7/20/2018
1
Brown Sugar:Deriving Satisfaction through
Data Analysis
By: Anirban BasuSage Policy Group, Inc.
On Behalf of
Michigan Land Title AssociationSummer Convention
July 16th, 2018
Disclaimer: Any resemblance between the presentation’s title and the speaker is purely coincidental.
Get off of My Cloud
IPSOS Global Confidence Index, June 2018
Source: IPSOS
Based on data from Thomson Reuters/Ipsos Primary Consumer Sentiment Index (PCSI).
2
© 2018 Ipsos
US
Largest drops
Turkey
South Africa
Argentina
CONSUMER CONFIDENCE GLOBAL SNAPSHOT Ipsos Consumer Confidence Index
June 2018
Canada
Mexico
Argentina
55.3/ +0.6
61.9/ -0.9
42.5/ -3.3
47.0 /+1.3
Brazil
42.7/ -1.2
50.7/+0.2
Great Britain
France
43.3/-2.4
Spain
44.3/+1.4 Italy
40.9/+2.3
South Africa43.1/ -3.8
Germany
56.8/ +0.2
Poland
51.0/-0.7Sweden
61.0/ -2.9
Hungary
45.2/ +1.2
Israel
55.1/+1.5
Turkey
37.9/-4.2
Saudi Arabia
57.9/+5.3
Russia
42.2/+1.4
China
71.2/+0.9
India
64.1/ -0.9
South Korea
47.7/+2.0
Japan
45.2/+0.2
Australia
53.8/-0.4
48.8/-1.0
Belgium
High Low
CountryIndex/3-month change
Change ≥ +1.5
Change ≥ -1.5
Largest gains
Saudi Arabia
Italy
South Korea
Global Average: 50.4
(3-month change: -0.1)
Highest (over 60) in:
China, India, U.S.,
Sweden
Lowest (below 40) in:
Turkey
Down in 5 countries:
Turkey, South Africa,
Argentina, Sweden,
France
Up in 4 countries:
Saudi Arabia, Italy, South
Korea, Israel
Based on data from Thomson Reuters/Ipsos Primary Consumer Sentiment Index (PCSI).
2
© 2018 Ipsos
US
Largest drops
Turkey
South Africa
Argentina
CONSUMER CONFIDENCE GLOBAL SNAPSHOT Ipsos Consumer Confidence Index
June 2018
Canada
Mexico
Argentina
55.3/ +0.6
61.9/ -0.9
42.5/ -3.3
47.0 /+1.3
Brazil
42.7/ -1.2
50.7/+0.2
Great Britain
France
43.3/-2.4
Spain
44.3/+1.4 Italy
40.9/+2.3
South Africa43.1/ -3.8
Germany
56.8/ +0.2
Poland
51.0/-0.7Sweden
61.0/ -2.9
Hungary
45.2/ +1.2
Israel
55.1/+1.5
Turkey
37.9/-4.2
Saudi Arabia
57.9/+5.3
Russia
42.2/+1.4
China
71.2/+0.9
India
64.1/ -0.9
South Korea
47.7/+2.0
Japan
45.2/+0.2
Australia
53.8/-0.4
48.8/-1.0
Belgium
High Low
CountryIndex/3-month change
Change ≥ +1.5
Change ≥ -1.5
Largest gains
Saudi Arabia
Italy
South Korea
Global Average: 50.4
(3-month change: -0.1)
Highest (over 60) in:
China, India, U.S.,
Sweden
Lowest (below 40) in:
Turkey
Down in 5 countries:
Turkey, South Africa,
Argentina, Sweden,
France
Up in 4 countries:
Saudi Arabia, Italy, South
Korea, Israel
50.4
7/20/2018
2
The business confidence index (BCI) is based on enterprises’ assessment of production, orders and stocks, as well as its current position and expectations for the immediate future. Opinions compared to a “normal” state are collected and the difference between positive and negative answers provides a qualitative index on economic conditions.
