Back to the Future Part II

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Transcription:

Back to the Future Part II On Behalf of MACPA By: Anirban Basu Sage Policy Group, Inc. April 24 th, 2014

Raging Bull (1980)

Historic and Projected World Output Growth 2004 through 2015* 6.0% 5.0% 5.1% 4.7% 5.2% 5.3% 5.2% Annual % Change 4.0% 3.0% 2.0% 1.0% 0.0% -1.0% 2.7% -0.4% 3.9% 3.1% 3.0% 3.7% 3.9% -2.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Source: International Monetary Fund *2014-2015 data are projections

Real GDP Growth, 20 Fastest and Slowest Growing Countries Estimated 2013, Annual Percent Change (for available nations) Rank Country Region % Rank Country Region % 1 South Sudan Africa 24.7 169 Belgium Europe 0.1 2 Sierra Leone Africa 13.3 170 Denmark Europe 0.1 3 Turkmenistan Central Asia 12.2 171 Samoa Asia 0.1 4 Paraguay South America 12.0 172 Swaziland Africa 0.0 5 Mongolia Asia 11.8 173 Czech Republic Europe -0.4 6 Lao P.D.R. Southeast Asia 8.3 174 Croatia Eastern Europe -0.6 7 Liberia Africa 8.1 175 Finland Europe -0.6 8 Timor-Leste Southeast Asia 8.1 176 Barbados Caribbean -0.8 9 Côte d'ivoire Africa 8.0 177 Spain Europe -1.3 10 Ghana Africa 7.9 178 Netherlands Europe -1.3 11 China Asia 7.6 179 Equatorial Guinea Africa -1.5 12 Panama Central America 7.5 180 Islamic Republic of Iran Middle East -1.5 13 Rwanda Africa 7.5 181 Portugal Europe -1.8 14 Kyrgyz Republic Central Asia 7.4 182 Italy Europe -1.8 15 Uzbekistan Central Asia 7.0 183 Slovenia Eastern Europe -2.6 16 Cambodia Southeast Asia 7.0 184 San Marino Europe -3.5 17 Ethiopia Africa 7.0 185 Greece Europe -4.2 18 Mozambique Africa 7.0 186 Libya Middle East -5.1 19 Tanzania Africa 7.0 187 Cyprus Europe -8.7 20 Myanmar Southeast Asia 6.8 188 Central African Republic Africa -14.5 Source: International Monetary Fund *2013-2014 data are projections

Estimated Growth in Output by Select Global Areas 2013 Advanced economies Euro area France Germany Italy Spain Japan United Kingdom Canada United States Emerging/developing countries Sub-Saharan Africa Central/eastern Europe Russia Developing Asia China India* Middle East, North Africa, Afghanistan, & Pakistan Latin America and Caribbean Brazil Mexico Source: International Monetary Fund -1.8% -1.2% -0.4% 0.2% 0.5% 1.3% 1.7% 1.7% 1.7% 1.9% 2.5% 1.5% 2.4% 2.6% 2.3% 1.2% 4.4% 5.3% 5.1% 6.5% 7.7% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Annual % Change *For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market prices. Corresponding growth forecasts for GDP at factor cost are 4.6 percent for 2013.

Estimated Growth in Output by Select Global Areas 2014 Projected Advanced economies Euro area France Germany Italy Spain Japan United Kingdom Canada United States Emerging/developing countries Sub-Saharan Africa Central/eastern Europe Russia Developing Asia China India* Middle East, North Africa, Afghanistan, & Latin America and Caribbean Brazil Mexico Source: International Monetary Fund 1.0% 0.9% 0.6% 0.6% 1.6% 2.2% 1.7% 2.4% 2.2% 2.8% 2.0% 2.8% 3.3% 3.0% 2.3% 3.0% 5.4% 5.9% 6.1% 6.7% 7.5% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% Annual % Change *For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market prices. Corresponding growth forecasts for GDP at factor cost are 4.6 percent for 2013.

