91.3% Correlation Between Foodstamp Usage And The S&P, Or How "Wealth Effect" = "Poverty Effect"

Tyler Durden's picture

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Cognitive Dissonance's picture

Silly Tyler. You're mixing up correlation with causality with coincidence with change you can believe in. You do still believe, don't you Tyler?        Tyler?

Hello? I think I got cutoff.

PhotonJohn's picture

I just spit coke on my monitor!

slaughterer's picture

Send this chart to USA Today, please, and have them put it on the front page. 

Highrev's picture

Ben Bobbin Hood.

Robbing the poor to pay the rich.

Misean's picture

I thought that was Dennis Moore?

ebworthen's picture

Your common Man (Woman) is not completely stupid. 

You are either in the top 2% or you join the bottom and get the goodies - perhaps while going underground and off the "grid".

If you are in the middle trying to pay all the bills, mortgage, insurance premiums, fees, taxes, and live on $2,000 a year disposable income you are a DAMN FOOL.

whatsinaname's picture

you apparently have not heard of how phosporic acid in coke affects your body.

Coke and Hookers's picture

You are not supposed to put it in your mouth. You whiff it, two fat lines at a time, preferably from a hooker's inner thigh.

Ancona's picture

Hunger is very bullish CD. It is the best motivator.

Sucks_to_be_Smart's picture

For the sake of consistency--

.913 is the correlation coefficient.  I would suggest using the R^2 to explain that 83% of the variability in the "model" can be explained by the independent variable... The way it is now is misleading. 

Also, you are regressing prices.  Which are not stationary, and do not have a an expected long term variance.  Its like regressing random upward sloping lines and saying there's a correlation here...  I would say regress monthly "returns" of the food stamp # of participants versus S&P for an actual statistical process to get this point across. 

 

The point is valid--how can the S&P keep going up at a time when more and more people are empoverished (if we lived in a sane world), but the presentation is misleading, which is what I wanted to point out. 

 

Thanks!  Trying to hold ZH to a higher standard than MSM!

Cognitive Dissonance's picture

Thanks!  Trying to hold ZH to a higher standard than MSM!

What you're asking for isn't tough at all. ZH could lie 83% of the time and still maintain a 50% higher standard than the MSM. I only hope Tyler doesn't start regressing his sloping coefficient. Then all bets are off and Marla will probably leave him. :>)

disabledvet's picture

i agree.  clearly we have a liar deficiency here.  and i'm not sure even i'm capable of being more ridiculous either.  still "i prefer my theater in a theater."  unless the term "theater" is another word for "battle space" in which case...

Mark McGoldrick's picture

I have no proof to back this up, but I get the feeling there has been a notable management change at ZeroHedge.  

I wonder if ZeroHedge acquired funding and sold a portion of itself?  The writing/wit is different. The accuracy of the content is different. The number of daily articles has increased quite dramatically.  I'm beginning to catch inconsistencies between articles.  Etc. 

That being said, I still think ZH is a fantastic website, but the change has been notable.

 

 

Tyler Durden's picture

The answer to all your questions, if there actually is a question bundled in among the rhetoric, is "no"

But the next time the difference between R and R2 is indicative of a poison pill, we will let you know.

Cognitive Dissonance's picture

LOL.

The nerve of some people calling your writing style into question. I'm sure it can all be attributed to your recent authorship of "Truth Blogging for Dummies". I hear you're sending free copies to the editorial staff of every MSM outlet except RT, The Onion and Al Jazeera. Oh, and don't forget The National Enquirer who are right far more often than they are wrong.

BTW how's that regressive sloping coefficient holding up Tyler? Enquiring minds want to know. :>)

whatz that smell's picture

i blew snot out my beer hole and i think i liked it! thanks, ty.

praise be the bernank! may he keep my beer hole snot happy forever!

Mark McGoldrick's picture

The nerve of some people calling your writing style into question...

Are you kidding me?  The writing style is markedly different than the original "Tyler".  In an article a few days ago, I found something that resembled a sentence that was so nauseatingly wordy it should have been broken into chapters. By the ninth comma, I had to take a tablespoon of Mylanta just to find my way to the end without getting vertigo and diarrhea.  That was NOT the work of any ZH author who has posted here before.  

And now, suddenly, the number of daily articles jumps by nearly 50%, with inconsistencies among the content.

You don't see this? It's so obvious!

