China's Growth Is Slowing? Big Shocker.

The following chart shows the natural log of imports from China divided by disposable personal income. When using natural logs, constant exponential growth is seen as a straight line.


Click to enlarge.

Can you say market saturation?

Source Data:
St. Louis Fed: Custom Chart

china sarcasm trade deficit

Rome Did Not Fall in a Day

The following chart shows the natural log of real disposable personal income per capita. Once again, constant exponential growth shows up as a straight line when using natural logs.


Click to enlarge.

There are at least a few things worth considering.

1. Due to rising income inequality, the typical person isn't doing nearly as well as this chart would suggest.

2. As automation takes on more and more human work, how will billions of people find employment? How much of this is seen in the chart?

3. The trend is definitely not a straight line. It is curving downwards with a very high correlation of 0.993. If the current trend continues, then we'll peak in 2058 (45 years from now). That's a big if. If I'm alive to see it, I'll be 94 years old. That's another big if.

4. It is mathematically impossible for this upside down parabolic trend to continue forever. There must be a failure at some point. If nothing else, I don't think any rational person would expect real disposable personal income per capita to ever fall below zero. That would happen in 2164. This would certainly not be the first failure we've seen in recent years. We live in the era of long-term trend failures.

5. Any failure would probably be to the downside, since that is the direction the data is being pulled (much like a camel's back when more and more weight is placed upon it).

6. Contrary to some, I therefore definitely believe that the long-term future is not so bright that I gotta wear shades.

“I believe in making the world safe for our children, but not our children's children, because I don't think children should be having sex.” - Jack Handey

Japan (our partner in ZIRP crime) must love Jack Handey quotes.

December 23, 2013
Japan’s Diaper Shift and Global Population Trends

As I concluded: “…world population could peak sooner and begin declining well below the 10 billion currently projected for the close of the 21st century.”

For what it is worth, I'm very much a believer in the theory. In some ways, we're like locusts and the lowest hanging fruit has already been eaten (USA prosperity analogy). I know it sounds grim, but that's what I believe. The good news is that I'm thankful every day that I was born where and when I was.

As seen in the chart, I'm not at all convinced that our children's children will be quite as thankful. It isn't that I think they will be unhappy being born in America. Far from it. I simply question the timing. It's not like I would tell them to move to China. Let's just put it that way.

Source Data:
St. Louis Fed: Custom Chart

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The Path to Free Toys!

Click to enlarge.

I wonder if the financial experts telling us all to invest in China were factoring in the price of toys.

November 20, 2013
Walmart's Black Friday, Thanksgiving Plans Try to Control Crowds: Will They Work?

Over 100 toys will be a part of the pre-Black Friday deals that begin on Friday. Among the deals are Hot Wheels cars, which are Walmart's biggest unit mover in its toy department, on sale for 60 cents from 97 cents. A game of Monopoly will be available for $5, down from its usual price of $11.77.

For what it is worth, I remember paying $1 per Hot Wheels car in the 1970s.

Source Data:
BLS: Inflation & Prices

charts china deflation stock market trade deficit

Barking Up the Wrong Tree

The following chart shows annual production and nonsupervisory logging employee hours worked.


Click to enlarge.

That dog don't hunt.

Unless the long-term trend changes, it would seem that about the only logging we'll be doing in the distant future will require a username and password.

October 9, 2013
Here’s the Report That May Have Prompted The Lumber Liquidators Raid

Conservation groups say forests in Russia’s far east are known for large scale illegal cutting operations. Illegal logging brigades comb forests for high-quality varieties like Mongolian oak and Korean pine, cutting down trees in the middle of the night and passing them along to illegal saw mills. From there, traders mix the illegal wood with legal wood and Chinese manufacturers use fake documentation to smuggle so-called black wood out of Russia to sell to Western retailers.

Source Data:
BLS: Employment

charts china employment russia sarcasm trade deficit

Gonna Pop Some Tags (Musical Tribute)

The following chart shows the 12-month moving average of annualized production and nonsupervisory apparel (nondurable goods) employee hours worked per capita.


Click to enlarge.

