Make Your Move

transcript

Make Your Make Your MoveMove

Make Your Make Your MoveMoveAlan BeaulieuAlan Beaulieu

ITR EconomicsITR Economics™™

www.itreconomics.com

DurationDuration ForecastForecast EstimatesEstimates

GDPGDP 1212 $13.593$13.593 $13.566 $13.566 (-0.2%)(-0.2%)

US Ind Prod.US Ind Prod. 3131 98.0 98.0 (12MMA)(12MMA) 97.2 97.2 (- 0.8%)(- 0.8%)

EU Ind. Prod.EU Ind. Prod. 1212 100.4 100.4 (12MMA)(12MMA) 98.9 (-98.9 (-1.5%)1.5%)

CA Ind. Prod.CA Ind. Prod. 88 96.7 96.7 96.4 96.4 (-0.3%)(-0.3%)

Retail SalesRetail Sales 3030 $2.186 $2.186 TrillionTrillion $2.140 $2.140 (-2.1%)(-2.1%)

HousingHousing 66 743 743 Ths UnitsThs Units 772 772 ( 3.9%)( 3.9%)

EmploymentEmployment 3333 143.9 143.9 millionmillion 142.5 142.5 (-1.0%)(-1.0%)

CPICPI 99 2.8%2.8% 2.1% 2.1%

* End of year 12-month index estimate

2012 Forecast Results2012 Forecast Results 2

CountryCountry DurationDuration AccuracyAccuracy

GermanyGermany 1212 98.0%98.0%

FranceFrance 1818 99.9%99.9%

ItalyItaly 1818 99.9%99.9%

United KingdomUnited Kingdom 1818 99.9%99.9%

SpainSpain 1818 98.6%98.6%

ChinaChina 1717 96.7%96.7%

JapanJapan 1515 95.9%95.9%

BrazilBrazil 1414 96.7%96.7%

EU IndustriesEU Industries 1414 94.1%94.1%

Results for 2011Results for 2011 3

US Industrial Production to US Industrial Production to Gross Domestic ProductGross Domestic Product

-14.6%

Year-over-year Quarter to Quarter (3/12)

US Industrial Production GrowthUS Industrial Production Growth

12/12 annual growth rate

Real Gross Domestic ProductReal Gross Domestic Product 6

Trillions of $

US Industrial Production to US Industrial Production to Wholesale Trade Durable GoodsWholesale Trade Durable Goods

12/12 Rates-of-Change

US Industrial Production to US Industrial Production to Wholesale Trade Nondurable GoodsWholesale Trade Nondurable Goods

Wholesale Trade Petroleum & Petroleum Wholesale Trade Petroleum & Petroleum Products to Crude Oil Futures PricesProducts to Crude Oil Futures Prices

US Industrial Production to Wholesale US Industrial Production to Wholesale Trade Machinery, Equipment & SuppliesTrade Machinery, Equipment & Supplies

US Industrial Production to Wholesale Trade US Industrial Production to Wholesale Trade Chemicals & Allied ProductsChemicals & Allied Products

Wholesale Trade Electrical & Wholesale Trade Electrical & Electronic GoodsElectronic Goods

Bils of $

Wholesale Trade Hardware & HVAC Equipment & Wholesale Trade Hardware & HVAC Equipment & Supplies to US Industrial ProductionSupplies to US Industrial Production

• Leading indicators pointing upLeading indicators pointing up• Liquidity is not an issueLiquidity is not an issue• Exports are upExports are up• Stimulative monetary policyStimulative monetary policy• Employment rising (companies right-sized)Employment rising (companies right-sized)• Banks are lending Banks are lending • Retail Sales Retail Sales • Construction spending is improvingConstruction spending is improving

RecoveryRecovery

• Europe’s financial troubles …Europe’s financial troubles …• China recession? …China recession? …• Massive legislative changes…Massive legislative changes…• Oil prices Oil prices couldcould break through $120 … break through $120 …• Fiscal Cliff…Fiscal Cliff…• Tax Hikes…Tax Hikes…• Massive deficit and growing nat’l debtMassive deficit and growing nat’l debt

Areas of ConcernAreas of Concern

National Defense Expenditures to National Defense Expenditures to Defense Capital Goods N.O.Defense Capital Goods N.O.