Could it be that your nose is so large it distorts the space/time continuum in front of your eyes? 


Eric Cartman's picture

Perhaps you're confusing actual Tyler Durden posts with guest posts? Often, if you're skimming the article it looks just like Tyler's but if you look closely you see it'sitalicized and it's actually a guest post eventhough Tyler's picture and name are at the top.

blindfaith's picture

Gosh, please, please, don't take offence, because some people in some places, or some people in other places, might, particularly if they had, or had not, the thicker skin to handle all the commas.

So,,,,,,,as the King of Austria said to Motzart,  "I like the music, but there are just to many notes.  The ear can hear only so many notes at one time".

 

As for me...Tyler I love the complex sentences!  They reflect the real world nicely and I follow them as if it is poetry.

Blano's picture

All of you need to quit talking over my head.  : )

disabledvet's picture

damn you!  damn you to heck for more free content!  from now on "it's government lies or nothing!"

spanish inquisition's picture

Tyler,

Well, I am not really sure about your answer. I would of expected a "No" at the beginning of a sentence as an accurate response for that kind of attack. (Note the capitalization of the first letter). Now obviously ''NO" would not do in this situation, which leads us to the overly understated "no". I think that you are hiding something and wish to downplay the situation and diffuse it with humor. I am putting you on notice that I am "onto you".

Our two weapons are fear and surprise...and ruthless efficiency...

 

Mark McGoldrick's picture

rickster

Pardon the delayed response. I had to return some videotapes.  

Then, I had 7pm reservations at Dorsia (impressive, eh?) with three hookers from Budapest, and I simply couldn't cancel. I was more than a little chagrined to be seated adjacent to Andrew Ross Sorkin's table, who happened to be wearing a suit embarrassingly similar to mine - a single breasted, double vented, pin-stripe Domenico Caraceni, made from the wool of an Arctic musk-ox that is only sheered once every three years.  Although I will say that my 7-fold Stephano Ricci tie was the clear winner over his Charvet, and an entire table of derivative traders from Saba sitting near the door confirmed this - including Boaz himself.

Anyway, I'm not quite sure why you insist on riding around on my coattails here at ZeroHedge, but your persistence has grown tiresome to me. I would suggest you cease and desist - that is, if you want to keep your spleen. 

And no, the link below is not me.  I only have threesomes with eastern Europen hookers, and they all sign waivers beforehand.  There is an idea of a Mark McGoldrick; some kind of abstraction. But there is no real me: only an entity, something illusory.*

Lastly, please tell your wife to stop laying on the floor next to her food dish all day. 

-----

*American Psycho

 

 

Robot Traders Mom's picture

Unfortunately, it probably is. See if there is another pedo on America's Most Wanted named "Robot Trader"

TruthInSunshine's picture

Chris Hansen is rumored to be wanting to do a sit down with Robo.

tmosley's picture

Either that or the head of GS's prop trading desk.

http://www.atrader.com/top-hedge-fund-manager

That's much worse.  Much, much worse.

Eric Cartman's picture

I think Marla did leave him... I haven't noticed any updates from her =(

TheMerryPrankster's picture

She's on holiday in Goa, or so I'm told.

A Man without Qualities's picture

"how can the S&P keep going up at a time when more and more people are empoverished"?

It's a necessary precondition for hyperinflation.  The government masks the declining wealth of the lower classes by giving out free bread and they fund the program by printing money, rather than taxing those who hold the real wealth.  Once they start down this road, there is only ever one outcome, as to take away the bread would lead to an uprising... and the wealthy simply move their money into real assets to avoid the shaving of the coinage.  The ones who suffer the most are those in the middle..

It is astonishing to watch this all happen in real time.

cossack55's picture

I think I read on ZH a few weeks ago that the Zimbabwe stock exchange reached its all time high at the same time they were printing $100 Trillion dollar bills. Yes?

XPolemic's picture

It is astonishing to watch this all happen in real time.

Yes, I have been studying stock market crashes, Empire collapses, corporate failures and end-cycle dynamics since 1987, and I never thought I would see an Empire collapse in my lifetime. It's a very exciting time, now that we have the technology to observe it real time.

I should begin on my book, and update it with current events as they transpire. Here is my thesis:

The cycle of human affairs can be measured by the following:

What is the cost of a mistake in your society?

If the cost of a mistake is high, then your society is at the beginning of the cycle, because only the extremely cautious and capable make it to the top.

