Why Are Americans Driving Straight Into The Non-Recovery (And 800 On The S&P)?

Tyler Durden's picture

One look at Americans' driving habits represented by total vehicle miles travelled through the start of the Second Great Depression shows a simple chart: an uninterrupted diagonal line from the lower left to the upper right, which makes sense - a growing economy means more commuting, means more commerce, means more demand to get from point A to point B, means more miles driven, and so on.

Then something happened.

As the chart below shows, starting in December of 2007, the date which according to the NBER is the beginning of the most recent recession (which also according to the NBER ended in June 2009) the number of miles driven flatlined and has been virtually unchanged around 3 trillion miles every year for the past five!

This, despite the US economy (GDP) supposedly rebounding in 2009 and once again at new all time highs. Maybe someone besides us has a slight problem with the chart below showing the complete break between GDP and driving habits starting in 2003, or around the time the Federal Reserve went all in to mask the collapse of the dot com bubble, by first reflating the housing bubble, and then after 2008, the central bank bubble where every single central bank has literally gone all-in on to reflate the Mother Of All Bubbles (MOAB).

Why the record disconnect?

And why instead of growing alongside the economy, as it did in the past as this year-over-year chart of miles driven shows, at least until the end of 2007, which until that point never had a year over year decline, have the driving habits of the American people - always so eager to
drive the 2 minute trip to their neighborhood retail outlet - suddenly

The chart below zooms into the recent history and shows that for the past year the 6 month moving trendline has been a disturbing one showing a consistent decline in the miles driven even as the economy, courtesy of the Fed's ongoing market manipulation, is said to be "recovering."

* * *

But we have saved the best for last: the chart below shows the correlation between miles driven and the S&P. Is it just us, or did something very odd happen in the late 1990s? And if the latter, is it safe to say that Bernanke has been responsible for about 50% of the upside in the Stanligrad & Poorski 500?

Source: Moving 12-Month Total Vehicle Miles Traveled (M12MTVUSM227NFWA)

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Frastric's picture

There's some mileage left in the S&P...

smlbizman's picture

....were did all the rubber go that wore off all those tires for all those miles?

Zer0head's picture

The 29-year-old source behind the biggest intelligence leak in the NSA's history explains his motives

Sunday 9 June 2013 3.18 EDT


Baldrick's picture

He seems like a nice ETHICAL kid and I truly hope he stays safe. Oh yeah, and the nsa can fuck off. What a waste of precious resources.

James's picture

I got your name from a friend of a friend
who said he used to work with you
Remember the all night creature from stereo ninety two
Yeah I said could you relate to our quarter track tape
You know the band performs in the nude
He said uh huh don't call us child we'll call you

francis_sawyer's picture

The only purpose for the S&P anymore is to give idiots a false indication that the economy hasn't collapsed [which it HAS]...


The only issue anymore has to do with "bagholders"... Up until 2008, 'retail' could always be counted on to be bagholders'... But since then [especially since August 2010], an uncomfortable number of 1%'ers are set up to be bagholders [because it's all printed money that was given to them for free]...

So were in the 'Mexican Standoff' part of Reservoir Dogs... [& now it's cheesepope vs. cheesepope]... Have fun lads...

Stuck on Zero's picture

All this goes to prove that it faster, cheaper, and much more economical to sit at a desk at the Fed and print money than to drive all over doing things.


Imminent Crucible's picture

By golly, you're right!  And the corollary is, think how high the S&P would go, and how (paper) rich we'd all be if the Fed would just grant EVERYONE the right to counterfeit Ben Franklins.


SRSrocco's picture

THE GREAT DIVERGENCE:  Ever since QE3, the FED and member banks have propped up the EQUITIES, TREASURY MARKET and REAL ESTATE, while at the same time destroying the price of gold and silver... thus killing investment demand.

