't offer guaranteed income for life, they offer plenty of flexibility.
Fidelity Income Replacement 2042 (FIXRX)
http://finance.yahoo.com/q/bc?s=FIXRX&t=1y&l=on&z=m&q=l&c=
Stag,
ReplyDeleteAlso, that S&P 500 p/e stress test I mentioned gets really ugly if financials over shoot on the downside. - mab
That WAS an understatement. Coyote ugly was more like it.
Recently, I decided to stress test housing at current levels in my town.
Despite currently low mortgages rates, I worry that the government is suckering people into another bad investment.
For one, if rates rise, the ability to sell the house at a higher price in the future is suspect. And if PIMPco's requested inflation hits consumer prices but not wages the situation gets to coyote ugly real fast.
But here is my big worry - incomes stagnate or fall due to the wall street meltdown, while property taxes continue rising at 6% or higher. It's not hard for me to imagine that wall streeters could be making less in ten years than they were at the peak in 2006. But in ten years, the fixed costs of owning a house could easily double as a result of NJ's huge budget problems.
In the past few months, house prices here have really cracked and yet there are almost no sales. One of the nicest areas in town has five houses officially listed for sale and two other houses listed for rent. Anyway, one of the nicest homes on that street just undercut the existing market by 15%. I'd say it is a 33% haircut from the peak prices of 2006. And still no bids. 50% off of peak is just around the corner.
More and more, I hear people complaining about property taxes in my area. They are obscenely high in Northern NJ. I see deflation in many items, unfortunately my fixed monthly costs keep going up. Utils, property taxes, insurances - all up yoy. It really doesn't help that I could rent my house to myself for less this year than last year.
My area really is different - we're worse off than most. Denial is dying quickly here.
mab,
ReplyDeleteIt really doesn't help that I could rent my house to myself for less this year than last year.
Of course it doesn't. That's why you need to raise the rent substantially and hope that you can still afford the rental payments. If you can afford them, then you'll have no problems paying the property taxes with the proceeds!
It doesn't take a Nobel Prize winning ponzi scientist to figure out workable solutions. All it takes is a schizophrenic financial adviser willing to work outside the asylum.
At least I know I'm not schizophrenic. It took a heated debate with myself to finally convince me, but in the end I made some pretty darned good counterarguments if I say so myself.