The Bullish Outlook Continues
Dr. Mark G. DotzourChief Economist
Real Estate Center at Texas A&M University
Household Debt Service Payments as a Percent of Disposable Personal Income
Household Debt Service Payments as a Percent of Disposable Personal Income
(Per
cent
)
Source: Board of Governors of the Federal Reserve System
Household Net Worth RecoveringAfter Stock Market Rally
Households and Nonprofit Organizations; Net Worth, Level
(Bill
ions
of D
olla
rs)
Source: Board of Governors of the Federal Reserve System
The Oil Market:“Let’s Play Hardball”
Money Supply and Velocity:Actual Money Supply Growing Modestly
Source: Federal Reserve Bank of St. LouisSource: Federal Reserve Bank of St. Louis
(Per
cent
Cha
nge
from
Yea
r Ago
)
MZM Money Stock
Too Much Money Chasing Deals
Too Much Money Chasing Deals
S&P 500 companies have parked $1.9 trillion of profits they have made outside the U.S.
• There is a total of $2.6 trillion in US money market funds.
• A recent report from Bain said PE firms have more than $1 trillion in unused cash at he end of 2013.
• Goldman Sachs has raised $2.4 billion for its second real estate debt fund. With leverage, it will be able to buy $4.2 billion in commercial real estate loans that mature in coming months.
• Carlyle Group raised $5.5 billion in new equity capital in 1Q2014, pushing total assets under management to $198 billion.
Margin DebtDebit Balances at Broker/Dealers
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
100000150000200000250000300000350000400000450000500000
Mill
ions
Source: Standard and Poor’s
Mar 2000 Dow 11,234Mar 2001 Dow 9,106Mar 2002 Dow 7,415
Jul 2007 Dow 14,021Jul 2008 Dow 10,827Jul 2009 Dow 8,087