Bill’s By The Number$

Posted by: Vanessa Guadiana | Posted on: September 21st, 2015 | 0 Comments

1. NOT OFTEN – With just over 3 months remaining in 2015, the S&P 500 is down 3.4% (total return) through the close of trading last Friday (9/18/15).  In the previous 40 years (1975-2014), there have been only 6 years when the full year performance result for the S&P 500 index produced a bigger loss than 3.4%.  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. STILL MADE MONEY – The S&P 500 index peaked on 10/09/07 before beginning a 17-month bear market that saw the raw index fall 57% before bottoming on 3/09/09.  An investment in the S&P 500 on 10/09/07 (i.e., at the market’s top) is up +48.8% (total return) as of the close of trading on Friday 9/18/15 (i.e., nearly 8 years later), an annualized return of +5.1% per year (source: BTN Research).  
3. TAX DATA – The 5.56 million tax returns from 2013 that reported at least $200,000 of adjusted gross income (AGI) represent 3.8% of all returns filed, received 31.4% of all AGI nationwide and paid 55.2% of all the federal income tax that was paid in 2013 (source: Internal Revenue Service).  
4. NOT THE RIGHT TIME – The bond market was priced on 8/14/15 to reflect a 45% chance of a ¼ of 1% rate hike by the Federal Reserve at their mid-September 2015 meeting.  That percentage had fallen to 25% as of Tuesday 9/15/15, the day before the Fed began a 2-day meeting that concluded with the Federal Open Market Committee leaving short-term interest rates unchanged for the 54th consecutive meeting (source: CME Group). 
5. SUBJECTIVE CALL – 85% of Americans surveyed in 2014 believe they are in the “middle class” as opposed to being in the “lower class” or in the “upper class” (source: Pew Research Center).   
6. 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%.  Over the 12 months ending 8/31/15, inflation has advanced +0.2% (source: Department of Labor).  
7. TEN BILLION A DAY – With just 10 days remaining in fiscal year 2015 (i.e., the 12 months ending 9/30/15), the government is projecting total fiscal year spending of $3.703 trillion, equal to $10.1 billion of daily outlays (source: Treasury Department).  
8. COVERS JUST TWO WEEKS – The Treasury Department implemented a policy in early 2015 requiring that it maintain a daily cash balance of at least $150 billion in the government’s “checking account,” roughly equivalent to 15 days of average spending by Uncle Sam (source: Treasury Secretary Jacob Lew).  
9. REALLY HIGH – A legal purchase of marijuana in the state of Colorado is subject to a 15% marijuana excise tax, a 10% marijuana state sales tax, a 2.9% general state sales tax and any local sales tax, i.e., total taxes of at least 27.9% (source: State of Colorado). 
10. COST OF DOING BUSINESS – 68% of the total employee cost that an employer pays in the private sector is for wages and salaries.  The other 32% 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).     
11. CONSEQUENCES – The International Energy Agency (IEA) predicted on 9/11/15 that continued low oil prices will force high-cost oil fields to close down, reducing the supply of American oil in 2016 by 400,000 barrels a day.  For the week ending 9/11/15, US oil production was 9.117 million barrels a day (source: IEA).  
12. 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). 
13. WHEN I’M SIXTY-FOUR – In the last 15 years, the age that an average American male begins his retirement has increased by 2 years to 64 years old (source: Center for Retirement Research at Boston College). 
14. BAILOUT NEEDED? – The US Postal System last earned a profit in 2006.  Since then, the US Postal System has lost $17.7 million a day for the last 8 years, i.e., 2007-2014, a total loss of $51.7 billion (source: Tax Foundation).     
15. SPORTS FAMINE – The Toronto Blue Jays, leading the AL East by 3 ½ games as of play through Thursday 9/17/15, last appeared in the MLB post season in 1993.  The Blue Jays’ post season drought is the longest in MLB today.  Seattle is # 2 on that list, having last made the playoffs in 2001 (source: Major League Baseball). 

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