ON THE ECONOMIC, BUSINESS AND POLITICAL CLIMATE · 2019 ITA FALL CONFERENCE Des Moines, IA...

2019 ITA FALL CONFERENCE Des Moines, IA – October 3, 2019

ON THE ECONOMIC, BUSINESS AND POLITICAL CLIMATE

Roger Tutterow, Ph.D.Coles College of BusinessKennesaw State [email protected]

Iowa Trust Association2019 Fall ConferenceOctober 3, 2019Des Moines, IA


Expansion Getting Tired?(Source: National Bureau Economic Research

Trough Peak MonthsOctober 1945 (IV) November 1948(IV) 37October 1949 (IV) July 1953(II) 45May 1954 (II) August 1957(III) 39April 1958 (II) April 1960(II) 24

February 1961 (I) December 1969(IV) 106November 1970 (IV) November 1973(IV) 36

March 1975 (I) January 1980(I) 58July 1980 (III) July 1981(III) 12

November 1982 (IV) July 1990(III) 92March 1991(I) March 2001(I) 120

November 2001 (IV) December 2007 (IV) 73June 2009 (II) ??? 124

Average Expansion, Post WWII 58.4


GDP = Consumption Gross Investment Net Exports Government

2017: Q3 3.2% 1.61% 1.25% 0.35% -0.02%2017: Q4 3.5% 3.12% 0.80% -0.80% 0.42%2018: Q1 2.5% 1.15% 1.07% 0.00% 0.33%2018: Q2 3.5% 2.7% -0.30% 0.67% 0.44%2018: Q3 2.9% 2.34% 2.27% -2.05% 0.36%2018: Q4 1.1% 0.97% 0.53% -0.35% -0.07%2019: Q1 3.1% 0.78% 1.09% 0.73% 0.5%2019: Q2 2.0% 3.03% -1.16% -0.68% 0.82%

Contributions To GDP Growth(Source: Bureau of Economic Analysis)

Gross Investment = Nonresidential Residential Inventory

2017: Q3 1.25% 0.32% -0.08% 1.00%2017: Q4 0.80% 1.08% 0.37% -0.64%2018: Q1 1.07% 1.15% -0.21% 0.13%2018: Q2 -0.30% 1.04% -0.15% -1.20%2018: Q3 2.27% 0.29% -0.16% 2.14%2018: Q4 0.53% 0.64% -0.18% 0.07%2019: Q1 1.09% 0.60% -0.04% 0.53%2019: Q2 -1.16% -0.14% -0.11% -0.91%


ISM’s “PMI”(Source: Institute of Supply Management)

25

30

35

40

45

50

55

60

65Ja

n-00

Nov

-00

Sep-

01Ju

l-02

May

-03

Mar

-04

Jan-

05N

ov-0

5Se

p-06

Jul-0

7M

ay-0

8M

ar-0

9Ja

n-10

Nov

-10

Sep-

11Ju

l-12

May

-13

Mar

-14

Jan-

15N

ov-1

5Se

p-16

Jul-1

7M

ay-1

8M

ar-1

9


Industrial Production(Source: Federal Reserve BOG)

-30%-25%-20%-15%-10%

-5%0%5%

10%15%20%

Jan-

97Ja

n-98

Jan-

99Ja

n-00

Jan-

01Ja

n-02

Jan-

03Ja

n-04

Jan-

05Ja

n-06

Jan-

07Ja

n-08

Jan-

09Ja

n-10

Jan-

11Ja

n-12

Jan-

13Ja

n-14

Jan-

15Ja

n-16

Jan-

17Ja

n-18

Jan-

19

IPManDurableNon-Durable


Foreign Exchange: Dollar & Major Currencies

(Source: Board of Governors of the Federal Reserve System)

60

70

80

90

100

110

120Ja

n-02

Nov

-02

Sep-

03Ju

l-04

May

-05

Mar

-06

Jan-

07N

ov-0

7Se

p-08

Jul-0

9M

ay-1

0M

ar-1

1Ja

n-12

Nov

-12

Sep-

13Ju

l-14

May

-15

Mar

-16

Jan-

17N

ov-1

7Se

p-18

Jul-1

9


Basis of Tariffs • Section 232: certain circumstances allows the

president to impose tariffs based on the recommendation from the Secretary of Commerce if "an article is being imported into the United States in such quantities or under such circumstances as to threaten or impair the national security.