OECD Business Confidence Index –Select Regions/CountriesMay 2000 - May 2018
Source: OECD
94.0
95.0
96.0
97.0
98.0
99.0
100.0
101.0
102.0
103.0
104.0
May
-00
No
v-0
0
May
-01
No
v-0
1
May
-02
No
v-0
2
May
-03
No
v-0
3
May
-04
No
v-0
4
May
-05
No
v-0
5
May
-06
No
v-0
6
May
-07
No
v-0
7
May
-08
No
v-0
8
May
-09
No
v-0
9
May
-10
No
v-10
May
-11
No
v-11
May
-12
No
v-12
May
-13
No
v-13
May
-14
No
v-14
May
-15
No
v-15
May
-16
No
v-16
May
-17
No
v-17
May
-18
OECD - Total Euro area (19 countries) United States China
Global Monetary Policy Tightening/EasingAs of June 2018
The CFR Global Monetary Policy Tracker covers fifty-four large countries—mainly those that target inflation in some manner. Tightening policy is indicated in red, loosening in blue. The more a country has raised (lowered) rates, in percentage points, from the most recent trough (peak) in its policy rate, the darker the shade of red (blue). Generally, the policy rate target is the overnight interbank rate, with exceptions indicated.
Source: Council on Foreign Relations (CFR), Global Monetary Policy Tracker
Estimated Growth in Output by Select Global Areas2018 Projected
Source: International Monetary Fund: World Economic Outlook Database, April 2018
2.3%2.3%
2.0%3.4%
7.4%6.6%6.5%
1.7%4.3%
3.4%4.9%
2.9%3.0%
2.1%1.6%
1.2%2.8%
1.5%2.5%
2.1%2.4%2.5%
-6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0%
BrazilMexico
Latin America & the CaribbeanMiddle East, North Africa, Afghanistan, & Pakistan
IndiaChina
Emerging & Developing AsiaRussia
Emerging & Developing EuropeSub-Saharan Africa
Emerging Market & Developing EconomiesUnited States
CanadaAustralia
JapanItaly
United KingdomFrance
GermanySpain
Euro AreaAdvanced Economies
Annual % Change
2018 Proj. Global Output Growth: +3.9%
2017 Growth (Estimate)
World: 3.8% Euro Area: 2.3%
United States: 2.3% Japan: 1.7%
7/20/2018
3
Start Me Up
0
20
40
60
80
100
120
140
200
5
Feb
-08
Jun
-08
Oct
-08
Feb
-09
Jun
-09
Oct
-09
Feb
-10
Jun
-10
Oct
-10
Feb
-11
Jun
-11
Oct
-11
Feb
-12
Jun
-12
Oct
-12
Feb
-13
Jun
-13
Oct
-13
Feb
-14
Jun
-14
Oct
-14
Feb
-15
Jun
-15
Oct
-15
Feb
-16
Jun
-16
Oct
-16
Feb
-17
Jun
-17
Oct
-17
Feb
-18
Jun
-18
June 2018 = 126.4 where 1985 = 100
Conference Board Consumer Confidence Index2005 – June 2018
Source: Conference Board
NFIB Index of Small Business Optimism: Good Time to Expand1986-2018
Source: National Federation of Independent Business (NFIB)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Jun
-86
Jun
-87
Jun
-88
Jun
-89
Jun
-90
Jun
-91
Jun
-92
Jun
-93
Jun
-94
Jun
-95
Jun
-96
Jun
-97
Jun
-98
Jun
-99
Jun
-00
Jun
-01
Jun
-02
Jun
-03
Jun
-04
Jun
-05
Jun
-06
Jun
-07
Jun
-08
Jun
-09
Jun
-10
Jun
-11
Jun
-12
Jun
-13
Jun
-14
Jun
-15
Jun
-16
Jun
-17
Jun
-18
June 2018:29%
% of respondents who think the next 3 months will be a good time to for small business to expand
7/20/2018
4
Paint It Black – Corporate ProfitsU.S. Corporate Profits After Tax*
Source: U.S. Bureau of Economic Analysis *With Inventory Valuation Adjustment (IVA) and Capital Consumption Adjustment (CCAdj); Seasonally Adjusted Annual Rate
