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Bill’s By The Number$

  1. STOCKS AND HIGH INFLATION – During the 15 highest inflation years (using the “Consumer Price Index” as the benchmark) over the last 100 years, i.e., 1921-2020, the S&P 500 stock index has been “up” 7 years and “down” 8 years. The index’s average performance for the 15 years is +2.5% per year (total return).  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).
  1. SINCE THEN – President Trump declared the coronavirus pandemic a “national emergency” on Friday 3/13/20. Over the 1-year since that announcement, i.e., Monday 3/16/20 through last Friday 3/12/21, the S&P 500 gained +48.0% (total return), in spite of a horrible 12.0% loss (total return) on Monday 3/16/20 (source: BTN Research).
  1. PUT IT ON THE CARD – In the 1-year since the declaration of a “national emergency” on 3/13/20, the US national debt has increased $4.46 trillion from $23.44 trillion to $27.90 trillion (source: Treasury Department).
  1. RISING RATES – From its all-time closing low of 0.501% on Monday 3/09/20, the yield on the 10-year Treasury note has more than tripled to close at 1.634% as of last Friday 3/12/21 (source: Treasury Department).
  1. ADDING TO CASHMoney market funds in the United States, including retail and institutional funds, both taxable and tax-free, have increased $615 billion (to $4.39 trillion) over the last 12 months through last Friday 3/12/21, an average increase of $12 billion a week (source: Investment Company Institute).
  1. BY PARTY – In the last 100 years (1921-2020), Republicans have a 52-48 edge over the Democrats in “years in the White House.” Inflation (using the “Consumer Price Index” benchmark) has been +1.9% per year during the Republicans’ 52 years, while inflation has been +3.4% per year during the Democrats’ 48 years (source: DOL).
  1. BLAME THE PANDEMIC – Total exports of goods and services by American corporations in calendar year 2020 were $2.13 trillion, down 16% from the year before and the smallest total recorded nationwide since 2010 (source: Bureau of Economic Analysis).
  1. WHO IS RIGHT? – In a 2/10/21 speech to the Economic Club of New York, Federal Reserve Chair Jerome Powell said, “published unemployment rates (from the Department of Labor) during COVID have dramatically understated the deterioration in the labor market.” He speculated an accurate jobless rate as of 1/31/21 was “close to 10%.”  As of 1/31/21, the official national jobless rate was 6.3% (source: Federal Reserve).
  1. YEAR-OVER-YEAR IMPROVEMENT – The aggregate earnings per share of the companies in the S&P 500 in the 1st quarter 2021 are forecasted to be +21.5% greater than the actual aggregate earnings per share of the S&P 500 companies from the 1st quarter 2020 (source: FactSet).
  1. NEW BUSINESSES – The 4 top months for “business applications” in US history have occurred since July 2020, i.e., during the pandemic. The all-time monthly record (582,334 applications) was set in July 2020, followed by January 2021 (497,539), September 2020 (463,175) and August 2020 (430,489) (source: Census Bureau).
  1. TAXES – The American Institute of CPAs (AICPA) sent a letter on 3/04/21 to the commissioner of the IRS requesting a 2-month delay of the 2021 tax deadline, i.e., from 4/15/21 to 6/15/21. The organization believes that filing obligations due a month from today are “simply not possible for many taxpayers” (source: AICPA).
  1. REALLY RICH FOLKS – Senator Elizabeth Warren (D-MA) proposed on 3/01/21 the “Ultra-Millionaire Tax Act” that would impose an annual wealth tax on households with at least a $50 million net worth. The tax would begin in 2023 and would impact an estimated 100,000 US households (out of 126 million total US households).  The bill’s tax rate is 2% on estates between $50 million and $1 billion, rising to 3% on estates valued in excess of $1 billion.  For Jeff Bezos, worth $181 billion as of the close of trading on Friday 3/12/21, the wealth tax would cost him $5.4 billion annually at his current net worth level (source: www.warren.senate.gov).
  1. NOT WHAT IT USED TO BE – To rank in the top 1% of US taxpayers took $85,428 of adjusted gross income (AGI) in 1981. To rank in the top 25% of US taxpayers took $87,044 of AGI in 2018 (source: Internal Revenue Service).
  1. THEY NEED MONEY – Hawaii’s state Senate passed legislation last week (3/09/21) to increase its top marginal tax rate to 16% (from 11% today) on taxable income of more than $200,000. The bill, which would give Hawaii the highest marginal tax rate in the nation, moves onto the Hawaii state House for debate (source: Hawaii Senate).
  1. LIKE FATHER, LIKE SON – Both Cecil Fielder (who played 13 MLB years) and his son Prince Fielder (who played 12 MLB years) each hit 319 home runs in their respective major league baseball careers (source: MLB).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. LAST TWO BULLS – From its 3/23/20 bear market low, the S&P 500 has gained +74.6% (total return) in the 240 trading days through Friday 3/05/21. From its 3/09/09 bear market low, the S&P 500 gained +67.4% (total return) in the first 240 trading days of what became a nearly 11-year bull market run that ended on 2/19/20.  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).
  1. IN MY LIFETIME – Last year’s (2020) contraction of the US economy (down 3.5%) was the largest drop our nation has experienced since 1946 or 74 years earlier (source: Bureau of Economic Analysis).
  1. WHAT A COMEBACK – Many American employers have recovered and as of 2/28/21 they have hired back 67% of the 25.4 million jobs that were lost last year during the 2 months of March-April 2020 (source: DOL).