• Section 301: designed to eliminate unfair foreign trade practices that adversely affect U.S. trade and investment in both goods and services.


Consumer Sentiment(source: University of Michigan, Survey Research Center)

556065707580859095

100105110115

Jan-

98Ju

l-98

Jan-

99Ju

l-99

Jan-

00Ju

l-00

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

03Ju

l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17Ju

l-17

Jan-

18Ju

l-18

Jan-

19Ju

l-19


Retail Sales(source: U.S. Bureau of the Census, annual rate of growth)

-12%

-9%

-6%

-3%

0%

3%

6%

9%

12%Ja

n-96

Jan-

97Ja

n-98

Jan-

99Ja

n-00

Jan-

01Ja

n-02

Jan-

03Ja

n-04

Jan-

05Ja

n-06

Jan-

07Ja

n-08

Jan-

09Ja

n-10

Jan-

11Ja

n-12

Jan-

13Ja

n-14

Jan-

15Ja

n-16

Jan-

17Ja

n-18

Jan-

19

RS TotalRS ex-auto


Auto & Light Truck Sales(Source: Department of Commerce, in millions)

4

5

6

7

8

9

10

11

12

13

14Ja

n-00

Jul-0

0

Jan-

01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

Jul-0

4

Jan-

05

Jul-0

5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8

Jan-

09

Jul-0

9

Jan-

10

Jul-1

0

Jan-

11

Jul-1

1

Jan-

12

Jul-1

2

Jan-

13

Jul-1

3

Jan-

14

Jul-1

4

Jan-

15

Jul-1

5

Jan-

16

Jul-1

6

Jan-

17

Jul-1

7

Jan-

18

Jul-1

8

Autos

Light Trucks


Corporate Profits (with CCA & Inventory adjustment)

(source: U.S. Bureau of the Census, annual rate of growth)

-40%

-20%

0%

20%

40%

60%

80%Ja

n-06

Aug-

06M

ar-0

7O

ct-0

7M

ay-0

8D

ec-0

8Ju

l-09

Feb-

10Se

p-10

Apr-1

1N

ov-1

1Ju

n-12

Jan-

13Au

g-13

Mar

-14

Oct

-14

May

-15

Dec

-15

Jul-1

6Fe

b-17

Sep-

17Ap

r-18

Nov

-18

L6ML12M


Leading Economic Indicators(source: Conference Board, % change in last 6 months)

-15%

-12%

-9%

-6%

-3%

0%

3%

6%

9%Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11Ju

l-11

Jan-

12Ju

l-12

Jan-

13Ju

l-13

Jan-

14Ju

l-14

Jan-

15Ju

l-15

Jan-

16Ju

l-16

Jan-

17Ju

l-17

Jan-

18Ju

l-18

Jan-

19Ju

l-19


Change in Payroll Employment (Source: Bureau of Labor Statistics)

-1000

-800

-600

-400

-200

0

200

400

600

800Ja

n-00

Jan-

01Ja

n-02

Jan-

03Ja

n-04

Jan-

05Ja

n-06

Jan-

07Ja

n-08

Jan-

09Ja

n-10

Jan-

11Ja

n-12

Jan-

13Ja

n-14

Jan-

15Ja

n-16

Jan-

17Ja

n-18

Jan-

19


State Employment (Net Change)(source: Bureau of Labor Statistics)

