Transcript Insights on Energy * A Global Perspective Challenges ahead

Rural Outlook Conference
US and Oklahoma Economic
Outlook Presentation
October 2015
Rural Outlook Presentation
October 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 Story
Irrational Exuberance
Stock Market Bubble/Bust
Recession of 2001
Floods of Liquidity Promoting
Speculation and Low Rates
Rise of the Housing Bubble
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 Story
Subprime Mortgage Crisis
Financial Contagion
Housing Market Collapse
Recession of 2007-2008
Fiscal & Monetary Stimulus
Muted Economic Recovery
The Continuing 19-Year Saga
Credit Market Deleveraging
Sovereign Debt Crises
Quantitative Easing Forever
Currency Devaluations
Global Political Discord
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, $8.6B AUM
Real Annualized GDP Growth
Recent Estimates place Q1 2013 at a 1.6% gain
Industrial Production
Retail Sales
Year-over-Year Change in U.S.
Non-Ag Employment
Purchasing Mgrs Index and
Fed Manufacturing Surveys
Recent Estimates place Q1 2013 at a 1.6% gain
Case Shiller Housing Price Indices
Housing Starts
Inflation
Monetary Policy
Federal Reserve gone wild?
Fed’s Magical Balance Sheet
Fed’s Magical Balance Sheet
Fed's Balance Sheet November 26, 2014 ($billions)
U.S. Treasury securities
Federal agency debt securities
Mortgage-backed securities
Credit loans
Other loans
Other Federal Reserve assets
Gold stock
2,461.6
38.7
1,729.8
208.1
0.1
80.2
11.0
Reserve balances with F.R. Banks
Currency in circulation
Reverse repurchase agreements
Treasury cash holdings
Other deposits with F.R. Banks
Other liabilities and capital
Total
4,529.6 Total
2,479.3
1,317.4
251.5
0.2
418.1
63.1
4,529.6
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