Post on 18-Jan-2016
transcript
Rural Outlook Conference
US and Oklahoma Economic Outlook Presentation
October 2015
Rural Outlook PresentationOctober 2015 Agenda
• Status of the US Economy– Storyline Retrospective– Major Indicators
• Monetary Policy– Fed’s Balance Sheet– Money Supply Growth
• Special Topics– Status of the Oklahoma Economy
• Employment Trends—State and Regional• Unemployment
– Price of Crude Oil & Employment Implications
Storyline and Continuing Saga
19th Year and Counting
First Chapters of StoryIrrational Exuberance
Stock Market Bubble/Bust
Floods of Liquidity Promoting Speculation and Low Rates
Rise of the Housing Bubble
Recession of 2001
Greenspan “Put”: Expand the Money Supply in the Face of any Financial Trauma
• 1987 Stock Market Crash– Solution—Add liquidity
• 1990 Gulf War– Solution—Add liquidity
• Mexican Financial Crisis– Solution—Add liquidity
• Asian/Russian Financial Crisis– Solution—Add liquidity
• Long-Term Capital Market Collapse– Solution—Add liquidity
• Y2K Problems– Solution—Add liquidity
• Stock Market Collapse– Solution—Add liquidity
• 2001 Recession– Solution—Add liquidity
• 9/11 Attack– Solution—Add liquidity
Has Greenspan created MORAL HAZARDS?
Next Chapters of StorySubprime Mortgage Crisis
Financial Contagion
Recession of 2007-2008
Fiscal & Monetary Stimulus
Housing Market Collapse
Muted Economic Recovery
The Continuing 19-Year SagaCredit Market Deleveraging
Sovereign Debt Crises
Currency Devaluations
Global Political Discord
Quantitative Easing Forever
Demographic and Other Cliffs
Continuing Slow Growth
Status of the National Economic Recovery
“Nobody can predict how long governments can get away with fake growth, fake money,
fake financial stability, fake jobs, fake inflation numbers and fake income growth.”
Paul Singer, Eliott Management, $8.6B AUM
Real Annualized GDP Growth
Recent Estimates place Q1 2013 at a 1.6% gain
Industrial Production
Retail Sales
Year-over-Year Change in U.S. Non-Ag Employment
Purchasing Mgrs Index and Fed Manufacturing Surveys
Recent Estimates place Q1 2013 at a 1.6% gain
Case Shiller Housing Price Indices
Housing Starts
Inflation
Monetary Policy
Federal Reserve gone wild?
Fed’s Magical Balance Sheet
U.S. Treasury securities 2,461.6 Reserve balances with F.R. Banks 2,479.3Federal agency debt securities 38.7 Currency in circulation 1,317.4Mortgage-backed securities 1,729.8 Reverse repurchase agreements 251.5Credit loans 208.1 Treasury cash holdings 0.2Other loans 0.1 Other deposits with F.R. Banks 418.1Other Federal Reserve assets 80.2 Other liabilities and capital 63.1Gold stock 11.0
Total 4,529.6 Total 4,529.6
Fed's Balance Sheet November 26, 2014 ($billions)
Fed’s Magical Balance Sheet
Federal Reserve’s Asset Holdings
Stock Market and Member Bank Reserves
Bank Reserve Balances Deposited at the Fed
U.S. Government Budget Balances
Status of the Oklahoma Economy
OKC, Tulsa, BOS Employment Trends
US and Oklahoma Employment Growth
Comparative State Unemployment Rates
Price of Oil
Houston, we have a problem!
WTI: What Happened in the 1980’s
WTI Historic
Historic U.S. Oil Production
US Historic Rig Count
Oil v. Natural Gas Rig Count
Oil Prices and Rig Counts
OK Direct Mining Sector Employment
OK Regional Direct Mining Sector Employment
That’s all, folks