By: Anirban Basu Sage Policy Group, Inc. October 17 th, 2014
Back to the Future Part II On Behalf of The Arizona Builders
Alliance
Slide 2
Raging Bull (1980)
Slide 3
Estimated Growth in Output by Select Global Areas 2014
Estimates* *IMF Staff Estimates The IMFs global and regional growth
figures for 2014 are based on new purchasing power parity (PPP)
weights derived from the recently released 2011 International
Comparison Program survey. **For India, data and forecasts are
presented on a fiscal year basis and output growth is based on GDP
at market prices. Source: International Monetary Fund, October 2014
WEO Database
Slide 4
Debt by Selected Country 2014 Projected Source: International
Monetary Fund, October 2014 WEO Database
Slide 5
RankExchangeIndex% Change 4Tokyo SENikkei 22556.7%
2NasdaqNASDAQ Composite38.3% 1NYSE GroupDJI A26.5% 6Frankfurt
SEDAX25.5% 8Bolsa De MadridMadrid General21.4% 12Swiss
ExchangeSwiss Market20.2% 5EuronextCAC 4018.0% 10BorsaItalianaFTSE
MIB16.6% 3London SEFTSE 10012.0% 9TSX GroupS&P TSX
Composite9.6% 11Hong Kong ExchangesHang Seng Index2.9% 7Shanghai
SEShanghai Composite-6.8% Top 12 Stock Exchanges 2013 Growth*
Source: Yahoo! Finance *Change from the 2012 close to the 2013
close.
Slide 6
S&P Select Sector Performance 12-Month Percent Change as of
October 10 th, 2014 Source: Standard & Poors
Slide 7
Federal Reserve Balance Sheet v. S&P 500 Index May 2008
October 2014* Source: Federal Reserve Bank; Yahoo Finance S&P
500 index depicted in orange *Through 10/8/2014
Top Gun (1986) Profits out of the Danger Zone Source: BEA, BLS,
S&P Case-Shiller, Yahoo! Finance
Slide 10
The Golden Child (1986) Highest Earning Hedge Fund Managers,
2013 Source: Forbes ManagerHedge Fund Firm2013 EarningsNet Return
George SorosSoros Fund Management$4 billion22% David
TepperAppaloosa Management$3.5 billion42% Steve CohenSAC Capital
Advisors$2.3 billion19% John PaulsonPaulson Enhanced$1.9 billion26%
Carl IcahnIcahn Enterprises$1.7 billion31% James SimonsRenaissance
Technologies$1.1 billion18% Ray DalioBridgewater Associates$900
million5.25% Ken GriffinCitadel$900 million19.25% Larry
RobbinsGlenview Capital$750 million43% Leon CoopermanOmega$730
million25% 2013 S&P 500: +29.6%
Slide 11
Airplane! (1980) David Teppers Move against the Market Source:
Forbes, Bloomberg 2013 Appaloosa Management: +$3.5 billion (42%)
Our big play versus the market is airlines. Thats a big play. Were
the biggest holder of all these different airlines. No hedge fund
owned as many airlines as we did and not too many people did.
Delta, UAL, LCC, US Air, AMR. We owned big percentages in all those
stocks. And you know what, they did pretty good pretty freaking
good. -David Tepper
Slide 12
Source: U.S. Bureau of Labor Statistics Median Weekly Earnings,
Full-Time U.S. Workers* 2000Q2 through 2014Q2 *SA, Constant
1982-1984 dollars (adjusted to CPI-U) Wage and salary workers ages
16+
Slide 13
Source: Moodys Economy Recession Watch as of July 2014
Slide 14
Industrial Production January 2001 through September 2014
Source: Federal Reserve The industrial production index measures
the real output of the manufacturing, mining, and electric and gas
utilities industries.
Slide 15
Gross Domestic Product 1990Q1 through 2014Q2 Source: Bureau of
Economic Analysis
Slide 16
Contributions to GDP Growth by Component 2013Q2 2014Q2 Source:
Bureau of Economic Analysis
Slide 17
Ordinary People (1980)
Slide 18
Source: U.S. Bureau of Labor Statistics September 2014: +248K
Net Change in U.S. Jobs, BLS January 2002 through September
2014
Slide 19
National Nonfarm Employment by Industry Sector September 2013
v. September 2014 All told 2,635K Jobs gained Source: U.S. Bureau
of Labor Statistics
Slide 20
National Construction Employment Monthly Net Change September
2000 through September 2014 Source: U.S. Bureau of Labor Statistics
Industry Sector14-Sep14-Aug13-Sep1-net12-net12-%
Construction6,079.06,063.05,849.016.0230.03.9% Residential
Building677.5671.3617.86.259.79.7% Nonresidential Building696.9
676.10.020.83.1% Heavy & Civil Engineering
Construction918.3917.8889.30.529.03.3% Specialty Trade
Contractors3,786.03,777.23,665.88.8120.23.3%
Slide 21
State-by-state Growth in Construction Jobs August 2013 v.