Debt by Selected Country 2013 Estimates Japan Italy United States Spain France United Kingdom Canada Germany Brazil India Argentina Mexico South Africa Indonesia China Russia Saudi Arabia Source: International Monetary Fund 0 50 100 150 200 250 General Government Gross Debt in Percent of GDP *IMF Staff Estimates

Top 12 Stock Exchanges 2011 Growth Rank Exchange Index % Change 1 NYSE Group DJI A 5.5% 2 Nasdaq NASDAQ Composite -1.8% 3 London SE FTSE 100-5.6% 12 Swiss Exchange Swiss Market Index -7.8% 9 TSX Group S&P TSX Composite -9.2% 8 Bolsa De Madrid IGBM -14.6% 6 Frankfurt SE DAX -14.7% 5 Euronext CAC 40-17.0% 4 Tokyo SE Nikkei 225-17.3% 11 Hong Kong Exchanges Hang Seng Index -20.0% 7 Shanghai SE Shanghai Composite -21.7% 10 Borsa Italiana FTSE MIB -25.2% Source: Yahoo! Finance

Top 12 Stock Exchanges 2012 Growth Rank Exchange Index % Change 6 Frankfurt SE DAX 29.1% 11 Hong Kong Exchanges Hang Seng Index 22.9% 4 Tokyo SE Nikkei 225 22.9% 2 Nasdaq NASDAQ Composite 15.9% 5 Euronext CAC 40 15.2% 12 Swiss Exchange Swiss Market Index 14.9% 10 Borsa Italiana FTSE MIB 7.8% 1 NYSE Group DJI A 7.3% 3 London SE FTSE 100 5.8% 9 TSX Group S&P TSX Composite 4.0% 7 Shanghai SE Shanghai Composite 3.2% 8 Bolsa De Madrid IBEX 35-4.7% Source: Yahoo! Finance

Top 12 Stock Exchanges 2013 Growth* Rank Exchange Index % Change 4 Tokyo SE Nikkei 225 56.7% 2 Nasdaq NASDAQ Composite 38.3% 1 NYSE Group DJI A 26.5% 6 Frankfurt SE DAX 25.5% 8 Bolsa De Madrid Madrid General 21.4% 12 Swiss Exchange Swiss Market 20.2% 5 Euronext CAC 40 18.0% 10 BorsaItaliana FTSE MIB 16.6% 3 London SE FTSE 100 12.0% 9 TSX Group S&P TSX Composite 9.6% 11 Hong Kong Exchanges Hang Seng Index 2.9% 7 Shanghai SE Shanghai Composite -6.8% Source: Yahoo! Finance *Change from the 2012 close to the 2013 close.

Top 12 Stock Exchanges Year-to-date Growth through 3/28/2014 Rank Exchange Index % Change 10 BorsaItaliana FTSE MIB 13.6% 8 Bolsa De Madrid Madrid General 5.8% 9 TSX Group S&P TSX Composite 4.9% 5 Euronext CAC 40 4.4% 6 Frankfurt SE DAX 2.0% 12 Swiss Exchange Swiss Market 1.8% 2 Nasdaq NASDAQ Composite 0.3% 1 NYSE Group DJI A -0.7% 3 London SE FTSE 100-1.5% 7 Shanghai SE Shanghai Composite -3.6% 11 Hong Kong Exchanges Hang Seng Index -5.5% 4 Tokyo SE Nikkei 225-7.6% Source: Yahoo! Finance

S&P Select Sector Performance 12 Month Percent Change as of March 28, 2014 Consumer Discretionary 21.4% Health Care Industrials Financials Information Technology Materials 25.3% 23.3% 21.5% 22.4% 19.3% Consumer Staples 7.0% Energy 11.8% Utilities 4.9% Telecommunication Services 2.5% 5% 0% 5% 10% 15% 20% 25% 30% 12 month percent change Source: Standard & Poor s

Federal Reserve Balance Sheet v. S&P 500 Index May 2008 March 2014 FRB Credit Reserve $Trillions 4.8 S&P 500 2100 4.3 1900 3.8 3.3 S&P 500 index depicted in orange 1700 1500 2.8 1300 2.3 1100 1.8 900 1.3 700 0.8 500 May 08 Jul 08 Sep 08 Nov 08 Jan 09 Mar 09 May 09 Jul 09 Sep 09 Nov 09 Jan 10 Mar 10 May 10 Jul 10 Sep 10 Nov 10 Jan 11 Mar 11 May 11 Jul 11 Sep 11 Nov 11 Jan 12 Mar 12 May 12 Jul 12 Sep 12 Nov 12 Jan 13 Mar 13 May 13 Jul 13 Sep 13 Nov 13 Jan 14 Mar 14 Source: Federal Reserve Bank; Yahoo Finance

