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91.3% Correlation Between Foodstamp Usage And The S&P, Or How "Wealth Effect" = "Poverty Effect"
Or how in kleptocratic America wealth effect poverty effects you.
Presented witout commentary.
R=0.913
And for all those who somehow passed the Captcha yet wonder why just two years of data: March 2009 is when QE1 aka "Wealth Effect" started.
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Don't hate the player, hate the game.
It is designed to attract leeches, just so that you might demand that they be stopped.
Problem is, your "problem solvers" are the biggest leeches yet.
I worked in public housing for awhile. People getting low-cost apartments or housing vouchers, often paying no rent at the end of the month.
My takeaway was that there were very few "leeches" among them, who truly just disgusted me and made me furious at their exploitation. Almost everyone using our services was in true dire straights one way or the other, and I didn't begrudge them too much. Many of them were in fact some of the most pitiable people I've ever met.
I am a capitalist, OK? But, here's the thing: I see all these "lazy bitches" comments and anecdotal "evidence" of bullshit in SNAP.... BBBUT, no statistics to back up anything. I'd wager (granted, just a gut feel) the fraud & waste is a teeny-tiny rate of .gov in general, and microscopic vs. medicare, etc. where, by the way, it's the "capitalists" that are milking it
+ 7.62 Break out the salt shaker, the leeches are killing us slowly.
You put yourself through college, but you failed to get an education. The average SNAP benefit is USD 101$ per person. Thats about $25.25 per week, so how many steaks and shrimp are you gonna buy for your 21 meals in a week on 25 bucks? That's an average of $1.20 per meal. Average price of steak is 5.99-6.99 per pound= 3.5 lbs of steak for 25 bucks.
So if you can live for a week on 3lbs of steak and nothing else, I guess your premise holds water otherwise, your just regurgitating talk radio crap.
http://www.google.com/search?hl=en&safe=off&client=firefox-a&hs=hO3&rls=...
http://www.google.com/search?q=average+price+of+steak+2011&ie=utf-8&oe=u...
Wealth Effect is such a funny term.
Bullard said interest rates are not a big deal since anyone can play in the casino.
Granny just has to trust a Goldman banker knows best how to grow her nest egg.
this may in fact be true. this may in fact be right. no one is claiming it is the moral thing of course. unless you are...of course.
much nicer avatar, baby, than that dark one on the other thread.... made you look too much like yer namesake :)
thx :)
It is extremlly difficult to get a decent head-shot at 40x40.
You're absolutely right, maybe next time use "ironic" in place of "funny", some people don't understand sarcasm (or irony). See my upthread post where i posit that Lloyd Blankfien will become the single richest man on earth as indicated by Squire Durden's fine fine Chart. A thing of beauty indeed, your avatar and the fine Mr. Durden's chart. Sometimes the truth is just a squiggly line.
what happened last summer/?? Summer BBQs take a hit outta the S&P?? Gotta outlaw all the community eating.. everyone eat alone and fill their fridge
If you let people get together like that, they might start talking.
Just another way to view the Govt. Spending multiplier effect. 2yrs of data though??
Since start of QE
what's that saying? "we all knew the odds in being a fighter pilot. we were just sure it would be that other guy...
tyler you are the shit man, you don't even have to end your sentences with a period. catch you. two times on this thread. must be
G O D.......................
You don't need punctuation when writing a clause, only when writing a sentence. A sentence must contain a complete though, not simply an addendum to another thought, as was the case here.
No offense to either you or VeloBabe, but one reason I come to ZeroHedge, is the no grammar nazis rule. Its all about content, if you can write it well enough that the average human can parse and understand it, that's sufficient grammar.
Fight club is about knowledge and understanding and sharing, insight, irony and humor. The first rule of fight club is never ever sweat a missed period.
That was so poetic I put a link to zerohege and quoted you in my title. Brilliant!
I have BB too did the analysis. THe FDSPNUM Index only goes back till late 2005, so I started from 2006 till today (using monthly data). It looks way different. I'm somewhat technologically retarded, how do I attach pics?
The R^2 in this analysis is .004 so it differs materially when you extend the time frame.
I'm looking at a different chart now which is the really interesting one. Essentially since QE has started, the correlation has increased to the extent that it looks like an exponential line.