  1. PANDEMIC BILL – The $1.9 trillion “American Rescue Plan Act of 2021” that the House passed would provide stimulus payments to an estimated 93% of US households (117 million). The Senate version of this legislation would provide stimulus payments to 87% of US households (110 million) (source: Penn Wharton Budget Model).
  1. IT’S THE RENTERS THAT ARE HURTING – Just 1 in 39 homeowners (2.5%) was at least 3 months behind in paying their monthly mortgage as of 12/31/20. However 1 in 5 renters (20.5%) was at least 3 months behind in paying their monthly rent as of 12/31/20 (source: Consumer Financial Protection Bureau).
  1. YOUR HOME – 62% of home mortgages (33.4 million) are federally backed, i.e., the loans are guaranteed by Fannie Mae, Freddie Mac, the Federal Housing Administration or the Veterans Benefits Administration. The government announced on 2/16/21 that the moratorium on foreclosures and evictions on federally backed, single-family home mortgages had been extended to 6/30/21 (source: Federal Housing Finance Agency).
  1. QUICK, BEFORE RATES RISE – 13% of outstanding home mortgages nationwide as of 12/31/20, i.e., 7.2 million mortgages out of 53.9 million mortgages, were refinanced during 2020 (source: Federal Reserve Bank of NY).
  1. IMPACT ON BOND INVESTORS – The yield on the 10-year Treasury note rose 0.37 percentage points (from 1.09% to 1.46%) in February 2021. That’s the largest monthly rise in the 10-year note yield since November 2016 when the yield went from 1.84% to 2.37%, a jump of 0.53 percentage points (source: Treasury Department).
  1. HIS OPINION – Legendary investor Warren Buffett released his annual letter to investors on 2/27/21. Referring to the recent rise in the yield of the 10-year Treasury note, Buffet opined that “bonds are not the place to be these days.  Fixed-income investors worldwide – whether pension funds, insurance companies or retirees – face a bleak future.”  The release was Buffett’s 56th annual letter (source: Berkshire Hathaway).
  1. IN SEARCH OF YIELD – American corporations issued $52 billion of “junk-rated” bonds in January 2021, the 3rd highest monthly volume of “junk” bonds in US history. A record $438 billion of “junk” bonds were issued in calendar year 2020.  “Junk” or “high yield” bonds are rated below “Baa” by Moody’s or rated below “BBB” by S&P (source: S&P Global Market Intelligence).
  1. ALMOST FIVE YEARS EARLY – The Congressional Budget Office (CBO) released a 10-year forecast on 1/19/16 (i.e., 5 years ago) of the projected size of our national debt. The non-partisan agency predicted that our national debt, $18.9 trillion in size as of 1/19/16, would reach $28.003 trillion as of 12/31/25.  As of last Monday 3/01/21, the national debt was $28.004 trillion (source: CBO).
  1. WHO OWNS WHAT – 39% of the US government debt that is “held by the public” was foreign owned in 2019 (the most recent year that data is available), down from 48% in 2008 (source: USA Facts).
  1. PAY NOTHING ON APRIL 15TH – 35% of the 153.8 million tax returns that were filed nationwide for tax year 2018 (the latest year for which data has been released) did not pay any federal income tax, a total of 53.4 million tax returns. 90% of these “non-taxable” returns (48.0 million returns) reported adjusted gross income of less than $40,000 (source: Internal Revenue Service).
  1. PANDEMIC, AND AFTER – The price of West Texas Intermediate (WTI) crude oil fell to $22.76 a barrel as of 4/09/20, i.e., 11 months ago. As of Friday 3/05/21, WTI crude oil closed at $66.09 a barrel (source: NYMEX).
  1. MONEY WENT TO MADOFF INSTEAD – Instead of paying professional baseball player Bobby Bonilla $5.9 million as he was owed in 1999, the New York Mets negotiated to pay Bonilla $1,193,248 every July 1st from 2011 through 2035, a total of $29.8 million over 25 years (source: New York Mets).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. TWO MONTHS IN – The S&P 500 has gained +1.7% YTD (total return) through Friday 2/26/21. The stock index has set 10 all-time closing highs this year, including 8 record closes since President Joe Biden took office on Wednesday 1/20/21.  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).
  1. TECH STOCKS – The NASDAQ Composite has gained +2.5% YTD (total return) through Friday 2/26/21, after gaining +44.9% (total return) in 2020 and gaining +36.7% (total return) in 2019. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system (source: BTN Research).
  1. MORE THAN HALF – The split between “up” stocks and “down” stocks in the S&P 500 based upon YTD performance through last Friday 2/26/21 is 59% “up” and 41% “down” (source: S&P 500).
  1. RECORD LOW SET A YEAR AGO – The yield on the 10-year Treasury note closed at 1.46% on Friday 2/26/21. The all-time record low close for the 10-year note was 0.50% set on 3/09/20.  10-year notes have been traded in the USA since 1790, i.e., 231 years of trading (source: Treasury Department).
  1. SMALLER HOMES – The average size of a single-family home built in the United States in 2019 was 2,509 square feet, the 4th consecutive year that the national average size has declined (source: Census Bureau).
  1. PANDEMIC IMPACT – Total state tax revenue, i.e., a combination of state income tax, corporate state income tax and state sales tax, increased in 22 states but declined in 28 states over the period April-to-December 2020 compared to the same 9 months from 2019. Idaho experienced the greatest gain (up +10.5%) while Alaska suffered the largest drop (off 43%) (source: Urban Institute’s State and Local Finance Initiative).