Fourth Quarter Earnings for Select Corporations Earnings per Share Symbol Q4 2012 Q4 2013 Estimated Q4 2013 Reported Surprise Symbol Q4 2012 Q4 2013 Estimated Q4 2013 Reported Surprise CAT $1.46 $1.28 $1.58 $0.30 AMD $0.14 $0.05 $0.06 $0.01 DOW $0.33 $0.43 $0.65 $0.22 XRX $0.30 $0.29 $0.29 $0.00 BTU $0.36 $0.10 $0.00 $0.10 GE $0.44 $0.53 $0.53 $0.00 STI $0.65 $0.69 $0.77 $0.08 CMG $1.95 $2.53 $2.53 $0.00 YHOO $0.32 $0.38 $0.46 $0.08 COH $0.86 $0.98 $0.98 $0.00 UTX $1.04 $1.53 $1.58 $0.05 MMM $1.41 $1.62 $1.62 $0.00 DD $0.11 $0.55 $0.59 $0.04 UPS $1.32 $1.25 $1.25 $0.00 FCX $0.78 $0.80 $0.84 $0.04 TXN $0.36 $0.46 $0.46 $0.00 HON $1.10 $1.21 $1.24 $0.03 VFC $0.77 $0.84 $0.82 $0.02 VZ $0.45 $0.65 $0.66 $0.01 MSFT $0.67 $0.75 $0.66 $0.09 MCD $1.38 $1.39 $1.40 $0.01 COF $1.41 $1.55 $1.45 $0.10 Source: Yahoo! Finance

Top Gun (1986) Profits out of the Danger Zone 60% Profits 44.7% 40% Percent change since end of 2007 20% 0% 20% Stocks 14.5% Incomes 3.3% Jobs 1.2% Housing 10.5% 40% 60% 2008 2009 2010 2011 2012 2013 Source: BEA, BLS, S&P Case-Shiller, Yahoo! Finance

Recession Watch as of December 2013 Source: Moody s Economy

Industrial Production January 2001 through February 2014 105 100 (Base year: 2007) 95 90 85 80 Jan 01 May 01 Sep 01 Jan 02 May 02 Sep 02 Jan 03 May 03 Sep 03 Jan 04 May 04 Sep 04 Jan 05 May 05 Sep 05 Jan 06 May 06 Sep 06 Jan 07 May 07 Sep 07 Jan 08 May 08 Sep 08 Jan 09 May 09 Sep 09 Jan 10 May 10 Sep 10 Jan 11 May 11 Sep 11 Jan 12 May 12 Sep 12 Jan 13 May 13 Sep 13 Jan 14 Index (2007 = 100) Source: Federal Reserve The industrial production index measures the real output of the manufacturing, mining, and electric and gas utilities industries.

Gross Domestic Product 1990Q1 through 2013Q4 Percent Change from Preceding Period (SAAR) 8% 6% 4% 2% 0% 2% 4% 6% 8% 10% 2013Q4: 2.6% Source: Bureau of Economic Analysis

Contributions to GDP Growth by Component Q4 2012 Q4 2013 3.0 2.5 2.22 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 2.6 SAAR (%) 2.0 1.5 1.0 0.5 0.0 0.5 1.0 1.5 1.1 1.5 1.2 1.4 1.3 0.8 0.7 0.1 0.1 0.1 0.1 0.3 0.99 0.99 0.4 0.7 1.4 0.41 2.0 Personal Consumption Government Spending Net Exports Gross Investment Source: Bureau of Economic Analysis

SAAR (%) Contributions to GDP Growth by Component Q4 2012 Q4 2013 3.5 2.5 1.5 0.5 0.5 0.4 0.7 1.4 2.6 1.6 1.0 0.9 0.41 0.43 0.2 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 0.9 0.4 1.7 0.02 1.5 2.5 Gross Investment Fixed Investment Private Inventory 2.0 Source: Bureau of Economic Analysis

Ordinary People (1980)

Net Change in U.S. Jobs, BLS January 2002 through March 2014 600 400 200 0 200 400 600 800 1000 Jan 02 Jun 02 Nov 02 Apr 03 Sep 03 Feb 04 Jul 04 Dec 04 May 05 Oct 05 Mar 06 Aug 06 Jan 07 Jun 07 Nov 07 Apr 08 Sep 08 Feb 09 Jul 09 Dec 09 May 10 Oct 10 Mar 11 Aug 11 Jan 12 Jun 12 Nov 12 Apr 13 Sep 13 Feb 14 Thousands March 2014: +192K Source: Bureau of Labor Statistics

