Bill’s By The Number$

Posted by: Vanessa Guadiana | Posted on: September 22nd, 2014 | 0 Comments

1. THE IMPACT OF QE ON STOCKS – The 3rd iteration of “Quantitative Easing” (QE3) was launched by Fed Chairman Ben Bernanke on 9/13/12.  In the 2 years following the announcement of the “print-and-purchase” strategy, the S&P 500 gained +41.9% (total return) through 9/13/14.  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. AVOIDING A CORRECTION – As of today, the S&P 500 has gone 1,084 calendar days (i.e., from 10/03/11 through and including 9/21/14) without a 10% or greater drop in the index, the 5th longest stretch without a double-digit pullback in the last 50 years.  If the S&P 500 is able to avoid a 10% correction through 11/04/14, this run will move into 4th place, unseating a 1,127 day streak within the 1984-87 bull (source: BTN Research).
3. BIG GAIN DAYS – Of the 25 best percentage-gain days for the S&P 500 during the last 50 years (i.e., 1964-2013), a third (8 of the 25 days) occurred in calendar year 2008 (source: BTN Research).
4. BIG LOSS DAYS – Of the 25 worst percentage-loss days for the S&P 500 during the last 50 years (i.e., 1964-2013), nearly half (11 of the 25 days) occurred in calendar year 2008 (source: BTN Research).
5. TAX DATA – The 5.25 million tax returns from 2012 that reported at least $200,000 of adjusted gross income (AGI) represent 3.6% of all returns filed, received 33.4% of all AGI nationwide and paid 55.1% of all the federal income tax that was paid for the year (source: Internal Revenue Service).
6. OLDER AND STILL WITH DEBT – The number of American seniors age 65 and older with mortgage debt on the homes they own has increased from just over 1 in 5 (22%) to nearly 1 in 3 (30%) over the last decade (source: Consumer Financial Protection Bureau).
7. EXPENSIVE HOME – 35% of American households (both homeowners and renters) spend at least 30% of their pre-tax income on housing costs (source: Joint Center for Housing Studies at Harvard University).
8. I DO NOT AGREE – The Fed voted 8-2 last Wednesday (9/17/14) to maintain short-term interest rates at the “near-zero level” that they have been at since December 2008.  Regional Fed Presidents Charles Plosser and Richard Fisher cast the 2 dissenting votes, the 6th dissenting vote cast by Plosser and the 8th dissenting vote for Fisher.  Fed Chair Janet Yellen never cast a dissenting vote while she served as a member of the Fed’s Board of Governors (1994-1997) and as the San Francisco Regional Fed President (2004-2010) (source: Federal Reserve).
9. RISING PRICES – Over the 5 years 1977-1981, inflation (as measured by the Consumer Price Index) advanced by +61.5%, an increase of +10.1% per year.  Since then, only 1 calendar year (1990) has produced annual inflation of at least +5% (source: Department of Labor).
10. TEN BILLION A DAY – With just 1 week and 1 day remaining in fiscal year 2014 (i.e., the 12 months ending 9/30/14), the government is projecting total fiscal year spending of $3.576 trillion, equal to $9.8 billion of daily outlays (source: Treasury Department).
11. PRETTY SMALL AMOUNT – Collection of federal estate taxes amounts to approximately $18 billion annually, equal to what Uncle Sam spends in 44 hours (source: Tax Foundation).
12. COST OF DOING BUSINESS – 69% of the total employee cost that an employer pays in the private sector is for wages and salaries.  The other 31% is for the various benefits that are either legally required (e.g., Social Security) or are simply provided to attract and retain workers, including insurance, retirement plans and paid leave (source: Department of Labor).
13. ANALYZE THAT – More than twice as many college students graduated with a psychology degree (108,986) at the end of the 2011-12 school year than the number of students that graduated with a computer sciences degree (47,384) (source: National Center of Education Statistics).
14. NOT UNTOUCHABLE – When a 1983 Social Security committee (chaired by Alan Greenspan) implemented changes that gradually increased the age at which a retiree would receive full social security benefits from age 65 to age 67, only Americans that were 20 or more years from turning 65 were impacted (source: Social Security).
15. GO BIG RED – University of Nebraska graduate Warren Buffett (class of 1950) bet $550 that his alma mater would cover the 12 ½ point spread in their 9/13/14 football matchup with Fresno State.  The Huskers won by 36 and Buffett won $1,050, a +91% profit in the first legal sports bet he has ever wagered (source: CNBC).

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