Edit: oops I was looking at INDU, with SPX, the R^2 is .005 from a range 10/31/2005 (the max I can go back) till today
Can you post a link to your output? I do NOT have BB, but will find the data and do it w/Excel to compare yours, mine and TD's. Thanks -
I can't stop coming back to this thread because of how much you people don't get the point.
If this were a regression model, the point would be to predict food stamp utilization based on SPX returns. That is so not the point its not even funny.
The point is that QE did a ramp job on stocks and poverty, not that the SPX now predicts SNAP program participation.
The point is so simple. You guys and your math are looking for quant brownie points and its funny. No one assumes a predictive model for food stamps is the point of this post. Stop with the spreadsheets.
As said above, this is just soooo homo-fucking-skedastic... Stop it.
X. Kurt: Thanks for sharing. Clinical research shows 9 out of 10 posters on ZH are the smartest guy in the room. We all have our own motives. I would hope that anyone who scrolls this far down in a thread whose heading contains no commentary understands the difference between causation and correlation. Cheers, The Grip
//The point is that QE did a ramp job on stocks and poverty, not that the SPX now predicts SNAP program participation.//
The thing is, you can't statistically say anything about this if you JUST analyze the time-frame where QE takes place. Do you understand that? I think I DO get the point.
Who the fuck thinks any of this quant analysis concludes that the SPX PREDICTS SNAP? That's ridiculous. What I personally wanted to show was the R in the time-frame before QE and after. This DOES show us that QE, ceteris paribus (I use latin because I'm the smartest person the room), affects SNAP participation. After accounting for policy lag, as soon as QE starts, asset prices start rising, and SNAP starts increasing. And what you do see is that the R increases dramatically as time passed from 2005 until today. This is one statistical point showing how QE is increasing wealth disparity as more asset holders benefit from higher stock prices while simultaneously, more people who do not hold assets (assuming people on SNAP are not stockholders) are getting inline for public food assistance.
PS I doubt anyone is looking to get "brownie points" by performing a 10 minute analysis using an undergrad understanding of statistics.
How do I post screenshots? I can do it today or email you it.
Thanks Akashic. That is good of you. [edit]
How do I post screenshots? I can do it today or email you it.
I will do it today
This is another interesting chart showing the percentage of citizens in each US State + Washington DC that are on Food Stamps and the percentage of citizens in each US State + Washington DC that are counted as unemployed (U-6).
http://frac.org/wp-content/uploads/2011/02/SNAPandU6.pdf
Surprise surprize! DC is the winner. The land of haves and have nots.
now u can use food stamp to buy up SPX in NYSE!
It's clear we're moving to a slave holder society. That would solve everything! All those who've been priced out of the middle class can sell themselves and their kids in return for food and a roof. The work will be long and hard but in return the standard of living will skyrocket! (If only for the very few). Don't forget that as a slave you'll never have to pay taxes again!
People who wont work at shitty slave labor jobs.dont deserve their.foodstamps. hunger would be a good motivator to behave responsibly
I'm going to call you out on a particular point.
Do you (or does anyone here) really think there the children, who have no fault in the cluster that has enveloped this economy and government, should really not get nutritional assistance?
I am cynical, jaded and getting as angry as anyone at the bullshit, the incompetence, the criminality and all the rest, but I'm not going to take it out on programs that benefit many children.
SNAP is no doubt inefficient and full of fraud, but at least millions of little kids are getting basic nutritional sustenance because of it.
your emotional appeal of "won't someone please think of the children!" was what set off my alarms.
we have an obesity epidemic among Americans, children included. Now I'm not going to get into the details of WHY Americans are fat, but I'll counter your illogic with anecdotal evidince because I'm too lazy to find the studies that back me up.
When parents buy food with food stamps, they buy what they themselves would eat. This is often not nutritious food, but garbage (Candy, snackfoods, etc). It is their right to buy nutritious food for their children with their money, but why must we subsidize their poor decisions?
If you want to "Think of the children" try doing it with money that doesn't come from other people. By subsidizing this lifestyle, we encourage it, and I hate poverty.
just STFU, you're embarrassing yourself
Broker do you have kids? I have three and my wife and I try our best to provide all five of us a healthy life style but there is one glaring fact you fail to recognize, the least expensive food at the stores is the CRAP you are accusing these people of feeding their already unhealthy children. *Sorry for the run on sentence*.
maybe some Chinese Angelina Jolie can swoop down and adopt your kids and save them from their terrible poverty environment.. ya third worlder
One day a week i work in a clinic with these food stamp types.
