This page has been archived and commenting is disabled.
One of these is not like the others. Well, two...
- advertisements -
Contact Information:
Tips: tips [ at ] zerohedge.com
General: info [ at ] zerohedge.com
Legal: legal [ at ] zerohedge.com
Advertising: ads [ at ] zerohedge.com
Abuse/Complaints: abuse [ at ] zerohedge.com
Suggested Reading:
Make sure to read our "How To [Read/Tip Off] Zero Hedge Without Attracting The Interest Of [Human Resources/The Treasury/Black Helicopters]" Guide
It would be very wise of you to study our disclaimer, our privacy policy and our (non)policy on conflicts / full disclosure. Here's our Cookie Policy.
This is a dumb chart. Feel free to downvote me.
Why, because it shows the results of "money" spent and what little benefit, if any, there was from the expansion of the fed's balance sheet?
The chart is dumb, because GDP shouldn't be on the same scale. Stocks shouldn't ever have a 1:1 coorelation with yoy GDP growth. There are a million ways to show that stocks are overvalued and that GDP growth is weak, but this chart doesn't show that.
Damn! It sure fooled me then!
Courtesy Of FED Et AL...
GOOD Is BAD ...
BAD Is GOOD ...
TYLER, You Could Add GOLD n' SILVER In There, Fit Right In...
You're right that GDP should not exist on the same scale. But you're assuming the wrong message here. The above chart shows the massive wealth transfer away from middle class America, as real disposable income drops and wealth in aggregate does not because it includes the wealthy classes. This ultimately will make the market overvalued. But it is not overvalued because of it's growth rate differential to GDP growth per se. But either way... the chart spells suckage.
This chart illustrates where the flow of money went from the expansion of the fed's balance sheet. It also shows that the fed's printing is not translating to economic activity like we are being led to believe. Moreover we can see that thanks to the misallocation of capital, the markets are no longer a discounting mechanism to signal the health of the economy. I'm sorry if you can't see it, others clearly can.
Wait 'till next year: the real disposable income will plummet as everyone pays the bills for ObummerCare, and the GDP will rise as everyone pays the bills for ObummerCare.
Not really. The bulk of the money went to Government "workers." They're running out of taxpayers...and now interest rate a are moonshotting "but for Fed stimulus." The criminals are rounding themselves up and about to be Terminated.
You are missing my point. I don't disagree that Fed money is being misallocated, I just don't think GDP growth should be on the same scale. Do you think that since the SP was up 27% we should have 27% GDP growth? Also, prices are a leading indicator and GDP is lagging, so the data is premature.
Agreed. Scale and time make it odd to put all of this on one bar graph. But you are fighting City Hall here. There seems to be a daily posting quota that must be met regardless if there is just no material new news. So you have to skim over much in reading here, hoping for one new nugget every week.
IT'S JUST A FUCKING CHART! GET OVER IT!
Probably a better chart would show the total money supply vs. GDP. That is a disturbing chart.
http://research.stlouisfed.org/fredgraph.png?g=qoI
See where the GDP tracks the money supply almost perfectly on an index (neutral) scale, right up until the depth of the financial crisis? See what happened afterwards? If you buy into the idea that the USD is essentially backed by the US GDP, this should greatly concern you.
They're both showing % growth, so I don't get your argument that they shouldn't be on the same scale. Nobody said there has to be 1-to-1 movement of the market and the economy, but since the market is supposed to be representative of the economy, I find it quite interesting that it's up 10-to-1.
slotmouth , you are like the smart ass in the class who raises his hands every time and thinks that the rest doesnt know wtf is going on , when in rality the rest just doesnt have the need to feed their ego in the same way as the smart ass ie . you .... of course the chart doesnt apply .... but we all agree that even if GDP is a lagging indicator , dont you think that if you look at the sheer numbers to the left of the chart the numbers to the right even though smaller , wouldnt have shown some moar lovin' ?? anyway ... i dont even know why I m replying to this post
But the GDP should be where all of the growth in the other items listed should originate, for it should be the growing ecnonomy that is the source for the other increases.
But it's not.
And it's not coming from corporate profit growth either, which is down to a 4.67% rate of annual growth(after taxes). That's down from 10.54% two years ago and 8.22% one year ago(Strengthening economy my ass...)
It should be pretty clear to all but the most ignorant which metrics are going to be correcting soon.
Whaaaat?
GDP should be whatever Mister Yellen says it is.
Comrade.
While I agree with your intent, your message/delievery gets an 'F'. Replace GDP with margins by sector, thats when the real fun begins.