  1. WHERE? – The average single-family home in the USA has appreciated +39.0% over the 5 years ending 12/31/20. Homes in Idaho (+82.5%) have experienced the greatest growth in value while homes in North Dakota (+14.1%) have seen the least percentage increase in value (source: Federal Housing Finance Agency).
  1. HIGHEST NUMBERS EVER – Mortgage debt ($10.04 trillion), student loan debt ($1.56 trillion) and auto loan debt ($1.37 trillion) reached all-time record highs as of 12/31/20 (source: Federal Reserve Bank of New York).
  1. QUITE A FINANCIAL STORM – 19 of the largest US banks will participate in the Federal Reserve’s stress test this year. The annual analysis models the banks’ ability to function during a hypothetical recession that includes a 10.75% unemployment rate, a 55% drop in stock prices and a 4% decline in the size of the US economy (source: Federal Reserve).
  1. ACCURATE? – The government surveys 60,000 households each month in order to estimate our nation’s unemployment rate, i.e., 60,000 households out of a grand total of 8 million households. That means data collected from 1 out of every 2,097 households is the source of our jobless rate (source: Department of Labor).
  1. NO PROGRESS IN A DOZEN YEARS – US “life expectancy at birth” for calendar year 2020 that was reported on 2/18/21 was 77.8 years, the same “life expectancy at birth” that was originally reported by the US on 12/09/10 for calendar year 2008 (source: National Vital Statistics Reports).
  1. NEED LESS SPACE – 278 executives surveyed in August 2020 anticipate they will reduce their office space footprint by an average of 30% when their current leases come up for renewal. Those surveyed report that a successful “work from home” experience during the pandemic has decreased their need for daily office space (source: McKinsey Global Institute).
  1. WHAT THEY GET FOR WHAT THEY DO – The government payment to a hospital caring for a Medicare-eligible patient who has been diagnosed with COVID-19 has been increased by +20% over traditional inpatient reimbursement through Medicare. This additional payment will be in effect until the end of the public health emergency caused by the pandemic (source: Centers for Medicare & Medicaid Services).
  1. BIG PROMISE – The European Union (27 European countries) implemented in 2013 its “Youth Guarantee” program which ensures any person under the age of 25 will receive a “good quality” job, an apprenticeship or continued education within 4 months of finishing his/her schooling or after being laid off (source: EU).
  1. BACK-TO-BACK – The 2000 New York Yankees baseball team was the last major league team to repeat as World Series champs, a feat the Los Angeles Dodgers will attempt to duplicate in 2021 (source: MLB).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. BULL RUN – In the nearly 11 months since bottoming on 3/23/20, the S&P 500 has gained +77.4% (total return) through last Friday 2/19/21. The S&P 500 consists of 500 stocks chosen for market size, liquidity and industry group representation.  It is a market (source: BTN Research).
  1. LUCKY – A person with $1 million invested 100% in the S&P 500 as of 1/01/73 withdrawing an inflation-adjusted $100,000 per year would be out of money in 9 years, i.e., as of 12/31/81. A 2nd person with $1 million invested in the S&P 500 as of 1/01/82 withdrawing an inflation-adjusted $100,000 per year would have $6.32 million remaining after 39 years, i.e., as of 12/31/20.  This calculation ignores the ultimate impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance.  Actual results will fluctuate with market conditions and will vary (source: BTN Research).
  1. BAD DAY, BAD YEAR – The worst year for the taxable bond market in the last 30 years (1991-2020) was a loss of 2.92% (total return) in 1994. The stock market, using the S&P 500 as a measurement, has had 105 trading days in the last 30 years that resulted in a loss of at least 2.92% (total return).  The Bloomberg Barclays US Aggregate Bond Index (created in 1986 with backdated history calculated to 1976), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1 year until final maturity, was used as the bond measurement (source: Bloomberg Barclays).
  1. MORE OUT THAN IN – The 4 largest monthly budget deficits in US history occurred in 2020. The 4 months were June 2020 ($864 billion deficit), April 2020 ($738 billion deficit), May 2020 ($399 billion deficit) and February 2020 ($235 billion deficit).  The last month to run a surplus was in September 2019 (source: Treasury Department).
  1. START RIGHT AWAY – A child born in February 1999 (22 years ago) who started college in the fall of 2017 is scheduled to graduate from an average 4-year public in-state college in May 2021. If the child’s parents had invested $146 per month beginning at the child’s 1999 birth and had earned an annualized +8% on all invested dollars, the parents would have been able to pay for their child’s 4-year college expenses of tuition, fees, room and board (the 4-year cost was $86,320).  This calculation ignores the ultimate impact of taxes on the investment account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment or performance.  Actual results will fluctuate with market conditions and will vary (source: College Board).
  1. TOP SHELF – To rank in the top 0.1% of US taxpayers in tax year 2018, i.e., the top 1 out of 1,000 taxpayers, required an adjusted gross income of $2,514,209 (source: Internal Revenue Service).
  1. PEOPLE – The US population reached 200 million in 1967, 300 million in 2006 (39 years later) and was projected in February 2020 to reach 400 million in 2058. Our population today is 330 million (source: Census Bureau).
  1. NEW HOMES – The construction of 991,100 new single-family homes began in 2020, the 9th consecutive year of increasing home building in the US. In the decade of the 2010s, 6.8 million new homes began construction, down 44% from the 12.3 million new homes that started in the decade of the 2000s (source: Census Bureau).
  1. BY STATE – There are 27 Republican governors and 23 Democratic governors. The longest tenured governor nationwide is Andrew Cuomo (D-NY) who just began his 11th year in office (source: Ballotpedia.org).