For most of them it is a way of life, not a temporary handout.
Food stamps need to be limited to one year in ten of a person's life. 90 percent of the people on food stamps are capable of subsistence labor at the very least. Put them on chaingangs cleaning our streets for one or two days per week before they are allowed to get their weekly foodstamps. Fucking parasites.
The Sisters of the Road cafe in Portland, Oregon, which provides meals for the poor (or anyone else who wants them) uses an interesting concept. You can pay $1.50 for a meal, or if you cannot afford that, barter 15 minutes of labor for it. They've been doing this for a long time, and apparently the majority of their meals are provided in this way. Recently they've started a push towards serving organic produce and grain-fed free-range beef, which in this bizarro world means that now the bums are eating better than many working men.
You get junked for this, but what is wrong with requiring people who get government handouts from working for them? I think a decent idea would be to allow people to sign up for trades, etc., that they may have skill in... (other than joint rolling or hiding from the police)... e.g. mowing yards for example. Then, you let say the middle class folks (the top 30% less the top 10%?) sign up for "government labor". When you come home after work one day, your yard is mowed... or cut with scissors or hand picked or whatever... if they fuck up, you call the popos and they don't get any money.
Whether it's picking up trash, picking tomatoes, changing bedpans, mowing yards, repairing fences, sweeping garages, pouring concrete, lifting boxes... or whatever... there is work to be done. If this work is properly applied to those getting the pinch from both ends, e.g. the middle class, it could help alleviate some of the pinch. I suspect that the governmental workers will largely not be taking over any jobs of americans... given these have already been outsourced to help from south of the border or have been done without to save money.
Isn't the whole point of welfare to keep people from wrecking shit? Well, what better way to do that than keep them busy too?
[I have a sneaking suspicion there will be a shit ton more people trying to fill the ranks of burger flipper as opposed to some of the potential work].
JP Morgan Profits From Food Stamp Program – Outsources Help Calls to India
Globalization is everywhere. Lol.
Edit: Forgot to mention Skank of America
More>
O'bumble's new McDonald's deal:
Order anything you like...the guy behind you has to pay for it.
A SNAP card in every aisle!
In truth, TARP/TALF/QE are far more insidious, as those programs were insidious by bailing out the reckless, irresponsible, and even criminally bad actors on Wall & Broad, and were implemented on a false (and pre-planned) 'Doomsday' threat by Goldman's inside bald headed fucker, Hank 'Stammerin' Paulson.
At least SNAP is benefitting some people who did no wrong, and are having a difficult time. This is especially true of children, who can not possibly be held responsible for the catastrophe of an economy and government we now have.
Bernanke has now directly funneled or pledge (in backstop guarantees of debt obligation) close to 20 trillion as a result of the malfeasance of financial firms and banks, so that scumbags on Wall Street can continue to screw people and governments over all around the globe, and pay themselves record bonuses after doing so.
I hardly am going to let red herrings distract me from the significant cause of harm to the Republic.
Foodstamps. A contract with the dregs of society to keep them fed so that you do not find them burglarizing your home. Or robbing you at gun point. They don't have food but most have a cheap throw away gun or two. You get my point. So for the paltry 70 billion annualy, that is cheaper than the lost property and incarceration costs the taxpayer would face.
BBBY busting a move AH, up 9%
New world, record high.
The U.S. Consumer cannot be stopped from buying sheets and towels, apparently....
LOL....
I guess we know what happens when the sheep stop clamoring for iPad2's and bedding and start buying gold coins, right?
This is really pretty bad for your health.
lol
I am just waiting for the new government entitlement program - the Netflix Stamp Program - free DVD rentals to all Americans under $30K annual income. Bread and circus people.
On this topic, "Lefty" economist Josepth Stiglitz in Vanity Fair
"America - Of the 1%, by the 1%, for the 1%"
http://www.fundmymutualfund.com/2011/04/josepth-stiglitz-of-1-by-1-for-1...
Or explanation of what we're looking at, or what the first graph is of even (fdspnum?), or what it represents, or how it concludes a correlation, where the data came from, if it's reliable....
Take your wagon and head back home.
Listen, I'm not defending the government. Our government is now a completely lawless rougue kleptocracy.
But this article, was stupid. It doesn't show anything, or explain anything. You want to make a proposition, that's fine, but back it up with your reasoning, or just keep your mouth shut.
