[RD] Daily Graphs and Charts

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Mise said:
The right axis doesn't even have zero line. When you're doing two-axis graphs, and both graphs have a zero present, the zero line should go all the way across and join both sides. It's fine for the scales to be different (that's the whole point of two axes!) but if the zeros are in different places it looks terrible.

The other point, which is less important but still irks me, is that the major unit on the right axis is 19. NINETEEN?! Why are we expected to count in 19s all of a sudden? The point of the gridlines / major unit is so that you can easily see roughly what number each point is. If the scale is 10s, and the line is roughly half way between two gridlines, then I know the number ends in a 5. If it's 1/3rd up, then it ends in a 3. Etc etc. Having the major unit as 19 makes it unnecessarily difficult to see what the numbers are.

Presumably, they've done it in such a cackhanded way because they wanted to show a correlation between petrol price changes and consumer price changes, and setting the units to be more sensible, and to cross through zero at the same place, makes it more difficult to show that. Having said that, it looks like the red line is still "too low"; making zero on the left axis correspond to -20 on the right axis or something (thus shifting the red line up a bit) would probably make the correlation even more obvious. So maybe it's not deliberate, just that those were the default scales and units when they plotted it in Excel and they don't know how or why they should change it.
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Sup yo, thank me later http://research.stlouisfed.org/fred2/graph/
 


NYSE margin debt at unprecedented extremes. this means a lot of money is being used to assert leveraged bets on a rising market. which of course raises the question of what happens when those bets are in aggregate wrong. fortunately and as the graph shows, we do have two recent precedents of such an event.
 
Cool graph Monsterzuma, I might snag that.
 
How do you know they're betting on a rising market? Surely they are just as likely to be betting on a falling market. I mean, there are a crapload of 2014 bears around.

Also, it looks like a change in credit balance is a leading indicator, i.e. the balance goes sharply towards positive from the negative peak, and then ~6 months later, there's a crash. So we're okay for at least 6 months. This would be easier to see if the credit balance axis was flipped, but maybe "they" don't want you to see that...
 
Bets on a falling market put downward pressure on prices. The price doesn't reflect the volume activity but how much people want to buy there. I suppose there might be a way in which betting bearish could directly drive up S&P prices but I haven't learned it or given it much thought.

What's interesting is that the credit balance largely correlates to the private sector flow-balance in the sectoral-balances identity, which is a mirror of the government sector flow-balance.

I'm starting to think that the stock market is inversely related to the health of the economy and not from a structural inequality standpoint but from a structural stocks-go-up-because-real-investment-opportunities-are-down standpoint.
 
Hygro said:
I'm starting to think that the stock market is inversely related to the health of the economy and not from a structural inequality standpoint but from a structural stocks-go-up-because-real-investment-opportunities-are-down standpoint.
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I've been saying that for a long time. Bubble are what happens when a lot of investable cash is chasing too few real investment opportunities.
 
How do you know they're betting on a rising market?
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I don't think a lot of people ever short much on leverage. way too risky under normal conditions.
 
Cutlass said:
I've been saying that for a long time. Bubble are what happens when a lot of investable cash is chasing too few real investment opportunities.
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Well that's definitely true, and related, but a bit different. That's saying excess moneys go towards inflating asset prices in the face of poor real-investment opportunity (perceived or real).

What I'm saying is perhaps additionally asset prices are pushed up because of a lack of excess hard money. Why would it be that every time the economy grasps its asymptote for its current form (the distribution of aggregate supply and the amount of hard money demand to meet it) the stock market rallies way past that point? As in, you can chalk it up to investor psychology thinking everything is great so unleash the leveraged buys, or perhaps there's something else in play that's less psychology and more mechanistic.

Brainstorming here but could it simply be that there's just a total lack of new buyers (from real-money-meets-aggregate-supply growth) perversely creates a game of price-rise hot potato?

That really it's caused by a money shortage?
 
Hygro said:
Well that's definitely true, and related, but a bit different. That's saying excess moneys go towards inflating asset prices in the face of poor real-investment opportunity (perceived or real).

What I'm saying is perhaps additionally asset prices are pushed up because of a lack of excess hard money. Why would it be that every time the economy grasps its asymptote for its current form (the distribution of aggregate supply and the amount of hard money demand to meet it) the stock market rallies way past that point? As in, you can chalk it up to investor psychology thinking everything is great so unleash the leveraged buys, or perhaps there's something else in play that's less psychology and more mechanistic.

Brainstorming here but could it simply be that there's just a total lack of new buyers (from real-money-meets-aggregate-supply growth) perversely creates a game of price-rise hot potato?

That really it's caused by a money shortage?
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Integral wrote something once about the irrationality of market investing. Looking for a few of the things we talked of gets us THIS and THIS. I can't find the exact post, and it might not have been in that thread. The short version is, market speculation in the buying and selling of existing assets is always irrational, because it is always done on the assumption that the other person has misunderstood the true current and future value of those assets.
 
Er it wasn't Occupy--what the hell was going on in early-mid 2012? The mainstream briefly catching up to Occupy's culture just as it was dying out?
 
Could be, that's still pretty delayed though.
 
Good one!

I know they're not mammals, but there's an awful lot of chickens out there.

http://visual.ly/there-are-more-chickens-people-world

I don't get that chart. There's 19 billion chickens in the world, but only 371 million in China - which has the largest flock in the world. That doesn't make sense, does it? I'd have expected China to have about 3 billion of them.
 
Monsterzuma said:
I don't think a lot of people ever short much on leverage. way too risky under normal conditions.
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You have to use margin to short. There is another correlation here to consider which is 40's act funds (or liquid alternatives).

Regarding Hygros comment what economic data are you looking at because my data has been positively trending for over a year and Wall Street strategists are still in bearish mode(contrary indicator)
 
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