Reader asked an eminently reasonable question which I should answer – since she’s probably not the only one to wonder about this:
“I am looking at your chart of the week “2nd Depression Tracker”, and I can’t make any sense of it. The 2000-2009 red line looks fine, but the 1929-1939 blue line appears to start at over 11000 and end at 4300. These are far from historic values. If you extrapolated the data, then why not mention it? Also I am very fuzzy on the conclusion that I am supposed to draw. If you have time please explain.
The chart she refers to is the one at the bottom of this page, here. (scroll down a tad)
Point #1: Yes, both lines start at the 1/20/2000 Dow level from January of 2000. The reason that the 1929 Dow looks the same is that the 1929 Dow has been multiplied by 31.15419986 to ‘normalize’ the data. So each of the historical values for the 1929-1940 period is multiplied by this figure so that we can see how the two traces compare.
This is a really dandy way to ‘norm’; data so you can do an apples-to-apples comparison of performance. Not only that, but since the purchasing power of the dollar has been watered down so much since 1929, it actually makes sense to diddle with the numbers to so extent.
My personal preference is to divide the 1929 Dow (376.29 on 9/3/29) into the 2000 Dow (11,722.98 in 2000) to get the ‘correction’ which is then uniformly applied.
I keep thinking everyone can hear what I’m thinking, so I don’t very often remind people of this.
The important thing is that the general shape of the curves is similar. If you want to really see how close they are, you could align the data for both inflation adjustments and then ‘norm’ it. Problem is, if you do this, the curves get way closer together since there was rapid deflation in the 1930′s event, which increased the purchasing power of those dollars that were available.
On the other hand, in the present replay of 1929, the dollar values have (more or less) constantly eroded.
I’ve haven’t done the inflation correction/constant dollar ‘norming’ version of this chart, simply because no one has asked, but I’ve put it on my ‘to-do’ list for this weekend’s Peoplenomics report. Yeah, it’ll be interesting, but more’n likely quite damning since the track will be even closer.
I resisted the urge to put a ‘tail’ on the data, but in some of my charts I will repeat the last value several times so that the vertical height my be more easily ascertained relative to the Y axis scaling.
The “Art of the Chart” is an area of data presentation is one worthy of a little bit of study. For example, one can either make or break apparent performance by choosing the scaling of charts. Logarithmic scale charts can turn curves into what see like straight lines, for example, and while that may be to some people’s tastes, it certainly isn’t to mine – which is why I tend toward linear charting.
Same thing with trend lines: I like to put lots of them in place since they can be useful in trying to get a sense of what underlying dynamic the numbers may be obeying. A linear trend my look most pleasing, or an X period moving average, or an exponential curve, or a polynomial.
I apologize for not making this a little more clear in the past and promise to add a little note (1929 data normed to 1/10/2000 Dow levels.
Not sure you’ll want to see how close they come when they’re all adjusted to constant dollars. Then it gets really ugly and you might not like the picture. Remember the Jack Nicholson line from “A Few Good Men”, non?
The more things change, the more they stay the same, LOL.
The Well-Regulated Life
Thinking about holding a garage sale? Well, just make sure you’re not reselling recalled toys, or Uncle could take up after you. Or, as the Kansas City Star headlines it: “Seller, beware: Feds cracking down on secondhand sales of some products.“
That the US has a huge demographic bubble of Boomers (including me) just amazes me; With all the lead paint and dangerous toys around from when us oldsters were kids, it’s amazing that any of us survived at all! Although maybe the lead paint levels back then have something to do with our political choices nowadays… Yeah, that’s it: Maybe we really are that dumb.
Around the Ranch: Cop Calling
With the return of Panama Bates from another round of Central American adventures (including the being swept out to sea only to be ‘spit up’ on the shore by a rogue wave while returning froim a hike in the mountains north of Panama City some 80-miles, or so) we had a nice dinner out up in Tyler last night. There, Panama was able to have his first steak in a year.
Turns out, after some discussion, that when you eat out in some of the not-so civilized places in Central America that there are certain health risks that we very much take for granted here in the US. “If you eat out very much, it’s only a matter of time until you get intestinal parasites,” he explained. “People have different ideas about health. For example, it’s common not to wash lettuce or other vegetables. “ Oh-oh. Forgot about that part of travel.
Last time I was traipsing around way off the beat path, it was 1984 in Peru…time blurs the details while the highlights of such adventures remain fairly crisp.
Nevertheless, on the way back to the ranch from Tyler, we were pulled over by a local police car in Coffee City for doing 70 in a 55. Honest mistake on my part, since I was pretty sure that the speed limit was 65 there…hmmm.
