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
collapsed.

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)