Bill’s By The Number$

Posted by: Kim Vo | Posted on: January 23rd, 2017 | 0 Comments

1. HALF MISSED OUT – The S&P 500 gained +12.0% (total return) in 2016, higher than the index’s trailing 50-year average performance of +10.2% per year. An estimated 52% of American adults were invested in the US stock market last year, either in personal accounts or through their retirement portfolios. 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: Gallup).

2. HUGE – The US stock market was worth $25.3 trillion as of 12/31/16. The S&P 500 comprises 80% of the total US stock market capitalization as of 12/31/16, equal to $20.2 trillion (source: BTN Research).

3. NOT A GREAT PATTERN – The last Republican president who was voted into office to begin his time as POTUS who did not suffer through a recession within 18 months of his inauguration was Warren G. Harding, our country’s # 29 president who served from 1921-23 before dying of a heart attack (source: BTN Research).

4. WEALTH – The richest 1% of individuals in the world have a collective net worth that exceeds the collective net worth of the other 99% of people in the world (source: Oxfam International).

5. HAS BEEN LOWER – Inflation (as measured by the Consumer Price Index) advanced by +2.1% during 2016. Inflation in 2015 (+0.7%) and 2014 (+0.8%) were 2 of the 3 lowest rates of annual inflation in the United States in the last 50 years, i.e., 1967-2016 (source: Department of Labor).

6. THE EFFECT BEFORE AND NOW – The S&P 500 lost 9.1% (total return) in the 24 trading days after the Federal Reserve raised short-term interest rates for the first time in 9 ½ years on 12/16/15, i.e., the 24 trading days from 12/17/15 through Friday 1/22/16. The S&P 500 has gained +1.0% (total return) in the 24 trading days since the Federal Reserve raised short-term interest rates again on 12/14/16, i.e., the 24 trading days from 12/15/16 through last Friday 1/20/17 (source: BTN Research).

7. IMPACT ON OUR INTEREST RATES? – China has cut its holdings of US Treasuries to $1.05 trillion as of November 2016, its lowest level since May 2010. Since peaking at $1.32 trillion in November 2013, the Chinese have sold $267 billion of Treasuries in an effort to support its own currency (source: Treasury Department).

8. REMITTANCE – The Fed had profits of $92.0 billion in 2016 (to be returned to the Treasury Department), largely from interest income on the $3.7 trillion of Treasury notes and bonds purchased during the 6 years of “quantitative easing” (QE) that ended on 10/31/14. Over the last 8 calendar years (2009-2016), the Fed has returned $657 billion to the Treasury Department, equal to $82 billion a year. Over the 18 years prior to QE (i.e., 1991-2008), the Fed returned an average of just $19 billion a year to the Treasury (source: Federal Reserve).

9. YOU ARE REPLACEABLE – Although just 5% of occupations consist of activities that are 100% automatable, i.e., they could be replaced entirely by technology or robots, 60% of all occupations have at least 30% of their daily activities that are automatable (source: McKinsey Global Institute).

10. WHAT IF? – The average interest rate paid by the government on its interest bearing debt was 2.232% as of 12/31/16, less than half of the 5.034% paid as of 12/31/06, i.e., 10 years ago (source: Treasury Department).

11. LET’S GO – For every 2 families that moved into South Dakota last year, just 1 family moved out, making South Dakota the “top moving destination” state. For every 1 family that moved into New Jersey last year, 2 families moved out, placing New Jersey last on the same list (source: United Van Lines).

12. TWINS? – A child born in 2015 will cost a higher-income family (defined as those making at least $107,400 of before-tax income) $372,210 in 2015 dollars (i.e., a present value amount) and $454,770 in inflation adjusted dollars over the first 17 years of the child’s life, i.e., not including college (source: Department of Agriculture).

13. NOT NEEDED – Chuck Grassley (R-IA), the Chairman of the Senate Judiciary Committee, did not go to law school. Grassley is the 1st chair of the committee in history not to have a law degree (source: Congress).

14. TWO SUCCESSFUL PRESIDENTS – When Abraham Lincoln (R-IL) won the 1860 presidential election, he got just 39.8% of the popular vote. Lincoln received 55.0% of the popular vote when he won the 1864 election. When Bill Clinton (D-AR) won the 1992 presidential election, he got just 43.0% of the popular vote. Clinton received 49.2% of the popular vote when he won the 1996 election (source: PresidentElect.us).

15. FETE – President Obama welcomed 86 championship athletic teams to the White House during his 8 years in office, an average of 1 every 5 weeks. The last team to visit: the Chicago Cubs (source: Washington Examiner).

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