  1. BY AGE – 81% of US pandemic deaths as of 2/19/21 were Americans at least age 65. 1% of US pandemic deaths as of 2/19/21 were Americans under age 35 (source: Centers for Disease Control and Prevention).
  1. BY MONTH – 195,000 Americans died in October 1918 during the worldwide flu outbreak, the deadliest month in our nation’s history. 95,000 Americans died from COVID-19 in January 2021, the worst month to date for pandemic-related deaths nationwide (source: Center for Disease Control).
  1. OUTLAYS – US consumer spending dropped 3% during calendar year 2020, a combination of spending on “goods” increasing +6% while spending on “services” fell 7% (source: Federal Reserve Bank of New York).
  1. PUSHING THE LOCALS ASIDE – The “home buying budget” today in Austin, TX for home buyers from outside of the state of Texas is +32% higher than the “home buying budget” of local buyers (source: Redfin).
  1. PAY FOR IT LATERStudent loan debt in the United States was 90% larger than credit card debt nationwide as of 12/31/20, i.e., $1.56 trillion to $820 billion (source: Federal Reserve Bank of New York).
  1. GOLF – Tiger Woods has earned $121 million in career earnings from playing golf on the PGA tour, but has earned $1.5 billion in his career from endorsements, appearances and course design work (source: Forbes).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. STOCK MARKET – The median annual return of the stock market over the last 45 years (1976-2020) was a gain of +15.8% (total return). The stock market has produced a positive total return gain in 37 of the last 45 years, i.e., 82% of the time.  The S&P 500, consisting of 500 stocks chosen for market size, liquidity and industry group representation, was used as the stock measurement.  It is a market value weighted index with each stock’s weight in the index proportionate to its market value (source: BTN Research).
  1. BOND MARKET – The median annual return of the taxable bond market over the last 45 years (1976-2020) was a gain of +6.5% (total return). The taxable bond market has produced a positive total return gain in 42 of the last 45 years, i.e., 93% of the time.  The Bloomberg Barclays US Aggregate Bond Index (created in 1986), calculated using publicly traded investment grade government bonds, corporate bonds and mortgage-related bonds with at least 1 year until final maturity, was used as the bond measurement (source: Bloomberg Barclays).
  1. DO THE MATH – The S&P 500 is up +4.9% YTD (total return) through last Friday 2/12/21. Since the S&P 500 is a cap-weighted index, the largest capitalized stocks carry a disproportionate impact on the index’s performance calculation.  As of 2/12/21, the 8 largest stocks in the index (out of 505 individual stocks counted in the index) represent 25% of the total capitalization of the index (source: Slickcharts.com).
  1. SUPPLY AND DEMAND – The price of West Texas Intermediate (WTI) crude oil had fallen to $22.76 a barrel as of 4/09/20 as the global impact of COVID-19 was crushing the worldwide demand for oil. As of last Friday 2/12/21, WTI crude oil closed at $59.47 a barrel, its highest closing price since 1/09/20 (source: NYMEX).
  1. MORE IN THAN OUT – For every $1 of goods that US companies exported to Chinese buyers in 2020, American consumers imported $3.49 of goods from Chinese manufacturers (source: Department of Commerce).
  1. IT’S AN INDEX – Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020. The category “food” within the CPI calculation was up +3.9% for the year, “medical care services” was up +2.8%, but “energy” was down 7.0% last year (source: Department of Labor).
  1. WILL YOU NEED TO WORK? – Even though 1 of 4 current retirees (27%) have held a job for pay during their retirement years, just under 3 of 4 current workers (74%) anticipate they will hold a job for pay during their upcoming retirement years (source: Employee Benefit Research Institute 2020 Retirement Confidence Survey).
  1. LET’S SHOOT FOR MORE – A 65-year old American male has a life expectancy of 18.2 years. A 65-year old American female has a life expectancy of 20.8 years (source: National Center for Health Statistics).
  1. HOME EQUITY – Single-family home values in the United States have increased by an average of +10.0% YTD through 11/30/20, likely to result in the first “double-digit” average return for home values nationwide for an entire calendar year since 2004. Data on the change in home values during December 2020 will be released on 2/23/21 (source: Federal Housing Finance Agency).
  1. DREAM HOME – Ground was broken in the United States on the construction of 100,200 single-family homes in October 2020, the largest monthly total nationwide since June 2007 (source: Census Bureau).
  1. HOW WE LIVE – Of the 7.2 million new US households created in the last 4 years, 100% were “owner” households while none were “renter” households, i.e., “owner” households grew from 75.6 million (12/31/16) to 82.8 million (12/31/20), while “renter” households remained flat at 43.0 million (source: Census Bureau).
  1. WE’RE DOWN, THEY’RE DOWN A LOT – The US economy fell 3.5% in size during calendar year 2020. The collective economies of the 19 countries that use the Euro as their common currency, i.e., the Eurozone, fell 6.8% in size during calendar year 2020 (source: Department of Commerce, Eurostat).
  1. BLUE CONTROL – The House of Representatives is currently made up of 221 Democrats, 211 Republicans and 3 vacancies. 2 of the 3 vacancies are in Louisiana, and a 3rd is from Texas (source: House of Representatives).
  1. ALL DONE WITH MY WORK – An average American worker has increased his/her productivity by +50% in the last 21 years, i.e., an average worker can complete in 2 hours as of 12/31/2020 the same amount of work that it took him/her 3 hours to finish as of 12/31/1999 (source: Department of Labor).
