Kerosene-Type Jet Fuel

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Economics is not rocket science. It just looks like it sometimes.

Jet Fuel

Oil prices increased about fivefold from 2003 to 2008, raising fears that world petroleum production is becoming unable to keep up with demand. The fact that there are few alternatives to petroleum for aviation fuel adds urgency to the search for alternatives. Twenty-five airlines were bankrupted or stopped operations in the first six months of 2008, largely due to fuel costs.

Source Data:
EIA: Petroleum
St. Louis Fed: Population

Consumer Price Index Since 2008

The following chart shows what the consumer price index has done since hitting the bottom in December of 2008. I have added a 2nd order polynomial trend line in red (excluding the temporary deflationary deviation from February 2010 to April 2011).


Click to enlarge.

It's an awesome display of gravity if ever I've seen one.

September 26, 2013
Where Is the Panic Over Deflation?

But it's striking that the Fed's preferred price measure is declining at a time when the main conversation among policy makers is when and how to tighten monetary policy, rather than to make it more accommodative.

September 30, 2013
Warning - Deflation Will Take the Most by Surprise

The last thing on the minds of most people is deflation.

In my very humble opinion, ZIRP is going to be with us for what will seem to be an eternity, just like it was in Japan. It is also my very humble opinion that our stock market won't like much better than Japan's did. Not right away perhaps, but eventually.



This is not investment advice.

Source Data:
St. Louis Fed: CPI
St. Louis Fed: Nikkei Stock Average vs. Discount Rate for Japan

Federal Deficit as Percent of GDP

Click to enlarge.

The future's too bright.

Merriam Webster: Pretension

an allegation of doubtful value

This post inspired by robj's comment at Calculated Risk.

Source Data:
St. Louis Fed: Federal Surplus or Deficit [-] as Percent of Gross Domestic Product

A Retail Sales Accident Waiting to Happen (Musical Tribute)

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Monthly retail and food services sales per capita is shown in blue.
Annual median household income is shown in red.

Please factor in that neither series is adjusted for inflation. You are therefore looking at the raw data in all its grandeur.

We must be incredibly optimistic as a society. I say this because the following is what Google offers me as search results.

1. 8,870,000 search results for "Pent-Up Demand"
2. 230 search results for "Pent-Down Demand"

As for the latter, my blog currently holds the top search result. Hurray! And with this post, I'm looking to expand my dominance of the "Pent-Down Demand" analysis market! Most excellent! Sigh.



If you're happy and you know it, pent demand!
If you're happy and you know it, pent demand!
If you're happy and you know it
And you really want to show it
If you're happy and you know it, pent demand!

Next up... Stomping our feet and turning around! Woohoo!

September 5, 2013
August Retail Sales Shy of Hopes

Many retailers, including the major department stores, have stopped reporting monthly results over the past year, making it more difficult to gauge the performance of the entire industry.

Where have we heard that before?

"The reason those guys don't want to report same-store sales is because they're in a lot of trouble. They have a broken business model, and they would sorely wish analysts would pay less attention to what they're doing. They're trying to hide." - Peter Morici, 2008

And on that note, I am officially reducing my short-term inflation outlook (as seen in the upper left corner of my blog) to boringly flat just in time for the 2013 Christmas season. It's just a gut feel, nothing more.

This is not investment advice.

Source Data:
St. Louis Fed: Custom Chart

Quote of the Day

September 29, 2013
Golden era of farm prosperity in Iowa, nation at an end

Farmers may still be the richest people many of us know, but their seeming license to print money during a seven-year run of record grain prices and near exponential growth in land values has been revoked by falling markets for corn and soybeans.

The Affordable Housing High-Wire Act

The following chart shows the median price of new homes sold divided by the median household income.


Click to enlarge.

HUD: Affordable Housing

Who Needs Affordable Housing?

More people than you might realize.

May 2013
REALTOR: Not a High-Wire Act

The economic benefits of a strong housing market are clear. Housing has contributed 17 to 19 percent to the national gross domestic product on average over the past four decades; it still accounts for about 15 percent of GDP despite ongoing challenges to housing markets around the country. And home ownership remains the greatest tool for wealth creation our nation’s families have.

Parabolically increasing home prices relative to income for the win! It's the greater fool's greatest tool!

Source Data:
St. Louis Fed: Custom Chart

A Reason for Optimism: Washington, D.C.

The following chart shows the median household income of Washington, D.C. divided by the median household income of the United States.


Click to enlarge.

Exponential growth! It's only a matter of time before our "investment" pays off! Genius!

The Next Biggest Boom Towns In The U.S.

No. 6: Washington, D.C.

The D.C. metro area's great competitive advantage lies in proximity to the federal government. Washington has continuing job growth, including in high-wage science and tech fields, and an improving real estate market. It's also the only large metro in the Northeast with close to double-digit gains in the ranks of small children, a sign that people believe they can build a long term future there. However, a significant downsizing of the federal government in the near future could slow the region's growth.

Let's all move to Columbia! Yes!

And when I say Columbia, I don't mean the state capital of South Carolina. There's some sort of "plague" going on there. For the love of all that is holy, stay away!

September 19, 2013
Declining income, rising poverty plague SC economy

COLUMBIA, SC — South Carolinians were better off at the turn of the century than they are today, according to a new report released Thursday.

It finds the state’s residents bring home less money in their paychecks and more are living in poverty than in 2000. Also, fewer have health insurance compared with five years ago, according to the U.S. Census’ American Community Survey.

I also don't mean that we should move to the Mall of Columbia. That's just silly talk. We don't need to live in a Banana Republic quite yet. Give it a few more years!

And let's not forget the country of Columbia. It would make a very poor substitute for the flourishing District of Columbia.

So when it comes to Columbias, one stands above the rest. Stick with what works! The future's so bright there that I gotta wear shades!

See Also:
Sarcasm Disclaimer

Source Data:
St. Louis Fed: Custom Chart

Business Loans vs. Deposits

Click to enlarge.

For the love of all that is holy, please stop depositing so much cash in the banks. They've already got the Holy Grail. They certainly don't need yours!

Some of us would like to actually earn more than 0.49% on 5-year CDs again. So stop already!

1.0049^5 = 1.0247

2.47% total return in 5 years? I say bury that cash instead! What's the worst that could happen?

The Worst that Could Happen


Do *not* weasel your investment! Bury it deep! Cash makes a horrible mulch!

This is gardening advice and as such should not be confused with investment advice.

See Also:
Hyperinflation Theories Poned Again

Source Data:
St. Louis Fed: Custom Chart