$0
$400
$800
$1,200
$1,600
$2,000
1950
Q1
1952
Q1
1954
Q1
1956
Q1
1958
Q1
196
0Q
1
196
2Q1
196
4Q
1
196
6Q
1
196
8Q
1
1970
Q1
1972
Q1
1974
Q1
1976
Q1
1978
Q1
198
0Q
1
198
2Q1
198
4Q
1
198
6Q
1
198
8Q
1
199
0Q
1
199
2Q1
199
4Q
1
199
6Q
1
199
8Q
1
200
0Q
1
200
2Q1
200
4Q
1
200
6Q
1
200
8Q
1
2010
Q1
2012
Q1
2014
Q1
2016
Q1
2018
Q1
$ Billions
2018Q1: $1.92 Trillion
U.S. Job OpeningsMay 2001 through May 2018
Source: U.S. Bureau of Labor Statistics
2.0
3.0
4.0
5.0
6.0
7.0
May
-01
No
v-0
1
May
-02
No
v-0
2
May
-03
No
v-0
3
May
-04
No
v-0
4
May
-05
No
v-0
5
May
-06
No
v-0
6
May
-07
No
v-0
7
May
-08
No
v-0
8
May
-09
No
v-0
9
May
-10
No
v-10
May
-11
No
v-11
May
-12
No
v-12
May
-13
No
v-13
May
-14
No
v-14
May
-15
No
v-15
May
-16
No
v-16
May
-17
No
v-17
May
-18
Job
Op
en
ing
s (M
illi
on
s)
May 2018:6.64M Openings
Net Change in U.S. JobsJune 2002 through June 2018
Source: U.S. Bureau of Labor Statistics
-1000
-800
-600
-400
-200
0
200
400
600
Jun
-02
Oct
-02
Feb
-03
Jun
-03
Oct
-03
Feb
-04
Jun
-04
Oct
-04
Feb
-05
Jun
-05
Oct
-05
Feb
-06
Jun
-06
Oct
-06
Feb
-07
Jun
-07
Oct
-07
Feb
-08
Jun
-08
Oct
-08
Feb
-09
Jun
-09
Oct
-09
Feb
-10
Jun
-10
Oct
-10
Feb
-11
Jun
-11
Oct
-11
Feb
-12
Jun
-12
Oct
-12
Feb
-13
Jun
-13
Oct
-13
Feb
-14
Jun
-14
Oct
-14
Feb
-15
Jun
-15
Oct
-15
Feb
-16
Jun
-16
Oct
-16
Feb
-17
Jun
-17
Oct
-17
Feb
-18
Jun
-18
Th
ou
san
ds
June 2018:+213K
7/20/2018
5
National Nonfarm Employmentby Industry Sector, June 2017 v. June 2018
Source: U.S. Bureau of Labor Statistics
-28
17
57
99
127
261
282
285
308
445
521
-100 0 100 200 300 400 500
Information
Government
Mining and Logging
Other Services
Financial Activities
Leisure and Hospitality
Construction
Manufacturing
Trade, Transportation, and Utilities
Education and Health Services
Professional and Business Services
Thousands, SA
All told 2,374K jobs gained
U.S. Labor Force Participation: Men Ages 25-342000 – 2018
Source: U.S. Bureau of Labor Statistics, Current Population Survey
88%
89%
90%
91%
92%
93%
94%
200
0Q
2
200
0Q
4
200
1Q2
200
1Q4
200
2Q2
200
2Q4
200
3Q2
200
3Q4
200
4Q
2
200
4Q
4
200
5Q2
200
5Q4
200
6Q
2
200
6Q
4
200
7Q2
200
7Q4
200
8Q
2
200
8Q
4
200
9Q
2
200
9Q
4
2010
Q2
2010
Q4
2011
Q2
2011
Q4
2012
Q2
2012
Q4
2013
Q2
2013
Q4
2014
Q2
2014
Q4
2015
Q2
2015
Q4
2016
Q2
2016
Q4
2017
Q2
2017
Q4
2018
Q2
89.2%
-2,000
0
2,600
3,600
3,700
5,900
6,700
7,800
8,200
8,800
12,500
-5,000 -3,000 -1,000 1,000 3,000 5,000 7,000 9,000 11,000 13,000 15,000
Information
Mining and Logging
Financial Activities
Other Services
Manufacturing
Government
Education & Health Services
Trade, Transportation, & Utilities
Professional & Business Services
Leisure & Hospitality
Construction
Michigan Nonfarm Employmentby Industry Sector Groups (SA)May 2017 v. May 2018 Absolute Change
Source: U.S. Bureau of Labor Statistics
MI Total: +57.8K; +1.3%
US Total (SA): +2,400K; +1.6%
*According to the Local Area Unemployment Statistics (LAUS) seriesMI added 28,117 jobs between May 2017 and May 2018.
