The Sarcasm Report v.209

March 18, 2015
5 Things You Need to Retire Early and Comfortably

Most early retirees need the help of growing equities to sustain their lifestyle for decades.

The stock market has tripled off the lows of the Great Recession. If early retirees "need" more than that, then it should be no problem at all over the long-term. The stock market is like an infinite well of prosperity that can never run dry. Count on 10% annual returns for all of eternity, or perhaps 9% for those looking for a tiny bit of safety buffer.

You need to get over the nervousness of trying something new, and drive to the places you want to visit.

As an early retiree, I knew I was doing something wrong. I "need" to drive my car more! It's the only way I can be happy! It's just that I am always so nervous trying new things. That's why I sit in the front yard on the grass and play with the dogs in the summer. It's an unhealthy habit I really "need" to break. I'm in a rut though, and am having difficulty escaping it.

Why do I do that when I could just as easily be buying tickets to France? Flying there? Interacting with Homeland Security? Renting a car? Driving around? Trying to find parking? Living the better life? Dreaming of what could have been? All while our dogs cry at home wondering why they've been abandoned. I'm such a fool!

Those who sit around all day quickly find that the days get boring, and a lack of social interaction and exercise can also start to impact your health.

Agreed. I am always so bored! I found that out within the first few minutes of quiting my job. Waves of depression rolled over me. And don't even get me started on how bored I was the first time I was ever laid off years earlier. The only way to alleviate it was to buy a kite and take my dog, at the time, to a local park. The sun was out. Beautiful day. Still have that kite, as a reminder to me of the great boredom that can appear if I don't keep my guard up.

Much better to sit around all day at an office job than sit around all day in a hammock at home, reading a good book. And the social interaction I had at work just couldn't be beat. In the final days of my last job, we'd all talk and talk about each new round of layoffs and the legendary corporate fraud that helped cause it. Good times. Was never more relaxed or stress free. I miss those days.

Workin' for the man kept me healthy too. If I don't have someone constantly telling me what to do and how fast to do it, then I tend to lose all reason to live. It's a tragedy of epic proportions, let me tell you. The lost productivity fills me with guilt and anxiety. I am not contributing to the coffers of Corporate America nearly as much as I once was! The shame is nearly unbearable!! Hopefully the government will continue to step in and subsidize corporations where I have failed.

Best Place to Park Your Money

If capital depreciation appeals to you, then France might be the perfect fit! Bump those investment returns! Make a serious dent in your long-term savings goals!

March 14, 2015
Currency wars threaten Lehman-style crisis

The head of the Dutch central bank, having not previously complained publicly, last week admitted that euro-QE, by propping up spendthrift governments, would shield the likes of France and Italy from “market discipline”, postponing vital reforms. A senior Goldman Sachs banker added that negative interest rates are “freaking him out”.

And no wonder. For the longer profligate eurozone governments are able to ramp up borrowing, the more likely monetary union is dramatically to implode. And the further share prices are pumped up by QE and other monetary mutations, the more vulnerable global stock markets are to crash.

Hold on now. No need to freak out. As long as we keep the global economic speed down to the bare minimum, implosions and crashes seem highly unlikely. I doubt the airbags will even deploy!

Quote of the Day

January 28, 2015
Long-Term Interest Rates Have Been This Low Only Twice In The Last 214 Years

Only one other time — for about two decades following the Great Depression and through the post-World War II era — has the rate on long-term debt been so low.

Hey fellow retirees! Welcome to about two decades of post great construction bust long-term interest rates! That's if we get lucky and Japan opts to bomb Pearl Harbor, Germany invades France, and we can win World War III decisively without resorting to nuclear weapons. Somebody needs to destroy some serious industrial capacity at some point or we may never get out of this funk!

Gallows humor... it's what's for dinner (once the cat food runs out).

In all seriousness, I have built up quite the safety buffer on my prediction for 2015. In early December I claimed, with 80% confidence, that the 30-year treasury yield would stay under 3% every single day this year, in sharp defiance to the rising interest rate theories constantly told to us on CNBC. So far, so good. Knock on wood.

The French Fry

The following chart shows the 4-month moving average of U.S. annual import growth from France.


Click to enlarge.

December 12, 2014
Fitch downgrades France ratings to 'AA'

The outlook on France’s long-term rating is now stable, Fitch said.

Stable? Over the long-term? Good luck on that.



Source Data:
St. Louis Fed: Custom Chart

Parabolic Trend Failure of the Day: The Middle East Cries Uncle (Sam)

The following chart shows the 522-week (~10 years) moving average of crude oil imports.


Click to enlarge.

The parabolic trend in red is failing to the downside. It is currently being pulled towards the blue line (which shows the average daily crude oil imports over the past year).

Never underestimate a weakened US economy combined with a booming North Dakota!

December 8, 2014
Oil drops $2 to five-year low on oversupply

The U.S. shale industry has yet to be hit by the slump in crude prices, Baker Hughes said in a report on Friday, reporting three new U.S. oil-drilling rigs had been added in the last week.

Rising interest rate environment! It's the only way to stop the relentlessly upward trend in oil prices! Oh, wait. Never mind. I think I have that backwards.

In all seriousness, any further attempts at $100+ oil by the Middle East will probably be met by increased oil production in the Middle West. You don't have to be a rocket fuel scientist to figure that out. Well, unless you work at ShadowStats anyway.

Speaking of which, I anxiously await their next imminent hyperinflation special report, just like I do every year. As a saver with deflationary tendencies, they just get more and more amusing!

