By: Anirban Basu Sage Policy Group, Inc. October 17 th, 2014 Back to the Future Part II On Behalf of The Arizona Builders’ Alliance

Raging Bull (1980)

Estimated Growth in Output by Select Global Areas 2014 Estimates* *IMF Staff Estimates The IMF’s global and regional growth figures for 2014 are based on new purchasing power parity (PPP) weights derived from the recently released 2011 International Comparison Program survey. **For India, data and forecasts are presented on a fiscal year basis and output growth is based on GDP at market prices. Source: International Monetary Fund, October 2014 WEO Database

Debt by Selected Country 2014 Projected Source: International Monetary Fund, October 2014 WEO Database

RankExchangeIndex% Change 4Tokyo SENikkei % 2NasdaqNASDAQ Composite38.3% 1NYSE GroupDJI A26.5% 6Frankfurt SEDAX25.5% 8Bolsa De MadridMadrid General21.4% 12Swiss ExchangeSwiss Market20.2% 5EuronextCAC % 10BorsaItalianaFTSE MIB16.6% 3London SEFTSE % 9TSX GroupS&P TSX Composite9.6% 11Hong Kong ExchangesHang Seng Index2.9% 7Shanghai SEShanghai Composite-6.8% Top 12 Stock Exchanges 2013 Growth* Source: Yahoo! Finance *Change from the 2012 close to the 2013 close.

S&P Select Sector Performance 12-Month Percent Change as of October 10 th, 2014 Source: Standard & Poor’s

Federal Reserve Balance Sheet v. S&P 500 Index May 2008 – October 2014* Source: Federal Reserve Bank; Yahoo Finance S&P 500 index depicted in orange *Through 10/8/2014

Second Quarter Earnings for Select Corporations Earnings per Share SymbolQ Q Estimated Q Reported SurpriseSymbolQ Q Estimated Q Reported Surprise CMG$2.82$3.09$3.50$0.41BTU$0.33-$0.29-$0.28$0.01 COF$1.87$1.82$2.04$0.22DD$1.28$1.17 $0.00 UTX$1.70$1.71$1.84$0.13GE$0.36$0.39 $0.00 FCX$0.22$0.51$0.58$0.07MMM$1.71$1.91 $0.00 COH$0.89$0.53$0.59$0.06AMD-$0.09$0.03$0.02-$0.01 TXN$0.58$0.59$0.62$0.03YHOO$0.35$0.38$0.37-$0.01 DOW$0.64$0.72$0.74$0.02STI$0.68$0.76$0.72-$0.04 HON$1.28$1.36$1.38$0.02UPS$1.13$1.25$1.21-$0.04 VFC$0.32$0.35$0.36$0.01MCD$1.38$1.44$1.40-$0.04 XRX$0.27$0.26$0.27$0.01MSFT$0.66$0.60$0.55-$0.05 VZ$0.73$0.90$0.91$0.01CAT$1.45$1.53$1.69-$0.16 Source: Yahoo! Finance

Top Gun (1986) Profits out of the Danger Zone Source: BEA, BLS, S&P Case-Shiller, Yahoo! Finance

The Golden Child (1986) Highest Earning Hedge Fund Managers, 2013 Source: Forbes ManagerHedge Fund Firm2013 EarningsNet Return George SorosSoros Fund Management$4 billion22% David TepperAppaloosa Management$3.5 billion42% Steve CohenSAC Capital Advisors$2.3 billion19% John PaulsonPaulson Enhanced$1.9 billion26% Carl IcahnIcahn Enterprises$1.7 billion31% James SimonsRenaissance Technologies$1.1 billion18% Ray DalioBridgewater Associates$900 million5.25% Ken GriffinCitadel$900 million19.25% Larry RobbinsGlenview Capital$750 million43% Leon CoopermanOmega$730 million25% 2013 S&P 500: +29.6%

Airplane! (1980) David Tepper’s Move against the Market Source: Forbes, Bloomberg 2013 Appaloosa Management: +$3.5 billion (42%) “Our big play versus the market is airlines. That’s a big play. We’re the biggest holder of all these different airlines. No hedge fund owned as many airlines as we did and not too many people did. Delta, UAL, LCC, US Air, AMR. We owned big percentages in all those stocks. And you know what, they did pretty good… pretty freaking good.” -David Tepper

Source: U.S. Bureau of Labor Statistics Median Weekly Earnings, Full-Time U.S. Workers* 2000Q2 through 2014Q2 *SA, Constant dollars (adjusted to CPI-U) Wage and salary workers ages 16+

Source: Moody’s Economy Recession Watch as of July 2014

Industrial Production January 2001 through September 2014 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 2014Q2 Source: Bureau of Economic Analysis

Contributions to GDP Growth by Component 2013Q2 – 2014Q2 Source: Bureau of Economic Analysis

Ordinary People (1980)

