Monthly Archives: March 2012

The Incredibly Non-mean-reverting Corporate Profits

For all of the talk about the necessary mean reversion in corporate profits, let’s start with auto-correlation of Corporate Profits as a % of GDP: No such mean-reversion.  Future profits are actually well correlated with past profits, but the relationship … Continue reading

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Population and Growth

Contributing to the discussion on the nature of growth, I present the lead/lag correlations between population growth and economic growth. 

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Will Mortgage Rates Follow Treasury Rates Up?

The correlation between the 30y mortgage rate and 10-year US Treasury Bill rate is generally pretty strong and stable.  From 2004 through the July of 2007, the spread between the two stayed in a tight 54 basis point range.  Since … Continue reading

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Transfer Payments in Recovery and Recession

In our on-going series comparing a single variable across multiple recoveries and recessions, we now present Transfer Payments as % of Personal Income. Let’s take about heading into recession: Transfer payments as a fraction of income actually increase heading into … Continue reading

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Auto Sales – Into and Out Of Recessions

Before a recession begins, auto sales have already begun to flag: They have also typically lagged recovery in past situations, but certainly not this one: One thing that looks clear is that it looks nothing like an economy heading into … Continue reading

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What will it take to get higher interest and inflation rates?

Some historical recovery cycle comparisons to fuel the discussion: Wage Growth: Real 5 year rates: Real Fed Funds Rates:

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