-6%

-3%

0%

3%

6%

9%

12%

15%

18%

21%U

tah

Texa

s

Nor

th D

akot

a

Col

orad

o

Was

hing

ton

Idah

o

Dis

trict

of C

ol

Flor

ida

Cal

iforn

ia

Sout

h C

arol

ina

Ore

gon

New

Yor

k

Mas

sach

uset

ts

Tenn

esse

e

Geo

rgia

Nev

ada

Sout

h D

akot

a

Nor

th C

arol

ina

Ariz

ona

Mon

tana

Min

neso

ta

Virg

inia

Neb

rask

a

New

Ham

pshi

re

Indi

ana

Okl

ahom

a

Arka

nsas

Del

awar

e

Kent

ucky

Mar

ylan

d

Haw

aii

Mic

higa

n

Iow

a

Alas

ka

Penn

sylv

ania

Mis

sour

i

Wis

cons

in

Illin

ois

Verm

ont

Ohi

o

New

Jer

sey

Rho

de Is

land

Kans

as

Alab

ama

Loui

sian

a

Mai

ne

Wes

t Virg

inia

New

Mex

ico

Mis

siss

ippi

Con

nect

icut

Wyo

min

g


Employment: Iowa & Neighbors

-7%-6%-5%-4%-3%-2%-1%0%1%2%3%4%Ja

n-05

Aug-

05M

ar-0

6O

ct-0

6M

ay-0

7D

ec-0

7Ju

l-08

Feb-

09Se

p-09

Apr-1

0N

ov-1

0Ju

n-11

Jan-

12Au

g-12

Mar

-13

Oct

-13

May

-14

Dec

-14

Jul-1

5Fe

b-16

Sep-

16Ap

r-17

Nov

-17

Jun-

18Ja

n-19

IL

IA

MN

MO

NE

SD

WI


Employment: Iowa

-10%

-5%

0%

5%

10%

15%

20%

25%

IOW

A

Ames

Ced

ar R

apid

s

Des

Moi

nes

Dub

uque

Iow

a C

ity

Om

aha-

Cou

ncil

Bluf

f

Siou

x C

ity

Qua

d C

ities

Wat

erlo

o-C

edar

Fal

ls

Recess

Recover

Net


US Employment Shift by Sector(Source: Bureau of Labor Statistics)

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%To

tal

Min

ing

Con

st

Man

uf

T T

& U

til

Info Fin

Prof

& B

iz S

er

Educ

& H

C

Leis

& H

osp

Oth

er S

erv

Gov

t

L12M

L5Yr


Labor Force Participation

62%

63%

64%

65%

66%

67%

68%Ja

n-95

Nov

-95

Sep-

96Ju

l-97

May

-98

Mar

-99

Jan-

00N

ov-0

0Se

p-01

Jul-0

2M

ay-0

3M

ar-0

4Ja

n-05

Nov

-05

Sep-

06Ju

l-07

May

-08

Mar

-09

Jan-

10N

ov-1

0Se

p-11

Jul-1

2M

ay-1

3M

ar-1

4Ja

n-15

Nov

-15

Sep-

16Ju

l-17

May

-18

Mar

-19


Labor Force Participation

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

16 to 19 20 to 24 25 to 34 35 to 44 45 to 54 55 to 64 65 to 74 75 +

1996200620162026


Prices: Still talk of Deflation/Inflation?

(source: Bureau of Labor Statistics)

• CPI was up 0.1% in August – after being up 0.3% and 0.1% in July and June.

• Core CPI up 0.3% in August – after rising by 0.3%, 0.3% and 0.1% in previous three months.

• Overall CPI up 1.7% over last 12 months. Core up 2.4% over same period.

• Energy component down by 4.4% over the last 12 months.


Crude Oil: West Texas Intermediate(Source: US Energy Information Administration)

20

40

60

80

100

120

140Ja

n-04

Sep-

04M

ay-0

5Ja

n-06

Sep-

06M

ay-0

7Ja

n-08

Sep-

08M

ay-0

9Ja

n-10

Sep-

10M

ay-1

1Ja

n-12

Sep-

12M

ay-1

3Ja

n-14

Sep-

14M

ay-1

5Ja

n-16

Sep-

16M

ay-1

7Ja

n-18

Sep-

18


Construction Cost w/o Energy(Source: BLS PPI & ABC)

-15%

-10%

-5%

0%

5%

10%In

puts

to C

onst

ruct

ion

Inpu

ts to

Non

res

Con

stru

ct

Plum

b Fi

xtur

es a

nd F

ittin

gs

Fabr

ic S

truct

Met

al P

rodu

cts

Iron

and

Stee

l

Stee

l Mills

Pro

duct

s

Non

ferro

us W

ire a

nd C

able

Softw

ood

Lum

ber

Con

cret

e Pr

oduc

ts

Prep

ared

Asp

halt

M/M

Y/Y


Federal Funds Rate9 Short Rate Hikes Later

(Source: Board of Governors of Federal Reserve System)

