Bill’s By The Number$

Posted by: Vanessa Guadiana | Posted on: July 20th, 2015 | 0 Comments

1. EVERY TEN YEARS – The S&P 500 was up +7.9% per year (total return) for the 10-years ending 6/30/15.  A decade ago, the S&P 500 was up +9.9% per year (total return) for the 10-years ending 6/30/05.  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. SHOPPING – Retail sales in the USA in June 2015 were $442 billion, equal to $14.7 billion of retail sales per day.  The all-time monthly record is $449 billion set in November 2014 (source: Commerce Department).   
3. DRAW DOWN – The US Army will reduce their active-duty force to 450,000 (from 490,000 today) by 9/30/17, a 40,000 personnel cutback that will largely come from soldiers leaving the Army voluntarily (source: Pentagon).      
4. IN AND OUT – After 9 months of fiscal year 2015 (i.e., the 9 months ending 6/30/15), Uncle Sam has collected $1 of tax receipts for every $1.13 of outlays, creating a deficit to date of $313 billion (source: Treasury Department).  
5. PAYING ON TIME – The percentage of home mortgages nationwide that are “current and performing” is 94.2% as of 3/31/15, i.e., no monthly payments are outstanding (source: Office of the Comptroller of the Currency).   
6. KICK THE CAN – The Greeks are not required to make principal or interest payments on the outstanding debt from their 2010 and 2012 bailouts until 2023.  On 7/13/15, the IMF released a “Debt Sustainability Analysis” where they recommended that the “grace period” (during which Greece would not be required to make principal or interest payments on all of its bailout debt) be extended for an additional 30 years, i.e., until 2053 (source: IMF).     
7. GUARANTEE FUND – The Greek parliament agreed last Thursday (7/16/15) to move 50 billion Euros worth of state assets (e.g., real estate, airports, a power company) into a trust fund that is effectively being used as collateral to support the latest proposed Greek bailout.  The trust fund will be Greek-managed and the assets will be sold off with half of the proceeds allocated to recapitalizing Greek banks (25 billion Euros), a quarter to reducing Greek debt (12.5 billion Euros) and a quarter for Greek stimulus (12.5 billion Euros).  Many Greek watchers are skeptical of Greece’s ability to identify 50 billion Euros worth of assets for the fund (source: BTN Research).     
8. NO STUDENT DEBT – On 7/03/15 the state of Oregon became the 2nd US state to pass a bill authorizing tuition-free access to a community college education.  Tennessee was the first state.  Oregon’s plan requires students to maintain a GPA of at least 2.50 but does not require the student to be enrolled on a full-time basis in order to receive state assistance (source: The Oregonian).  
9. SHORT OF CASH – Faced with an underfunded pension plan for its workers, Cook County commissioners (Illinois) voted on 7/15/15 to increase its sales tax rate to 10.25% effective 1/01/16, giving Chicago (the county seat of Cook County) the highest combined sales tax rate of any major US city (source: Tax Foundation).    
10. MONTHLY COMMITMENT – The nation’s household debt service ratio (defined as debt service payments and financial obligations stated as a percentage of disposable personal income) was 9.92% as of the 1st quarter 2015, down from 13.17% as of the 4th quarter 2007.  This statistic has been tracked by the government since 1980 and until the 4th quarter of 2012 had never been reported below 10% (source: Federal Reserve).     
11. LIKE A ROOM WITHOUT A ROOF – 80% of current American retirees have found “happiness and fulfillment” in their retirement years.  68% of current American workers anticipate that they will find “happiness and fulfillment” in their future retirement years (source: Northwestern Mutual 2015 Planning & Progress Study).  
12. CUT IN HALF – The closing price of a barrel of oil peaked in calendar year 2014 at $107.26 on 6/20/14 (13 months ago today).  The price of oil closed at $50.78 last Friday (7/17/15), down 53% since 6/20/14 (source: NYMEX).      
13. WHEN THE FED MOVES ON RATES – Over the past 20 years, every 1 percentage point increase in the short-term Fed funds rate has equated to an increase of just 22 basis points in the yield on the 10-year Treasury note.  As of the close of trading on Friday 7/17/15, the Fed funds rate is 0-0.25% and the yield on the 10-year Treasury note is 2.35% (source: David Kelly, JPMorgan).   
14. WATER – The drought in California has impacted water usage of individuals, water districts and entities that hold “water rights” that were established as far back as 1903 (source: Water Resources Control Board).   
15. ACTIVE KID – Kris Bryant, 23-year old rookie 3rd baseman for the Chicago Cubs, played in last week’s All-Star game in Cincinnati.  As a youth growing up in Las Vegas, Bryant played 172 games of travel baseball during calendar year 2001 as a 9-year old (source: USA Today).   

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