But even though there was no ticket (“I’m going to let you off with a warning. Ya’ll keep it down…”), since the officer was going the other direction and turned around to come after me instead of the gray Silverado that had been between us and the cop car on the Lake Palestine bridge on Highway 155, I was reminded that as much fun as my red car is to drive, it’s a cop caller.
Why would a police officer go after a nondescript pick-up when there was a much shinier guards red, whale tail, driving lights on target which looked like it was going fast?
After thinking a bit on the topic I’ve tentatively concluded that I may put an ad on eBay offering the red car as partial trade on an airplane. It might be fun to have both the red car and a small plane (both get around the same mileage) but not much sense having a 150+ MPH capable car when it’s never going to be legally driven at more than half that. On the other hand, even a used Geo Metro would get us to the airport and from there, t’ain’t no speed limits upstairs except 200 knots in certain kinds of airspace.
Only thing that worries me is that this kind of thinking may be an indication of getting old. Can’t have that. Maybe I’m just trying to decide whether I’d like to be listening for an outer marker or a radar detector…just no telling.
Speaking of automobiling – Russian TV has a special 26-minute piece about the “Motor Rally to the North Pole. Seems in April for the first time “two Russian-made YEMELYA experimental vehicles traveled over 1,100 kilometers across the drift ice of the Arctic and reached the North Pole.“ That’d be off-roading even by E. Texas standards.
Can’t get the Russia Today channel? Ooops. Limited inputs, limited outputs. What can I say?
OK, this is absolute proof that you can find anything on the internet. Happened to touch base with a ham radio friend this morning and he mentioned that one of his next projects was to build a ‘shepherd’s sling”. “A what Jeff?” I asked.
OK…another goodie to add to my repertoire of skills I suppose. But, as crazy as lawmakers are (and they are experts at slinging you-know-what) I think I’ll hold off on this one. I figure it’ll only be a matter of time, though, till we’re all gonna be required to register rocks.
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The UrbanSurvival Mall:
Peoplenomics This Week:
Short Term Values, Capital Preservation
First up is a short look at ‘immediacy values” from the predictive linguistic work which could impact personal and business expectations between now and when the next “Shape of Things To Come report is issued around September 15th. The good news is that while some things look better, other prospects have grow more ominous. Then we’ll consider some of the recent developments in the market and whether it’s time to get back to bearish since I became bullish in late March (Issue #395: “Me Bullish? Where to Play the 401(k) Game).
My commodity broker JB Slear and I have written a simple book to get you started on high density hydroponics. It’s an example of how someone with a little creativity, access to a few ‘dollar stores’ and willing to try out some new farming techniques can grow an amazing amount of produce sin a very small space – like even an apartment balcony (if it gets some sunlight). Sound interesting? It’s just $10 bucks here…
No, when you tell your browser to ‘empty your cookies’ of web sites you’ve visited, it probably won’t get them all. Why? Because there is a whole class of ‘browser-independent’ cookies that will gobble up space on your hard drive, but more important is they will sneak out information about you without you being aware of it. Ever week I get emails like this one:
“Thanks again for the Maxa Tools recommendation, I never knew how much additional garbage gets attached every time I browse. “
Test drive it free by downloading it. To upgrade to full functionality will be $35 bucks. Is your privacy worth it?
Once you try it out, click the upgrade button (!) on the upper right hand side for the $35 unlock to get it to remove even those nasty and highly intrusive ‘non-browser specific’ cookies. Bonus: You computer may run faster. I’ve taken 1,000 34,759 cookies off my machine now. It’s just amazing.
Attn: Mac Drivers: MCM does support the Safari Browser, but that does not mean it is compatible with Mac OS. Maxa-Tools only support the Windows world….so far. Given Jens and the other engineers time…
Want to be a thorn in the side of the Old World Order? Simply click here and send a link to this site to everyone on your distro list…Nothing more dangerous than sharp, clear-thinking upstarts who ask a lot of questions, eh? Unless you believe WTC-7 fell over on its own, of course….
“Live on $10,000″ Updated
I’ve told you in the past to order my ebook “How to Live on $10,000 a year or less…” with the rationale that “We’re all going to live it shortly, anyway.“ Don’t know as you have looked lately, but the unemployment rate is up more than 3% since I wrote the first edition of that book and underpasses have never been more homely. Worth ordering? Just visit www.liveontenthousand.com or, click this little whizzie…
It’s an automatic download. It’s written in an information dense style: The whole thing runs about 65 pages, but it gives you a vision of how to not only live on the cheap, but also how to migrate up the economic foodchain if you have a little hustle left… Click here for the index and details.