National Nonfarm Employment by Industry Sector March 2013 v. March 2014 Professional and Business Services 667 Trade, Transportation, and Utilities 529 Leisure and Hospitality 406 Education and Health Services 334 Construction 151 Manufacturing 72 Financial Activities 57 Other Services 40 Mining and Logging Government -19 38 All told 2,246K Jobs gained Information -29-200 0 200 400 600 800 Thousands, SA Source: Bureau of Labor Statistics

Cumulative Job Growth Since December 2007: Full-time v. Part-time December 2007 March 2014 6,000 4,000 2,000 0 2,000 4,000 6,000 Full time Part time 8,000 10,000 12,000 Dec 07 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09 Feb 10 Apr 10 Jun 10 Aug 10 Oct 10 Dec 10 Feb 11 Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 Feb 12 Apr 12 Jun 12 Aug 12 Oct 12 Dec 12 Feb 13 Apr 13 Jun 13 Aug 13 Oct 13 Dec 13 Feb 14 Source: Bureau of Labor Statistics, Current Population Survey Full time: 3.61 million Part time: +2.95 million

Maryland Nonfarm Employment by Industry Sector Groups (SA) February 2013 v. February 2014 Absolute Change Leisure and Hospitality 8,600 Education and Health Services 5,100 Professional and Business Services Mining, Logging, and Construction Financial Activities Government Other Services Manufacturing Information Trade, Transportation, and Utilities -2,500-2,900-3,200-4,700 1,600 1,200 2,300 2,100 MD Total: +7.6K; +0.3% US Total (SA): +2,158K; +1.6% -10,000-5,000 0 5,000 10,000 Source: Bureau of Labor Statistics *According to the Local Area Unemployment Statistics (LAUS) series MD gained 4,737 jobs between February 2013 and February 2014.

Baltimore Towson MSA Nonfarm Employment by Industry Sector Groups (NSA) February 2013 v. February 2014 Absolute Change Professional and Business Services 8,400 Leisure and Hospitality 4,900 Mining, Logging, and Construction 3,400 Education and Health Services 2,600 Trade, Transportation, and Utilities 600 Financial Activities Information Other Services Manufacturing Government -900-1,800-1,900-3,100 200 Baltimore MSA Total: +12.4K; +0.9% MD Total (SA): 7.6K; +0.3% US Total (SA): +2,158K; +1.6% -8,000-3,000 2,000 7,000 12,000 Source: Bureau of Labor Statistics

Washington, DC Arlington Alexandria MSA Nonfarm Employment by Industry Sector Groups (NSA) February 2013 v. February 2014 Absolute Change Education and Health Services 9,200 Trade, Transportation, and Utilities Leisure and Hospitality 7,000 6,900 Financial Activities Mining, Logging, and Construction 2,600 2,200 Other Services Information -2,400 600 DC MSA Total: +4.8K; +0.2% Manufacturing Government -2,600-3,600 US Total (SA): +2,158K; +1.6% Professional and Business Services -10,000-5,000 0 5,000 10,000 15,000 Source: Bureau of Labor Statistics

