Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.
-
Upload
frederick-cole -
Category
Documents
-
view
216 -
download
2
Transcript of Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.
![Page 1: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/1.jpg)
Renee D. Laychur, CFASenior Vice President & Senior Portfolio Mgr
First National Bank
![Page 2: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/2.jpg)
Revisiting the Past Year
Those who cannot remember the past are condemned to
repeat it.
George Santayana
![Page 3: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/3.jpg)
Roots of the Financial Crisis – 2003 to 2007
•Credit Growth Exceeded
Economic Growth•Historical Low Interest Rates•Sub-Prime Loans •“Creative” Mortgage Products
– Packaged & Sold•Housing Prices Rose Creating
“Bubble”
![Page 4: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/4.jpg)
![Page 5: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/5.jpg)
Financial Crisis Timeline
• 3/16/08 – Bear Stearns Acquired• 9/7/08 – Federal Takeover of Fannie Mae and
Freddie Mac• 9/10/08 – DJIA clings to 11,000 level• 9/14/08– Merrill Lynch Sold to Bank of America• 9/15/08 – Lehman Brothers Declares Bankruptcy• 9/16/08 – Fed lends AIG $85 billion to Prevent
Bankruptcy: Reserve Money Fund “Breaks Buck”• 9/29/08 – House Rejects Financial Rescue
Package
![Page 6: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/6.jpg)
Financial Crisis Timeline
• 10/3/09 – House Passes Financial Rescue Plan• 10/6/08 – DJIA Closes under 10,000 for first time 4
Years and Losses over 22% for the Week - Worst in 75 Years
• 10/11/08 – Most Volatile Day in DJIA’s 112 year History, up over 900 Points
• 12/11/08 – Bernie Madoff Arrested• 12/19/08 – Treasury Grants Loans to GM &
Chrysler• 3/9/09 – DJIA Declines to 6,440
![Page 7: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/7.jpg)
![Page 8: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/8.jpg)
Dow Jones Industrial Average – Past Year
![Page 9: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/9.jpg)
Dow Jones Industrial Average – Past 5 Years
![Page 10: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/10.jpg)
Market Highs to Lows
• Dow Jones Industrial Average
- Peaked at 14,164.53 on 10/9/07
- Bottomed at 6,547.05 on 3/7/09
- 54% Decline• Since 3/9/09 DJIA has appreciated 3,080 points or 47%• Year to Date DJIA is up over 9%• Interesting Fact
- On 9/10/01 DJIA closed at 9,605.51
- On 9/11/09 DJIA closed at 9,605.41
![Page 11: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/11.jpg)
Economic Activity
![Page 12: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/12.jpg)
The Great Recession
• Longest and Deepest Post WWII Recession• Currently in 22nd Month of Recession which
began in December 2007• First Quarter GDP Decline of -6.4% is the Largest
Drop in 27 Years• Four Consecutive Quarters of Negative GDP –
Longest Streak on Record
![Page 13: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/13.jpg)
Gross Domestic Product
![Page 14: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/14.jpg)
Copyright © 2009 CRANDALL, PIERCE & COMPANY • All rights reserved. • 14047 West Petronella Drive • Libertyville, Illinois 60048 • 1-847-549-6015 • Internet: www.crandallpierce.com
This copyright protected illustration is for internal use only. Under no circumstances may this illustration be copied, reproduced or redistributed in whole or in part including the data contained herein, without prior written permission from Crandall, Pierce & Company.The information presented herein was compiled from sources believed to be reliable. It is intended for illustrative purposes only, and is furnished without responsibility for completeness or accuracy. Past performance does not guarantee future results.
Real Gross Domestic Product
Sources: Bureau of Economic Analysis; National Bureau of Economic Research; Copyright © 2009 Crandall, Pierce & Company • All rights reserved.
*Data Released August 27, 2009 Shaded areas represent recessionary periods.
-8
-6
-4
-2
0
-8
-6
-4
-2
0
In percent change from previous quarter,seasonally adjusted annual rates.
-CCLXXXII-6E
0
2
4
6
8
10
12
0
2
4
6
8
10
122nd Quarter 2009 (Preliminary)* - Real GDP decreased at anAnnual Rate of -1.0%, or -32.9 Billion Dollars. In the 1st Quarter2009, Real GDP decreased -6.4%, or -216.5 Billion Dollars.
