Transcript Presentation 1

SRI Conference 2015
The Broadmoor
Tortoise Vs. Bull-Who Will Win In An Election Year?
Mel Miller, CFA
Chief Economist
Assumption
Is This The State Of The Tortoise
Recovery ?
Or Is This The Future State of The
Economy?
Will The Bull Market Continue?
Or is it Merely Resting?
Political Framework for the Election
Household Real Median Income Since
First SRI Conference
And Yet…………………..
OECD Countries with Greater Income
Equality Than United States
OECD Countries With Less Income
Equality Than United States
Note: After Taxes and Transfers
1=Perfect Inequality
0=Perfect Equality
Be Prepared for Change
Change Example-Trump White House
2014 Forecast
Forecast
GDP (Gross Domestic Product
Actual
2.50-3.00%
2.4%
Inflation (Core CPI)
1.5% - 2%
1.6%
Unemployment Rate
7%
5.6%
Federal Funds Rate
.25%
.25%
Stock Market Returns
6% - 10%
13.68%
Bond Market Returns
+/- 2.0%
5.97%
2015 Fearless Forecast
10/26
End of 2015
Actual
GDP (Gross Domestic Product
2.5%-3%
Inflation (Core CPI)
1.7%
1.8%
Unemployment Rate
5.5%
5.1%
2.17% **
Federal Funds Rate
.50%
.25%
Stock Market Returns
6-10%
2.27%
Bond Market Returns
+/- 2%
1.14%
GDP Update
Current State of the Economy
Monthly Change in Nonfarm Payrolls
Underemployment Rate-U6
Labor Participation Rate
Retail Sales
Cause of Slow Retail Sales
Year Over Year Wage Growth
Econ 101 Basic Formula
Long Term Wage Growth= Price Inflation + Labor Productivity +
Change in Labor
Share of Income
Labor’s Share of Income
Raise the Minimum Wage !!!!!!!!!
Labor Productivity
Housing-Slow Improvement
Consumer Ready To Borrow Again?
Causes of Slowdown
Dollar Appreciation
Business Reaction
Bank Stress Formula
Durable Goods New Orders
ISM Purchasing Managers IndexManufacturing
ISM Purchasing Manager-Service Sector
Industrial Production
Recession Predictor-CFNAI
Market Forecasts
Gold’s Technical Chart
Following the “Correction” is the Bull
Resting ?
Or The Start Of The Goring?
Taming of the Bull
Relative Value Comparison
Rule of 20
Audience Test
“How Many Conservative Economists Does It Take to
Change a Light Bulb?”
None. The darkness will cause the light bulb to change by itself.
None. If it really needed changing, market forces would have caused it to happen.
None. If the government would just leave it alone, it would screw itself in.
None. “Because, look! It’s getting brighter! It’s definitely getting brighter!!!”
2016 Fearless Forecast
By the End of 2016
GDP (Gross Domestic Product
1.8%-2.2%
Inflation (Core CPI)
1.8%
Unemployment Rate
4.9%
Federal Funds Rate
.50%
Stock Market Returns
6-10%
Bond Market Returns
+/- 2%
Danger Lurks !!!!!
Known Unknowns - Some Recycled
Middle East Military Expansion/Russia
Euro Crisis Revisited
Russia-Ukraine Conflict Expansion
Corporate Bond Market Collapse
Technology Driven Market Crash-Cyber Terrorism/Outdated Systems
Shadow Banking/Money Market Collapse (REPO Market)
China Credit Induced Crash In Progress
Pandemic
Closing Aphorism
The Truth is Out There. So What Are You Doing Here?!
HAVE A GREAT CONFERENCE