Employment Growth, U.S. States (SA) February 2013 v. February 2014 Percent Change RANK STATE % RANK STATE % RANK STATE % 1 NORTH DAKOTA 4.1 16 NEBRASKA 1.4 33 SOUTH DAKOTA 0.8 2 NEVADA 3.6 16 NEW YORK 1.4 33 VERMONT 0.8 3 COLORADO 2.8 16 TENNESSEE 1.4 37 HAWAII 0.7 3 FLORIDA 2.8 21 IOWA 1.3 38 CONNECTICUT 0.6 3 TEXAS 2.8 22 MISSOURI 1.2 38 MICHIGAN 0.6 6 OREGON 2.6 22 NORTH CAROLINA 1.2 40 ILLINOIS 0.5 7 UTAH 2.4 22 OKLAHOMA 1.2 40 LOUISIANA 0.5 8 CALIFORNIA 2.2 25 MAINE 1.1 42 MISSISSIPPI 0.4 8 DELAWARE 2.2 25 WISCONSIN 1.1 42 PENNSYLVANIA 0.4 10 ARIZONA 1.9 25 WYOMING 1.1 44 MARYLAND 0.3 11 RHODE ISLAND 1.8 28 ARKANSAS 1.0 45 WEST VIRGINIA 0.2 11 WASHINGTON 1.8 28 IDAHO 1.0 46 DISTRICT OF COLUMBIA 0.1 13 MINNESOTA 1.6 28 MONTANA 1.0 46 NEW JERSEY 0.1 14 INDIANA 1.5 28 NEW HAMPSHIRE 1.0 48 VIRGINIA 0.0 14 SOUTH CAROLINA 1.5 28 OHIO 1.0 49 ALASKA -0.1 16 GEORGIA 1.4 33 ALABAMA 0.8 50 NEW MEXICO -0.2 16 MASSACHUSETTS 1.4 33 KANSAS 0.8 51 KENTUCKY -0.3 Source: Bureau of Labor Statistics U.S. Year over year Percent Change: 1.6%

Unemployment Rates, U.S. States (SA) February 2014 RANK STATE % RANK STATE % RANK STATE % 1 NORTH DAKOTA 2.6 17 SOUTH CAROLINA 5.7 35 NEW MEXICO 6.7 2 NEBRASKA 3.6 17 TEXAS 5.7 36 NEW YORK 6.8 2 SOUTH DAKOTA 3.6 20 DELAWARE 6.0 37 OREGON 6.9 4 VERMONT 3.7 20 WEST VIRGINIA 6.0 37 TENNESSEE 6.9 5 UTAH 3.9 22 COLORADO 6.1 39 CONNECTICUT 7.0 6 WYOMING 4.2 22 INDIANA 6.1 40 ARKANSAS 7.1 7 IOWA 4.4 22 MAINE 6.1 40 GEORGIA 7.1 8 LOUISIANA 4.5 22 WISCONSIN 6.1 40 NEW JERSEY 7.1 9 HAWAII 4.6 26 FLORIDA 6.2 43 ARIZONA 7.3 10 NEW HAMPSHIRE 4.7 26 PENNSYLVANIA 6.2 44 DISTRICT OF COLUMBIA 7.4 11 MINNESOTA 4.8 28 ALABAMA 6.4 44 MISSISSIPPI 7.4 12 KANSAS 4.9 28 MISSOURI 6.4 46 MICHIGAN 7.7 12 VIRGINIA 4.9 28 NORTH CAROLINA 6.4 47 KENTUCKY 7.8 14 OKLAHOMA 5.0 28 WASHINGTON 6.4 48 CALIFORNIA 8.0 15 MONTANA 5.1 32 ALASKA 6.5 49 NEVADA 8.5 16 IDAHO 5.3 32 MASSACHUSETTS 6.5 50 ILLINOIS 8.7 17 MARYLAND 5.7 32 OHIO 6.5 51 RHODE ISLAND 9.0 Source: Bureau of Labor Statistics U.S. Unemployment Rate: 6.7%

Unemployment Rates, 20 Largest Metros (NSA) January 2014 Rank MSA UR Rank MSA UR 1 Washington-Arlington-Alexandria, DC-VA-MD- WV Metropolitan Statistical Area 5.0 11 Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area 6.7 2 3 4 5 6 7 7 9 10 Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area 5.1 12 Houston-Sugar Land-Baytown, TX Metropolitan Statistical Area 5.6 13 Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area 5.7 14 Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area 5.8 15 San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area 6.1 16 Boston-Cambridge-Quincy, MA-NH Metropolitan NECTA 6.2 17 Miami-Fort Lauderdale-Pompano Beach, FL Metropolitan Statistical Area 6.2 18 Baltimore-Towson, MD Metropolitan Statistical Area 6.3 19 Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area 6.5 20 San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area 7.0 Philadelphia-Camden-Wilmington, PA-NJ- DE-MD Metropolitan Statistical Area 7.1 Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical Area 7.2 New York-Northern New Jersey-Long Island, NY-NJ-PA Metropolitan Statistical Area 7.3 St. Louis, MO-IL Metropolitan Statistical Area 7.5 Los Angeles-Long Beach-Santa Ana, CA Metropolitan Statistical Area 8.2 Detroit-Warren-Livonia, MI Metropolitan Statistical Area 8.5 Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area 8.6 Riverside-San Bernardino-Ontario, CA Metropolitan Statistical Area 9.5 Source: Bureau of Labor Statistics