However, the FED'S BUBBLE will pop and their will be a stampede into hard assets at some point in time.  I wrote about this in the link below:

Silver Investment Demand: The Ticking Time Bomb


AllWorkedUp's picture

" will be a stampede into hard assets at some point in time."

Hmmm, I suppose at some point that may or may not be true. I've been getting my ass kicked in this stuff for so long now I'm not so sure. The stampede would imply free and fair markets and also physical demand dictating price. The fucks in Comex will never, I repeat, NEVER, let that happen as long as they are setting prices.

ninja247's picture

another great indicator for growth is diesel consumption. 

jerry_theking_lawler's picture

isn't it obvious, Americans are either flying (rich) or riding the bus (poor)....pretty simple.

Skateboarder's picture

Bus rides cost $2 one way man. Monthly passes are $70. Driving to work costs me $30/week - biking is free of charge so that's what I do. A 24oz Bud/Coors/etc also costs $2. If you only have $2 for the day, you got a choice to make. Not that I have the misfortune of making that choice at the moment, but I've had to in the past and probably will in the future.

Ham-bone's picture

looking for correlation to economic details w/ the S&P (or bonds or or or) is a fools game.  The Fed broke these and now owns these "propaganda tools".  Do not look for "market" based pricing to return.

Sorry to say but from 2009 til now...the winners are the CB'ers and their believers.  PM's...not good.  Those looking for a collapse...not good.  Not happy or comfortable with this but from '09 til now...there is no argument against who the winners have been.  Doesn't mean they have won the war...but certainly many CB haven't lost a battles from '09 to '13. 

Racer's picture

Gald to see it written as it should be... the Second Great Depression, or arguably the Greater Depression

max2205's picture

That spy chart shows that ben has stabilized the market...not.  ben and greenspan ...useless except to panic out the sheep and line banker profits

AgLand's picture

Why has driving flatlined?

Cheap Peak Oil now ruled the market. When prices rise to a certain level, driving drops off as people get priced out of discretionary trips.

Throw in the non-inflation that filters thru everything touched by oil and the avge US family is getting hosed.

If avge prices rise more expect demand to fall off more until incomes adjust accordingly. Or prices drop again.

Thank you Bennie and the Boys for screwing over the nation in favor of your banksters buddies.

q99x2's picture

I used to drive a lot but haven't so much since I took up jogging about 3 years ago. Maybe that's it.

logicalman's picture

Gave up my car in favour of a very nice mountain bike 3 years ago.

I'm now fit as the proverbial butcher's dog and have spent gas money on metal.

So far, so good.

Feel better both physically and mentally.

At 58 I can keep up with my 18 year old son over a couple of hours hard trail riding.

Hardly any downside at all, except for taking empties back to the beer store!

James_Cole's picture

I'm now fit as the proverbial butcher's dog and have spent gas money on metal.

So far, so good.

Feel better both physically and mentally.

That's what jogging and biking will do for you. Funny, a zillion diet programs out there that don't work when the answer is pretty simple..

Also, whenever I see these stats related to driving being on the downturn the only thing I can think is GREAT. 

TheMerryPrankster's picture

right, apparently you gave up thinking when you gave up driving. so you jog to the grocery store and jog home with 6 bags of groceries. So you jog to the hardware store and jog home with 6 sheets of plywood and 4 bags of cement?

I smell bullshit....


RockyRacoon's picture

You're just looking for a fight where one doesn't exist.   It's obvious that it was discretionary driving that was being discussed.   Be reasonable.  

For this same reason, I bought a scooter for short trips, including the grocery store where a LOT of stuff will fit in the trunk case I installed on it. 

Now... for your Fight Club ass-whoopin'.  Step forward.

tango's picture

I don't think he means "literally". Biking is perfect unless you live outside the city, don't have perfect weather, never buy grocies or garden supplies, have kids or go out at night.  Besides that, it's fine. I tried biking to work when I was a consultant but the extra time required (trip, parking, shower, etc) wasn't worth the few dollars I saved.  I go to Costco, Lowe's, financial meetins, famers co-op and out to eat.  The difference is that increasingly I am doing all these in one trip.  

