Wall Street: Up 5.7%
Price to Earnings "PE" Ratio's
Leverage simply put, if a Company has one million dollars in earnings it can be indebted on the Stock and Bond Markets for up to Twenty Million Dollars or more per million.
Actual formula: If the Stock has a earnings value in the last 12 months is/up $1.00 a share for one million shares and the Stock is selling at $20.00 a share then your PE is 20 or 20 million dollars. Inflate the PE to 25 to get a twenty five million dollar value.
In comparison, if a Real Estate Investment had a value of one million dollars could you get a loan to in-debt the Real Estate for twenty million dollars or twenty five million and call it a good investment?
Dow Industrials have increased volume from about 19,900 in January 2017 to 21,053 as of 5/30/2017 or has inflated about +5.7 %. The Wall Street ink is still red and wet overall.
THE GLOBAL MARKET: Up 9.3%
Global Industrials have increased their volume from about 25,750 in January 2017 to 27,610 as of 5/30/2017 or has inflated about +9.3 %. The ink is still red.
FED Chair Janet Yellen a Democratic Appointee
of the past Administration and the FED Governors will look back to the 2016 GDP results as part of their decision making process to move forward with the FEDS proposed agenda of Interest Rate Hikes without cause.
In the 1st quarter and 2nd quarter of 2016 the GDP growth was Under -1% very low. In the the third quarter the 2016 GDP was slightly Over +1% growth, low, considering as this is a normal annual upswing in production due to Christmas orders. The fourth quarter reached 2.1% as a result of Christmas orders and the normal boost by Politics in any election year to be re elected.
The FED raised interest rates at the March 2017 meeting as they looked forward to the June 14, 2017 meeting, considering the possibility of another rate increase. If the FED raises interest rates it would be for the second time in 2017 and would probably result in the continued downturn of the USA economy. The FED appears to be changing their focus to whatever figures accomodate the FED's agenda and not Americas best interest. Such as the Unemployment Insure Benefit Rate easing down and not 40 hour a week jobs at a economic level to fuel the USA economy.
This type of attitude by the FED seemingly makes it improbable for the current administration to achieve any success to improve Americans and America's economic status.
2017 FED Results:
5.70% Wall Street Volume increase.
9.30% Global Market Volume increase.
0.40% USA Existing Home Sales Ave. ~ Flat
Off -7.10% USA Benchmark estimate
0.17% USA Retail Sales Average ~ Decrease
Off -4.83% USA Benchmark estimate
A FUTURE FINANCIAL OUTLOOK
The FED has not provided any stimulus to America or the American people to increase the USA purchasing power in the past 3 years. The FED has made moves to take any financial benefit to Americans off the table.
As of May 2017 the FED has still abandoned Main Street America and has their focus set on Wall Street.
REAL ESTATE FUTURES EXPANDED:
Prime Lending Rate: 4.0%
Mortgage Interest Rates ease down from 4.25% during May 2017 to 4.00%.
Speculation to increase purchasing power:
What can be done at this late date to benefit the USA economy and give Americans some purchasing power to fuel the retail sales markets.?
One avenue would be develop expanded Home Equity guidelines for 1st and 2nd Mortgages and Cash Out Programs, for existing home owners to access capital. This may spur retail sales and home sales, growth and new small business opportunity and big business employment, regenerating the USA economy.
Another avenue would be modify existing lending guidelines to influence re-investment into the real estate market such as for the "First Time Home Buyer" or a Buyer re-entering the Home Ownership market.
Partial Reprint of May 3, 2017
Higher interest rates is not the answer. Rates need to decrease under 4% to bring the market back to a growth level anytime soon. A possible scenario that may work would be back up to the growth level of the 3.50% 30 years rates as they were in mid 2016. Then look at easing them up annually at .25% if necessary, to maintain a healthy level of growth in the real estate market.
USA ECONOMIC DATA AS OF
up to June 1, 2017
June 1, 2017
The TRUMP Trek begins to Restore America.
Obama leaves a trail of Debt for Americans.
