The Structure and Nature of the New Economy Prepared and Presented by: Richard Hastings Macro Strategist Global Hunter Securities, LLC 949.335.0686 – [email protected]Presented to the New York Media Credit Group Hosted by ABC-Amega, Inc. - New York – November 6, 2012
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S&P/Experian First and Second Mortgage Default Indices
35 35
Loan Performance
36
77%
0%
2%
4%
6%
8%
10%
12%
14%
Q2
19
91
Q4
19
92
Q2
19
94
Q4
19
95
Q2
19
97
Q4 1
998
Q2
20
00
Q4
20
01
Q2
20
03
Q4
20
04
Q2
20
06
Q4
20
07
Q2
20
09
Q4
20
10
Q2
20
12
Delinquency Rate Charge-off Rate
Quarterly loan performance data, not seasonally adjusted. Through Q2 2012.
Source: Federal Reserve. Interpretation: Global Hunter Securities
Commercial Real Estate Loan Trends: Charge-offs and Delinquencies
37
77%
($10,000)
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
Q2 1
991
Q2 1
992
Q2 1
993
Q2 1
994
Q2 1
995
Q2 1
996
Q2 1
997
Q2 1
998
Q2 1
999
Q2 2
000
Q2 2
001
Q2 2
002
Q2 2
003
Q2 2
004
Q2 2
005
Q2 2
006
Q2 2
007
Q2 2
008
Q2 2
009
Q2 2
010
Q2 2
011
Q2 2
012
Consumer Loan Delinquencies 4-year $ change
Data source: Federal Reserve. Interpretation, Global Hunter Securities
Quarterly, not seasonally adjusted, through Q2 2012, in millions USD
38 38
S&P/Experian Consumer Credit Default Indices, National Indices
Index July 2012
Index Level
June 2012
Index Level
July 2011
Index Level
July 2009
Index Level
Composite 1.51% 1.52% 2.06% 5.24%
First
Mortgage 1.41% 1.41% 1.93% 5.32%
Second
Mortgage 0.75% 0.73% 1.25% 3.94%
Bank Card 3.83% 3.97% 5.64% 8.18%
Auto
Loans 1.01% 1.04% 1.27% 2.46%
Source: S&P/Experian Consumer Credit Default Indices. Data through May 2012.
39 39
A Housing Recovery
40
77%
120
122
124
126
128
130
132
134
136
138
140
22%
23%
23%
24%
24%
25%
25%
26%
26%
Se
p-0
9
De
c-0
9
Ma
r-10
Ju
n-1
0
Se
p-1
0
De
c-1
0
Ma
r-11
Ju
n-1
1
Se
p-1
1
De
c-1
1
Ma
r-12
Ju
n-1
2
Sources: S&P/Case Shiller Home Price Indices; CoreLogic, Inc. Interpretation: Global Hunter Securities
Negative Equity and Home Price Trends: Quarterly from Q3 2009 to Q2 2012
Negative equity %, left side Home Price Indices, right side
41
77%
CoreLogic® House Price Index (HPI), Aug. 2012 – Major CSBAs
Image source: CoreLogic® www.corelogic.com
42
77%
0
10
20
30
40
50
60
70
80
90
100
De
c-0
4
Fe
b-0
5
Ap
r-05
Ju
n-0
5
Au
g-0
5
Oc
t-05
De
c-0
5
Fe
b-0
6
Ap
r-06
Ju
n-0
6
Au
g-0
6
Oc
t-06
De
c-0
6
Fe
b-0
7
Ap
r-07
Ju
n-0
7
Au
g-0
7
Oc
t-07
De
c-0
7
Fe
b-0
8
Ap
r-08
Ju
n-0
8
Au
g-0
8
Oc
t-08
De
c-0
8
Fe
b-0
9
Ap
r-09
Ju
n-0
9
Au
g-0
9
Oc
t-09
De
c-0
9
Fe
b-1
0
Ap
r-10
Ju
n-1
0
Au
g-1
0
Oc
t-10
De
c-1
0
Fe
b-1
1
Ap
r-11
Ju
n-1
1
Au
g-1
1
Oc
t-11
De
c-1
1
Fe
b-1
2
Ap
r-12
Ju
n-1
2
Au
g-1
2
Oc
t-12
Northeast Midwest South West
Source: National Association of Home Builders. Interpretation: Global Hunter Securities
NAHB Home Builder Sentiment Index (HMI) - Regions, Monthly
43 43
Unemployment – Selected Metro Areas (not seasonally adjusted)
Area Aug-12 Aug-11 Aug-07 5-yrs multiple
Atlanta (city) 11.5% 12.7% 5.8% 2.0x
Atlanta (CSA) 8.9% 9.9% 4.6% 1.9x
Chicago (city) 10.3% 10.6% 5.4% 1.9x
Chicago (CSA) 8.8% 10.4% 5.0% 1.8x
Dallas (city) 7.5% 8.7% 4.7% 1.6x
Dallas (CSA) 6.9% 8.1% 4.3% 1.6x
Denver (CSA) 7.6% 8.1% 3.8% 2.0x
Los Angeles (city) 12.3% 14.2% 5.9% 2.1x
Los Angeles (CSA) 10.7% 12.3% 5.3% 2.0x
Minn/St Paul (CSA) 5.7% 6.5% 4.3% 1.3x
Phoenix (city) 7.7% 9.2% 3.6% 2.1x
Phoenix (MSA) 7.4% 8.8% 3.1% 2.4x
San Francisco (CSA) 8.4% 9.8% 4.7% 1.8x
Seattle (city) 7.0% 7.3% 3.3% 2.1x
Seattle (CSA) 8.1% 8.5% 3.8% 2.1x
Data source: Census.gov; Interpretation, Global Hunter Securities. CSA = combined statistical area.