  1. NICE JOB SCOUTING – 6 college quarterbacks were selected before Tom Brady in the 1999 NFL draft. 3 of the 6 never played in an NFL playoff game.  The other 3 played in a grand total of 11 playoff games.  Tom Brady has played in 45 playoff games, including 10 Super Bowls (source: Pro Football Reference).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. TEN YEARS – Since 1950, there have been 62 different 10-year periods (i.e., the 10-years from 1950-59, 1951-60, . . ., 2011-2020). The S&P 500 produced a positive total return in 60 of the 62 decade-long periods.  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).
  1. ONE STOCK, ONE MONTH – The top performing individual stock in the S&P 500 index during January 2021 was up +49% for the month (source: S&P).
  1. NOTHING – 76% of 619 millennials surveyed in the 4th quarter 2019 do not believe Social Security will exist when they retire. Millennials were born between 1981-97 and are ages 24-40 in 2021 (source: Transamerica).
  1. HISTORIC NEED FOR MONEY – The Treasury Department is expected to auction this week $126 billion of 3-year notes ($58 billion), 10-year notes ($41 billion) and 30-year bonds ($27 billion), an all-time quarterly debt auction record amount (source: Treasury Department).
  1. JOBS – The Congressional Budget Office forecasted on 2/01/21 that the number of employed Americans (150.0 million as of 1/31/21) will not recover to its pre-pandemic level of 158.7 million until 2024 (source: CBO).
  1. WILL CONGRESS AGREE? – The $1.9 trillion COVID-relief plan as outlined by the Biden administration includes $350 billion in aid to state and local governments, $400 billion for pandemic vaccination, testing, tracing and for the reopening of schools, $600 billion in direct aid to families (the $1,400 per person stimulus payments), $400 billion in jobless benefits, and $150 billion in “Paycheck Protection Program” (PPP) loans/grants for small businesses (source: The Brookings Institution).
  1. IT HAS BEEN DONE BEFORE – Congressional Democrats are using “budget reconciliation” to move President Joe Biden’s $1.9 trillion COVID-relief plan through the Senate. “Reconciliation bills” are not subject to the “filibuster rule” that ends debate on a piece of legislation only after 60 senators agree to do so, i.e., it would take just 51 senators (instead of 60) to approve the COVID-relief bill.  Congress has used the “budget reconciliation” process to enact 21 bills in the last 40 years (source: Center on Budget and Policy Priorities).
  1. NEGOTIATING WITH THE BANK – As of the end of October 2020, just 3.0 million homeowners with mortgages were in a forbearance plan with their lender, representing 5.6% of all homeowners with mortgages and only 3.6% of all homeowners (source: Black Knight Mortgage Monitor).
  1. THOUGHT IT WOULD BE HIGHER – 522,808 Americans filed bankruptcy in 2020, down 30% from 752,160 bankruptcy filings in 2019 (source: United States Courts, Table F-2, Bankruptcy Filings).
  1. WERE YOU IN ON THIS? – 5.6 million existing homes were sold in 2020, the highest number recorded in the United States since 2006 (source: National Association of Realtors).
  1. GREATER THAN INFLATION – Wages and salaries in the private sector increased +2.8% during calendar year 2020. Wages and salaries in the public sector (i.e., local and state government workers) increased +1.8% during calendar year 2020.  Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020.   (source: Department of Labor).
  1. JUST ONE OF FIFTY STATES IMPROVED – The unemployment rate in 49 of 50 US states increased between December 2019 and December 2020. Hawaii had the greatest jobless rate jump (up 6.6 percentage points from 2.7% to 9.3%).  South Dakota was the only state to report a lower jobless rate last year, dropping from 3.4% to 3.0% (source: Bureau of Labor Statistics).
  1. HUNT FOR HIGHER YIELD – The average current yield on “CCC” rated corporate bonds (as rated by S&P) was 7.6% in January 2021, within 0.3 percentage points of the lowest average yield ever recorded for this “junk bond” rated category, i.e., an all-time low of 7.3% was set in 2014. The current yield of bonds drops as investors bid up the price of the bonds (source: Ice Data Services).
  1. GENTLEMAN FARMER – Bill Gates is the largest private owner of farmland in the United States with 242,000 acres. His largest holdings are in Louisiana, Arkansas and Nebraska (source: The Land Report).
  1. SPRING (AND SNOW) IS IN THE AIR – Training camps for major league baseball teams open this month. The minimum salary for a major league baseball player for 2021 is $570,500.  To rank in the top 1% of all US taxpayers (based upon 2018 tax data) required an adjusted gross income level of at least $540,009 (source: MLB).

– Broker/Dealer Use Only, Reproduction Prohibited without Express Permission –
Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. ONE MONTH – The S&P 500 lost 1.01% (total return) in January 2021. Exactly one-third (33%) of the months over the last 30 years (the 360 months from 2/1991 through 1/2021) have produced a negative return.  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).
  1. INDEX MATH – The S&P 500 closed at an all-time high on Monday 1/25/21, finishing the day at 3855. Just 13 individual stocks in the index also closed at an all-time high on Monday 1/25/21 (source: BTN Research).
  1. END OF LIFE – 2,839,000 Americans died in 2018. 2,855,000 Americans died in 2019.  An estimated 3,271,000 Americans died in 2020 (source: Center for Disease Control).
  1. IN A UNION – 35% of workers in the public sector (i.e., local, state or federal government) were union members in 2020. 6% of workers in the private sector were union workers in 2020 (source: Bureau of Labor Statistics).
  1. PLANNING AHEAD – 6 out of every 7 full-time workers surveyed (86%) in October 2020 are investing money for their retirement, mostly through an employer-sponsored pre-tax plan. 2,069 workers participated in the survey (source: Transamerica Center for Retirement Studies).
