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Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: April 27th, 2020 | 0 Comments

1. IN MY LIFETIME AND BEYOND – With 4 trading days remaining in April 2020, the S&P 500 is down 11.7% YTD (total return), its worst YTD total return performance through April 24th in any year since 1939. 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. FEWER SHARES LEFT TO BUY – Companies in the S&P 500 spent $730 billion in 2019 on stock buybacks, i.e., purchasing back the companies’ own shares. Buybacks have the effect of reducing the number of outstanding shares of the publicly held company on the open market, increasing the ownership stake of the remaining shareholders. The $730 billion is the 2nd largest annual total in history (source: Goldman Sachs).

3. ONE MONTH – As of 9am ET on Tuesday 3/24/20, the United States reported 44,795 cases of COVID-19 patients and 550 deaths. As of 9am ET on Friday 4/24/20, the United States reported 878,248 cases of COVID-19 patients and 49,948 deaths (source: NBC News reports).

4. IT WASN’T LARGE ENOUGH – The $349 billion “Paycheck Protection Program” (PPP) in the CARES Act was completely loaned out as of Thursday 4/16/20. A total of 1,661,397 loans were made over 2 ½ weeks since the signing of the legislation, an average of $210,000 per loan (source: PPP).

5. ADD MORE MONEY – An additional $310 billion was allocated to the PPP program as of 4/24/20. $60 billion of the $310 billion will be available only through small, midsize and community lenders (source: Congress).

6. WOW – The CARES Act, signed a month ago today (3/27/20), is projected to increase the fiscal year 2020 budget deficit of the USA by $1.61 trillion, increasing the full year deficit forecast to $2.62 trillion (source: CBO).

7. BIGGEST IN HISTORY – The largest annual budget deficit in US history is $1.41 trillion in fiscal year 2009, i.e., the 12 months ending 9/30/09 (source: Office of Management and Budget).

8. PRESTO! – The Fed’s balance sheet reached $5.45 trillion as of 4/22/20, up from $3.85 trillion as of 2/26/20. The $1.6 trillion balance sheet increase in less than 2 months is the result of digital creation of money by the Fed, i.e., money used for purchases or lending created with the press of a button (source: Federal Reserve).

9. IN THE YEAR 2034 – Social Security trustees announced on 4/22/20 that the trust fund backing the payment of Social Security benefits (OASI retirement benefits) would be zero in 2034. A zero “trust fund” does not mean the payment of Social Security benefits would also go to zero, but rather would drop to 76% of their originally promised levels through the year 2095. When the trustees released their report in 2010 (i.e., 10 years ago), the Social Security Trust Fund was projected to be depleted in 2040 (source: Social Security Trustees 2020 Report).

10. LONG-TERM ISSUE – The estimated Social Security shortfall today (i.e., a present value number) between the future taxes anticipated being collected and the future benefits expected to be paid out over the next 75 years is $16.8 trillion. The entire $16.8 trillion deficit could be eliminated by an immediate 3.14 percentage point increase in the combined Social Security payroll tax rate (from 12.40% to 15.54%) or an immediate 19% reduction in benefits that are paid out to current and future beneficiaries (source: Social Security Trustees 2020 Report).

11. JUST SITTING SOMEWHERE – 64% of the commercial aircrafts operated by airlines worldwide have been removed from daily usage and are currently in storage (source: Upgraded Points).

12. STAY HOME – Wuhan, China, ground zero of the COVID-19 pandemic, was placed on a 76-day quarantine that ran from 1/23/20 to 4/08/20. Wuhan has a population of 11 million, more than NY City (source: Financial Times).

13. LOSE A JOB, LOSE HEALTH INSURANCE – 39% of 2,644 American adults surveyed in the first week of April 2020 have either lost their job, had their working hours reduced, have been asked to take a temporary leave, or expect to have one of those work reductions occur as a result of COVID-19. Loss of employment has health insurance implications since 49% of the US population had access to their health insurance through their employer as of December 2019 (source: Data for Progress, Kaiser Family Foundation).

14. THEY PAY TAXES – The 10% of California’s workforce who are immigrants living in the state illegally paid an estimated $2.5 billion in state and local taxes in 2019 (source: California Governor Gavin Newsom).

15. UNEXPECTED – Joe Burrow was not listed in an article titled “11 Best QBs Who Will Be Returning to College Football in 2019” that was published in December 2018. In spite of the snub, Heisman Trophy winner Burrow was picked # 1 by the Cincinnati Bengals in the 2020 NFL Draft last Thursday 4/23/20 (source: Bleacher Report).

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