You are right, GDP shouldn't be on the same scale but it is now because our "bettors" have put it in the equation.
Anyway, I am so going backward in time to take advantage.
"Stocks shouldn't ever have a 1:1 coorelation with yoy GDP growth"
Subtract debt and GDP is on the wrong side of the zero line, as well.
I'll explain...
Title: Spot The Odd One Out
Mr SlotMouth believes GDP plot is the "Odd One Out".
Jeeezzzusss....the guy WINS a prize!!!
Clean and simple.
Dude it is percentage change, what are you talking about.
I agree, real GDP change was actually much worse.
Fuck GDP:
WHAT'S WRONG WITH THE GDP AS A MEASURE OF PROGRESS
Since its introduction during World War II as a measure of wartime production capacity, the gross national product (now routinely measured as gross domestic product -- GDP) has become the nation's foremost indicator of economic progress. It is now widely used by policymakers, economists, international agencies and the media as the primary scorecard of a nation's economic health and well-being.
Yet the GDP was never intended for this role. It is merely a gross tally of products and services bought and sold, with no distinctions between transactions that add to well-being, and those that diminish it. Instead of separating costs from benefits, and productive activities from destructive ones, the GDP assumes that every monetary transaction adds to well-being by definition. It is as if a business tried to assess its financial condition by simply adding up all "business activity," thereby lumping together income and expenses, assets and liabilities.
On top of this, the GDP ignores everything that happens outside the realm of monetized exchange, regardless of its importance to well-being. The crucial economic functions performed in the household and volunteer sectors go entirely ignored. The contributions of the natural habitat in providing the resources that sustain us go unreckoned as well. As a result, the GDP not only masks the breakdown of the social structure and natural habitat; worse, it actually portrays such breakdown as economic gain.
I. GDP Treats Crime, Divorce & Natural Disasters as Economic Gain
II. GDP Ignores the Nonmarket Economy of Household & Community
III. GDP Treats the Depletion of Natural Capital as Income
IV. GDP Increases with Polluting Activities & Again with Clean-Ups
V. GDP Takes No Account of Income Distribution
VI. GDP Ignores the Drawbacks of Living on Foreign Assets
I thought the federal govt had just decided to adopt an additional GDP measure that sums production at all stages not just final. I guess the broken windows and Katrina's and broken families would still count as positive, but at least consumers spending would stop being king.
I'd like to see it in dollars instead of percentage.
You're right. The same chart logic could have been used in 2008. It appears the group is feeling free today. The Friday after Christmas will do that. I heard the Fed is launching an ETF next year, Blackstone will be the underwriter...
What's "dumb" is that GDP includes government spending, and government spending is from a growing debt.
Just think how bad it would have been.....
Look on the brightside, they could have attempted to compete with twitter!
Food stamp recipients on the extreme left.
Wookie P Tang following the Danish PM selfie" on extreme right.
should have added the price of gold/silver in 2013. now, that would have been funny.
Adding the gdx might have been just funny
In a world where anything short of a complete disaster can be perceived as bullish, this chart makes complete sense. As long as the sun comes up in the morning, there is no reason not to buy. What else would they do for a living? I mean if the market was to go down, the selling would be over in a few days and no one would be buying except the Fed. I see this as a limited opportunity for the pit bosses and dealers.
The thing that I can't figure out is WHO IS SELLING. ??? An actual market requires buyers and sellers, so who is selling?
The market goes up 20 to 100 points per day and on down days it is down only 1 to 20 points and then maybe once a quarter it is down 100 on a single day. One would think that 401k plans are still buying each month as workers' pay is being automatically deposited each pay period. Do the markets really know who owns what anymore, or is it left to the big firms to just know internally??? What if the entire system is being run like Bernie Madoff's business???
what do you mean "what if"?
Corporate directors and insiders are selling, the Fed and corporations are buying. It is as simple as that.
Wouldn't it be awesome if real commerce worked that way. You could use near free credit to have your company buy unlimited amounts of its own product. You could just print money.
Well that is actually how Nike works.
I don't believe so. Credit default swaps were created and sold because there wasn't enough shit to sell but there were plenty of buyers. What has changed on the buyer side? If anything, with QE infinity there is even more buying power, but what is there to be sold? Gold and silver are slammed so it looks like no one is buying physical. IPOs are down so once again, who is selling and what are they selling???
I will have a few drinks this weekend an ponder but my theory is that just like libor and other conspiracies, the largest institutions, if not just purely making up the numbers electronically, are colluding, and just selling the same stocks back and forth to push their market values ever higher.
yes
..and if you look at individual stocks, you realize you'd have to have a good and diverse portfolio to make a few bucks last year
Main index up and a few MOMO stocks.