  1. RELIEF DOLLARS – 36% of stimulus payment money received by Americans from the March 2020 CARES Act was put into savings, while 35% was used to pay down debt (source: Federal Reserve Bank of New York).
  1. THEY VOTE THIS YEAR – Presidents of 4 of the 12 regional Federal Reserve Banks began their 1-year rotation as voting members of the Federal Open Market Committee (FOMC) last Tuesday 1/26/21. The 4 new voting members in 2021 are Charles Evans (Chicago), Mary Daly (San Francisco), Raphael Bostic (Atlanta) and Thomas Barkin (Richmond).  The New York Fed President (currently John Williams) is a permanent member of the FOMC (source: Federal Reserve).
  1. SELLERS’ MARKET – There were 1.07 million existing homes for sale nationwide as of 12/31/20. Two years ago (12/31/18), there were 1.53 million existing homes for sale nationwide.  Ten years ago (12/31/10), there were 3.02 million existing homes for sale nationwide (source: National Association of Realtors).
  1. AS LONG AS RATES STAY LOW – The average interest rate that the US government pays on its interest-bearing debt as of 12/31/20 was 1.695%, down from 2.331% as of 12/31/15. That means our government can borrow 37.5% more money today than it borrowed 5 years ago and still have the same out-of-pocket interest expense cost (source: Treasury Department).
  1. COMING BACK? – The number of operating oil rigs in the United States both on land and offshore have increased for 10 consecutive weeks through last Friday 1/29/21. The current total of 384 operating oil rigs nationwide is 57% higher than the low point of 244 from 8/14/20.  The pandemic forced 60 North American oilfield service companies into bankruptcy (source: Baker Hughes, Haynes and Boone).
  1. GLOBAL TRADE REBOUNDS – After declining for 10 months during the 2020 pandemic, the monetary value of goods shipped worldwide in November 2020 exceeded its previous high-water mark achieved in December 2019 (source: Netherlands Bureau for Economic Policy Analysis).
  1. READY TO LEAVE?New York residents are currently subject to a top state marginal tax rate of 8.82% at taxable income levels of $1.08 million for an individual return and $2.16 million for a joint return. NY Governor Andrew Cuomo has proposed raising that top marginal rate to 10.86% for the 2022 fiscal year beginning 4/01/21.  NYC residents are also subject to a maximum city marginal tax rate of 3.876%, i.e., their total marginal rate could be as high as 14.736% during fiscal year 2022, the highest in the nation (source: IncomeTaxPro.net).
  1. GETTING ACCURATE INFORMATION – Over the 15 years from 2005 to 2020, 2,100 American newspapers went out of business (source: University of North Carolina Hussman School of Journalism and Media).
  1. IT’S FREE – 17 US states offer free community college education, including Arkansas, California, Maryland, Oregon and New York. All 17 states do enforce different eligibility requirements to qualify for the free tuition, e.g., community service, or a minimum high school GPA (source: The College Post).
  1. BROKE?! – Evander Kane of the NHL’s San Jose Sharks is in the 3rd year of a 7-year contract that will pay him $7 million a year. However Kane filed for Chapter 7 bankruptcy protection on 1/09/21, listing in the bankruptcy filing $10 million of assets offset by $27 million of liabilities (source: San Jose Mercury News).

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Bill’s By The Number$

  1. FIRST QUARTER – Over the last 30 years (1991-2020), the S&P 500 has gained an average of +1.65% (total return) during the 1st quarter (January-February-March), a total that represents just 15% of the index’s 30-year average return of +10.70% per year. 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).
  1. IS IT A BUBBLE? – The US stock market was worth $42.6 trillion as of the close of trading on 1/22/21, 2.0 times the size of our $21.2 trillion economy. At the peak of the dot-com stock bubble in March 2000, the US stock market was worth 1.4 times the size of the US economy (source: Fund Manager Julien Bittel).
  1. RED AND BLUE PROBLEM – The national debt increased +86% during George W. Bush’s 8 years as president, reaching $10.63 trillion as of 1/20/09. The national debt increased +88% during Barack Obama’s 8 years as president, reaching $19.95 trillion as of 1/20/17.  And finally, the national debt increased +39% during Donald Trump’s 4 years in the White House, reaching $27.75 trillion as of 1/20/21 (source: Treasury Department).
  1. LAST FOUR YEARS – From 1/20/17 to 1/20/21, i.e., Donald Trump’s 4 years as President, the S&P 500 gained +83.3% (total return), an average of +16.4% per year. The S&P 500 set 151 record closing highs during the Trump administration, including one on President Trump’s last day as POTUS (source: BTN Research).
  1. TIME FLIES – When Joe Biden was sworn in as a US Senator from the state of Delaware on 1/05/1973, he was the 5th youngest senator (age 30) in US history. When Joe Biden was sworn in as POTUS # 46 on 1/20/2021, he was the oldest president (age 78) to be inaugurated in US history (source: Politico.com).
  1. NOT DONE YET – In 2008-2009, the Congress authorized spending of $983 billion to alleviate the impact of the global mortgage crisis, an amount equal to 6% of the size of the US economy. In 2020, the Congress authorized spending of $3.7 trillion to alleviate the impact of the global pandemic, an amount equal to 17% of the size of the US economy (source: BTN Research).