First I take issue with this article saying nothing and then asserting "well, this should be obvious to anybody that looks at it", then I'm taking issue with what you are saying, which, as near as I can actually tell - is nothing. Explain what the article didn't. That would impress me.
A Tobin tax would fix that. Tax all stock trades at 0.1%. Give the proceeds to the poor.
agreed!
Foodstamps are jokingly known among the Illuminati as Federal Reserve ''Stamps of Approval''
http://www.youtube.com/watch?v=gynji6pEyrk&feature=related
As poverty is increasing, this is very bullish for stocks...
This needs to be a ZH headline:
Obama on gas prices: "Nothing we can do about it."
http://finance.yahoo.com/news/Obama-says-little-shortterm-apf-1680912387...
Pitching the promise of energy independence, President Barack Obama cautioned Wednesday that it's going to be tough to transition from America's oil-dependent economy and acknowledged there's little he can do to lower gas prices over the short term.
"I'm just going to be honest with you. There's not much we can do next week or two weeks from now," the president told workers at a wind turbine plant. It's a theme Obama's struck before as he tries to show voters he's attuned to a top economic concern with gas prices pushing toward $4 a gallon.
Obama said he wants to move toward "a future where America is less dependent on foreign oil, more reliant on clean energy produced by workers like you." That will happen by reducing oil imports, tapping domestic energy sources and shifting the nation to renewable and less polluting sources of energy, such as wind, the president says. He has set a goal of reducing oil imports by one-third by 2025.
But the president said it won't happen overnight and if any politician says it's easy, "they're not telling the truth."
"Gas prices? They're going to still fluctuate until we can start making these broader changes, and that's going to take a couple of years to have serious effect," Obama said.
Obama needled one questioner who asked about gas prices, now averaging close to $3.70 a gallon nationwide, and suggested that the gentleman consider getting rid of his gas-guzzling vehicle.
"If you're complaining about the price of gas and you're only getting 8 miles a gallon, you know," Obama said laughingly. "You might want to think about a trade-in."
Yes we can!
Obama gone pay my mortgage! Obama gone fill my car with gas!
WTF happened? Obama gone in 2012!
It's always darkest before dawn, or some shit like that...time to introduce a nice, big, fat Tobin tax!!!
it is true, leo. it is darkest before dawn, i see it, every morning.
It's always darkest just before it goes pitch black.
http://despair.com/
I call BS. I don't see any control for snow.
End corporate person hood; repeal the sinister citizens united decision by constitutional white out inserting natural before all persons. Do this and the common, middling and gentry get a better station in life.
I've been saying that for years, once corporations gained 'personhood' it was all over.
no shit. WTF's wrong with "entity"?? a perfectly legit description. Fuckin' lawyers and their fuckin' pimp corpromaniacs and their fuckin' shit-shovelling peasants (aka politicos). oh, did I mention the douche-bag, black-robed dementia cases?
My preferred term for coporations is "psychotic malevolent gang" but that's just me. I think words are important and should describe things as they are, precision in language is beneficial to all.
Think about the mindset of a corporation, its us against the world. We have to take everything we can for as long as we can. Compare and contrast that to your favorite gang of thugs, be they bankers or narco-gangsters. Corporations are just another name for an organized band of thugs.
The difference between people and Corporations, are they are organized and financed and people are just people, we live and die and are happy and sad, but we are finite in resources and life, Corporations are infinite in all aspects, especially capability to do evil in the name of Capitalism, that peculiar god, that doesn't really exist, but everyone is certain they have seen and been in the presence of.
I don't see too many outliers on Chart #2.
Here is the obvious correlation narrative:
Wall Street and Washington collude to inflate housing prices, devalue the currency, debase manufacturing and shift jobs overseas to inflate corporate profits. At the same time the cost of insurance and healthcare is raised 10-25% per year, forcing use of inflated equity in housing for basic needs. Coincidentally (wink, wink) outsourced manufacturing makes cheap shit from China, well, cheap.
The population thinks things are good and blows their wad. Wall Street and Washington blows their wad with bonuses, kickbacks, bribes, lobbying $$$, and finally, the money shot bailouts.
Problem: the cameras were not rolling.
Damn.
Ben and Timmah and Washington and Wall Street now trying to sell R-Rated clips with bad acting, poorly written script, pirated music track, and bad packaging.