August 2014 Source: U.S. Bureau of Labor Statistics *Construction,
Mining, and Logging are included in one industry. STATE Year-over-
year Ch. (000) STATE Year-over- year Ch. (000) STATE Year-over-
year Ch. (000) FLORIDA43.5NEW YORK4.3OREGON0.4
CALIFORNIA35.6MICHIGAN3.4MASSACHUSETTS0.2 TEXAS27.7NORTH
DAKOTA3.2IDAHO0.0 ILLINOIS11.1CONNECTICUT3.0NEW HAMPSHIRE0.0
PENNSYLVANIA10.8WISCONSIN3.0HAWAII*-0.1 LOUISIANA9.5ARKANSAS2.9NEW
MEXICO-0.2 UTAH8.4ALABAMA2.4DISTRICT OF COLUMBIA*-0.2
MINNESOTA7.9IOWA2.2KENTUCKY-0.3 INDIANA7.6OKLAHOMA2.2MONTANA-0.3
NEVADA7.2KANSAS2.1ALASKA-0.4 TENNESSEE*7.0DELAWARE*2.1MISSOURI-0.4
NORTH CAROLINA6.7MAINE1.8SOUTH DAKOTA*-0.4 GEORGIA6.0SOUTH
CAROLINA1.4OHIO-1.5 WASHINGTON5.9NEBRASKA*0.9WEST VIRGINIA-1.8
MARYLAND*5.5RHODE ISLAND0.7MISSISSIPPI-3.7
COLORADO4.8VERMONT0.7ARIZONA-5.4 VIRGINIA4.5WYOMING0.5NEW
JERSEY-11.3
Slide 22
Arizona Nonfarm Employment by Industry Sector Groups (SA)
August 2013 v. August 2014 Absolute Change Source: Bureau of Labor
Statistics AZ Total (SA): +51.3K; +2.0% US Total (SA): +2,551K;
+1.9%
Slide 23
Phoenix-Mesa-Glendale MSA Nonfarm Employment by Industry Sector
Groups (NSA) August 2013 v. August 2014 Absolute Change Source:
Bureau of Labor Statistics Pheonix MSA Total (NSA): +42.2K; +2.3%
AZ Total (SA): +51.3K; +2.0% US Total (SA): +2,551K; +1.9%
Slide 24
U.S. Year-over-year Percent Change: 1.9% Employment Growth,
U.S. States (SA) August 2013 v. August 2014 Percent Change R ANK S
TATE %R ANK S TATE %R ANK S TATE % 1NORTH
DAKOTA4.418MISSOURI1.835KANSAS0.8 2NEVADA3.518SOUTH
CAROLINA1.835PENNSYLVANIA0.8
2TEXAS3.520MASSACHUSETTS1.637ILLINOIS0.7
2UTAH3.520MINNESOTA1.637MICHIGAN0.7
5FLORIDA2.820WISCONSIN1.637MISSISSIPPI0.7
6DELAWARE2.723ARKANSAS1.537NEW MEXICO0.7
6OREGON2.723LOUISIANA1.537SOUTH DAKOTA0.7 8NORTH
CAROLINA2.425KENTUCKY1.342NEBRASKA0.6
9COLORADO2.325MAINE1.343IDAHO0.5 10GEORGIA2.227IOWA1.243VIRGINIA0.5
11CALIFORNIA2.127NEW YORK1.245MARYLAND0.4 11TENNESSEE2.127RHODE
ISLAND1.245NEW HAMPSHIRE0.4 11WASHINGTON2.127WYOMING1.245VERMONT0.4
14ARIZONA2.031ALABAMA1.148CONNECTICUT0.3
14INDIANA2.031HAWAII1.148OHIO0.3 14OKLAHOMA2.031WEST
VIRGINIA1.150NEW JERSEY0.1 17MONTANA1.934DISTRICT OF
COLUMBIA1.051ALASKA-0.8 Source: U.S. Bureau of Labor
Statistics
Slide 25
U.S. Unemployment Rate: 6.1% Unemployment Rates, U.S. States
(SA) August 2014 RANKSTATE%RANKSTATE%RANKSTATE% 1NORTH
DAKOTA2.817VIRGINIA5.633WEST VIRGINIA6.6
2NEBRASKA3.617WASHINGTON5.636ILLINOIS6.7 2SOUTH
DAKOTA3.617WISCONSIN5.636NEW MEXICO6.7 2UTAH3.621OHIO5.738ALASKA6.8
5VERMONT4.122INDIANA5.838NORTH CAROLINA6.8
6HAWAII4.322LOUISIANA5.840ALABAMA6.9
6MINNESOTA4.322MASSACHUSETTS5.841ARIZONA7.1 8NEW
HAMPSHIRE4.422PENNSYLVANIA5.841KENTUCKY7.1
9IOWA4.526ARKANSAS6.343OREGON7.2
10WYOMING4.626FLORIDA6.344CALIFORNIA7.4
11IDAHO4.726MISSOURI6.344MICHIGAN7.4
11MONTANA4.729MARYLAND6.444TENNESSEE7.4 11OKLAHOMA4.729NEW
YORK6.447DISTRICT OF COLUMBIA7.6 14KANSAS4.929SOUTH
CAROLINA6.447NEVADA7.6 15COLORADO5.132DELAWARE6.549RHODE ISLAND7.7
16TEXAS5.333CONNECTICUT6.650MISSISSIPPI7.9 17MAINE5.633NEW
JERSEY6.651GEORGIA8.1 Source: U.S. Bureau of Labor Statistics
Slide 26
Unemployment Rates, 20 Largest Metros (NSA) August 2014
RankMSAUR RankMSAUR 1 Minneapolis-St. Paul-Bloomington, MN-WI
Metropolitan Statistical Area3.89 Phoenix-Mesa-Glendale, AZ
Metropolitan Statistical Area6.3 2 Seattle-Tacoma-Bellevue, WA
Metropolitan Statistical Area5.312 Miami-Fort Lauderdale-Pompano
Beach, FL Metropolitan Statistical Area6.6 3 Houston-Sugar
Land-Baytown, TX Metropolitan Statistical Area 5.4 12 St. Louis,
MO-IL Metropolitan Statistical Area6.6 3 San
Francisco-Oakland-Fremont, CA Metropolitan Statistical Area5.414