  1. DID WE SHRINK DURING 2020? – The 1st of 3 estimates (spaced a month apart) of GDP growth/shrinkage for all of calendar year 2020 will be released on Thursday 1/28/21. Our nation’s GDP grew by +3.2% annually during the 1970s, by +3.1% annually during the 1980s, by +3.2% annually during the 1990s, by +1.9% annually during the 2000s, and finally by +2.3% annually during the 2010s (source: Department of Commerce).
  1. PERKS OF THE JOB – All former living US presidents (Carter, Clinton, Bush, Obama, Trump) receive a pension, an annual income of $221,400 (before-tax) in 2021. Former presidents also receive lifetime Secret Service protection (source: Former Presidents Act).
  1. NOW WHAT DO I DO? – 82% of 2020 college graduates did not have a full-time job in place on the day they graduated last year (source: TotalJobs Group Ltd.).
  1. GOING MY WAY? – The 3 most popular states to move into during 2020 were Tennessee, Texas and Florida. The 3 states with the greatest outflow of people during 2020 were California, Illinois and New Jersey.  The rankings are based upon more than 2 million rentals of moving trucks last year that involved a “1-way” interstate movement of furnishings, personal possessions and clothing (source: U-Haul Migration Trends 2020).
  1. I OWE ABSOLUTELY NOTHING! – 37% of US homeowners do not have any outstanding debt on their primary residence, including no mortgage debt or any debt associated with a home equity loan (source: American Community Survey).
  1. HOW CHEAP? – At the beginning of 2020, the all-time record low average interest rate nationwide for a 30-year fixed rate mortgage was 3.31% set on 11/22/12. A new record low average rate was established during 16 separate weeks in 2020, the last taking place on 12/24/20 at 2.66% (source: Freddie Mac).
  1. ELBOW ROOM – First class and business class airline tickets generate 30% of the revenue of an average US airline that flies internationally (source: International Air Transport Association).
  1. BIG CITIES, BIG FOOTPRINT – Just 25 cities in the United States create 52% of our nation’s GDP, including New York City (8.8% of the USA’s GDP), Los Angeles (5.4%) and Chicago (3.5%) (source: Statista).
  1. TIME TO WORK ON THAT HANDICAP – Former President Donald Trump owns 19 golf courses, including 12 in the United States and 7 overseas (source: The U.S. Sun).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. INVEST FOR THREE YEARS – Since 1926, 84% of the rolling 3-year periods for the S&P 500 index (i.e., the 93 separate 3-years beginning 1926-28, then 1927-29, . . . 2018-20) have produced a positive return. 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).
  1. YEAR ONE IN THE WHITE HOUSE – This year (2021) is the 1st year of Joe Biden’s 1st 4-year presidential term. The S&P 500 has been positive on a total return basis during just 13 of the last 23 “presidential 1st-years,” i.e., 1st-years dating back to 1929, but has been up 8 of the last 9 “1st years.”  The average performance for the S&P 500 during the last 23 “presidential 1st-years” has been a gain of +7.7% (total return) (source: BTN Research).
  1. THE INDEX TO FOLLOW – The S&P 500 stock index, worth $33.4 trillion as of 12/31/20, represents 81% of the $41.2 trillion market capitalization of all US stocks (source: S&P).
  1. REALLY LOW – Inflation, as measured by the “Consumer Price Index” (CPI), was up +1.4% for 2020. For the decade of the 2010s (1/01/2010 through 12/31/2019), inflation was up just +1.8% per year, the lowest decade of inflation in the USA since the 1930s.  By comparison, the decade of the 1970s (1/01/1970 through 12/31/1979) suffered +7.4% annual inflation (source: Department of Labor).
  1. THEY OWN IT NOW – Banks foreclosed on 50,238 homes nationwide in 2020, down 65% from 143,955 foreclosures in 2019 and down 78% from 230,305 foreclosures in 2018. The worst single year of foreclosures in US history – 1,050,500 foreclosures in calendar year 2010 (source: ATTOM Data Solutions).
  1. TOP TEN AND EVERYONE ELSE – The top 10% of US taxpayers in tax year 2018 made at least $152,000 in adjusted gross income (AGI), received 48% of all AGI nationwide and paid 71% of all federal income tax (FIT) collected for the 2018 tax year. The bottom 90% of US taxpayers in tax year 2018 made less than $152,000 in AGI, received 52% of all AGI nationwide and paid 29% of all FIT collected for the 2018 tax year (source: IRS).
  1. WHAT TYPES OF TAXES? – 35% of the total tax revenue taken in by state and local governments are property taxes, a total that is more than the combined tax revenue collected in the form of state income taxes (20%) and corporate income taxes (3%) (source: Tax Foundation).
  1. SOMETHING FOR SENIORS – President-elect Biden outlined on the 2020 campaign trail a proposal that would provide an additional boost in Social Security benefits for those seniors that have been receiving retirement benefits for at least 20 years (source: CNBC).
  1. LOAN OR A GRANT – The 3rd iteration of the “Paycheck Protection Program” (PPP) began last Monday 1/11/21. The first 2 PPP programs loaned out $522 billion while PPP # 3 will lend out as much as $284 billion to first-time business borrowers and to some small businesses as repeat-borrowers (source: Paycheck Protection Program).
  1. PRINT AND PURCHASE – The Fed’s balance sheet reached $6.8 trillion as of 1/13/21, up from $3.9 trillion as of 3/11/20, the result of additional purchases of Treasuries (up +$2.2 trillion in 10 months) and mortgage-backed securities (up +$668 billion in 10 months) (source: Federal Reserve).
  1. FOUR YEARS, EIGHT TRILLION – On 1/20/17, the day Donald Trump was inaugurated as POTUS 45, the national debt was $19.9 trillion. As of 1/14/21, the national debt was $27.7 trillion (source: Treasury Department).