7/20/2018
6
-3,300
-800
-400
-200
200
1,400
2,100
4,600
5,900
7,700
-5,000 -2,000 1,000 4,000 7,000 10,000
Professional & Business Services
Information
Government
Other Services
Manufacturing
Education & Health Services
Financial Activities
Mining, Logging, & Construction
Trade, Transportation, & Utilities
Leisure & Hospitality
Detroit-Warren-Dearborn MSA Nonfarm Employmentby Industry Sector Groups (NSA)May 2017 v. May 2018 Absolute Change
Source: U.S. Bureau of Labor Statistics
Detroit Total: +17.2K; +0.9%
MI Total (SA): +57.8K; +1.3%
US Total (SA): +2,400K; +1.6%
-400
-300
200
600
700
700
1,900
2,000
2,400
3,900
-1,000 0 1,000 2,000 3,000 4,000
Financial Activities
Information
Other Services
Government
Trade, Transportation, & Utilities
Leisure & Hospitality
Mining, Logging, & Construction
Manufacturing
Professional & Business Services
Education & Health Services
Grand Rapids-Wyoming MSA Nonfarm Employmentby Industry Sector Groups (NSA)May 2017 v. May 2018 Absolute Change
Source: U.S. Bureau of Labor Statistics
Grand Rapids Total: +11.7K; +2.1%
MI Total (SA): +57.8K; +1.3%
US Total (SA): +2,400K; +1.6%
RANK STATE % RANK STATE % RANK STATE %
1 UTAH 3.4 18 KANSAS 1.6 35 ALABAMA 1.1
2 IDAHO 3.1 18 MASSACHUSETTS 1.6 35 DISTRICT OF COLUMBIA 1.1
3 TEXAS 2.9 18 NEW MEXICO 1.6 35 INDIANA 1.1
3 WASHINGTON 2.9 21 OKLAHOMA 1.5 35 IOWA 1.1
5 NEVADA 2.8 21 RHODE ISLAND 1.5 35 NEW YORK 1.1
6 COLORADO 2.7 23 MAINE 1.4 40 ILLINOIS 1.0
7 ARIZONA 2.5 23 MISSISSIPPI 1.4 40 LOUISIANA 1.0
8 NORTH CAROLINA 2.3 23 NEW JERSEY 1.4 40 MINNESOTA 1.0
8 OREGON 2.3 23 OHIO 1.4 43 KENTUCKY 0.8
8 WEST VIRGINIA 2.3 23 SOUTH DAKOTA 1.4 44 CONNECTICUT 0.7
11 FLORIDA 2.1 28 MICHIGAN 1.3 44 WISCONSIN 0.7
12 NEW HAMPSHIRE 1.9 28 DELAWARE 1.3 46 MONTANA 0.6
13 CALIFORNIA 1.8 28 NEBRASKA 1.3 47 MARYLAND 0.5
13 SOUTH CAROLINA 1.8 28 PENNSYLVANIA 1.3 47 ARKANSAS 0.5
13 TENNESSEE 1.8 28 VIRGINIA 1.3 49 VERMONT 0.4
16 GEORGIA 1.7 28 WYOMING 1.3 50 ALASKA -0.2
16 HAWAII 1.7 34 MISSOURI 1.2 51 NORTH DAKOTA -0.5
Employment Growth, U.S. States (SA) May 2017 v. May 2018 Percent Change
Source: U.S. Bureau of Labor Statistics
U.S. Year-over-year Percent Change: +1.6%
7/20/2018
7
Rank MSA % Rank MSA %
1 Orlando-Kissimmee-Sanford, FL 3.5 14 Atlanta-Sandy Springs-Roswell, GA 1.7
2 Dallas-Fort Worth-Arlington, TX 3.4 15 Boston-Cambridge-Nashua, MA-NH 1.6
3 Seattle-Tacoma-Bellevue, WA 3.3 16 Baltimore-Columbia-Towson, MD 1.5
4 Phoenix-Mesa-Scottsdale, AZ 3.1 16 Minneapolis-St. Paul-Bloomington, MN-WI 1.5
4 Riverside-San Bernardino-Ontario, CA 3.1 18 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 1.4