0%

5%

10%

15%

20%

25%

Jan-

80O

ct-8

1Ju

l-83

Apr-8

5Ja

n-87

Oct

-88

Jul-9

0Ap

r-92

Jan-

94O

ct-9

5Ju

l-97

Apr-9

9Ja

n-01

Oct

-02

Jul-0

4Ap

r-06

Jan-

08O

ct-0

9Ju

l-11

Apr-1

3Ja

n-15

Oct

-16

Jul-1

8


Real Federal Funds Rate:FFR less 6 month core PCE

(Source: Board of Governors of Federal Reserve System)

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

Jan-

90M

ay-9

1Se

p-92

Jan-

94M

ay-9

5Se

p-96

Jan-

98M

ay-9

9Se

p-00

Jan-

02M

ay-0

3Se

p-04

Jan-

06M

ay-0

7Se

p-08

Jan-

10M

ay-1

1Se

p-12

Jan-

14M

ay-1

5Se

p-16

Jan-

18


Market’s FFR Outlook(Source: CME Group)

0%

20%

40%

60%

80%

100%

120%

Current 10/30/2019 12/11/2019 1/29/2020 3/18/2020 4/29/2020

50-75bps

75-100bps

100-125bps

125-150bps

150-175bps

175-200bps


Market’s FFR Outlook:December 2018

(Source: CME Group)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

12/19/2018 1/30/2019 3/20/2019 5/1/2019 6/19/2019 7/31/2019 9/18/2019 10/30/2019 12/11/2019

200-225 bps

225-250 bps

250-275 bps

275 - 300 bps

300-325 bps

325-350 bps

350-375 bps


Comments on LIBOR/SOFR

• LIBOR fading away?• SOFE is secured, based on actual

transactions.• Transitions on exiting contract will be

challenging.• Derivatives have longest exposure


10-Year Treasury Bonds(Source: Board of Governors of Federal Reserve System)

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%Ja

n-80

Oct

-81

Jul-8

3Ap

r-85

Jan-

87O

ct-8

8Ju

l-90

Apr-9

2Ja

n-94

Oct

-95

Jul-9

7Ap

r-99

Jan-

01O

ct-0

2Ju

l-04

Apr-0

6Ja

n-08

Oct

-09

Jul-1

1Ap

r-13

Jan-

15O

ct-1

6Ju

l-18


“PIIGS Revisited”(Source: European Central Bank)

0%

2%

4%

6%

8%

10%

12%

14%

Portugal Ireland Italy Greece Spain

Jun-15Nov-15Feb-16Oct-16Jun-17Sep-17Apr-18Aug-18Nov-18Apr-19


Large Scale Asset Purchases(source: Federal Reserve System)

• QE1 (March 2009)– $1.25 T in MBS– $200B in Agencies– $300M in Treasuries

• QE2 (November 2010)– $600B in Treasuries

• Operation Twist– Swapped $667B in longs for shorts

• QE3 (September 2012)– $85B/month agency MBS & Treasuries– Taper begins December 2012


Fed: Securities Held Outright

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

4500000Ja

n-04

Sep-

04

May

-05

Jan-

06

Sep-

06

May

-07

Jan-

08

Sep-

08

May

-09

Jan-

10

Sep-

10

May

-11

Jan-

12

Sep-

12

May

-13

Jan-

14

Sep-

14

May

-15

Jan-

16

Sep-

16

May

-17

Jan-

18

Sep-

18

May

-19


2-10 Treasury Spread (bps)

-300

-200

-100

0

100

200

300

400

Jun-76N

ov-77Apr-79Sep-80Feb-82Jul-83D

ec-84M

ay-86O

ct-87M

ar-89Aug-90Jan-92Jun-93N


ec-01M

ay-03O

ct-04M

ar-06Aug-07Jan-09Jun-10N


ec-18


Corp to Treasury Spread (bps)

0

100

200

300

400

500

600

700

Jan-98O

ct-98Jul-99Apr-00Jan-01O






ct-16Jul-17Apr-18Jan-19

AAA-10yTBaa-10yT


Flat (or “inverted) Yield Curves . . .

