Macroeconomic Outlook 10th Annual Waterways Symposium October 1-3, 2013
Synchronous Global Growth: Lead by Emerged Economies and Especially the U.S. or a European Lead Collapse? a Chinese Hard Landing?
Focus On TheU.S. Economic Prospects • Slow Growth With Headwinds • 2014 “Organic Growth” Less Government • Know the Rules / Not Like the Rules
Business Investment Improving
Organic Growth and Jobs: Housing’s Role
We Keep Counting On The Consumer • Saving Less Now! Why?
Gas Prices: Help or Hindrance
Is Natural Gas America’s “Ace In The Hole”?
Crude Oil and Natural Gas Price Relationships • Recent Divergence • Energy Implications • Implications For Renewable Fuels
1 barrel of Crude Oil contains 5.8 million btu. The current price (August 2013) of 1 barrel of Crude Oil is $106.30 per barrel. Cost per million btu in the form of Crude Oil = $106.30/5.8 = $18.33. Cost per million btu in the form of Natural Gas = $3.43.
Liquidity Issues Are Banks in Good Shape? The Fed’s Policy Role? The New Fed Chair?
Bernanke’s Watch: Don’t Blame It On The Fed! • Central Bank Accommodations • Driven By The Data
Yield Curve Background Normal Yield Curve NormalCurve The longer you lend money, the more money you want back in return. Interest Rate 3M 2YR 5YR 10YR 30YR Maturity Flattening Yield Curve NormalCurve Short Rates Gain On Long Rates Interest Rate FlatCurve 3M 2YR 5YR 10YR 30YR Maturity Inverted Yield Curve Long rates are below short rates; not paying a risk premium for money lending. NormalCurve Interest Rate Inverted Curve 3M 2YR 5YR 10YR 30YR Maturity
Federal Deficit The Dollar and Trade
The Macroeconomic Implications For Commodities As An Asset Class