{"id":45708,"date":"2019-04-28T14:03:23","date_gmt":"2019-04-28T19:03:23","guid":{"rendered":"https:\/\/olduvai.ca\/?p=45708"},"modified":"2019-04-28T14:03:26","modified_gmt":"2019-04-28T19:03:26","slug":"this-is-the-end-of-the-cycle","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=45708","title":{"rendered":"This Is the End of the Cycle"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\"><a href=\"https:\/\/www.oftwominds.com\/blogapr19\/end-cycle4-19.html\">This Is the End of the Cycle<\/a><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><em>Both new households and new businesses are in secular decline. Goosing the stock market and GDP doesn&#8217;t change this reality.&nbsp;<\/em><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Everyone wants every cycle of expansion to last forever, but alas every cycle ends. The growth cycle that began in 2009 is finally coming to an end.<\/strong>&nbsp;The signs are everywhere, notwithstanding the torrid 3.2% GDP growth for the first quarter of 2019 (which as others have noted, is less than meets the eye.)<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Gross Domestic Product (GDP) is the standard measure of expansion, but it is an imperfect metric.<\/strong>&nbsp;GDP can still notch gains while the majority of the economy is stagnating and assets are losing value.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Better guides to expansion than GDP are sales volumes, prices, profits, wage increases and sustained rises in new enterprises and households.<\/strong>&nbsp;All of these measures of expansion are stagnant, indicating that monetary and fiscal stimulus are no longer moving the needle.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Corporate profits are higher as a result of accounting gimmicks, not soaring sales or expanding gross profit margins. Stocks are being pushed higher by the old trick of lowering earnings estimates so that corporations can &#8220;beat by penny.&#8221;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In many once-hot real estate markets, sales are slowing while prices continued edging higher but at much slower rates than in the past. This is classic late-cycle activity: sales are declining as the pool of buyers has been drained while price increases have become marginal.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Global sales of pricey mobile phones and vehicles have slowed, indicating the exhaustion of the cycle is global.<\/strong>&nbsp;Again, this is classic late-cycle activity: trends that powered the narrative of &#8220;strong growth everywhere&#8221; are fading, despite attempts to hype some blip as a sign that strong growth is about to start up again.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&nbsp;\u2026click on the above link to read the rest of the article\u2026<\/p>\n","protected":false},"excerpt":{"rendered":"<p>This Is the End of the Cycle Both new households and new businesses are in secular decline. Goosing the stock market and GDP doesn&#8217;t change this reality.&nbsp; Everyone wants every cycle of expansion to last forever, but alas every cycle ends. The growth cycle that began in 2009 is finally coming to an end.&nbsp;The signs [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[127,353,25725,587],"class_list":["post-45708","post","type-post","status-publish","format-standard","hentry","category-economics","tag-charles-hugh-smith","tag-gdp","tag-growth-cycle","tag-of-two-minds"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45708","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=45708"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45708\/revisions"}],"predecessor-version":[{"id":45709,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/45708\/revisions\/45709"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=45708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=45708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=45708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}