6 Denver-Aurora-Lakewood, CO 2.819
Washington-Arlington-Alexandria, DC-VA-MD-WV
1.37 Charlotte-Concord-Gastonia, NC-SC 2.7
8 Houston-The Woodlands-Sugar Land, TX 2.6 19 Los Angeles-Long Beach-Anaheim, CA 1.3
9 Portland-Vancouver-Hillsboro, OR-WA 2.3 21 New York-Newark-Jersey City, NY-NJ-PA 1.2
9 Tampa-St. Petersburg-Clearwater, FL 2.3 22 Detroit-Warren-Dearborn, MI 0.9
11 San Antonio-New Braunfels, TX 2.2 22 Miami-Fort Lauderdale-West Palm Beach, FL 0.9
11 San Diego-Carlsbad, CA 2.2 22 St. Louis, MO-IL 0.9
13 San Francisco-Oakland-Hayward, CA 1.8 25 Chicago-Naperville-Elgin, IL-IN-WI 0.8
Employment Growth, 25 Largest Metros (NSA)May 2017 v. May 2018 Percent Change
Source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES) Survey
Unemployment Rates, 25 Largest Metros (NSA)May 2018
Source: U.S. Bureau of Labor Statistics, Current Employment Statistics (CES) Survey. Note: 1. Area boundaries do not reflect official OMB definitions.
U.S. Unemployment RateMay: 3.8% June: 4.0%
Rank MSA UR Rank MSA UR
1 Denver-Aurora-Lakewood, CO 2.3 11 Dallas-Fort Worth-Arlington, TX 3.4
1 Minneapolis-St. Paul-Bloomington, MN-WI 2.3 11 Phoenix-Mesa-Scottsdale, AZ 3.4
3 San Francisco-Oakland-Hayward, CA 2.4 11 Portland-Vancouver-Hillsboro, OR-WA 3.4
4 San Diego-Carlsbad, CA 2.9 17 Miami-Fort Lauderdale-West Palm Beach, FL 3.5
5 Orlando-Kissimmee-Sanford, FL 3.0 17 New York-Newark-Jersey City, NY-NJ-PA 3.5
6 Boston-Cambridge-Nashua, MA-NH 3.1 19 Detroit-Warren-Dearborn, MI 3.7
7Washington-Arlington-Alexandria, DC-VA-MD-WV
3.2 19 Los Angeles-Long Beach-Anaheim, CA 3.7
7 San Antonio-New Braunfels, TX 3.219
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
3.79 St. Louis, MO-IL (1) 3.3
9 Tampa-St. Petersburg-Clearwater, FL 3.3 19 Riverside-San Bernardino-Ontario, CA 3.7
11 Atlanta-Sandy Springs-Roswell, GA 3.4 23 Seattle-Tacoma-Bellevue, WA 3.8
11 Charlotte-Concord-Gastonia, NC-SC 3.4 24 Baltimore-Columbia-Towson, MD 4.0
11 Chicago-Naperville-Elgin, IL-IN-WI 3.4 25 Houston-The Woodlands-Sugar Land, TX 4.2
Gimme Shelter
7/20/2018
8
15-Year & 30-Year Fixed Mortgage RatesJuly 1995 through July 2018*
Source: Freddie Mac
*Week ending 7/12/2018
4.02%
4.53%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Jul-
95
Jan
-96
Jul-
96
Jan
-97
Jul-
97
Jan
-98
Jul-
98
Jan
-99
Jul-
99
Jan
-00
Jul-
00
Jan
-01
Jul-
01
Jan
-02
Jul-
02
Jan
-03
Jul-
03
Jan
-04
Jul-
04
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Jan
-09
Jul-
09
Jan
-10
Jul-
10Ja
n-1
1Ju
l-11
Jan
-12
Jul-
12Ja
n-1
3Ju
l-13
Jan
-14
Jul-
