rural outlook conference us and oklahoma economic outlook presentation october 2015
TRANSCRIPT
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Rural Outlook Conference
US and Oklahoma Economic Outlook Presentation
October 2015
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Rural Outlook PresentationOctober 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
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Storyline and Continuing Saga
19th Year and Counting
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First Chapters of StoryIrrational Exuberance
Stock Market Bubble/Bust
Floods of Liquidity Promoting Speculation and Low Rates
Rise of the Housing Bubble
Recession of 2001
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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?
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Next Chapters of StorySubprime Mortgage Crisis
Financial Contagion
Recession of 2007-2008
Fiscal & Monetary Stimulus
Housing Market Collapse
Muted Economic Recovery
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The Continuing 19-Year SagaCredit Market Deleveraging
Sovereign Debt Crises
Currency Devaluations
Global Political Discord
Quantitative Easing Forever
Demographic and Other Cliffs
Continuing Slow Growth
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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, $8.6B AUM
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Real Annualized GDP Growth
Recent Estimates place Q1 2013 at a 1.6% gain
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Industrial Production
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Retail Sales
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Year-over-Year Change in U.S. Non-Ag Employment
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Purchasing Mgrs Index and Fed Manufacturing Surveys
Recent Estimates place Q1 2013 at a 1.6% gain
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Case Shiller Housing Price Indices
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Housing Starts
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Inflation
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Monetary Policy
Federal Reserve gone wild?
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Fed’s Magical Balance Sheet
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U.S. Treasury securities 2,461.6 Reserve balances with F.R. Banks 2,479.3Federal agency debt securities 38.7 Currency in circulation 1,317.4Mortgage-backed securities 1,729.8 Reverse repurchase agreements 251.5Credit loans 208.1 Treasury cash holdings 0.2Other loans 0.1 Other deposits with F.R. Banks 418.1Other Federal Reserve assets 80.2 Other liabilities and capital 63.1Gold stock 11.0
Total 4,529.6 Total 4,529.6
Fed's Balance Sheet November 26, 2014 ($billions)
Fed’s Magical Balance Sheet
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Federal Reserve’s Asset Holdings
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Stock Market and Member Bank Reserves
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Bank Reserve Balances Deposited at the Fed
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U.S. Government Budget Balances
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Status of the Oklahoma Economy
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OKC, Tulsa, BOS Employment Trends
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US and Oklahoma Employment Growth
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Comparative State Unemployment Rates
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Price of Oil
Houston, we have a problem!
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WTI: What Happened in the 1980’s
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WTI Historic
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Historic U.S. Oil Production
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US Historic Rig Count
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Oil v. Natural Gas Rig Count
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Oil Prices and Rig Counts
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OK Direct Mining Sector Employment
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OK Regional Direct Mining Sector Employment
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That’s all, folks