Divine Wind's picture




I wonder if the EMPLOYMENT bubble bursting might be a contributing factor?

When tens of millions of people lose their jobs, it sure as hell will have a difference in the aggregate number of miles driven.

tenpanhandle's picture

Half the population is paid to stay home and drink beer.

DeadFred's picture

The Budweisers don't drive themselves to the liquor store though

francis_sawyer's picture

Budweiser is like that piss contraption that Kevin Costner had in the movie 'Waterworld'... In goes PISS... Out comes...........................Budweiser [which ~ can be recycled into more piss ~ sans the accompanying 'flag waving' bullshit]...

logicalman's picture

Budweiser - Coors Light et al.....

Like making love in a canoe....

fucking close to water!

Milestones's picture

Loved your post!!        Milestones

Agent P's picture

I once sent some Budweiser to a medical lab for testing, the results came back that my horse had diabetes.

TheMerryPrankster's picture

It was the sugar content of the beer. I wouldn't use that lab again, there are markers they can use to detect whether the liquid they are working with is urine, and apparently they didn't bother to check.

sounds like a great lab to send a piss test for drugs to, just send them distilled water and you'll get an all clean....

Curt W's picture

Down for being too dumb to see Agent was telling a joke.

B2u's picture

The best mileage gained is when going down.

Kreditanstalt's picture

ZH, you don't have to endlessly show us why the S&P is "overvalued".  Of course it is - ACCORDING TO OLD THINKING.

Why DO stock indices have to conform to the real economy anymore?  NO RELATIONSHIP!

The stock "market" prices have NOTHING to do with underlying company performance. 

Say it again: stock "market" prices have NOTHING to do with underlying company performance.

For the leveraged big players this is a DESPERATE search for any yield at all, heedless of old-time definitions of risk.  Yield-seeking has now reduced players to gamblers and the markets to casinos.  These stocks do not stand for "companies": they are just counters to be placed on any momentum-providing number. 

This will go on precisely until there comes a better yield-providing alternative asset class...never mind risk - or fundamentals - or technicals - or "Hindenburgs" - or whatever...

U4 eee aaa's picture

The Elites have walked out on us. The marriage is over. America is cuckolded. They have run off with their SECretary

ebworthen's picture

Banker to Croupier at Roulette table:  "Red 3 at 35:1 odds please."

Banker soft whisper into lapel microphone:  "Ben?  Magnet on Red 3.  What?  Yes, I know pensioners, savers, and retirees have all their chips on Black/Even.  Right, thanks, we'll have your money at the Cabana."

Urban Redneck's picture

Your position is clear - "This will go on precisely until

But of course, this time, it really is different... Because you're so much smarter (or some other daft bullshit)...

There is a vast chasm between "stock market prices have NOTHING to do with underlying company performance" and whether or not S&P is "overvalued" or more accurately at risk of a price correction.

Kreditanstalt's picture

I didn't say I was in this market!  I'm out, except for precious metals miners...

But trying to pretend that this market will crash BECAUSE it is out of line with company fundamentals is deluding yourself.   It WILL crash, but ONLY when there is some other game available with better yield prospects...it's all about DIVIDENDS and MOMENTUM.  There are no "value investors" left.

Urban Redneck's picture

1) I never said you were in the market

2) I'm not pretending that the market will crash of because is it out of line with company fundamentals

More substinatively- your notion of better interest rate alternatives is inconsisent (and I'm being polite) with equity market history- beit the ancient history Pre-WW2 or modern history such as the 08-09 selloff or the flash crash.  If you think otherwise- point out the money flowing out of equities and into higher yielding debt products or derivatives during 08-09 or on May 6, 2010.  

Or to quote myself from a mere 12 hrs ago-


It's always "junk" bonds that cause the shit to hit the fan.  