14Ja
n-1
5Ju
l-15
Jan
-16
Jul-
16Ja
n-1
7Ju
l-17
Jan
-18
Jul-
18
Rat
e
15-yr 30-yr
U.S. Households: Owner v. Renter Occupied, 1965-2017
Source: U.S. Census Bureau; Pew Research Center
36.2
75.4 76.2
21.3
34.2
43.1
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
196
5
196
7
196
919
71
1973
1975
1977
1979
198
1
198
319
85
198
7
198
919
91
199
319
95
199
719
99
200
1
200
320
05
200
7
200
9
2011
2013
2015
2017
# of Household Heads (Millions)
Homeowners
Renters
• From 2006-2017 the number of households headed by owners remained relatively flat.
• At the same time, the number of households renting their home increased significantly (+26%).
• The share of renter households also increased—from 31.2% of households in 2006 to 36.1% in 2017.
58%
60%
62%
64%
66%
68%
70%
198
0Q
119
81Q
119
82Q
119
83Q
119
84
Q1
198
5Q1
198
6Q
119
87Q
119
88
Q1
198
9Q
119
90
Q1
199
1Q1
199
2Q1
199
3Q1
199
4Q
119
95Q
119
96
Q1
199
7Q1
199
8Q
119
99
Q1
200
0Q
120
01Q
120
02Q
120
03Q
120
04
Q1
200
5Q1
200
6Q
120
07Q
120
08
Q1
200
9Q
120
10Q
120
11Q
120
12Q
120
13Q
120
14Q
120
15Q
120
16Q
120
17Q
120
18Q
1
2018Q1:64.2%
U.S. Homeownership (NSA)1980Q1-2018Q1
Source: U.S. Census Bureau *NSA: not seasonally adjusted
7/20/2018
9
$0
$10
$20
$30
$40
$50
$60
$70
May
-93
May
-94
May
-95
May
-96
May
-97
May
-98
May
-99
May
-00
May
-01
May
-02
May
-03
May
-04
May
-05
May
-06
May
-07
May
-08
May
-09
May
-10
May
-11
May
-12
May
-13
May
-14
May
-15
May
-16
May
-17
May
-18
$ B
illi
on
s (S
AA
R)
U.S. Private New Multifamily ConstructionMay 1993 through May 2018
Source: U.S. Census Bureau
S&P Case-Shiller Home Price Indices for Select MetrosApril 2018, 12-Month Percentage Change
Source: Standard & Poor’s
0%
2%
4%
6%
8%
10%
12%
3.0% 3.2%4.0%
5.0%5.5% 5.7%
6.6% 6.9%7.4%
8.3% 8.6%
10.9%
12.7%
12-M
on
th %
Ch
an
ge
U.S. Single-Family Housing StartsMay 1999 through May 2018
Source: U.S. Census Bureau
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
May
-99
No
v-9
9M
ay-0
0N
ov-
00
May
-01
No
v-0
1M
ay-0
2N
ov-
02
May
-03
No
v-0
3M
ay-0
4N
ov-
04
May
-05
No
v-0
5M
ay-0
6N
ov-
06
May
-07
No
v-0
7M
ay-0
8N
ov-
08
May
-09
No
v-0
9M
ay-1
0N
ov-
10M
ay-1
1N
ov-
11M
ay-1
2N
ov-
12M
ay-1
3N
ov-
13M
ay-1
4N
ov-
14M
ay-1
5N
ov-
15M
ay-1
6N
ov-
16M
ay-1
7N
ov-
17M
ay-1
8
Th
ou
san
ds,
SA
AR
May 2018: 936K
7/20/2018
10
National Nonresidential Construction Spending by Subsector May 2015 v. May 2018
Source: U.S. Census Bureau
-24.8%-17.6%
-10.8%-10.3%
1.2%4.4%5.0%5.7%
10.3%13.9%
16.8%22.7%
24.2%25.4%
37.7%45.4%
-35% -25% -15% -5% 5% 15% 25% 35% 45% 55%
ManufacturingReligious