Philadelphia-Camden-Wilmington, PA-NJ-DE- MD Metropolitan
Statistical Area6.7 5 Boston-Cambridge-Quincy, MA-NH Metropolitan
NECTA 5.5 15 Tampa-St. Petersburg-Clearwater, FL Metropolitan
Statistical Area6.8 5 Dallas-Fort Worth-Arlington, TX Metropolitan
Statistical Area 5.5 16 Baltimore-Towson, MD Metropolitan
Statistical Area 7.0 7 Washington-Arlington-Alexandria, DC-VA-MD-WV
Metropolitan Statistical Area5.617 Los Angeles-Long Beach-Santa
Ana, CA Metropolitan Statistical Area 7.7 8 San Diego-Carlsbad-San
Marcos, CA Metropolitan Statistical Area6.218
Detroit-Warren-Livonia, MI Metropolitan Statistical Area 7.9 9
Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area
6.3 19 Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical
Area 8.0 9 New York-Northern New Jersey-Long Island, NY-NJ- PA
Metropolitan Statistical Area6.320 Riverside-San
Bernardino-Ontario, CA Metropolitan Statistical Area8.7 Source:
U.S. Bureau of Labor Statistics
Slide 27
Field of Dreams (1989)
Slide 28
15-Year & 30-Year Fixed Mortgage Rates February 1995
through October 2014* Source: Freddie Mac *Week ending
10/16/2014
Slide 29
U.S. New Home Sales January 1999 through August 2014 Source:
U.S. Census Bureau
Slide 30
U.S. Housing Starts January 1999 through August 2014 Source:
U.S. Census Bureau
Slide 31
U.S. Housing Building Permits January 1999 through August 2014
Source: U.S. Census Bureau August 2014: 1 Unit: 626K 5 Units or
more: 343K
Slide 32
S&P/Case-Shiller Home Price Indices for Select Metros July
2014, 12-Month Percentage Change Source: Standard & Poors
Slide 33
Source: The American Institute of Architects Architecture
Billings Index January 2008 through August 2014 August 2014:
53.0
Slide 34
Nonresidential Construction Put-in-Place December 2006 through
August 2014 Source: U.S. Census Bureau Dec. 08: $697.4 billion
August 14: $603.7 billion -13.4%
Slide 35
National Nonresidential Construction Spending by Subsector
August 2013 v. August 2014 Source: U.S. Census Bureau
Slide 36
Inputs to Construction PPI January 2001 August 2014 Source:
U.S. Bureau of Labor Statistics
Slide 37
Construction Materials PPI 12-month % Change as of August 2014
Source: U.S. Bureau of Labor Statistics
Slide 38
The Shining (1980)
Slide 39
Sales Growth by Type of Business September 2013 v. September
2014* Source: U.S. Census Bureau *September 2014 advanced
estimate
Slide 40
Conference Board Leading Economic Indicators Index August 2007
through August 2014 Source: Conference Board
Slide 41
Coming to America (1988) Economy gained momentum over the
course of last year; Tailwinds included booming stock market, lower
gasoline prices, stabilizing global economy, and consumer
expenditures on interest rate sensitive durable goods like housing
and autos; The current year is associated with greater certainty
regarding federal budgeting and monetary policy that helps; The
world is not perfect - black swan threats remain: (1) Iran (2)
Israel/Iran (3) Europe (4) contagion (5) cyber (6) EMP; Healthcare
reform could slow full- time hiring over the course of the year;
and Regions with rapid population growth and/or significant
import/export activity, industrial output and energy production
will lead the way Arizona poised to be an outperformer.
Slide 42
Thank You Follow us on Twitter @SagePolicyGroup You can always
reach me at [email protected][email protected] Please look
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410.522.7243 (410.522.SAGE) Please contact us when you require
economic research & policy analysis.
Slide 43
15-Year & 30-Year Fixed Mortgage Rates February 1995
through October 2014* Source: Freddie Mac *Week ending
10/9/2014