• Signals recession is coming?• Signals short rate too high?• Risk-Return less favorable? Not paid

for accepting duration• Eliminates “rolling down the curve”

offset to Interest Rate Risk• Flat and low means – reduced capital

gains opportunities?• Caution on negative convexitity

instruments.


CAPE vs 10 Year T-Bond(source: http://www.econ.yale.edu/~shiller/)

0

2

4

6

8

10

12

14

16

18

0

5

10

15

20

25

30

35

40

45

50Ja

n-60

Jan-

62Ja

n-64

Jan-

66Ja

n-68

Jan-

70Ja

n-72

Jan-

74Ja

n-76

Jan-

78Ja

n-80

Jan-

82Ja

n-84

Jan-

86Ja

n-88

Jan-

90Ja

n-92

Jan-

94Ja

n-96

Jan-

98Ja

n-00

Jan-

02Ja

n-04

Jan-

06Ja

n-08

Jan-

10Ja

n-12

Jan-

14Ja

n-16

Jan-

18

CAPE

10 Yr


CRE Loan Standards: Net Tightening(Source: Federal Reserve System, Senior Officers Lending Survey)

-20

-10

0

10

20

30

40

5020

13 Q

4

2014

Q1

2014

Q2

2014

Q3

2014

Q4

2015

Q1

2015

Q2

2015

Q3

2015

Q4

2016

Q1

2016

Q2

2016

Q3

2016

Q4

2017

Q1

2017

Q2

2017

Q3

2017

Q4

2018

Q1

2018

Q2

2018

Q3

2018

Q4

2019

Q1

2019

Q2

ADCNon-ResMultifam


Total Debt Balance and Composition(source: Federal Reserve Bank of New York Credit Panel/Equifax)


MBA Mortgage Activity: Purchase & Refinance

(Source: Mortgage Bankers Association)

0

100

200

300

400

500

600

700

800

90019

97 -

Q1

1997

- Q

319

98 -

Q1

1998

- Q

319

99 -

Q1

1999

- Q

320

00 -

Q1

2000

- Q

320

01 -

Q1

2001

- Q

320

02 -

Q1

2002

- Q

320

03 -

Q1

2003

- Q

320

04 -

Q1

2004

- Q

320

05 -

Q1

2005

- Q

320

06 -

Q1

2006

- Q

320

07 -

Q1

2007

- Q

320

08 -

Q1

2008

- Q

320

09 -

Q1

2009

- Q

320

10 -

Q1

2010

- Q

320

11 -

Q1

2011

- Q

320

12 -

Q1

2012

- Q

320

13 -

Q1

2013

- Q

320

14 -

Q1

2014

- Q

320

15 -

Q1

2015

- Q

320

16 -

Q1

2016

- Q

320

17 -

Q1

2017

- Q

320

18 -

Q1

2018

- Q

320

19 -

Q1

Purch

Refi


Quarterly Transition: 30-60 Days Late Mortgages(source: Federal Reserve Bank of New York Credit Panel/Equifax)


90+ Days Delinquent by Loan Type(source: Federal Reserve Bank of New York Credit Panel/Equifax)


Charge Off Rates at Banks(source: Board of Governors of the Federal Reserve System)

-0.5%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%Ja

n-91

May

-92

Sep-

93Ja

n-95

May

-96

Sep-

97Ja

n-99

May

-00

Sep-

01Ja

n-03

May

-04

Sep-

05Ja

n-07

May

-08

Sep-

09Ja

n-11

May

-12

Sep-

13Ja

n-15

May

-16

Sep-

17

Biz

CRE


Construction Spending(Source: U.S. Bureau of Census)

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%Ja

n-03

Sep-

03M

ay-0

4Ja

n-05

Sep-

05M

ay-0

6Ja

n-07

Sep-

07M

ay-0

8Ja

n-09

Sep-

09M

ay-1

0Ja

n-11

Sep-

11M

ay-1

2Ja

n-13

Sep-

13M

ay-1

4Ja

n-15

Sep-

15M

ay-1

6Ja

n-17

Sep-

17M

ay-1

8Ja

n-19

Residential

Non-Residential


Non-Residential Construction(Source: U.S. Bureau of Census)