I wear your granddad's clothes
I look incredible
I'm in this big ass coat
From that thrift shop down the road

Source Data:
BLS: Employment
St. Louis Fed: Population

automation charts china employment india musical tribute sarcasm trade deficit videos

Quote of the Day

September 26, 2013
China investment opportunities today: Jim Rogers

"In the 19th century in America, we had 15 depressions, with a 'd', and yet we became the most exciting and successful country in the 20th century."

"China's gonna have a lot of problems. I don't know what or when or why, but I know it's coming. But when they happen, take advantage of the opportunity, don't throw up your hands and say 'oh gosh, now I'm going to Denmark to learn Danish' or something."

Based on what I've heckled about China on this blog in the past, I'd definitely be throwing my hands up if I moved to China to learn Chinese. I'd be surrendering to the totalitarian authorities. No doubt about it. Sigh.

So yeah, if forced to choose, I'd prefer to go to Denmark to learn Danish' or something.

I consider myself very fortunate to have been born in America. This freedom allows me to publicly state that I believe Jim Rogers is a total doofus. This is not his first quote of the day. He's always full of inspiring "sarchasmic" witticisms!

This post inspired by "The High Price of Digging Up Dirt in China" as seen at Credit Bubble Stocks.

china sarcasm stock market

Real Annualized International Trade per Capita

Click to enlarge.

Let's zoom in for a closer look.


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Sorry, China. It looks like we're pretty much done being your exponential growth engine.

August 11, 2013
China Faces Years Of Slowing GDP Growth, Top Strategist Says

“We need to get used to the fact that the boom is over,” said Andy Rothman, China macro strategist at brokerage CLSA. “The days when you could just roll out of bed and make money, or the days when you could expect that the growth rate for most things was going to be faster next year — that’s done. We should expect that for the foreseeable future, every year on average, most major economic data points are going to be growing more slowly.”

It could never happen here of course. This is America. Thanks to perma-ZIRP, booms will never end again! Hurray!

Don't mind us we're just spilling our guts
If this is love I don't wanna be hanging by the neck
Before an audience of death

See Also:
Sarcasm Disclaimer

Source Data:
St. Louis Fed: Custom Chart

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Long-Term Promise: More Cash! Less Work!

The following chart shows the 12-month moving average of real currency in circulation per American nonfarm payroll employee (July 2013 dollars).


Click to enlarge.

As seen in the chart, I think it pretty much goes without saying that this is not 1982. It does look a bit like World War II though. Is there another world war right now that nobody told me about?

I have not filed with the Federal Election Commission to run for President of the United States in 2016, but I'd certainly like to keep my options open. I therefore offer the following pledges so everyone knows where I stand on the tough issues facing our country.

If elected, I promise even more than more of the same! Even more cash! Even less work! The more cash and the less work the better!

Who wouldn't like that? In this increasingly digital age, we're currently $500 above trend! The prosperity is practically overflowing!

If you are a guy and you have a job in this more cash and less work environment, then I feel your pain. I'd like to ask you serious questions about the main issue that I assume affects you the most. How do you get your wallet to close with $8,600+ cash inside? Does this country need to make larger denomination bills? As of May 30, 2009, only 342 $5,000 bills were known to exist. What a tragedy!

If elected, I promise even larger denomination bills produced on the same quality paper that the smaller denomination bills are printed on!

On the off chance you are a bit shy of the $8,600+ in cash ($26,000 for a family of 3) then have no fear. Perhaps someone else does and it is on the verge of trickling down to you. I know you've been patient for 30 years so far, but perhaps you just need to be patient for a few more years!

If elected, I promise to patiently watch the cash trickle down with you! In no way, shape, or form shall I inhibit its ongoing progress!

See Also:
Sarcasm Disclaimer

Source Data:
St. Louis Fed: Custom Chart

automation charts china employment sarcasm trade deficit treasuries videos

China's "Growth" Story in One Chart

Click to enlarge.

See Also:
Sarcasm Disclaimer

Source Data:
St. Louis Fed: Custom Chart

charts china exponential trend failure inflation sarcasm

Real Dividends per Capita

Click to enlarge.

The tree that stands above the others gets blown down - Chinese proverb

Okay, yes. Technically speaking, the tree was blown down in 2009. It's not going to happen again though. This new tree has a concrete base reinforced with rebar!