77 79 81 83 85 87 89 91 93 95 97 0199 03 05 07 09
GDP – Quarterly Long Term Perspective
![Page 15: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/15.jpg)
Business Inventories
![Page 16: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/16.jpg)
Employment
![Page 17: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/17.jpg)
U.S. Unemployment Rate
![Page 18: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/18.jpg)
Unemployment by State
![Page 19: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/19.jpg)
Unemployment – Lagging Indicator
![Page 20: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/20.jpg)
Unemployment – Initial Claims
![Page 21: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/21.jpg)
Unemployment
• Since Beginning of Recession 6.9 Million Non-farm Jobs Lost
• Year to Date in 2009 – 3.85 Million Non-farm Jobs Lost
• 9.7% Unemployment Rate – Highest in 26 Years• Average Duration of Unemployment – 24.9 Weeks• Teenage Unemployment Rate 25.5% - Highest
Ever
![Page 22: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/22.jpg)
Housing
![Page 23: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/23.jpg)
Home Prices
![Page 24: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/24.jpg)
Home Prices
• Case-Shiller U.S. Home Price Index Rose in May & June 2009
• First Increases in Almost 3 Years• 2Q 2009 Prices Down 14.9% versus 2Q 2008• Las Vegas and Detroit Worst Markets
– Las Vegas Prices Down 54.3% from Peak– Detroit Prices Down 45.3% from Peak
![Page 25: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/25.jpg)
Home Price Recovery
![Page 27: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/27.jpg)
Housing Starts
![Page 28: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/28.jpg)
Consumer
![Page 29: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/29.jpg)
Consumer Spending
• Consumer Spending Represents 70% of Economic Activity
• 2009 Back to School Season Appears to have been Weak
• Christmas Season Important, but Current Surveys not Looking Promising
• 2008 Christmas Spending was Worst in 40 Years• July Consumer Credit Down $21 Billion – Largest
Decline in 43 Years
![Page 30: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/30.jpg)
Retail Sales
![Page 31: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/31.jpg)
Consumer Credit
![Page 32: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/32.jpg)
Household Debt
![Page 33: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/33.jpg)
Personal Savings Rate
![Page 34: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/34.jpg)
Vehicle Sales - Cash for Clunkers
![Page 35: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/35.jpg)
University of Michigan: Consumer Sentiment
![Page 36: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/36.jpg)
Economic Themes
• Slow Growth – V or W• Jobless Recovery• Weak Consumer Spending• Restrictive Credit Conditions• Future Inflation Concerns• Dollar Weakness
![Page 37: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/37.jpg)
Copyright © 2009 CRANDALL, PIERCE & COMPANY • All rights reserved • 14047 West Petronella Drive • Libertyville, Illinois 60048 • 1-847-549-6015 • Internet: www.crandallpierce.com
Sources: Bureau of Labor Statistics • Copyright © 2009 Crandall, Pierce & Company • All rights reserved.Shaded Areas - U.S. Recessions, Dashed Line - Beginning of Latest Recession
Consumer Prices and Producer Prices
191C CCLXXXI
Year to Year Percentage ChangeLast Observation July 2009
This copyright protected illustration is for internal use only. Under no circumstances may this illustration be copied, reproduced or redistributed in whole or in part including the data contained herein, without prior written permission from Crandall, Pierce & Company.The information presented herein was compiled from sources believed to be reliable. It is intended for illustrative purposes only, and is furnished without responsibility for completeness or accuracy. Past performance does not guarantee future results.
Consumer Price Index: All ItemsYear to Year Percentage Change
Last Observation July 2009
Producer Prices: Finished Goods
-6
-4
-2
0
2
4
6
8
10
12
14
16
18
20
-6
-4
-2
0
2
4
6
8
10
12
14
16
18
20
73 75 77 79 81 83 85 87 89 91 93 95 97 99 01 05 0703 0969 7167656361
Inflation
![Page 38: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/38.jpg)
Oil Prices
![Page 39: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/39.jpg)
Natural Gas Prices
![Page 40: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/40.jpg)
Federal Government Debt – Total Public Debt
![Page 41: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/41.jpg)
Interest Rates – 10 Year Treasury Yields
![Page 42: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/42.jpg)
Interest Rates – 3 Month Treasury Yields
![Page 43: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/43.jpg)
Pennsylvania Economy
![Page 44: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/44.jpg)
Pennsylvania – Unemployment Rate
![Page 45: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/45.jpg)
PA Unemployment by County – December 2007
![Page 46: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/46.jpg)
PA Unemployment by County – June 2009
![Page 47: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/47.jpg)
PA Unemployment – Rural versus Urban
![Page 48: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/48.jpg)
Pennsylvania Housing Market
• PA fared Better than U.S. in Price Depreciation• Foreclosures
– Nation - 1 in every 357 Homes– PA - 1 in every 950 Homes– Nevada - 1 in every 62 Homes
![Page 49: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/49.jpg)
2nd Quarter 2009 -Metropolitan Area House Price Year to Year Change
Metropolitan Area Chg Metropolitan Area Chg
Allentown-Bethlehem-
Easton-5.4% Philadelphia -3.1%
Altoona 2.6% Pittsburgh 1.2%
Erie 0.7% Reading -3.7%
Harrisburg-Carlisle -1.0% Scranton-Wilkes Barre 0.3%
Johnstown 2.2% State College 1.5%
Lancaster -0.9% Williamsport 2.3%
Lebanon 0.7% York-Hanover -3.5%
![Page 50: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/50.jpg)
Regional Leading Indicators
![Page 51: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/51.jpg)
Economic Outlook
It’s hard to make predictions,
especially about the future.
Yogi Berra
![Page 52: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/52.jpg)
Federal Reserve Bank of Philadelphia
![Page 53: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/53.jpg)
Aruoba-Diebold-Scotti Business Conditions Index
![Page 54: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/54.jpg)
Aruoba-Diebold-Scotti Business Conditions Index
The Aruoba-Diebold-Scotti business conditions index is designed to track real business conditions at high frequency. Its underlying economic indicators (weekly initial jobless claims; monthly payroll employment, industrial production, personal income less transfer payments, manufacturing and trade sales; and quarterly real GDP)
![Page 55: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/55.jpg)
2010 - Real GPD Projections
![Page 56: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/56.jpg)
2010 – Unemployment Projections
![Page 57: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/57.jpg)
2011 – Unemployment Projections
![Page 58: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/58.jpg)
FRB Philadelphia – Survey of Professional Forecasters
Average Annual Data
Real GDPUnemployment
Rate
2009 -2.6% 9.2%
2010 2.3% 9.6%
2011 2.9% 8.9%
2012 3.2% 8.0%
![Page 59: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/59.jpg)
Finally
![Page 60: Renee D. Laychur, CFA Senior Vice President & Senior Portfolio Mgr First National Bank.](https://reader038.fdocuments.us/reader038/viewer/2022110208/56649db25503460f94aa15d8/html5/thumbnails/60.jpg)
First National Bank Presence
Footprint