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Bill’s By The Number$

Posted by: Vanessa Guadiana | Posted on: May 19th, 2014 | 0 Comments

  1. THE HIGHEST EVER – The S&P 500 closed at 1897 last Tuesday 5/13/14, its 10th all-time record close this year.  The stock index set 45 record closes in 2013, the last on 12/31/13 on the final trading day of 2013.  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. FLAT, THEN NOT FLAT – Over the 11-year period from the end of calendar year 1967 to the end of calendar year 1978, the value of the S&P 500 changed by less than 1 point (i.e., an index value of 96.47 on 12/31/67 to an index value of 96.11 on 12/31/78).  Over the subsequent 35 years (1979-2013), the S&P 500 index value grew 19-fold, gaining +12.0% annually on a total return basis (source: BTN Research).
  3. BIG UP OR BIG DOWN – From 1970-2007 (i.e., 38 years), the S&P 500 either gained or lost at least 3% in a single trading day 98 times or just over 1% of trading days (i.e., measurement based upon the closing value of the index on consecutive trading days).  During 2008-11, the S&P 500 gained or lost at least 3% in a single trading day 85 times or more than 8% of trading days.  From 1/01/12 through Friday 5/16/14, the S&P 500 has not gained or lost at least 3% in any single trading day, a stretch of 596 trading days (source: BTN Research).
  4. MANY YEARS – If the Federal Reserve was to stop its “print-and-purchase” program (aka “Quantitative Easing”) and not reinvest any of the fixed income proceeds as the bonds mature in the future (i.e., the $4 trillion of bonds that were purchased in the last 5 ½ years), it will still take the Fed 5-8 years to reduce its balance sheet to pre-recession levels (i.e., September 2008), according to Senate testimony on 5/08/14 by Fed Chair Janet Yellen (source: Federal Reserve).
  5. POPULAR GUY40,000 people attended the annual meeting of Warren Buffett’s corporation in Omaha, NE in early May 2014.  Only 12 people attended Buffett’s annual corporate meeting in 1981 (source: BTN Research).
  6. THE (UN)GOLDEN YEARS – The number of American homeowners at least age 75 with mortgage debt has more than doubled in the last 10 years, rising from 1 out of every 12 seniors (8.4%) to 1 out of every 5 seniors (21.2%).  30% of American homeowners at least age 65 have an outstanding mortgage, up from 22% a decade ago (source: Consumer Financial Protection Bureau).
  7. NO MONTHLY MORTGAGE – 31% of the existing homes sold nationwide in calendar year 2013 were purchased for “all cash” (source: National Association of Realtors).
  8. NOT INTERESTED – 54% of US physicians do not accept Medicaid patients, up +10 percentage points (i.e., from 44% to 54%) from 4 years ago (source: Merritt Hawkins & Associates).
  9. NO CHANGE – Members of Congress (both Senators and House of Representative members) last received a pay hike in January 2009 when their annual salary was boosted to $174,000.  Since then, Congress has voted 5 times to deny themselves an increase in pay (source: Congress).
  10. SURPLUS – The US government reported a $107 billion surplus for April 2014, its first monthly surplus this calendar year.  The $414 billion of tax receipts in April 2014 was the largest monthly total ever collected (source: Treasury Department).
  11. MAY BE WORSE – The total of student loans outstanding reached $1.11 trillion as of 3/31/14, a +13% increase over the last year.  Although the student loan delinquency rate is 11.5% (i.e., at least 90 days past due by amount), the calculation assumes that those loans currently in deferment (and not required to make any current repayment) have a 0% delinquency rate, suggesting the 11.5% rate is understated (source: NY Federal Reserve Bank).
  12. BEST OF THE REST – The yield on the 10-year Treasury note was 2.57% on 8/05/11, the day that S&P announced a downgrade of the USA from AAA to AA+.  Now 33 months later, the yield on the 10-year Treasury note closed last Friday (5/16/14) at 2.50% as global bond investors continue to buy US debt (source: Treasury Department).
  13. BUT WHAT IF? – The average interest rate that Uncle Sam is paying on its interest bearing debt is 2.424% as of 4/30/14, half the cost the government was paying (4.838%) as of 12/31/07 (source: Treasury Department).
  14. NOT TOGETHER – From 6/30/04 to 6/29/06, the Fed raised short-term interest rates from 1% to 5.25%, but over the same period the yield on the 10-year Treasury note rose only from 4.62% to 5.22% (source: Federal Reserve).
  15. MAKE CONTACT – There have been just 2 MLB players in the last 50 years to have more home runs than strikeouts in a season.  The most recent was Barry Bonds who had 45 HRs and just 41 Ks in 2004 (source: MLB).


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