Reagan Bush Clinton BushCarter Obama

Year-Over-Year Growth Rates %

Western Europe Industrial ProductionWestern Europe Industrial Production

Global Leading IndicatorsGlobal Leading Indicators

Tax Revenue and Top Marginal Rates Compared,Tax Revenue and Top Marginal Rates Compared,1930-20121930-2012 19

Source: Tax Policy Center; Historical Tables, OMB; CBO Alternative Scenario.Produced by Veronique de Rugy, Mercatus Center at George Mason University

40-Year Average

International Comparison of Spending on Health, International Comparison of Spending on Health, 1980-20081980-2008 20

Costs by Age CategoriesCosts by Age Categories 21

Source: The Economist

Federal Reserve Act of 1913 32 pagesGlass-Steagall Act 37Dodd-Frank 848Not rules, but instructions on how to create more regulations and bureaucracies

Caught in the WebCaught in the WebWho can do what to whomWho can do what to whom 22

23Total U.S. Public DebtTotal U.S. Public Debt

(% of GDP)

Year-Over-Year Growth Rates %

24World Countries Industrial ProductionWorld Countries Industrial Production

25Global Industrial Production IndicesGlobal Industrial Production Indices

3.9 Mexico

3.7 US

0.7 SE Asia

-0.5 Japan

-1.6 Europe

-2.5 Brazil

US Manufacturing as a % of GDP (Value Added)US Manufacturing as a % of GDP (Value Added)

$ per pound, 3MMA

27Copper Price TrendCopper Price Trend

Crude Oil Futures PricesCrude Oil Futures Prices

Light & Sweet $ per Barrel, Data Trends

U.S. Dependence on Foreign Oil DecliningU.S. Dependence on Foreign Oil DecliningNet imports as a share of domestic consumptionNet imports as a share of domestic consumption 29

52%49%

57%58%60%60%

30Trends 10Trends 10

Housing

Production

Medical

New Orders

Soft Landing

FinancialRetail

Wholesale Trade

Foreign

NonresidentialConstruction

Hard Landing

Nondefense Capital Goods Nondefense Capital Goods New Orders w/o AircraftNew Orders w/o Aircraft

3/1212/12

Billions of $

USIP – 12/12Indicator - Monthly

US Industrial Production to US Industrial Production to ITR Leading IndicatorITR Leading Indicator

12/12 Rate-of-Change

University of Michigan Consumer University of Michigan Consumer Expectations IndexExpectations Index 33

6 Month Moving Average

Chicago Fed National Activity IndexChicago Fed National Activity Index 34

35Purchasing Managers IndexPurchasing Managers Index

Raw Data

36Ratio of Inventories to New OrdersRatio of Inventories to New Orders

Raw Data

37US Leading IndicatorUS Leading Indicator

Stock Prices IndexStock Prices Index

Actual 12MMA

S&P 500, 1941-43 = 10

Corporate Bond PricesCorporate Bond Prices

Rates-of-Change

40Retail Sales Excluding AutomobilesRetail Sales Excluding Automobiles

3/123/1212/1212/12

3MMT3MMT

12MMT12MMT

Trillions of 82-84$

Personal SavingsPersonal Savings

Billions of $, Annual Data TrendSAAR

42Housing StartsHousing Starts

3MMT 12MMT

Millions of Units

43Remodeling Market IndexRemodeling Market Index

US Industrial Production US Industrial Production to Private Non-Residential Constructionto Private Non-Residential Construction

Additions and AlterationCommercial Buildings -4.7% DOffice & Bank Alterations -6.9% A Stores & Restaurants -0.4% D

2013 3.5% 2014 4.5%

•Concise 6 Page Report

•Excellent Economic “Snap Shot"

•Consists of Current Events, Extensive Forecasts for Durable & Nondurable Goods, Snap Shot Indicators, Readers' Questions, Fed Notes, ITR Opportunity Index, and more

•Delivered Monthly

The NAW AdvisorThe NAW Advisor

4620132013

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4720142014

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Make Your Move

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