-20%

-10%

0%

10%

20%

30%

40%

L

odgi

ng

O

ffice

C

omm

erci

al

H

ealth

car

e

E

duca

tiona

l

R

elig

ious

P

ublic

saf

ety

A

mus

e &

Rec

T

rans

porta

tion

C

omm

unic

atio

n

P

ower

H

ighw

ay a

nd s

treet

S

ewag

e &

was

te d

isp

W

ater

sup

ply

C

onse

rv a

nd d

evel

op

M

anuf

actu

ring

2012 2013

2014 2015

2016 2017

2018 2019


US Housing Permits: SF and Total(source: U.S. Bureau of Census)

200

500

800

1100

1400

1700

2000

2300Ja

n-98

Nov

-98

Sep-

99Ju

l-00

May

-01

Mar

-02

Jan-

03N

ov-0

3Se

p-04

Jul-0

5M

ay-0

6M

ar-0

7Ja

n-08

Nov

-08

Sep-

09Ju

l-10

May

-11

Mar

-12

Jan-

13N

ov-1

3Se

p-14

Jul-1

5M

ay-1

6M

ar-1

7Ja

n-18

TotalSF


US Housing Permits: Multi-family(Source: U.S. Bureau of Census)

0

100

200

300

400

500

600Ja

n-98

Sep-

98M

ay-9

9Ja

n-00

Sep-

00M

ay-0

1Ja

n-02

Sep-

02M

ay-0

3Ja

n-04

Sep-

04M

ay-0

5Ja

n-06

Sep-

06M

ay-0

7Ja

n-08

Sep-

08M

ay-0

9Ja

n-10

Sep-

10M

ay-1

1Ja

n-12

Sep-

12M

ay-1

3Ja

n-14

Sep-

14M

ay-1

5Ja

n-16

Sep-

16M

ay-1

7Ja

n-18


Iowa Housing Permits: SF and Total(source: U.S. Bureau of Census)

2000

4000

6000

8000

10000

12000

14000

16000

18000Ja

n-98

Dec

-98

Nov

-99

Oct

-00

Sep-

01A

ug-0

2Ju

l-03

Jun-

04M

ay-0

5A

pr-0

6M

ar-0

7Fe

b-08

Jan-

09D

ec-0

9N

ov-1

0O

ct-1

1Se

p-12

Aug

-13

Jul-1

4Ju

n-15

May

-16

Apr

-17

Mar

-18

TotalSF


Iowa Housing Permits: Multi-family(Source: U.S. Bureau of Census)

0

1000

2000

3000

4000

5000

6000Ja

n-98

Sep-

98M

ay-9

9Ja

n-00

Sep-

00M

ay-0

1Ja

n-02

Sep-

02M

ay-0

3Ja

n-04

Sep-

04M

ay-0

5Ja

n-06

Sep-

06M

ay-0

7Ja

n-08

Sep-

08M

ay-0

9Ja

n-10

Sep-

10M

ay-1

1Ja

n-12

Sep-

12M

ay-1

3Ja

n-14

Sep-

14M

ay-1

5Ja

n-16

Sep-

16M

ay-1

7Ja

n-18


Home Prices & CPI(Source: S&P Case-Shiller & Bureau of Labor Statistics)