Source: U.S. Bureau of Labor Statistics September 2014: +248K Net Change in U.S. Jobs, BLS January 2002 through September 2014

National Nonfarm Employment by Industry Sector September 2013 v. September 2014 All told 2,635K Jobs gained Source: U.S. Bureau of Labor Statistics

National Construction Employment Monthly Net Change September 2000 through September 2014 Source: U.S. Bureau of Labor Statistics Industry Sector14-Sep14-Aug13-Sep1-net12-net12-% Construction6,079.06,063.05, % Residential Building % Nonresidential Building % Heavy & Civil Engineering Construction % Specialty Trade Contractors3,786.03,777.23, %

State-by-state Growth in Construction Jobs August 2013 v. August 2014 Source: U.S. Bureau of Labor Statistics *Construction, Mining, and Logging are included in one industry. STATE Year-over- year Ch. (‘000) STATE Year-over- year Ch. (‘000) STATE Year-over- year Ch. (‘000) FLORIDA43.5NEW YORK4.3OREGON0.4 CALIFORNIA35.6MICHIGAN3.4MASSACHUSETTS0.2 TEXAS27.7NORTH DAKOTA3.2IDAHO0.0 ILLINOIS11.1CONNECTICUT3.0NEW HAMPSHIRE0.0 PENNSYLVANIA10.8WISCONSIN3.0HAWAII*-0.1 LOUISIANA9.5ARKANSAS2.9NEW MEXICO-0.2 UTAH8.4ALABAMA2.4DISTRICT OF COLUMBIA*-0.2 MINNESOTA7.9IOWA2.2KENTUCKY-0.3 INDIANA7.6OKLAHOMA2.2MONTANA-0.3 NEVADA7.2KANSAS2.1ALASKA-0.4 TENNESSEE*7.0DELAWARE*2.1MISSOURI-0.4 NORTH CAROLINA6.7MAINE1.8SOUTH DAKOTA*-0.4 GEORGIA6.0SOUTH CAROLINA1.4OHIO-1.5 WASHINGTON5.9NEBRASKA*0.9WEST VIRGINIA-1.8 MARYLAND*5.5RHODE ISLAND0.7MISSISSIPPI-3.7 COLORADO4.8VERMONT0.7ARIZONA-5.4 VIRGINIA4.5WYOMING0.5NEW JERSEY-11.3

Arizona Nonfarm Employment by Industry Sector Groups (SA) August 2013 v. August 2014 Absolute Change Source: Bureau of Labor Statistics AZ Total (SA): +51.3K; +2.0% US Total (SA): +2,551K; +1.9%

Phoenix-Mesa-Glendale MSA Nonfarm Employment by Industry Sector Groups (NSA) August 2013 v. August 2014 Absolute Change Source: Bureau of Labor Statistics Pheonix MSA Total (NSA): +42.2K; +2.3% AZ Total (SA): +51.3K; +2.0% US Total (SA): +2,551K; +1.9%

U.S. Year-over-year Percent Change: 1.9% Employment Growth, U.S. States (SA) August 2013 v. August 2014 Percent Change R ANK S TATE %R ANK S TATE %R ANK S TATE % 1NORTH DAKOTA4.418MISSOURI1.835KANSAS0.8 2NEVADA3.518SOUTH CAROLINA1.835PENNSYLVANIA0.8 2TEXAS3.520MASSACHUSETTS1.637ILLINOIS0.7 2UTAH3.520MINNESOTA1.637MICHIGAN0.7 5FLORIDA2.820WISCONSIN1.637MISSISSIPPI0.7 6DELAWARE2.723ARKANSAS1.537NEW MEXICO0.7 6OREGON2.723LOUISIANA1.537SOUTH DAKOTA0.7 8NORTH CAROLINA2.425KENTUCKY1.342NEBRASKA0.6 9COLORADO2.325MAINE1.343IDAHO0.5 10GEORGIA2.227IOWA1.243VIRGINIA0.5 11CALIFORNIA2.127NEW YORK1.245MARYLAND0.4 11TENNESSEE2.127RHODE ISLAND1.245NEW HAMPSHIRE0.4 11WASHINGTON2.127WYOMING1.245VERMONT0.4 14ARIZONA2.031ALABAMA1.148CONNECTICUT0.3 14INDIANA2.031HAWAII1.148OHIO0.3 14OKLAHOMA2.031WEST VIRGINIA1.150NEW JERSEY0.1 17MONTANA1.934DISTRICT OF COLUMBIA1.051ALASKA-0.8 Source: U.S. Bureau of Labor Statistics