If the cost of a mistake is low, then your society is at the end of the cycle, because if the cost of a mistake is low, then the reckless and incompetent will slowly rise to the top (because we tend to admire the reckless, in the same way we slow down to look at a car wreck).

When the cost of a mistake is low, it implies abundant resources. For example, take the world of soccer. In poor South American countries, if a good player gets a serious injury early in life, it can derail or terminate their soccer career, but in the West, with abundant medical care, that player can be treated and carry on.

Likewise for the car industry in the United States. Through political corruption, the big car makers effectively drove out competition, thus making their business much easier. If an executive or CEO makes a costly mistake, the effect is dampened by the gouging of their customers through their oligopoly position. Hence the incompetent rise to the top.

The same is true of countries as a whole. The US Empire has been collecting Pax Americana from the rest of the world through the petro-dollar tax for ~60 years. This free money has flowed into the financial system, giving rise to a slew of idiots in investment banks. The financial system funds the military-industrial complex, which in turn enforces the petro-dollar Pax Americana. But it also provides cheap gasoline, which in turn supports fuel ineffecient vehicles, which are a speciality of the US car manufacturers (every other country in the world pays full price for gasoline).

The people who have been running the financial system, the auto-companies, the military-industrial complex, the white house, have been making mistake after mistake, but because of the massive surplus of wealth, the effect of these mistakes has been mitigated ... until now.

The final part of my thesis involves the tipping point. This is when the system is so completely full of incompetent morons, that the mistakes start accelerating and compounding, until everything the people in charge do is counter-productive, and the system itself starts to break down.

What happens after the system starts to break down is unpredictable, because while the rise of Empires follows a fairly logical progression, their collapse can take a number of different forms.

1. There can be a slow decay/decline while a new power rises.

2. There can be a catastrophic war with an external enemy.

3. There can be a bloody civil war.

4. There can be a relatively peaceful splintering of the Empire. In the case of the US, I would estimate it would splinter into 3 economic powers. West (California and Washington state), Mid-South (Southern and Mid-Western states), and East (the East Coast excluding Florida).


TheMerryPrankster's picture

Never pre-suppose a complex structure based on a single simple premise, especially one as vague and arbitrary as a "mistake". One man's mistake is another's serendipidity. The goddess of destuction assures us that nothing can be created without destroying something. Yin and yang, none of us are flawless, the black is embedded in the white and the white within the black.

Your work is derivative, google krondratiev

http://www.google.com/search?q=kondratiev&ie=utf-8&oe=utf-8&aq=t&rls=org...

and Igor Panarin

http://www.google.com/search?hl=en&safe=off&client=firefox-a&hs=AQi&rls=...

 

XPolemic's picture

Never pre-suppose a complex structure based on a single simple premise, especially one as vague and arbitrary as a "mistake".

All complex structures are based on simple premises, but not usually a single one. And the term 'mistake' is only arbitary if you don't know the intended outcome of the actions taken.

he goddess of destuction assures us that nothing can be created without destroying something. Yin and yang, none of us are flawless, the black is embedded in the white and the white within the black.

Did you write that yourself or do you have a software AI that spits out cliches?

Your work is derivative

Um ... duh. All works are derivative. But thanks for the heads up on Krondratiev and Panarin, I hadn't heard of either of them, but they both look interesting.



TheMerryPrankster's picture

Don't be pissed cause I write better than you. It's just practice. No worries on the cites mate, Kondratiev's life story is fascinating in and of itself, regardless of the brilliance of his work. If you find Panarin interesting, check out Dmitry Orlov:

http://www.google.com/search?q=Dmitry+Orlov&ie=utf-8&oe=utf-8&aq=t&rls=o...

blindfaith's picture

Yes, but have both of you considered the affects and effects of that which most discount as non-sense?

Neo: I suppose the most obvious question is, how can I trust you?
The Oracle: Bingo. It is a pickle. No doubt about it. The bad news is there's no way if you can really know whether I'm here to help you or not, so it's really up to you. You just have to make up you on damned mind to either accept what I'm going to tell you, or reject it.

 

May I suggest that you consider this into the mix, you might be surprised how 'spot on' this is as you read it...most written a very long time ago.  It might just be #5 on your list of out-comes.

Sanja Peric,

http://www.sanjaperic.com/category/english/

XPolemic's picture

Don't be pissed cause I write better than you. It's just practice. 