In an economy where money is a product of credit creation, and rational price discovery of credit is suppressed - the inevitable outcome is irrational exuberance and then correction (credit collapse).



Kreditanstalt's picture

"...into higher yielding debt products or derivatives..."

There AREN'T any right now, at least in the eyes of the momentum-chasing hot-money monkeys and Titanic-speed moving slow money dividend-seeking investment fundees who comprise the "market".    

Urban Redneck's picture

Any trip to 800 on the S&P that doesn't involve a slow grind over several years would take the form of a CRASH and it would NOT be caused by the sudden appearance of such a buying "opportunity" in higher yielding instruments.

You don't happen to live in the vicinity of Fukushima do you?  I could understand experience with the Nikkei (or radiation sickness) leading to such thinking, but otherwise I'm at a loss here, as I was asking for recent historical justification of or evidence to support your investment thesis.

Kreditanstalt's picture

So you don't believe the "imminent crash" thesis?

TheMerryPrankster's picture

all investment is based on faith. The faith the central bank will continue to subsidize and inflate the markets with liquidity (captial) is the current element of faith that secures participation.

formerly it was the faith of investing in companies that were growing (markets) or growing (profits) - ie intel j&J etc.

the faith of fundamentals was distributed over more companies and more investors and was more stable but it still collapsed every now and again - 1929, 1987, etc

With the new collosus having been built on a single pillar of sand and a constant hurricane dancing about, it is only a matter of time until their paths meet.

The shame is so many are back door invested, there jobs depend on a functioning economy, when the stock market goes next time, it will drag down even more of the real economy.

Poverty increasing is the only real trend you can count on. Foodstamps, children in poverty, wages, disposable income all the harbingers point to an existing economy far different than that painted by the gov and the msm (the other arm of the gov)

the reality is the stock market is a fantasy waiting for the dreamers to awaken.

Gasoline is too expensive relative to wages ergo driving is reduced, how it is reduced is merely symptomatic, not causative. People don't ride bikes causing reduced gas consumption because of no reason at all, people don't work from home for no reason at all, and one very big reason is the price of gasoline.

When something cannot continue, it will not continue, including gasoline use and the rise of the stock markets.


James_Cole's picture

There is a vast chasm between "stock market prices have NOTHING to do with underlying company performance" and whether or not S&P is "overvalued" or more accurately at risk of a price correction.

Are you suggesting that stock prices reflect company performance? 

Q. What's the difference between Western Capital Markets and a ponzi scheme?

A. There isn't any. 

Urban Redneck's picture

Hell NO, I'm simply pointing point the naivety of suggesting the status quo can be maintained indefinitely (infinitely).

Even Chair Satan the elder admitted Irrational Exuberance (and hence a disconnect from underlying fundamentals) in 1996 when the NASDAQ still had 300% upside to go.  Market reflection of underlying corporate equity fundamentals has been dead a long time.

BTW - in case it wasn't obvious- CRTL-C/CTRL-P dictated the word choice of that sentence.

James_Cole's picture

There is a vast chasm between "stock market prices have NOTHING to do with underlying company performance" and whether or not S&P is "overvalued" or more accurately at risk of a price correction.

I misunderstood what you wrote here, pretty common to hear people say this as meaning that equity markets are a bit overbought and maybe in for a minor correction but generally reflect fundamentals. 

Absurd, but I read it ALL the time. Not to mention TV, I just had CNN money on (seeing if CNN would be covering the NSA leaker Snowden as breaking news) and they were discussing gold in a bubble, equity markets looking good etc. 

Kreditanstalt's picture

Well put, James...anyone who even for a minute seriously believes or states that these markets represent " company fundamentals" is hopelessly naive, corrupt, on government money or selling something...

razorthin's picture

I hope the impending 90% crash finds you flat-footed.

May the flatulence of a 1,000 Bernankes overtake you on that fateful morning.