U.S. Unemployment Rate: 6.1% Unemployment Rates, U.S. States (SA) August 2014 RANKSTATE%RANKSTATE%RANKSTATE% 1NORTH DAKOTA2.817VIRGINIA5.633WEST VIRGINIA6.6 2NEBRASKA3.617WASHINGTON5.636ILLINOIS6.7 2SOUTH DAKOTA3.617WISCONSIN5.636NEW MEXICO6.7 2UTAH3.621OHIO5.738ALASKA6.8 5VERMONT4.122INDIANA5.838NORTH CAROLINA6.8 6HAWAII4.322LOUISIANA5.840ALABAMA6.9 6MINNESOTA4.322MASSACHUSETTS5.841ARIZONA7.1 8NEW HAMPSHIRE4.422PENNSYLVANIA5.841KENTUCKY7.1 9IOWA4.526ARKANSAS6.343OREGON7.2 10WYOMING4.626FLORIDA6.344CALIFORNIA7.4 11IDAHO4.726MISSOURI6.344MICHIGAN7.4 11MONTANA4.729MARYLAND6.444TENNESSEE7.4 11OKLAHOMA4.729NEW YORK6.447DISTRICT OF COLUMBIA7.6 14KANSAS4.929SOUTH CAROLINA6.447NEVADA7.6 15COLORADO5.132DELAWARE6.549RHODE ISLAND7.7 16TEXAS5.333CONNECTICUT6.650MISSISSIPPI7.9 17MAINE5.633NEW JERSEY6.651GEORGIA8.1 Source: U.S. Bureau of Labor Statistics

Unemployment Rates, 20 Largest Metros (NSA) August 2014 RankMSAUR RankMSAUR 1 Minneapolis-St. Paul-Bloomington, MN-WI Metropolitan Statistical Area3.89 Phoenix-Mesa-Glendale, AZ Metropolitan Statistical Area6.3 2 Seattle-Tacoma-Bellevue, WA Metropolitan Statistical Area5.312 Miami-Fort Lauderdale-Pompano Beach, FL Metropolitan Statistical Area6.6 3 Houston-Sugar Land-Baytown, TX Metropolitan Statistical Area St. Louis, MO-IL Metropolitan Statistical Area6.6 3 San Francisco-Oakland-Fremont, CA Metropolitan Statistical Area5.414 Philadelphia-Camden-Wilmington, PA-NJ-DE- MD Metropolitan Statistical Area6.7 5 Boston-Cambridge-Quincy, MA-NH Metropolitan NECTA Tampa-St. Petersburg-Clearwater, FL Metropolitan Statistical Area6.8 5 Dallas-Fort Worth-Arlington, TX Metropolitan Statistical Area Baltimore-Towson, MD Metropolitan Statistical Area Washington-Arlington-Alexandria, DC-VA-MD-WV Metropolitan Statistical Area5.617 Los Angeles-Long Beach-Santa Ana, CA Metropolitan Statistical Area San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area6.218 Detroit-Warren-Livonia, MI Metropolitan Statistical Area Chicago-Joliet-Naperville, IL-IN-WI Metropolitan Statistical Area Atlanta-Sandy Springs-Marietta, GA Metropolitan Statistical Area New York-Northern New Jersey-Long Island, NY-NJ- PA Metropolitan Statistical Area6.320 Riverside-San Bernardino-Ontario, CA Metropolitan Statistical Area8.7 Source: U.S. Bureau of Labor Statistics

Field of Dreams (1989)

15-Year & 30-Year Fixed Mortgage Rates February 1995 through October 2014* Source: Freddie Mac *Week ending 10/16/2014

U.S. New Home Sales January 1999 through August 2014 Source: U.S. Census Bureau

U.S. Housing Starts January 1999 through August 2014 Source: U.S. Census Bureau

U.S. Housing Building Permits January 1999 through August 2014 Source: U.S. Census Bureau August 2014: 1 Unit: 626K 5 Units or more: 343K

S&P/Case-Shiller Home Price Indices for Select Metros July 2014, 12-Month Percentage Change Source: Standard & Poor’s

Source: The American Institute of Architects Architecture Billings Index January 2008 through August 2014 August 2014: 53.0

Nonresidential Construction Put-in-Place December 2006 through August 2014 Source: U.S. Census Bureau Dec. 08: $697.4 billion August 14: $603.7 billion -13.4%

National Nonresidential Construction Spending by Subsector August 2013 v. August 2014 Source: U.S. Census Bureau

Inputs to Construction PPI January 2001 – August 2014 Source: U.S. Bureau of Labor Statistics

Construction Materials PPI 12-month % Change as of August 2014 Source: U.S. Bureau of Labor Statistics

The Shining (1980)

Sales Growth by Type of Business September 2013 v. September 2014* Source: U.S. Census Bureau *September 2014 advanced estimate

Conference Board Leading Economic Indicators Index August 2007 through August 2014 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 Regions with rapid population growth and/or significant import/export activity, industrial output and energy production will lead the way – Arizona poised to be an outperformer.

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15-Year & 30-Year Fixed Mortgage Rates February 1995 through October 2014* Source: Freddie Mac *Week ending 10/9/2014