US NATIONAL DEBT: SINCE 1-20-2017
-$19 TRILLION 927 BILLION Down
120 DAYS Down -$53 BILLION
National Debt: Notes
In 2008 the National Debt as of January 9, 2008 was 9 Trillion 719 Billion. The National Debt has more than Doubled in the last 9 years. The National Debt went down in the last 120 days!
US GDP GROSS DOMESTIC
+$18 TRILLION 986 BILLION
Last 120 DAYS Up +76 BILLION
US DEBT TO GDP RATIO: -104.49%
Improved in last 120 days +1.88%
USA Debt exceeds USA Income.
Obama has increased the USA Dollar Supply
-963 Billion in 12/31/2016
-778 Billion 6/01/2017 Improved
185 Billion less dollars printed
in the last 120 days. IMPROVED 20% Lower
Cost to each Taxpayer 12/31/2017
an additional -$2,962.00 Annual.
Down to -$2,369.00 6/01/2017 est.
With no apparent Benefit to the USA Taxpayer.
As of 1/31/2107
The above negative ratio indicates that
the USA is spending more money than produces. The Obama Administration and Congress is -$592 BILLION OVER THE 1 TRILLION 100 BILLION US 2016 BUDGET. Expressed as a percentage that is
53.81% ^ over budget. The Obama, US War chest is 548 Billion. The USA is not a healthy economy at this time. Americans Living in Poverty exceed 42 Million or 12.96%. Americans Living off Food Stamps is 41 Million. Both sets of number encompass different Americans with some duplication.
December 31, 2008 Comparison (year end)
US NATIONAL DEBT:
-10 TRILLION 447 BILLION
US GDP GROSS DOMESTIC PRODUCT:
+13 TRILLION 976 BILLION
US DEBT TO GDP RATIO: +35.46%
The above positive GDP Ratio reflects a USA economy that has produced more than it has spent.
BOTTOM LINE: 1/31/2017
WORSE 2008 TO 12/31/2016 -41.83%
January 31,2017 -41.15%
THE USA ECONOMY IS OVER -40.00%
WORSE AS OF JANUARY 31, 2017 THAN
IT WAS IN DECEMBER 31, 2008. Improving
This does not include random Money printing.
AVERAGE INFLATION RATE
YEARS INFLATION RATE AVERAGE
2017 Average. 2.5% Moderate Low
2009 TO 2016 1.4% Recession
2000 TO 2008 2.9% Moderate
America as a Democracy powered
by Capitalism should have a positive
"Growth At A Rate".
In order to do so a 2.5% Inflation Rate is Low and a 3.5% Inflation Rate is Moderate when compared to USA history and the current Global Economy. See World News page grid.
EXIT BENCHMARK: 3/28/2017
USA Full Time Employment Needed:
1 Million 215 Thousand Americans
To get back to 2008 Actual Unemployed Level
As of 1/10/2017: EXIT BENCHMARK
US Budget Deficit: -5 Trillion 645 Billion
Social Security: -15 Trillion 619 Billion
Medicare: -27 Trillion 720 Billion
Additional Unfunded Liabilities+ National Debt
-55 Trillion 777 Billion
Liability Per USA Taxpayer
$875 Thousand 156 Dollars as of 1/10/2017
NEXT ANALYSIS 1/10/2018
USA HOME BUYER AND SELLERS
The USA National Average for Home Ownership and Loan Programs exceed how much home the average American can buy due to out of date underwriting guidelines.
Average American Statistics as of 6/1/2017:
Credit Score 620+ Minimum 3 Credit Bureaus
$7,000. FHA Down Payment 3.5%*
$6,000. FHA Seller Credit for Closing Cost est.
$193,000. Loan Amount
4.00% Interest Rate at 0 Points
$921.00 30/30 Year FHA Loan
$200.00 Property Taxes and Insurance
$533.33 Other Credit Debt
3 Months Cash Reserves Required
$4962.99 Cash Reserves for $200,000 Purchase
$2254.00*Cash Available for Reserves
-$2708.99 Short fall on FHA Cash Reserves
FHA Scenario Analysis:
How much home, can you buy? $75,000
In order to meet the Cash Reserves Requirements your loan amount and purchase price drops to about $75,000. Yes, Cash Reserves are one of the hard fast rules for FHA financing. Cash Reserves are necessary because of the high loan 97.5%, to value.