  1. DEATHS – The USA had 2,855,000 deaths nationwide in calendar year 2019, i.e., pre-pandemic, an average of 238,000 per month. From 2/06/20 to 1/06/21, i.e., the 11 months beginning with the first COVID-19 death in the USA, 358,000 Americans died as a result of the pandemic, an average of 32,500 per month (source: CDC).
  1. ESTATE TAXES – The maximum amount that a deceased individual may pass onto his/her heirs federally estate-tax free (with proper planning) rises to $11.7 million in 2021, up from $11.58 million in 2020. The limit was $675,000 in 2001 or 20 years ago.  Please consult a tax expert for details (source: Internal Revenue Service).
  1. DIFFERENCE OF OPINION – Rock superstar Prince died on 4/21/16, leaving an estate that was valued (for estate tax purposes) at $82 million. The IRS has challenged the valuation techniques utilized by his administrator, upping the estate value at Prince’s death to $163 million.  The IRS is asking for an additional $39 million in estate taxes and penalties above what Prince’s estate has already paid (source: IRS).
  1. THEY’RE NOT ALABAMA – Only 3 FBS schools (Football Bowl Subdivision) out of 130 opted out of the entire 2020 college football season – Connecticut, New Mexico State and Old Dominion (source: NCAA).

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Copyright © 2021 Michael A. Higley.  All rights reserved.  Email mick.higley@mahbtn.com for subscription information.

Bill’s By The Number$

  1. WASHINGTON AND WALL STREET – Democrat Joe Biden will be sworn in as President # 46 on 1/20/21, and Democrats have control of Congress by achieving a voting majority in both the House and the Senate. Over the last 60 years (1961-2020), the S&P 500 has gained +11.8% per year (total return) when one party controls the White House, the Senate and the House.  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).
  1. FIFTY-FIFTY – The political split in the Senate today is technically not 50-50, but rather is 50 Republicans, 48 Democrats and 2 Independents who caucus with the Democrats, effectively making it a 50-50 split. The last time the Senate was split 50-50 was in 2001, George W. Bush’s first year in office (source: Senate).
  1. UP/DOWN – The S&P 500 has been up 40 of the last 50 years, i.e., 1971-2020, gaining an average of +10.9% per year (total return). The index had an average annual gain of +18.4% (total return) during the 40 “up years” while losing an average of 14.8% per year (total return) during the 10 “down years” (source: BTN Research).
  1. OUR PART OF THE WORLD – The US stock market had a total capitalization of $41 trillion as of 12/31/20, 39% of the world’s $104 trillion stock market capitalization (source: S&P).
  1. WHERE DOES THIS MONEY COME FROM? – The Fed is buying $120 billion of bonds each month – $80 billion of Treasury debt and $40 billion of mortgage-backed securities. The Fed confirmed on 12/16/20 that the purchases will continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals” (source: Federal Reserve).
  1. DEBT – The USA increased its national debt by $7.77 trillion in the last 4 years, i.e., 2017-20. The USA increased its national debt by $7.67 trillion in the previous 7 years, i.e., 2010-16 (source: Treasury Department).
  1. ONE IDEA – President-elect Biden proposed during his campaign a $15,000 tax credit for “first-time” home buyers, available to home buyers who have not owned a residence within the previous 3 years. The tax credit would be “refundable” (if you didn’t use the full amount of the credit, the unused balance is refunded to you) and “advanceable” (you are allowed to claim the credit immediately as opposed to waiting until you file your Form 1040 for the tax year in which you purchased a home).  Biden described the tax credit as a form of “down-payment assistance” (source: Biden 2020 Presidential Campaign).
  1. NINE ZEROS – The number of billionaires in the United States has increased +9% since mid-March 2020 to 659 (source: Institute for Policy Studies).
  1. GOT A LOWER RATE – Through 9/30/20, 65% of the mortgages that were originated in the United States YTD were refis of existing mortgages (source: Inside Mortgage Finance).
  1. YOU THINK IT’S THIS EASY EVERY YEAR? – More new brokerage accounts (an estimated 10 million) were opened during calendar year 2020 than in any other year in US history (source: JMP Securities).
  1. MARGIN DEBT – The use of margin debt on the New York Stock Exchange (NYSE) has increased to $722 billion in November 2020, an all-time record total. The previous record high was $669 billion set in May 2018 (source: Financial Industry Regulatory Authority).
  1. OLD AND THE YOUNG – 81% of COVID-19 deaths nationwide as of 12/30/20 were Americans at least age 65. Just 1% of COVID-19 deaths nationwide as of 12/30/20 were Americans under the age of 35 (source: National Center for Health Statistics).
  1. IN MY PAJAMAS, BUT STILL WORKING – 67% of 451 information technology (IT) executives in the United States that were polled in June 2020 anticipate that their firm’s “work-from-home” (WFH) policies would be permanent or at the very least “long-term” in duration (source: 451 Research).
  1. THE WORK-WORLD HAS CHANGED FOREVER – 80% of 1,388 American workers surveyed in June and July 2020 say they would prefer to work at least 3 days a week from home after the pandemic is brought under control (source: Global Workplace Analytics).
  1. WHO WINS? – Alabama faces off vs. Ohio State in college football’s national championship game tonight (1/11/21). An Alabama victory would give Nick Saban his 7th national title as a head coach (6 with Alabama and 1 with LSU), breaking the record of 6 coaching titles that he currently shares with Bear Bryant (source: NCAA).

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