Root system? This new tree don't need no stinkin' root system. It's growing to the sky without one!

Wiktionary: no tree grows to the sky

There are limits on growth. Growth does not continue indefinitely, eventually it will halt or collapse.

Oh, please. Infinite ZIRP fertilizer equals infinite growth! Everybody knows it, except for those clueless Japanese.


Click to enlarge.

Source Data:
St. Louis Fed: Custom Chart
St. Louis Fed: Interest Rates, Discount Rate for Japan

charts china exponential trend failure fed chairman inflation japan sarcasm stock market

Cliff Diving Chart of the Day

Click to enlarge.

Let me guess. In the name of prosperity, we've outsourced this to China too? Or perhaps this is proof that our recovery has solid [bicycle tire] traction?

Hey, just theories!

Special thanks to the person who sent me a private email that included a link to this refiner data. It is his believe that bicycle tires might be a good investment. It is not an idea that I can readily discount, lol. Sigh.

See Also:
Global Transportation Rebalancing Underway
CMCTABIFA!

Source Data:
EIA: U.S. Total Gasoline Retail Sales by Refiners
St. Louis Fed: Population

charts china oil sarcasm trade deficit

Imports: China vs. Mexico

Click to enlarge.

It looks to me like China's competitive advantage relative to Mexico has peaked. It happened during the Great Recession and we're well below that point now. I can't say with any certainty if the peak is permanent or simply temporary. I am willing to call it an exponential trend failure though.

In any event, I wonder what the savvy Chinese have to say about that?

Source Data:
St. Louis Fed: Custom Chart

charts china exponential trend failure mexico trade deficit

Sears: The Best Tool for "Made in America"

December 7, 2012
Sears accused of misleading public on Craftsman line

Costello declined to say how many Craftsman tools were made in the U.S. and Hart, who filed suit against the retailer in 2004, isn't sure either. After the suit was filed, Sears took Craftsman tools off the shelves and blacked out the words "Made in America," she said.

The best tool for the job is apparently a black marker. Sigh.

See Also:
The Softer Side of Sears (Musical Tribute)
Our Pillars of Retail Strength

china employment sarcasm trade deficit

Exponential Trend Failure of the Day (Musical Tribute)

Click to enlarge.

Mere words cannot do the trend line in blue justice.



Source Data:
St. Louis Fed: Industrial Production: Durable Materials

charts china exponential trend failure musical tribute videos

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!

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An Exponentially Increasing Exponential Trend

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As seen in the following chart, the exponential growth rates are themselves growing exponentially. In fact, it's nearly a perfect fit.


Click to enlarge.

If exponential trends are guaranteed to fail at some point (they are), then what does that say about exponentially increasing exponential growth rates?

The failure could be spectacular someday.

This would come as yet another major blow to the true believers of the Chinese economic miracle story. Note that the China Shanghai Composite Index is currently down 66% from the peak set in 2007. With miracles like that, who needs enemies?

November 8, 2012
Foxconn 'considers plan to open factories in US'

In Foxconn's huge assembly halls in China, iPhones and iPads are largely put together by human hands, with very little automation. In the US, sources say Foxconn will specialise in flatscreen TV sets, which are easier to assemble with the help of robots.

See Also:
Definition of Laspeyres Index

Source Data:
St. Louis Fed: Custom Chart

automation charts china employment sarcasm stock market

Mind Blowing Chart of the Day

Yesterday, I posted the following chart.

November 10, 2012
The Interest Rates of World War II

Click to enlarge.

I realized last night that I had seen that chart shape before. The following chart adds in manufacturing employment as a 2nd data series (in red).


Click to enlarge.

Let's use 10-year moving averages to remove the short-term cyclical noise.


Click to enlarge.

Mind blowing! Now let's take that data and put it on a scatter chart.


Click to enlarge.

This chart is consistent with my view that the 3-month treasury bill rate may remain low for a very, very long time. There are powerful inflationary forces in the world but there are powerful deflationary forces too. Thanks to increasing automation, it is my opinion that global manufacturing employment is definitely not on the rise (at least over the long-term).

Source Data:
St. Louis Fed: Custom Chart

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