44 44
55%
57%
59%
61%
63%
65%
67%
69%
Q1
19
65
Q1
19
66
Q1
19
67
Q1
19
68
Q1
19
69
Q1
19
70
Q1
19
71
Q1
19
72
Q1
19
73
Q1
19
74
Q1
19
75
Q1
19
76
Q1
19
77
Q1
19
78
Q1
19
79
Q1
19
80
Q1
19
81
Q1
19
82
Q1
19
83
Q1
19
84
Q1
19
85
Q1
19
86
Q1
19
87
Q1
19
88
Q1
19
89
Q1
19
90
Q1 1
991
Q1
19
92
Q1
19
93
Q1 1
994
Q1
19
95
Q1
19
96
Q1 1
997
Q1
19
98
Q1
19
99
Q1
20
00
Q1
20
01
Q1
20
02
Q1
20
03
Q1
20
04
Q1
20
05
Q1
20
06
Q1
20
07
Q1
20
08
Q1
20
09
Q1
20
10
Q1
20
11
Q1
20
12
Customary Ownership Rate Alternative Ownership Rate (from total inventory)
Quarterly data, Q1 1965 to Q2 2012
Data source: Census Bureau. Interpretation: Global Hunter Securities
45 45
Why 2% Is the Old 4%
46
77%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
6.5%
19
47
19
49
19
52
19
54
19
57
19
59
19
62
19
64
19
67
19
69
19
72
19
74
19
77
19
79
19
82
19
84
19
87
19
89
19
92
19
94
19
97
19
99
20
02
20
04
20
07
20
09
20
12
Source: BEA.gov. Interpretation: Global Hunter Securities
PCE = personal consumption expenditures. Underlying data is seasonally adjusted at annual rates, quarterly.
Embargoes
Post-2003: U.S.
deficits and weak
USD
Household Gasoline and Energy Spend as % of Total PCE Quarterly, based on seasonally adjusted data at annual rate, to Q3 2012
47
77%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
19
47
19
49
19
51
19
53
19
55
19
57
19
59
19
61
19
63
19
65
19
67
19
69
19
71
19
73
19
75
19
77
19
79
19
81
19
83
19
85
19
87
19
89
19
91
19
93
19
95
19
97
19
99
20
01
20
03
20
05
20
07
20
09
20
11
Gasoline and energy spending as % of PCE: Goods
Source: BEA.gov. Interpretation: Global Hunter Securities
U.S. deficits
and weak USD
Embargoes
PCE = personal consumption expenditures. Underlying data is seasonally adjusted at annual rates, quarterly, through Q3 2012.
48
77%
0%
5%
10%
15%
20%
25%
30%1
94
7
19
48
19
49
19
50
19
52
19
53
19
54
19
55
19
57
19
58
19
59
19
60
19
62
19
63
19
64
19
65
19
67
19
68
19
69
19
70
19
72
19
73
19
74
19
75
19
77
19
78
19
79
19
80
19
82
19
83
19
84
19
85
19
87
19
88
19
89
19
90
19
92
19
93
19
94
19
95
19
97
19
98
19
99
20
00
20
02
20
03
20
04
20
05
20
07
20
08
20
09
20
10
20
12
Gasoline and Other Energy Goods as % of Gross Private Domestic Investment
Source: BEA.gov. Interpretation: Global Hunter Securities
Do higher energy costs worsen the typical volatility of fixed asset investments?
Rising household spending on energy (determined by higher prices in 2003-2012), relative to the decline of new construction investments, seems capable of constraining GDP growth, when viewed through the impact on Gross Private Domestic Investment (capital intensive, fixed assets). Data is quarterly, Q1 1947 to Q3 2012.
49
77%
0%
2%
4%
6%
8%
10%
12%
14%
$
$1
$2
$3
$4
$5
$6
$7
$8
19
47
19
49
19
52
19
54
19
57
19
59
19
62
19
64
19
67
19
69
19
72
19
74
19
77
19
79
19
82
19
84
19
87
19
89
19
92
19
94
19
97
19
99
20
02
20
04
20
07
20
09
20
12
Services spend, in trillions of USD (left side)
Energy spend as % of services spend
Source: BEA.govv. Interpretation: Global Hunter Securities
Overlay of Household Spending on Services, and Energy as % of ServicesQuarterly through Q3 2012
Either energy spend would need to continue to decline towards 2% to 4% of services spend, or the rate of growth in total spend on services would need to decline - and indeed in recent years this effect has started.
50
77%
91.63%
20%
30%
40%
50%
60%
70%
80%
90%
100%
196
0
196
2
196
4
196
7
196
9
197
1
197
3
197
6
197
8
198
0
1982
1985
198
7
198
9
199
1
199
4
199
6
199
8
200
0
200
3
200
5
200
7
200
9
201
2Household Spending on Healthcare as % of Spending on Housing1
Quarterly through Q3 2012
Source: BEA.govv. Interpretation: Global Hunter Securities
1 Housing includes other housing-specific fixed expenses including utilities.
Linear trendline
51 51 Image source: USPS.gov
Need a ride
to Fiscal
Cliff?
52 52
About Global Hunter Securities, LLC
Global Hunter Securities, LLC is an international
investment banking and institutional services firm.
Global Hunter Securities, LLC has offices in Calgary, Chicago,
Fort Worth, Houston, New Orleans, New York, Orange County,