50

70

90

110

130

150

170

190

210Ja

n-00

Aug

-00

Mar

-01

Oct

-01

May

-02

Dec

-02

Jul-0

3Fe

b-04

Sep-

04A

pr-0

5N

ov-0

5Ju

n-06

Jan-

07A

ug-0

7M

ar-0

8O

ct-0

8M

ay-0

9D

ec-0

9Ju

l-10

Feb-

11Se

p-11

Apr

-12

Nov

-12

Jun-

13Ja

n-14

Aug

-14

Mar

-15

Oct

-15

May

-16

Dec

-16

CPICase-Shiller


House Prices: Net

-20%

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%C

olor

ado

Dis

trict

of C

olTe

xas

Nor

th D

akot

aSo

uth

Dak

ota

Tenn

esse

eW

ashi

ngto

nU

tah

Neb

rask

aId

aho

Ore

gon

Indi

ana

Okl

ahom

aKe

ntuc

kyKa

nsas

Sout

h C

arol

ina

Mon

tana

Iow

aN

orth

Car

olin

aG

eorg

iaH

awai

iM

isso

uri

Ohi

oW

isco

nsin

Min

neso

taLo

uisi

ana

Mic

higa

nW

est V

irgin

iaM

assa

chus

etts

Mai

neAl

aska

Penn

sylv

ania

Arka

nsas

New

Yor

kAl

abam

aW

yom

ing

Verm

ont

Virg

inia

New

Ham

pshi

reM

issi

ssip

piN

ew M

exic

oAr

izon

iaFl

orid

aR

hode

Isla

ndC

alifo

rnia

Nev

ada

Illin

ois

New

Jer

sey

Del

awar

eM

aryl

and

Con

nect

icut


CS/S&P Home Price Index(Source: S&P Case Shiller)

-80%

-60%

-40%

-20%

0%

20%

40%

60%D

enve

r

Dal

las

Seat

tle

Port

land

Bos

ton

Cha

rlotte

San

Fran

cisc

o

Nat

iona

l-US

Atla

nta

Los

Ang

eles

Com

posi

te-2

0

San

Die

go

Min

neap

olis

Cle

vela

nd

Det

roit

New

Yor

k

Was

hing

ton

Tam

pa

Mia

mi

Chi

cago

Phoe

nix

Las

Vega

s

Bust Net


Home Prices: Iowa & Neighbors

-15%

-10%

-5%

0%

5%

10%

15%19

88 Q

119

89 Q

119

90 Q

119

91 Q

119

92 Q

119

93 Q

119

94 Q

119

95 Q

119

96 Q

119

97 Q

119

98 Q

119

99 Q

120

00 Q

120

01 Q

120

02 Q

120

03 Q

120

04 Q

120

05 Q

120

06 Q

120

07 Q

120

08 Q

120

09 Q

120

10 Q

120

11 Q

120

12 Q

120

13 Q

120

14 Q

120

15 Q

120

16 Q

120

17 Q

120

18 Q

1

IA

IL

MN

MO

NE

SD

WI


Home Prices: Iowa

-10%

0%

10%

20%

30%

40%

50%

IOW

A

Ames

Ced

ar R

apid

s

Des

Moi

nes

Dub

uque

Iow

a C

ity

Om

aha-

Cou

ncil

Bluf

f

Qua

d C

ities

Siou

x C

ity

Wat

erlo

o-C

edar

Fal

ls

RecessRecoveryNet


Household RE Equity(Source: Board of Governors of Federal Reserve System)

2000

4000

6000

8000

10000

12000

14000

16000

18000

Jan-

00N

ov-0

0Se

p-01

Jul-0

2M

ay-0

3M

ar-0

4Ja

n-05

Nov

-05

Sep-

06Ju

l-07

May

-08

Mar

-09

Jan-

10N

ov-1

0Se

p-11

Jul-1

2M

ay-1

3M

ar-1

4Ja

n-15

Nov

-15

Sep-

16Ju

l-17

May

-18


The Demographics: Boom & Bust(Source: CDC, US Bureau of Census)


2018 Migration(source: NAMS Report)


Currents Issues in Fiscal Affairs• Federal:

– Shutdown – longest, done for now– 2017’s Biggest Play: Tax Reform – but 2.0 unlikely w/o SALT– Still in Play:, Keystone, Dodd-Frank, EPA, NLRB– Next in Play: Infrastructure – Always in Play: SCOTUS, ACA challenges– Ongoing Play: Revising Trade

» Bilateral vs Multilateral, Lumber deals and tariffs

• States:– Tax Reform Initiatives in other States slow, but SALT consideration weigh

in– Recent gains in manufacturing facilities due to “reshoring”– SE states domination biz location ranking, but not exclusive.

• Local:– RE valuation rising = tax revenues, fiscal distress moderating

ON THE ECONOMIC, BUSINESS AND POLITICAL CLIMATE · 2019 ITA FALL CONFERENCE Des Moines, IA...

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Transcript of ON THE ECONOMIC, BUSINESS AND POLITICAL CLIMATE · 2019 ITA FALL CONFERENCE Des Moines, IA...