The rest of the story is not that sexy
There is no free lunch and if you ponder these things, TPTB have you exactly where they want you.
Next thing for you to do is pushing the TBTFATH button.
Good luck playing!
I don't play but my money is forced to play via 401k and pension funds.
Exactly. The 401K's and Pensions must buy stocks. So Wall Street will make sure they have stock to buy.
Are you forced by law or contract to lose wages to these things? I'm not
Pretty sure that pension funds also offer bond funds as a choice -- pick yer poison!
Cattle breeders (High end ranchers) have been known to buy each others high price prize winners and their genetic product at ridiculous prices. The ordinary rancher looking to buy a better bull or two provide more profits to the breeders that way.
Hint hint, it is! Ponzi dollars = ponzi market. Always a greater fool...
Zerohedge never gets tired of comparing real to nominal if it supports the meme of the moment!
Where is the price of gold on this chart? oops, forgt where I was...
"Where is the price of gold on this chart?"
Phyzz or GLD? We may not know for a while longer what the true price discovery of phyzz is - but that's coming, perhaps with confiscation soon thereafter...hope you live near a deep lake, with a leaky rowboat...
Keep your tinfoil hat firmly in place!
Cali just banned our lead investments and the Feds ban use of other metals because as being armor piercing. Gold can get effed with in this way too.
To live a middle class lifestyle you need to make at least $120k a year. A level that would label you rich a decade ago. Almost any neighborhood in Massachusetts that is considered middle class takes at least that much. Places like Cambridge are out of reach of anyone bringing in $50k a year. Lexington and Concord are out of reach for some millionaires. Even places that would make Appalachia attractive have average home prices in the $250k range. Middle class cities like Worchester, Lowell, Fitchburg, and Leominster have turned into shitholes overrun with Hispanics. Check out the school system for the Worchester district, 80% of the students on reduced priced lunches and about 5% passing the state tests.
$50k a year is like $20k ten years ago. You can barely make it, and you are essentially living in poverty. At $50k you aren't eligible for any assistance. Being on welfare is an immediate better choice.
If you need to pull in upwards of $100k a year to at least feel comfortable, and less than 10% of jobs pay that level, how does this country have a future? Especially when the majority of the $100k jobs are in the healthcare sector that is going to get obliterated through Obamacare.
I see all of these people living in $300k homes they bought in new developments the past few years and wonder what they do. How are they making ends meet? The answer I suspect is that they aren't, living on credit.
"$50k a year is like $20k ten years ago. You can barely make it, and you are essentially living in poverty. At $50k you aren't eligible for any assistance. Being on welfare is an immediate better choice."
There's the goal for at least one and 3/4 of the 2 political parties, and the TPTB for sure. Total dependency, total debt slavery.
And if your family makes 200k in a similarly overpriced SF bay area communities your tax rate on every additional dollar is something over 50%. Lots of smart people around here uninterested in that deal. A lot of smart companies setting up in less retarded business climates, overseas or in the neighboring USA. Which is another reason the area is a source of underemployed, early retired, no longer searching, "independent consultant", or just-sitting-around types of people of high skill and education. It takes a few decades to become Detroit in the industrial age but it may take a shorter time in the knowledge worker age.
so what would happen if we allowed the group on the far right (per capita income disposers) the mandate to print themselves 85 or 75 billion per month in perpetuity, and made the Fed do something to earn it from that group?
Just a thought. Seems like kind of a rigged game on the surface of things. But I'm just a serf so maybe there's a super good reason to have it set up this way instead.
what far right? There's no right or left, that's just puppetry for a show for children.
Do the same charting for each year, and you'll see the definition of "diminishing returns"
Just make sure you exclude energy production...
OOOPs, a government openly following an inflationary policy is corrupt. A central bank executing an inflationary policy is crimminal. Inflation sucks the bone marrow from the poor, middle class, ignorant and powerless.
And just think, instead of giving that money to the banks the fed could have been giving every man woman and child in the country about $250 per month or $3000 per year.
But every man, woman, and child wouldn't kick back some to the Fed members and then hire them on to the staff once they retire from the Fed.
"A healthy and diversified stock portfolio should always include a good amount of tech companies from the NASDAQ"
Yours Truly Welcome,
Sir Alan
reading these posts i realize, SLOTMOUTH is correct. this chart, from left to right is ZH shorts, out of the market, Obama haters, long PM's, and finally, just long.