2010 January 11 | REMALO Marketing Blog

Archive for January 11th, 2010

Check out by the numbers, especially 8,9, & 14

Monday, January 11th, 2010

1. RIGHT ON - The morning after the S&P 500 closed at a bear market low of 677 on Monday 3/09/09, John Authers, journalist from the Financial Times newspaper wrote that “perhaps the greatest reason for hope (for the US stock market) at present is that almost all hope seems to have been lost.” At the time of Authers’ writing, the S&P 500 had fallen 55.2% over the previous 17 months (total return performance). In the 10 months since 3/09/09 to last Friday’s close of trading (1/08/10), the stock index has gained +72.4%. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the US stock market (source: Financial Times).

2. FEAR - 70% of investors were “bearish” on the US stock market on 3/11/09 or just 2 days after the S&P 500 hit a closing low on 3/09/09 at the end of a 17-month bear market. By comparison, only 26% of investors identified themselves as “bearish” last week (source: American Association of Individual Investors).

3. BARACK BUFFETT - President Barack Obama predicted on 3/03/09 that “profit and earnings ratios are starting to get to the point where buying stocks is a potentially good deal if you’ve got a long-term perspective on it” (source: White House).

4. PESSIMISTS - 58 of 100 money managers surveyed in late March 2009 did not believe the bear market for stocks had reached a bottom as of that date (source: Barron’s).

5. REBOUND - On 12/31/08, stock market strategist Thomas Lee of JPMorgan Chase predicted the S&P 500 would finish 2009 at 1100, up from its 2008 close of 903. The index’s actual 2009 close was 1115 (source: USA Today).

6. THE DEAD RISE - On 8/13/79, BusinessWeek ran a cover story that was titled “The Death of Equities.” The S&P 500 closed at 107 on 8/13/79. The S&P 500 closed calendar year 2009 at 1115 (source: BusinessWeek).

7. STICK TO TEACHING - 2 weeks before the 10/29/29 stock market crash, Yale economics professor Irving Fisher predicted that stock prices had achieved “what looks like a permanently high plateau” (source: Time).

8. YOU THINK? - On 7/14/08, Barney Frank, the chairman of the House Financial Services committee stated “Freddie Mac and Fannie Mae are fundamentally sound. I think they are in good shape going forward.” When the financial crisis exploded in September 2008, the US government took over Fannie Mae and Freddie Mac, committing $200 billion to cover future mortgage defaults. As the size of the potential problem was ascertained, the $200 billion pledge was doubled to $400 billion in February 2009. On 12/30/09, the government reluctantly lifted the $400 billion cap and announced an unlimited amount of taxpayer funds will be made available through 2012 if necessary to bail out Fannie Mae and Freddie Mac (source: BusinessWeek, White House).

9. JOBLESS RATE - The Federal Reserve issued their first ever 3-year forecast of the nation’s unemployment rate on 11/20/07, i.e., predictions for 2008-09-10. The forecast called for our country’s unemployment rate to range between 4.8-4.9% in 2009. Actual unemployment on 12/31/09 was 10.0% (source: Federal Reserve, DOL).

10. NOT CLOSE - President Richard Nixon declared in January 1974 (i.e., 36 years ago) that “at the end of this decade, in 1980, the US will not be dependent on any other country for the energy we need to provide our jobs, to heat our homes, and to keep our transportation moving.” Of the 19.5 million barrels per day of petroleum products that Americans consumed in 2009, 11.1 million barrels or 57% were imported (source: DOE).

11. THEY DON’T KNOW - The Department of Energy predicted in January 2009 that the price of oil would average $43 a barrel in 2009. Oil began the year at $44.60 a barrel and ended 2009 at $79.36 a barrel (source: DOE).

12. GOOD CALL - A headline in the business section of USA Today on 1/09/08 stated: “Economist (Martin Feldstein) fears nasty recession headed our way this year.” The National Bureau of Economic Research announced on 12/01/08 that indeed the nation had fallen into an official recession on 12/31/07 (source: USA Today, NBER).

13. IT HAPPENED - Diane Swonk, chief economist of Mesirow Financial, predicted in late December 2008 that 30-year fixed rate mortgages “could go below 5%” in 2009. The average nationwide rate of a 30-year fixed rate mortgage dropped to 4.71% on 12/03/09, an all-time record low (source: Money, Freddie Mac).

14. WE WISH - Forecasters at the 1893 Chicago World’s Fair (i.e., 117 years ago) predicted that by the year 2000, Americans would work no more than 3 hours a day (source: Wall Street Journal).

15. LONG-SHOT - On the Wednesday following last year’s Super Bowl # 43 (i.e., 2/04/09), the odds of the Cincinnati Bengals winning Super Bowl # 44 were 75-1, the longest odds of any of the 12 teams that made the NFL postseason playoffs that began over this last weekend (source: Denver Post).
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Remember, keep moving forward to stay ahead in reverse.
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Please join us on Wednesday, January 13, 2010 at 2:00 p.m. EDT when Sam Collins will discuss how we can get back to the Basics in our reverse mortgage business.

We will discuss how to get back into the groove of the “old days”, yet incorporate the New stuff to create a winning strategy for Success and growing your originations and client retention.