MD County Unemployment Rates January 2014 Rank Jurisdiction UR Rank Jurisdiction UR 1 Howard County 4.3 13 Talbot County 7.0 2 Montgomery County 4.4 14 Garrett County 7.4 3 Calvert County 5.2 15 Caroline County 7.5 3 Frederick County 5.2 16 Washington County 7.6 5 St. Mary's County 5.3 17 Cecil County 7.7 6 Anne Arundel County 5.4 18 Allegany County 7.8 7 Charles County 5.5 19 Kent County 8.0 8 Carroll County 5.6 20 Wicomico County 8.6 9 Queen Anne's County 5.8 21 Baltimore City 9.0 10 Harford County 6.1 22 Dorchester County 9.7 10 Prince George's County 6.1 22 Somerset County 9.7 12 Baltimore County 6.3 24 Worcester County 16.5 Source: Bureau of Labor Statistics

Field of Dreams (1989)

15 Year & 30 Year Fixed Mortgage Rates February 1995 through April 2014 10% 9% 8% 15 yr 30 yr 7% 6% 5% 4.41% 4% 3% 2% 3.47% 1% Feb 95 Aug 95 Feb 96 Aug 96 Feb 97 Aug 97 Feb 98 Aug 98 Feb 99 Aug 99 Feb 00 Aug 00 Feb 01 Aug 01 Feb 02 Aug 02 Feb 03 Aug 03 Feb 04 Aug 04 Feb 05 Aug 05 Feb 06 Aug 06 Feb 07 Aug 07 Feb 08 Aug 08 Feb 09 Aug 09 Feb 10 Aug 10 Feb 11 Aug 11 Feb 12 Aug 12 Feb 13 Aug 13 Feb 14 Rate Source: Freddie Mac

U.S. New Home Sales January 1999 through February 2014 1,600 1,400 Thousands, SAAR 1,200 1,000 800 600 February 2014 440K 400 200 0 Source: Economy.com, Census Bureau

U.S. Housing Starts February 1999 through February 2014 2,500 2,000 1 Unit 5 units or more 1,500 1,000 February 2014: 1 Unit: 583K 5 Units or more: 312K 500 0 Feb 99 Jun 99 Oct 99 Feb 00 Jun 00 Oct 00 Feb 01 Jun 01 Oct 01 Feb 02 Jun 02 Oct 02 Feb 03 Jun 03 Oct 03 Feb 04 Jun 04 Oct 04 Feb 05 Jun 05 Oct 05 Feb 06 Jun 06 Oct 06 Feb 07 Jun 07 Oct 07 Feb 08 Jun 08 Oct 08 Feb 09 Jun 09 Oct 09 Feb 10 Jun 10 Oct 10 Feb 11 Jun 11 Oct 11 Feb 12 Jun 12 Oct 12 Feb 13 Jun 13 Oct 13 Feb 14 Thousands, SAAR Source: Census Bureau

U.S. Housing Building Permits February 1999 through February 2014 2,500 2,000 1,500 1,000 1 Unit 5 units or more February 2014: 1 Unit: 588K 5 Units or more: 407K 500 0 Feb 99 Jun 99 Oct 99 Feb 00 Jun 00 Oct 00 Feb 01 Jun 01 Oct 01 Feb 02 Jun 02 Oct 02 Feb 03 Jun 03 Oct 03 Feb 04 Jun 04 Oct 04 Feb 05 Jun 05 Oct 05 Feb 06 Jun 06 Oct 06 Feb 07 Jun 07 Oct 07 Feb 08 Jun 08 Oct 08 Feb 09 Jun 09 Oct 09 Feb 10 Jun 10 Oct 10 Feb 11 Jun 11 Oct 11 Feb 12 Jun 12 Oct 12 Feb 13 Jun 13 Oct 13 Feb 14 Thousands, SAAR Source: Census Bureau

S&P/Case-Shiller Home Price Indices for Select Metros January 2014, 12-Month Percentage Change 25% 23.1% 24.9% 12 Month % Change 20% 15% 10% 5% 6.7% 9.0% 9.1% 9.2% 10.0% 10.8% 13.2% 15.6% 16.5% 16.8% 18.9% 0% Source: Standard & Poor s