Shit.
misfire.
Hot damn, the next bubble is dependence, disability and desperation (for the fools willing to work and pay for the freeloaders).
Me thinks Ill issue an new ETF....DDD
The irony is that the ad in the left bar is for Government issued paid cell phones, and shows possibly illegal aliens
with the mother grinning. 250 minutes!
my DDD ETF will be the play of the decade!
Gentlemen, You are all idiots. Mr Tyler Durden has presented visual observation of non-obvious relationship about two important economic indicators. He/they provided it along with statistical hipothesis about their connection (linear, non-linear, log, delayed, etc, whatever). As a first stage of proof he/they provided simplest calculation of "correlation". By math stat rules, established by Gauss, Laplace etc the term "correlation", can NOT be applied directly, bacause we do not have the proof that the observed processes are NORMALLY DISTRIBUTED. Therefore the obtained "correlation" can not be used as a final verdict on a hipothesis, BUT can serve as basis of further investigation. The further investihation can be done by robust (non-normal) methods, or (if fail) by non-parametric methods (for a process with totally unknown distribution, or by calculation the actual distribution) .
Personally, I prefer this further investigation be provided by attorney general of New York, or Attorney General of United Stated of America. This is not a matter of further MATH investigation. This is a matter of a CRIMINAL investigation.
So, Mr. Tyler Durden is right, and you gentlemen are idiots - as well as Attorney General.
P.S. Did you know that the main Dept to investihate this is ... Secret Service of USA?
http://www.secretservice.gov/mission.shtml
So let me get this straight; the Secret Service has been in hibernation since 1963?
Yes, sir. That is correct. And... Mr. Obama does not wear any longer a gift wristwatch he got from Secret Service:
http://www.onthedash.com/docs/obama.html
That is a nice watch they bought him; seems an insult for him to not wear it if they are watching his life all the time.
My Seiko Kinetic has been fantastic.
Exactly.
It will be a difficult task for them - to decide which part of their "mission" to provide: to defend Constitution (their oath) and monetary system of USA, OR (Big OR, very Big OR) to defend top persons of US Gov, members of (not jewish only) financial mafia, who are destroying the monetary system and (therefore) the US Justice system and (therefore) the US Constitution.
The OR is big because now these two parts of a mission are not compatible.
BTW, take a closer look of what exactly Mr Obama writes of a wall desk teaching at the University of Chicago Law School in September 1992 on the pic from the wristwatch link above.
I am always saying Film Photography Art is a kind of good magic mystery and has some prophetic features.
http://www.onthedash.com/pics4docs/Obama/ObamaLecturer.jpg
dupe
de dupe (sorry)
I am of the opinion that its high time that this 44.2 million people number on food stamps have some sort of heuristics or birth/death like adjustment made immediately.
These prompt and effective revisions would make me feel much better.
I did not read through all of the comments, so sorry if I repeat any points already being made. I think, however, Tyler came across an interesting idea. So I downloaded some time series and put some more econometrics in it, my main findings are:
1. There is a positive relationship between the *monthly change* of the number of people on food stamps (FDSPNUM) and the *return* of the SPX. In fact a 1pp monthly increase in the SPX increases the number of food stampers by 5. (for those econ-geeks: Adj. R2: 29.76%, ADF Test reject unit root, so time series are stationary).
2. Now lets see where it comes from, because with 1. people could argue that the regression is to easy (not any control variables present). So I took the excess return of the financial industry (SPX-Fin) over the SPX: The effect drops to 3.02 people per 1pp increase in the *excess return*, but statistics still being significant.
3. Whats striking me is the following observation. If I lag the return of the SPX-Fin by e.g. 9 month, so I explain the monthly change in the number by the return of the financial industry nine month ago my results are even better. Note that the average monthly return is negative, so a negative coefficient means an increase in the number of food stamps.
Concluding: There is indeed explanatory power to the change in the number of food stamps and the return of the SPX, furthermore controlling for the financial industry the effect is stable. Of course this could be an artefact and I wouldn't be surprised if adding usual controls the effect will get smaller...
Still: Past returns of the financial industry increase today's number of food participants.
yep, it is because of the hyper-inflationary 'rally' in almost all prices, isnt it?
well, lets stick to gold / silver / real estate / stocks / other hard assets and lets avoid paper 'assets' ... it is as easy as that :-)
cheers!