Bill’s By The Number$

Posted by: Lisa Navarro | Posted on: October 26th, 2020 | 0 Comments

HIGHS AND LOWS – The S&P 500 is up +8.9% YTD (total return) through Friday 10/23/20. The index has had a 8% bear market loss (total return) and a +56.5% bull market gain (total return) during the year. 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).

WAY UP – During fiscal year 2019, US government outlays for “Income Security,” a category that includes federal unemployment benefits and the nation’s “food stamps” program, were equal to 49% of the outlays made for Social Security benefits. During fiscal year 2020, US government outlays for “Income Security” were equal to 115% of the outlays made for Social Security benefits (source: Treasury Department).

JUST FIVE SURPLUS YEARS – The budget deficit for the United States in fiscal year 2020 (i.e., the 12 months that ended 9/30/20) was $3.1 trillion. The United States has run a budget deficit in 55 of the last 60 fiscal years, i.e., 1961-2020. The only surplus years were 1969, 1998, 1999, 2000 and 2001 (source: Treasury Department).

BACK IN TIME – The cover story for Time Magazine on 3/05/84 was “That Monster Deficit, America’s Economic Black Hole.” The article, written by Charles Alexander, chronicled how the nation’s 1984 budget deficit threatened to derail the country’s economic recovery. The fiscal year 1984 budget deficit was $185 billion, or 6% of the size of the fiscal year 2020 deficit that reached a record $3.132 trillion (source: Time Magazine).

NO BOSS – 20% of American workers between the ages of 18-49 are self-employed. 46% of American workers between the ages of 65-69 are self-employed (source: National Bureau of Economic Research, September 2019).

DOUBLE IN THIRTY YEARS – It would take $1,961 in September 2020 to have the same purchasing power as $1,000 in September 1990 (source: CPI Inflation Calculator, Bureau of Labor Statistics).

WOOD – The price of lumber increased nearly 50% from 4/30/20 to 8/31/20, the largest 4-month increase ever in the cost of lumber based upon data maintained since 1949 (source: Bureau of Labor Statistics).

NOT ALL INCOME – The maximum taxable wage base subject to the social security payroll tax will be $142,800 in calendar year 2021. An estimated 5% of earnings of all US workers will be subject to the social security payroll tax next year, a levy that is 6.2% for employees and 6.2% for employers (source: 2020 Trustees Report).

WAS IT WORTH IT? – 56% of the $1.54 trillion of student loan debt in the United States is held by individuals with graduate degrees, i.e., beyond a bachelor’s degree (source: Federal Reserve, 2019 data).

MAKING MONEY IN OIL – The price of oil (West Texas Intermediate) closed at $39.85 a barrel on 10/23/20. The breakeven price for oil produced in the Permian Basin is estimated to be $50 a barrel. The last time oil closed above $50 a barrel was on 2/24/20 or 8 months ago. The Permian Basin is a 90,000 square mile stretch of land from West Texas to New Mexico (source: Federal Reserve Bank of Dallas).

KIDS COST MONEY – The United States had 3.79 million births in 2018, the latest calendar year for which data has been released. On 6/15/20, the Brookings Institute forecasted that the COVID-19 virus and subsequent US recession will result in a drop of births in 2021 by 300,000 to as much as 500,000 (source: Brookings Institute).

SLIPPING – From 1978 to 2013, the United Kingdom’s credit rating was Aaa by Moody’s, its top ranking. On 2/22/13, the UK was downgraded to Aa1. On 9/22/17, the UK was again downgraded to Aa2. Just 10 days ago (on 10/16/20), the UK was downgraded to Aa3. As of today, there are just 12 countries in the world that have a top Aaa rating from Moody’s, including the United States (source: Moody’s).

BABY IT’S COLD OUTSIDE – The Canadian government extended its closure agreement with its US border on 10/19/20 for an additional month to 11/21/20. The ban originally became effective on 3/21/20. It prevents any non-essential vehicle travel across the US/Canadian border. The estimated 300,000 Canadian “snowbirds” that come south for the winter will be forced to fly into the US instead of driving a car or an RV across the border (source: National Post).

OF COURSE HE IS – Jeff Bezos, the founder of Amazon and the world’s richest person (worth $189 billion as of Friday 10/23/20) was Time Magazine’s “Person of the Year” in 1999. Time Magazine’s 12/27/99 cover story declared “E-commerce is changing the way the world shops” (source: Time).

WINNER TAKE ALL – MLB’s American League Championship Series and the National League Championship Series both went 7 games in 2020, the first time that has happened since 2004 (source: MLB).