Income: $56,516. Annual for $193,000 Mtg.
This is for the FHA $193,000 Loan amount that a buyer would need if you meet the FHA Cash Reserve Requirements(s).
The Qualifing Ratios for FHA Loans are 31% Housing and 43% Housing and Overalll Debt Ratio.
National Averages for the above scenario:
$ 236,400 Median Home Price
$ 189,120 Loan Amount with 20% Down
$ 56,516 Income
$ 47,280 Down Payment
30% Principal/Interest Ratio
37% All Debt Ratio
Trump Speculation per Thousand Dollars:
Trumps Initial Plan Per:
+280.00. Inflation at 3.5% over 8 years
$1280.00 Earnings in 8 years
$500.00 Expenses for the $1000. Earnings
+140.00 Inflation at 3.5% over 8 years
$640.00 Expenses in 8 years
+$13,440. End Game per $1000.00 of Income
Benchmark for Real Estate Appreciation 7.5% Annual
$100,000 Home Value 1/1/2017
$178,347 Estimated Value 1/1/2025
+$78,347 End Game Per $100,000
Real Estate Invested
$100,000 Stock Market Investment
$152,308 Yield Estimated at 5.4% Annual
+$52,308 Per $100,000 Invested in the market.
+ $5,230 Per $10,000 Invested in the market.
USA ANNUAL INFLATION RATE
Trump Target 2.5% to 3.5%
||Base of Moderate
2017 is a 4 Month Average
for January through April 2017.
Inflation Rates 2014-2015
US Bureau Of Labor Statistics
USA AVERAGE HOME
QUICK QUALIFIER INFO
Median Individual's Income
2017 - $30,125. v
2000 - $28,408. =
Estimated Average Family Income
2016 - $56,516
USA Home Median Price
Loan Amount $189,120
Income to Qualify with 20% Down $4709.66 Month (or $56,516. Annual)
Loan Rate 4.20% 30 due in 30 Yrs.
Payment $925.00 a Month
Taxes and Insurance $249.00
Other Debt $533.33
$1707.33 PITI and Debt per Month
24.92 / 36.24
The reason the model above still qualifies with the higher interest rate of +1.0% is because home prices have decreased about -$9,600 since July 2016
Underwriting Variance is estimated
upward at +2%
33 / 38
Cash Down Payment required is
estimated at $47,280. plus closing cost and cash reserves.
Red indicates a Potential Deficiency
Average Family Savings $9,550.00 v
||Point Cost Est
|30/30 - 417K
|5/25 - 417K
|15/15 - 417K
|Point Cost Lowers Rate
|Commercial 7 Yr. Fixed Due in 20 $6,000,000.
60 Day Delivery 30/30 YR.
USA HOME FORECLOSURES REPORTED
Foreclosure Filings as of June 2017 505,124 v
Note:The above figure does not include defaults,auctions and repositions as shown in the annual figures below.
Courtesy of RETV.News. 6/1/2017
Foreclosure Filings in 2016 - 933,045
Foreclosure Filings in 2015 - 1,100,000
Foreclosure Filings in 2014 - 1,100,000
Courtesy of Realty Track
SPECULATION JUNE TO DECEMBER 2017:
Americans are in the tight squeeze as the governments controls basically minimize the ability to have the of Home Ownership. Middle income or working Americans are finding out that Home Ownership is really becoming an "American Dream" as Americans are not being allowed to participate in a USA Democracy and Capitalistic economy.
The FED and its resources including Fannie Mae and Freddie Mac that are still under government conservatorship after 8 years of the resolved mortgage crises. The government is manipulating the numbers, apparently, utilizing interest rates primarily to deflate the Home Sales Market since Mid June 2016.
These measures have been used as a control during the preceding socialist focused administration from 2009-2016 and have not worked to stimulate growth.
Partial Reprint of May 2017
Fannie Mae and Freddie Mac are the two largest Mortgage Banks in the USA. Both are still under the US Government Conservator ship.
The result is, that mortgage interest rates are not in really moving with the market. They are moving under the control of the Government.