Subscription fees of $175 per year? Every year? And they take a credit card? That's a ridiculous thing to do during hyperinflation! I don't mean to be preachy, but I feel the need to offer them some free advice.

1. You are providing a service! Crank up those fees to match the inflation you see in our real service economy! Don't get left behind! You can't afford to show weakness as the whole country falls around you!

2a. Credit cards? During hyperinflation? Seriously? That's insane! At the very least, you should be getting paid in canned goods, gold, silver, copper, toilet paper, cattle, ammunition, or dare I say it, imported French sparkling natural mineral water (Perrier)! Just think of the hyperinflationary panic! Create a self-fulfilling prophecy and the paid newsletter world becomes your oyster!

2b. Credit cards? When you know "full well" our country has a serious debt problem? Seriously? What kind of message are you trying to send? That's just got bad public relations written all over it. Did you learn nothing of BP's liability nightmare?

3. Speaking of "full well" and oil, have you ever considered creating an imminent hyperdeflation special report written in Japanese or Swiss Standard German? Go global! Increase your market share! Attract a wider audience! Heck, the Swiss central bank might even buy you out!

Source Data:
EIA: Petroleum & Other Liquids

China's Miraculous Parabolic Growth Engine

The following chart shows the 12 month moving average of the natural log of U.S. imports of goods from mainland China. When using natural logs, constant exponential growth is seen as a straight line.


Click to enlarge.

It's a miracle! Just look at how well it follows the upside down parabola. Sure, there were a few hiccups (dotcom bust and Great Recession, as seen in the chart), but we're right back on the toppy lookin' long-term trend. Woohoo!

In all seriousness, China better find more customers if it wants to continue to grow like it has been. How about France or Japan?



Oops. Sorry about that. It wasn't all seriousness apparently. I apologize.

In all seriousness (attempt #2), thank goodness the global economy has apparently decoupled again. The USA will be completely sheltered from what happens next no doubt! Woohoo!



Oh, crap. I wasn't serious again? Seriously? Shame on me.

Source Data:
St. Louis Fed: Custom Chart

The Sarcasm Report v.173

November 14, 2012
RPT-CORRECTED-UPDATE 1-Congress, Obama face dynamite in 'fiscal cliff' -CEOs

A failure in Washington to solve the crisis by the year's end could prompt major companies to curtail investment plans, said Duncan Niederauer, CEO of NYSE Euronext, operator of the New York Stock Exchange.

"We simply won't be investing in the United States. We will be investing elsewhere where we have more certainty of the outcome," Niederauer said in an interview.

If certainty of the outcome is all that matters then Europe seems the perfect place to invest! Or perhaps China? Rain or shine, their official numbers always seem fantastic!

Sandy Cutler, CEO of manufacturer Eaton Corp, shared his concern.

"Until we solve the fiscal issues (in the United States and Europe), you're not going to get back to normal GDP growth," Cutler told investors on Tuesday.

Normal GDP growth? What a hoot!

July 27, 2012
Real GDP Growth per Capita


Click to enlarge.

Step right up! We're running a special on old normals and new normals! Borrow the money to buy the old normal at the regular price and get a new normal at that same low price!

Services vs. Goods (Musical Tribute)

Click to enlarge.

If the Fed can keep the consumer price index growing at a stable and predictable pace then the following must be true.

1. If the inflation adjusted price of goods goes down, then the inflation adjusted price of services must go up.

2. If the inflation adjusted price of goods goes up, then the inflation adjusted price of services must come down.

Those betting on the long-term strength of our *service* economy should probably keep these two rules in mind (as should the hyperinflationists).

The following chart shows the historical Consumer Price Index for All Urban Consumers: Services minus the Consumer Price Index for All Urban Consumers: All Items.



What a ride that was. Or is the ride just beginning? Here comes the musical tribute!



My hands are definitely up. I'm also waving the new French flag. It's a white cross emblazoned on a white background!

And why might France want that new flag? Ouch!

See Also:
Charting the Health of Our Service Economy

Source Data:
St. Louis Fed: Custom Chart #1
St. Louis Fed: Custom Chart #2

I Think I'm Turning Japanese (Musical Tribute)

January 27, 2011
The New York Times: In Japan, Young Face Generational Roadblocks

“Japan has the worst generational inequality in the world,” said Manabu Shimasawa, a professor of social policy at Akita University who has written extensively on such inequalities. “Japan has lost its vitality because the older generations don’t step aside, allowing the young generations a chance to take new challenges and grow.”


Click to enlarge.

I had no idea that the younger workers of Japan had it so bad. As seen in the chart above, it is roughly half as bad as it is for the younger workers in America.

We do not want to end up like Japan. I must therefore beg older workers to step aside. Please. Do it for the children.

We've only had one decade of extremely poor stock market performance. Japan has had two. See? Our situation isn't even remotely the same. If you are an older worker, there's absolutely no reason to keep working.

“In France, the young people take to the streets,” Mr. Takahashi said. “In Japan, they just don’t pay.”

The young people in France take to the streets? Let's add that to the chart. Maybe there's some sort of clue to be found there.


Click to enlarge.

As a side note, if you happen to have a 40-year-old unemployed girlfriend who is back in college in an attempt to compete more effectively with the younger workers of the future, then welcome to the club. We aren't even Japanese. Yet.



Source Data:
St. Louis Fed: United States Unemployment (Ages 20-24)
St. Louis Fed: Japan Unemployment (Ages 20-24)
St. Louis Fed: France Unemployment (Ages 20-24)