PowerSewage and Waste Disposal
Conservation and DevelopmentHighway and Street
Water SupplyHealth CareEducational
TransportationPublic Safety
Amusement and RecreationCommunication
OfficeCommercial
Lodging
3-year % Change
Total Nonresidential Construction: +$47.8B; +6.8%
$0
$10
$20
$30
$40
$50
$60
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Bil
lio
ns
of
$US
Foreign investment increases 85.1% in 2015
Cross-border investment remained elevated in 2016:Although down relative to a record 2015, offshore investment levels still exceeded the pre-2015 high in 2007.
Commercial/Multifamily Offshore Investment Sales Volumes Reach New Heights in 2015/16
Source: Jones Lang LaSalle; Real Capital Analytics Note: Among transactions larger than $5.0 million
Foreign Investment in U.S. Commercial Real EstateTop Destination Markets, 2017
Source: Real Capital Analytics; Colliers International
$1.5
$1.7
$2.0
$2.4
$2.7
$3.2
$3.5
$4.5
$5.0
$9.0
$0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 $9.0 $10.0
Seattle
Atlanta
Dallas
Chicago
Boston
Houston
Los Angeles
San Francisco
Washington, D.C.
New York City
2017 Deals ($Billions)
7/20/2018
11
19th
NervousBreakdown
Gross Domestic Product1990Q1 through 2018Q1*
Source: U.S. Bureau of Economic Analysis *3rd (Final) Estimate
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
199
0Q
1
199
1Q1
199
2Q1
199
3Q1
199
4Q
1
199
5Q1
199
6Q
1
199
7Q1
199
8Q
1
199
9Q
1
200
0Q
1
200
1Q1
200
2Q1
200
3Q1
200
4Q
1
200
5Q1
200
6Q
1
200
7Q1
200
8Q
1
200
9Q
1
2010
Q1
2011
Q1
2012
Q1
2013
Q1
2014
Q1
2015
Q1
2016
Q1
2017
Q1
2018
Q1%
Ch
an
ge
fro
m P
rece
din
g P
eri
od
(S
AA
R) 2018Q1: +2.0%
Conference Board Leading Economic Indicators IndexAugust 2007 through May 2018
Source: Conference Board
-1.5%
-1.0%
-0.5%
0.0%
0.5%
1.0%
1.5%
Au
g-0
7N
ov-
07
Feb
-08
May
-08
Au
g-0
8N
ov-
08
Feb
-09
May
-09
Au
g-0
9N
ov-
09
Feb
-10
May
-10
Au
g-1
0N
ov-
10F
eb-1
1M
ay-1
1A
ug
-11
No
v-11
Feb
-12
May
-12
Au
g-1
2N
ov-
12F
eb-1
3M
ay-1
3A
ug
-13
No
v-13
Feb
-14
May
-14
Au
g-1
4N
ov-
14F
eb-1
5M
ay-1
5A
ug
-15
No
v-15
Feb
-16
May
-16
Au
g-1
6N
ov-
16F
eb-1
7M
ay-1
7A
ug
-17
No
v-17
Feb
-18
May
-18
On
e-m
on
th P
erc
en
t C
ha
ng
e
May 2018: 109.5 where 2016: 100
7/20/2018
12
U.S. Saving Rate, May 2005 – May 2018 (Savings as Percentage of Personal Disposable Income)
Source: U.S. Bureau of Economic Analysis
0.0
2.0
4.0
6.0
8.0
10.0
12.0
May
-05
Sep
-05
Jan
-06
May
-06
Sep
-06
Jan
-07
May
-07
Sep
-07
Jan
-08
May
-08
Sep
-08
Jan
-09
May
-09
Sep
-09
Jan
-10
May
-10
Sep
-10
Jan
-11
May
-11
Sep
-11
Jan
-12
May