The Shining (1980)

Conference Board Consumer Confidence Index 2005 March 2014 120 100 80 March 14 82.3 60 40 20 0 2005 2007 Feb 08 Apr 08 Jun 08 Aug 08 Oct 08 Dec 08 Feb 09 Apr 09 Jun 09 Aug 09 Oct 09 Dec 09 Feb 10 Apr 10 Jun 10 Aug 10 Oct 10 Dec 10 Feb 11 Apr 11 Jun 11 Aug 11 Oct 11 Dec 11 Feb 12 Apr 12 Jun 12 Aug 12 Oct 12 Dec 12 Feb 13 Apr 13 Jun 13 Aug 13 Oct 13 Dec 13 Feb 14 Source: Conference Board

U.S. Retail and Food Service Sales January 2001 through February 2014 15.0% 10.0% Feb 14, 1.50% 5.0% 0.0% 5.0% 10.0% 15.0% Jan 01 May 01 Sep 01 Jan 02 May 02 Sep 02 Jan 03 May 03 Sep 03 Jan 04 May 04 Sep 04 Jan 05 May 05 Sep 05 Jan 06 May 06 Sep 06 Jan 07 May 07 Sep 07 Jan 08 May 08 Sep 08 Jan 09 May 09 Sep 09 Jan 10 May 10 Sep 10 Jan 11 May 11 Sep 11 Jan 12 May 12 Sep 12 Jan 13 May 13 Sep 13 Jan 14 Year to Year % change Source: Census Bureau

Sales Growth by Type of Business February 2013 v. February 2014* Internet, etc. Retailers Health & Personal Care Stores Building Material & Garden Supplies Dealers Food & Beverage Stores Food Services & Drinking Places Clothing & Clothing Accessories Stores Motor Vehicle & Parts Dealers Miscellaneous Store Retailers Furniture & Home Furn. Stores General Merchandise Stores Electronics & Appliance Stores Gasoline Stations Sporting Goods, Hobby, Book & Music Stores 4.6% 5.2% 2.4% 0.8% 3.2% 2.8% 2.6% 2.6% 2.2% 1.4% 0.3% 5.5% 6.3% 9.0% 6.0% 3.0% 0.0% 3.0% 6.0% 9.0% 12 month % change Source: Census Bureau *February 2014 advanced estimate

National Vehicle Sales December 2004 through February 2014 (SAAR) 25 20 15 10 5 0 Jan 04 Apr 04 Jul 04 Oct 04 Jan 05 Apr 05 Jul 05 Oct 05 Jan 06 Apr 06 Jul 06 Oct 06 Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13 Oct 13 Jan 14 Vehicle Sales (millions) GM Ford Chrysler Honda Toyota Nissan Others Source: Autodata Corp.

Percentage of Americans Spending Less Than Their Incomes and Saving the Difference 2008 2014 Survey Results 76% 74% 72% 74% 73% 73% 70% 71% 68% 66% 64% 62% 66% 65% 60% 2008 2009 2010 2011 2012 2013 Survey Year Source: American Savings Education Council (ASEC); Consumer Federation of America (CFA)

Conference Board Leading Economic Indicators Index August 2007 through February 2014 1.5% 1.0% 0.5% 0.0% 0.5% 1.0% February 2014 = 99.8 where 2004=100 1.5% Nov 13 Feb 14 Aug 07 Nov 07 Feb 08 May 08 Aug 08 Nov 08 Feb 09 May 09 Aug 09 Nov 09 Feb 10 May 10 Aug 10 Nov 10 Feb 11 May 11 Aug 11 Nov 11 Feb 12 May 12 Aug 12 Nov 12 Feb 13 May 13 Aug 13 One month Percent Change Source: Conference Board

Coming to America (1988) Economy gained momentum over the course of last year; Tailwinds included booming stock market, lower gasoline prices, stabilizing global economy, and consumer expenditures on interest rate sensitive durable goods like housing and autos; The current year is associated with greater certainty regarding federal budgeting and monetary policy that helps; The world is not perfect black swan threats remain: (1) Iran (2) Israel/Iran (3) Europe (4) contagion (5) cyber (6) EMP; Healthcare reform could slow full time hiring over the course of the year; and Further evidence of Maryland s economic and demographic under performance.

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