[RD] Daily Graphs and Charts

[SS-18 ICBM]

Quake family tree:

Oh hey, something that isn't an economics chart or a map. Where's Counter-Strike though? It runs on the GoldSrc engine. Same deal with Half-Life.

 

[Mise]

Yeah, it doesn't have all the games on it. Doesn't have HL2 for that matter; it's more about the engines than the games I think.

 

[Winner]

Curiosity lander probe descent sequence:

 

[Monsterzuma]

http://www.ritholtz.com/blog/2012/03/military-spending-addenda/

this is what we call a qualitative difference.

 

[Arwon]

Impact of 25 GW of solar panels on the electricity spot price in Germany over a particular day, compared to four years ago when there was 5 GW installed:





Basically, you can see the mid afternoon peak price period has completely disappeared due to solar PV bidding behaviour. However, the night-time price has close to doubled.

Article here - http://www.renewablesinternational.net/the-afternoon-dip/150/537/33320/

The article speculates that given they can't get higher prices at peak demand periods, electricity providers are upping their price bids more during the middle of the night when solar PV isn't contributing in order to recoup their generation expenses.

I'm not sure what impact this change in spot price behaviour has had on overall wholesale energy costs, which make up maybe 40% of a typical residential power bill (in Australia, at least

 

[Monsterzuma]

http://www.ritholtz.com/blog/2012/03/77683/

Low and falling volume, low and falling participation by individual investors and high and rising margin debt: this pretty much corroborates my thesis that the stock market is being bid up by a dwindling group of credit-addicted fanatics. The level of the stock market tells you nothing, because there is enough credit available out there (0% federal funds rate) to bid the market to whatever level some tiny clique of bulls think the market should be at.

 

[Integral]

5-year inflation expectations, taken from the past eight years:

 

[Arwon]

How are expectations figured out? I assume a survey - by who and of who?

 

[luiz]

How are expectations figured out? I assume a survey - by who and of who?

The futures market can do the trick (many contracts are bought and sold with an underlying inflation assumption for a given date).

 

[Monsterzuma]

How are expectations figured out? I assume a survey - by who and of who?

By taking the difference in interest rate (i.e. spread) between Treasury Inflation Protected Securities and regular Treasury bills/bonds. People make a "bet" on how much inflation will take place in the time it takes for the bill/bond to mature by pricing in the inflation that is adjusted for when the payout occurs. The pooling together of such bets through the participation of many investors forms the market's indication of expected inflation.

 

[Arwon]

Ah, cheers guys. Wasn't sure what TIPS was.

 

[Integral]

Yep! It's the difference between the real interest rate (as measured by inflation-protected bonds) and the nominal rate on regular Treasury bonds. By the Fisher equation, the difference should be approximately the expected inflation rate.

This is so cool. I mean,we have a real-time, market measure of expected inflation!

And if your central bank targets inflation, the spread tells you what market participants think inflation will be, so you can monitor how well you're doing at hitting your target in real time!

 

[Monsterzuma]

And if your central bank targets inflation, the spread tells you what market participants think inflation will be, so you can monitor how well you're doing at hitting your target in real time!

This kind of thing has always slightly puzzled me. For the TIPS spread to indicate inflation expectations accurately it is required that a lot of investors engage in bidding with the expectation of profiting from bidding the price up/down to its proper level. However, if the central bank is actively trying to influence inflation and watching the market in order to aim for a specific target, isn't it a foregone conclusion that the priced in inflation rate will match the central bank's target and isn't it for that reason largely impossible for anyone to rationally expect to profit from bidding it away from that level?

 

[Monsterzuma]

Spoiler :

Spoiler :

Spoiler :

Fascinating set of charts from the quarterly J.P. Morgan Asset Management deck.

Its as a good a time as any to open up the conversation: Why is Congress’ approval rating at record lows? Why are so many people at such political extremes?

http://www.ritholtz.com/blog/2012/03/open-thread-u-s-political-polarization/

 

[Whomp]

I get that deck every quarter. I always pull 6-10 slides for future reference and should probably post some when the new one comes out. What I find fascinating in those is the negative correlation between approval rating and Political polarization. I guess no surprise, really.

Another slide I like is median monthly rent (@$708) vs. monthly median mortgage payment (@$521). No major difference between the two from 1988 until '05 where mortgages completely blow out and now it's going the other direction big time. Along with a lot of discussion around the topic.

 

[Cutlass]

I get that deck every quarter. I always pull 6-10 slides for future reference and should probably post some when the new one comes out. What I find fascinating in those is the negative correlation between approval rating and Political polarization. I guess no surprise, really.

Another slide I like is median monthly rent (@$708) vs. monthly median mortgage payment (@$521). No major difference between the two from 1988 until '05 where mortgages completely blow out and now it's going the other direction big time. Along with a lot of discussion around the topic.

What's the reasoning behind rents historically being much higher than mortgages?

 

[Whomp]

What's the reasoning behind rents historically being much higher than mortgages?

There's a shortage of rental stock and even with the large amount of building it' not meeting demand. What a recent group of economists have suggested is allow potential foreclosed properties be converted to rentals to the people who would ordinarily be foreclosed on at below market rent, no credit hit and allows investors to come in as buyers. I saw one bank piloting this in Phoenix, Vegas and NY.

 

[Cutlass]

I've heard of that program to deal with the housing problem. But many of those houses is not in the cities where I would think that rental property is the tightest.

 

[Whomp]

I've heard of that program to deal with the housing problem. But many of those houses is not in the cities where I would think that rental property is the tightest.

But the people who live in those houses still need a place to live so I'm not sure I understand how that matters. The multi-dwelling construction market will still stay strong, and it is, as long as there's demand.

Anyhow, here's the chart I was talking about.

 

[Monsterzuma]

The chart on affordability is interesting. It supports the case of, for example, market monetarists, who claim that the "housing bubble" was not unsustainable if looser monetary policy had been applied in 2008.

The relatively high affordability during the "housing bubble" is among other things the result of low interest rates. I suppose these would under conventional theory be viewed as being the result of:
- the rise in exports (= cheap imports for US, lower prices, looser monetary policy) and savings in emerging markets?
- increase in income inequality within the US, with high income individuals consuming less and saving more than low income individuals?

However, the savings rate in the US had been low and falling for a long time, so I imagine the saving happened mainly abroad?

What are the other influences on this affordability? The monthly mortgage payment in the graph above seems to be high during the housing bubble. Why is affordability not correspondingly low? Is something else keeping it down?

For another interesting graph (can't get the url with my current browser):
http://libertystreeteconomics.typepad.com/.a/6a01348793456c970c0163032f2bac970d-popup

The unemployment to population ratio is really, really depressing.