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Bill’s By The Number$

Posted by: Kim Vo | Posted on: April 10th, 2017 | 0 Comments

1. STOCKS – The S&P 500 gained +6.1% (total return) in the 1Q 2017, the 5th best opening quarter for the stock index over the last 25 years, i.e., 1993-2017. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation. It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).

2. TIME FLIES – The S&P 500 bull market that began on 3/09/09 is now in its 98th month. The average bull market for the stock index since 1950 (including the current bull) has lasted 61 months (source: BTN Research).

3. WOO PIG SOOIE – In data tracked since 1976 (i.e., 41 years ago), the February 2017 unemployment rates in Arkansas (3.7%) and Oregon (4.0%) are the lowest ever reported (source: Department of Labor).

4. WHAT’S IMPORTANT – 54% of 4,200 American workers surveyed would switch jobs for a better retirement plan (source: Transamerica Center for Retirement Studies).

5. NO PROGRESS MADE – After adjusting numerical data from the past for the impact of inflation, the median household income today ($56,516) is lower than the median household income ($57,909) from 1999 (source: Federal Reserve Bank of St. Louis).

6. BUT WOULD YOU UNDERSTAND IT? – The federal tax code and accompanying federal tax regulations contain 10 million words, a publication that would take an individual reading 300 words a minute (the average reading speed for an adult) more than 23 days of non-stop reading to digest (source: Tax Foundation).

7. YOU BORROW, YOU PAY – 94.7% of home mortgages are “current and performing” as of 12/31/16. Just 2.3% of home mortgages were “seriously delinquent” (defined as 60 days or more past due) as of 12/31/16 (source: Office of the Comptroller of the Currency).

8. THE REWARD – 30% of American homeowners who are approaching retirement move. Surprisingly, of the 30% that move, a greater number of homeowners buy a more expensive home compared to the number of homeowners who elect to downsize in retirement (source: Calvo, Haverstick and Zhivan).

9. NOT UP TO SNUFF – The 75-year (1942-2016) average growth rate of the US economy (i.e., “Gross Domestic Product” annual growth rate) is +3.3% per year. However, the actual growth rate of the US economy has reached +3.3% or greater in only 2 of the last 16 calendar years (source: Commerce Department).

10. BANKING BUSINESS – Just 4 banks in the USA hold 89% of all derivatives nationwide as of the end of 2016. The face amount of the derivative contracts held by all insured commercial banks and savings associations was $165.2 trillion as of 12/31/16. 75% of the $165.2 trillion were interest rate derivative contracts (source: Office of the Comptroller of the Currency).

11. REMOVES AN INCENTIVE FOR BANKS TO LEND – The +1% that the Federal Reserve currently pays to banks on the $2.185 trillion of excess reserves the banks hold at the 12 regional Fed banks (as of 3/29/17) is equal to $59.9 million in daily interest. The Fed began paying ¼ of 1% on excess reserves as of 10/06/08, increased the rate paid to ½ of 1% as of 12/17/15, increased again to ¾ of 1% as of 12/15/16, and finally to +1% as of 3/16/17 (source: Federal Reserve).

12. AWASH IN OIL – The storage of crude oil in the United States reached 535.5 million barrels as of Friday 3/31/17, an all-time record volume for our country. The 535.5 million barrels, up +56.5 million barrels YTD, are separate from any oil stored in the “Strategic Petroleum Reserve” which has a capacity of 727 million barrels (source: Department of Energy).

13. HAS TO TRAVEL A LONG WAYS – Oil pumped in Saudi Arabia and exported to the USA takes 90 days to reach America. Saudi Arabia is the # 2 country that the USA imports petroleum products from, trailing only Canada (source: Energy Information Administration).

14. PERSONALIZED MEDICINE – 10 years ago, it cost $10 million and took several weeks to “sequence a genome,” i.e., mapping out a person’s entire genetic code. Today, the work can be completed for $1,000 in just a few hours (source: Financial Times).

15. HOOPS – North Carolina beat Gonzaga on 4/03/17 for the championship of men’s college basketball. The game was held before 76,168 fans at the University of Phoenix Stadium in Arizona, more than the 75,765 fans that attended college football’s Alabama vs. Clemson title game held in the same arena on 1/11/16 (source: NCAA).

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