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Bill’s By The Number$

Posted by: Kim Vo | Posted on: September 19th, 2016 | 0 Comments

1. YOU STILL MADE MONEY – The S&P 500 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 and before the fall) is up +66.1% (total return) as of the close of trading on Friday 9/16/16 (i.e., nearly 9 years later), an annualized return of +5.8% per year. The S&P 500 consists of 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. NICE GAIN – 2015’s +5.2% rise in household median income is the largest year-over-year increase ever recorded (2015’s median income over 2014’s median income). The household income statistic has been tracked nationally since 1967 and is adjusted for inflation (source: Census Bureau).

3. NOT THE MOST – Household median income in the USA was $56,516 in 2015. The highest level of household median income recorded was $57,909 in 1999, a total that has been adjusted for inflation (source: Census Bureau).

4. THEY EXTRAPOLATE – The government surveyed 95,000 American households to compile the “household income” statistic, or less than 0.1% of the nation’s 118.3 million households (source: Census Bureau).

5. HAVING BABIES – The birth rate in the United States is 13.42, i.e., 13.42 births per 1,000 citizens. The birth rate in Mexico is 19.02, i.e., 19.02 births per 1,000 citizens, or +42% higher than that of the United States (source: CIA World Factbook).

6. TAX DATA – The 6.22 million tax returns from 2014 that reported at least $200,000 of adjusted gross income (AGI) represent 4.2% of all returns filed, received 34.2% of all AGI nationwide and paid 58.2% of all the federal income tax that was paid nationally in 2014 (source: Internal Revenue Service).

7. 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 8/31/16, inflation advanced +1.1% (source: Department of Labor).

8. MORE THAN TEN BILLION A DAY – With less than 2 weeks remaining in fiscal year 2016 (i.e., the 12 months that will end on 9/30/16), the government is projecting fiscal year spending of $3.88 trillion, equal to $10.6 billion of daily outlays (source: Treasury Department).

9. COST OF DOING BUSINESS – Based upon June 2016 data, 69% of the total employee cost that an employer pays in the private sector is for wages and salaries. The other 31% is for the various benefits that are 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).

10. FED ACTION – When the Fed raised short-term interest rates on 12/16/15, their post-meeting press conference included a forecast of 4 rate hikes in 2016 that would result in a one percentage point increase, i.e., 4 hikes spread over 8 scheduled meetings of ¼ of 1 percentage point each. Through the first 5 meetings of 2016, the Fed has not raised rates. Meeting # 6 of 2016 will take place this week (source: Federal Reserve).

11. THEY DIDN’T AGREE – This week’s Fed meeting is the 21st of the Janet Yellen era. Yellen became the Fed chair on 2/03/14. There have been 13 dissents to her interest rate recommendations from her first 20 meetings, cast by just 5 different members of the Federal Open Market Committee (source: Federal Reserve).

12. NOT UNTOUCHABLE – When a 1983 Social Security committee (chaired by Alan Greenspan) implemented changes that gradually increased the age from 65 to 67 at which a retiree would receive full social security benefits, only Americans that were 20 or more years from turning 65 were impacted (source: Social Security).

13. EARN LESS, PAY IN MORE – The trustees of the Illinois Teachers’ Retirement System (TRS) pension plan voted to reduce the plan’s discount rate from 7.5% to 7% on Friday 8/26/16. This action will force the pension plan to increase its annual plan contribution by $421 million to $4.3 billion a year (source: TRS).

14. BEIJING FLYING – Increased airline travel in China is projected to require +100,000 additional pilots over the next 2 decades, an average of nearly 100 new pilots a week for the next 20 years (source: BusinessWeek).

15. ARE YOU READY FOR FOOTBALL? – 35% of the NFL football players on the opening day rosters for 2016 graduated from high schools in just 3 states – Florida, California and Texas. Only 2 states (Alaska and Maine) do not have a player on a NFL roster this season (source: MaxPreps).

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