You are projecting.


Yes, many people have written about the coming collapse of the American Empire, but I am not so much interested in the specific case as I am in the general dynamics of end-cycles. In this particular case, the United States, those of us interested in these end-cycles are able to observe it happen in real time, rather than in retrospect, as one had to with previous Empire-ending events.

The current velocity of information allows this real-time observation, combined with what will be the largest economic collapse in history (there may have been equally large collapses pre-history, but one cannot be sure), it's going to be quite a show.

So far, the only thing you have added to this conversation is other people's ideas. Do you have any of your own?


X. Kurt OSis's picture

This is the most obnoxious post I have ever read.  Spare us the cut and paste job from the Level II CFA book.  There is a reason why you obviously failed the first time around.  You spew the mathematical concept, but can't grasp how to apply it.

This is honestly so stupid, I can't craft a response.  If I wasn't so taken aback by the obnoxiousness of this, my reply would much more witty.

The purpose of a regression analysis would be to model an predicted outcome (GDP goes up by 1% so my company's sales should by X in the next quarter).  TD is not trying to create a predictive model, moron.  Proof of a highly correlated relationship is all that we need to see for the purpose of this post.

d00daa's picture

Fuck the junker, this is absolutely spot on.

X. Kurt OSis's picture

That post was soooo HOMOskedastic, fo reallz.

DrLamer's picture

To Sucks_to_be_Smart:

Nope. That Your explanation, Sir, is misleading. And ZH (or better call it FightClub, "FICLU" more correct) is right. And here is why:

you are regressing prices.  Which are not stationary,

No prices are "stationary". There are no "stationary" prices in this world. The word "stationary" can only used to points in time of a *RANDOM* "stationary process".

http://en.wikipedia.org/wiki/Stationary_process

http://en.wikipedia.org/wiki/Stochastic_process

No trader in the world is pressing keys of a keyboard *RANDOMLY* (except POMO NYFed trading desk). There is no a Nobel Prize economist who showed up that establishing prices is a random process. There is no proved ssumption that normal math stat methods can be applied to economy DIRECTLY and AUTOMATICALLY.

Its like regressing random upward sloping lines and saying there's a correlation here...

You mixed up various stages of math stat investigation. Math methods of stat are proving HIPOTHESIS. And how the building the hipotesis itself starts? It normally starts from (90% cases) *visual observation* of linear or of non-linear relationships (log, x^2, various scales, various PERIODS, etc) and graphs. You, sir is talking about further PROOF of hipothesis, FICLU is talking about START, I repeat, START of building a hipothesis. Which can (or can not) futher be proved by normal stat (by conventional correlation), or slightly non-normal stat (by so-called robust methods), or by pure (non-Gauss) economic stat (by so-called  non-parametric stat methods, Spearman method etc).

 

Variance Doc's picture

Well you’re not that smart after all.  Here, the use of the correlation coefficient is perfectly fine.  It is a measure of the linear association between the two variables and that is what Tyler is using it for.  Furthermore, r^2 is the coefficient of determination and it IS NOT the variability of the model due to the predictor, it IS the amount of variability in the response due to the regression; that is, the amount of variation in the response that can be predicted by the regression.

 

As long as I’m here, let’s dispense with more of your nonsense.  Tyler is treating the sample as a population and running a regression; that is perfectly ok.  Since he/she is NOT making any statistical inference, the constant variance assumption is not important at all.  Stationary is not important here either, since Tyler is not treating the data as a time series.  They are simply running a simple linear regression to understand the relationship between the two variables.  I’m not sure what you mean by “…expected long term variance.”, but I really never understood what C+ students are talking about either.

 

The analysis presented above is perfectly fine, it’s just that you really don’t understand enough statistics.  That’s the problem.

 

willien1derland's picture

CD....Paging CD, Please pick up the White Courtesy Phone for an important message from President Obama..and by the way please bring some change that his campaign can believe in....(I am certain that I will be asked to work from home as my 'laughter explosion' has frightened the troops - thanks for the post - I needed that!) 

covert's picture

super funny. is there really any connection?

http://covert2.wordpress.com

 

Cognitive Dissonance's picture

You gotta believe first. There's always a connection when you really really really believe in that hope and change thingy. I'm talking return of messiah belief in case you need a reference. I think America can handle that.

Hell, we believe we'll get laid Friday night if only we would use Crest toothpaste and any modern day version of Old Spice.