-12
Sep
-12
Jan
-13
May
-13
Sep
-13
Jan
-14
May
-14
Sep
-14
Jan
-15
May
-15
Sep
-15
Jan
-16
May
-16
Sep
-16
Jan
-17
May
-17
Sep
-17
Jan
-18
May
-18
Sa
vin
gs
Ra
te (
%)
May 2018:3.2%
Global Debt Reaches All Time Highs (IIF)
Sources: 1. Institute of International Finance (IFF), Global Debt Monitor. 2. Business Insider. 3. The Telegraph. 4. Reuters.
• According to the International Institute of Finance (IIF), global debt has reached an all-time high in 2016;
• At $247 trillion as of 2018Q1, global debt—including household, government, and corporate—now represents 318% of global GDP;
• Last year the IMF warned of risks to the global economy:
• “sheer size of debt could set the stage for an unprecedented private deleveraging process that could thwart the fragile economic recovery”
Shiller Price-Earnings Ratio, 1980-2018
Source: Robert J. Shiller Data used in his book, "Irrational Exuberance" Princeton University Press.
0
10
20
30
40
50
Jun
-80
Jun
-81
Jun
-82
Jun
-83
Jun
-84
Jun
-85
Jun
-86
Jun
-87
Jun
-88
Jun
-89
Jun
-90
Jun
-91
Jun
-92
Jun
-93
Jun
-94
Jun
-95
Jun
-96
Jun
-97
Jun
-98
Jun
-99
Jun
-00
Jun
-01
Jun
-02
Jun
-03
Jun
-04
Jun
-05
Jun
-06
Jun
-07
Jun
-08
Jun
-09
Jun
-10
Jun
-11
Jun
-12
Jun
-13
Jun
-14
Jun
-15
Jun
-16
Jun
-17
Jun
-18
June 2018:32.09
7/20/2018
13
Shattered! --- Bitcoin Price, 2014-2018
Source: CoinMarketCap.com
$0
$4,000
$8,000
$12,000
$16,000
$20,000
7/1/
14
9/1
/14
11/1
/14
1/1/
15
3/1/
15
5/1/
15
7/1/
15
9/1
/15
11/1
/15
1/1/
16
3/1/
16
5/1/
16
7/1/
16
9/1
/16
11/1
/16
1/1/
17
3/1/
17
5/1/
17
7/1/
17
9/1
/17
11/1
/17
1/1/
18
3/1/
18
5/1/
18
7/1/
18
7/8/2018:$6.8K
Time is on My Side, at least in the Near-Term
• U.S. setting up for best year since ’05. . .;
• Global economy better than it was -- still;
• Job opportunities are abundant;
• Corporate profitability elevated;
• Consumer and business confidence has been surging. . .;
• And now tax cuts, including major reductions in corporate taxes . . . What could go wrong?;
• A lot can go wrong – that’s always true – first there are the Black Swan threats:
• “I’m forever blowing bubbles, pretty bubbles in the air, they fly so high, nearly reach the sky, and like my dreams, they fade and die”;
• Where are all the pretty bubbles? Equity markets? U.S. bond market? Commercial real estate? Bitcoin?
• 2018 will be fine – better than fine –2019 might be, too, but beyond that, potential deleveraging cycle prompted by a repricing of assets – Bad!!!!
Thank YouPlease follow me on Twitter -- @sageanirban
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