Bill’s By The Number$

Posted by: Kim Vo | Posted on: August 29th, 2016 | 0 Comments

1. VERY THIN RANGE – The S&P 500 has traded at least 1% higher or lower from the previous day’s close during just 1 trading day of the 35 trading days through Friday 8/26/16. But the index traded at least 1% up-or-down from the previous day’s close during 30 of the first 35 trading days of calendar year 2016. 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. IN A DECADE – Our national debt, $19.5 trillion today, is projected to reach $28.2 trillion as of the end of fiscal year 2026, i.e., 10 years from now (source: Congressional Budget Office).

3. UP BIG – Interest payments on our national debt are projected to nearly triple over the next 10 years, rising from $248 billion in fiscal year 2016 to $712 billion in fiscal year 2026 (source: Congressional Budget Office).

4. SENSITIVE – The “duration” of the 30-year T-bond as of 8/26/16 was 21.687 years, i.e., a 1 percentage point increase in the current yield of the long bond will reduce the value of the bond by 21.687% (source: Ryan ALM).

5. LAST QUARTER – The 3 months of October-November-December rank 2-4-3 in terms of average monthly performance for the S&P 500 index (i.e., October is 2nd best, November is 4th best and December is 3rd best). The 3 months have jointly gained + 5.1% per year (total return) over the last 25 years (1991-2015) or 52% of the index’s total return over the entire 25-year period (source: BTN Research).

6. GIT R DONE – Productivity of the average American worker (output per worker per hour) over 10-year stretches of time increased the greatest (+34%) from 1957-1966. Productivity of the average American worker had its weakest 10-year growth (+11%) from 1973-1982 (source: Department of Labor).

7. QUACK, QUACK – Between 6/30/15 and 6/30/16, average home prices increased in 49 of 50 US states. Oregon’s +11.7% average home price gain led the nation (source: Federal Housing Finance Agency).

8. BIG PIECE – Payroll taxes finance Social Security, Medicare and unemployment benefits. Projected payroll taxes during fiscal year 2016 (i.e., the 12 months ending 9/30/16) are $1.1 trillion, 33% of the total tax receipts ($3.3 trillion) forecasted for the full fiscal year (source: Office of Management and Budget).

9. NEED A LITTLE HELP – Just 6 life insurance companies have failed in the last 5 calendar years (2012-16) as of Friday 8/26/16 and were taken over by state insurance departments. A total of 105 banks have failed over the same time period and were taken over by the Federal Deposit Insurance Corporation (source: National Organization of Life & Health Insurance Guaranty Associations, FDIC).

10. LOWER OIL PRICES – 45 of the 79 American companies (57%) that have defaulted on corporate debt in the 12 months ending 6/30/16 represent companies in the energy and natural resources industries (source: S&P Global Fixed Income Research).

11. AT ODDS – The average growth of the US economy over the last 50 years (through 6/30/16) is +2.8% per quarter (i.e., quarter-over-quarter change expressed as an annualized result) but all quarters since October 2014 have reported less than +2.8% growth. The average monthly jobs gain over the last 50 years (through 7/31/16) is +134,000, but all months since October 2014 have reported an average of +221,000 new jobs (source: DOL).

12. COLLEGE AND CARS – The outstanding balance of student loans ($1.26 trillion) is larger than the outstanding balance of auto loans ($1.10 trillion) as of 6/30/16 (source: Federal Reserve Bank of New York).

13. MAKE MORE, PAY MORE – The effective federal tax rate for the top 1% of US taxpayers for 2016 is projected to be 33.0% of income, including federal income taxes, payroll taxes, excise taxes, estate taxes and gift taxes. The estimate does not include the payment of state income taxes. The effective federal tax rate for the bottom 20% of US taxpayers is projected to be just 3.5% of income (source: Tax Foundation).

14. FANNIE AND FREDDIE – Treasury Secretary Hank Paulson announced on 9/07/08 (i.e., 8 years ago) the government’s plan to take control of mortgage giants Fannie Mae and Freddie Mac. The Treasury Department initially pledged up to $200 billion of financial support in anticipation of future mortgage defaults. Fannie and Freddie actually received $187 billion of taxpayer aid, but have paid back $247 billion for a $60 billion profit for taxpayers, equal to a +3.5% annualized gain (source: Treasury Department).

15. LADIES RULE – The American Olympic team won 121 medals at the Rio Games, split between 61 medals won by US women, 55 medals won by US men and 5 medals in mixed-gender sports (source: BTN Research).

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Bill’s By The Number$

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