01 octubre 2015

buenas y malas noticias

No todo son malas noticias de EEUU. Hay unas malas, y otras buenas…
Bad news seems more prone to get the headlines, whereas there's lots of good news that goes largely unnoticed. Some examples:
The bad news: this is the weakest recovery ever; the labor force participation rate has been falling for 15 years; productivity growth is dismally low; our national debt is at a post-war high of 72% of GDP; race relations have deteriorated; tax and regulatory burdens are suffocating the private sector; savers and retirees have been severely penalized by seven years of near-zero interest rates; the rule of law has been weakened by the emergence of the Imperial Presidency; crony capitalism (a euphemism for corruption in government) is rampant; the tax code is a nightmare; and transfer payments are at record-high levels that correspond to 20% of personal income and over 70% of federal spending.
The good news: despite all the bad news, household net worth is at an all-time high ($85.7 trillion), whether measured in nominal, real or per capita terms; households' leverage has fallen by more than 30% since the 2009 peak; the economy has been growing and jobs have been expanding for more than six years; 30-yr fixed mortgage rates are 3.84%, only 40 bps higher than their all-time lows of 2012; housing starts have increased by an annualized 15% rate for the past six years; the private sector has created over 4 million net new jobs since 2007; inflation has averaged only 2% for the past 10 years; and the dollar is still one of the world's strongest currencies.
Here are some charts which incorporate the data on Q2/15 household net worth released today:
Household net worth has reached an astounding $85.7 trillion. That represents an increase of almost 30% ($18.9 trillion) from the pre-recession levels of 2007. The increase was driven by a $16.7 trillion increase in financial assets, and it occurred—in very healthy fashion—alongside a modest reduction in liabilities.
After adjusting for inflation, household net worth now stands at a new, all-time high. That continues the long-term trend of annualized increases of almost 2.5% in real household net worth.
After adjusting for inflation and population growth, real per capita net worth is also at a new, all-time high of about $268K.
Even if all this staggering amount of wealth were held by just a handful of people, it would still be the case that we all benefit from it. This wealth is the ultimate source of all jobs and our living standards. Because our economy can produce so much, so efficiently, the fruits of modern life (e.g., iPhones, air travel, clean water, abundant food) are available to virtually everyone. This is unequivocally good news.
As the chart above shows, all of the wealth gains have occurred against a backdrop of pronounced deleveraging on the part of the household sector. Leverage has been rolled back to the levels of the mid-1980s. Who says that deleveraging is bad for growth and prosperity?
The chart above shows the Fed's calculation of the average homeowner's percentage equity ownership in his or her home. Although still relatively low from a long-term historical perspective (it was over 80% in the early 1950s), it has rebounded significantly in the past six years. Households' real estate holdings today have just about regained their prior peak levels of 2006. You can almost hear the sighs of relief all across the country
PD1: Goldman Sachs, el mayor banco de inversiones de EEUU, el que más mueve el mercado con sus recomendaciones, ha dicho que el SP500 podría terminar el año en los 2000 puntos y que a finales de 2016 subiría hasta los 2100 puntos, desde los 1900 actuales. Flat…, algo que quizás es bueno y tal…
With three months left in the year, we were wondering how long it would take before Goldman's equity strategist would throw in the towel on his increasingly improbable (unless of course the Fed launches QE4, NIRP and/or helicopter money in the coming months) year-end S&P500 price target of 2100. The answer: not very long, as this is precisely what Goldman did overnight, when it cut both its 2015 and 2016 EPS forecasts (to $109 and $120 from $114 and $126), with a corresponding cut in Goldman's 2015 year-end price target from 2100 to 2,000, rising to a nice round 2,100 the year following.
The catalyst for the cut: precisely the two things Goldman had been - incorrectly - banging the table on for months and years, namely that US growth is accelerating, and that low oil prices are good for the economy. 
Here is David Kostin's mea culpa:
Slower economic growth in the US and China and a lower oil price than we previously assumed translate into a reduced profit forecast and a lower trajectory for US stocks. Our revised top-down 2015 S&P 500 EPS forecast of $109 (from $114) represents a 3% year/year decline. Our new 2016 EPS estimate of $120 (from $126) reflects annual growth of 10%. We expect S&P 500 will rise by 6% to our lowered year-end target of 2000. We expect S&P 500 will climb by 5% to 2100 in 2016. Focus on stocks with high US sales, firms returning cash to shareholders, and high quality stocks.
Some details:
We have lowered both our S&P 500 earnings estimates and price targets. The impetus for these reductions is that our models now incorporate a slower pace of economic activity in the US and China and a lower oil price than we had been previously assuming. We cut our 2015 EPS estimate by 4% to $109 and our year-end price forecast by 5% to 2000. Previously, we had assumed EPS of $114 and expected the index would climb to 2100 by the end of this year.
A lower path of profits is an obvious reason to lower a price target but the risks for the index level and P/E multiple have also increased. In 2016, we expect US GDP will rise by just 2.4% and the world ex-US will expand at 3.7%, down from our prior assumptions of 2.8% and 4.3%, respectively. China is growing much slower than we previously assumed. Our CAI suggests economic growth is about 100 bp slower than the official GDP data indicates.
We expect the Fed will begin its long-awaited tightening process this December.Historically, rising short-term interest rates have been associated with declining P/E multiples. We expect the Treasury curve to bear flatten as short-rates rise at a faster pace than ten-year note yields during the next few years. Rising bond yields are consistent with lower multiples. Using our estimates, the P/E will slide from 16.4x today to 16.1x by 2017.
Finally, the political landscape in Washington, DC remains unstable following the resignation of Speaker Boehner. The federal debt ceiling will be reached in November. Precedent suggests raising the debt limit will be contentious and may rattle investors.
Our baseline forecast is that the US economy will grow at a modest pace, earnings will rise, and the S&P 500 index will climb slowly while the P/E multiple declines as interest rates rise (see Exhibit 2). “Flat is the new up” will be the 2016 investor refrain.
And there is your soundbite for 2016: "flat is the new up"
D2: Somos unos raritos muy normales. Llevo muchos años escribiéndote estas postdatas y de vez en cuando me pregunto si merece la pena…, si no te cansas de mis rollos. Aunque para mi es una oportunidad que no puedo desaprovechar… Estamos en ese momento de la historia en que lo raro es ser normal… Menuda peña tenemos. Hay que seguir fieles en lo de siempre, en lo que nos gusta, en lo que creemos, en lo que nos llena. Lo demás, es pernicioso…