1. Economic Forecast: What Awaits Our New President ?
SRI Conference 2016
Hyatt Regency-Denver
Economic Forecast: What Awaits Our New President ?
Mel Miller, CFA
Chief Economist, First Affirmative Financial Network

2. Election Finally Over

3. Voting Anguish

4. GDP (Gross Domestic Product)
2016 Fearless Forecast
Update thru Sept 2016
By End 2016
GDP (Gross Domestic Product)
1.5%
1.8% - 2.2%
Inflation (Core CPI)
2.2%
1.8%
Unemployment Rate
5.0%
4.9%
Federal Funds Rate
0.50%
0.50%
Stock Market Returns
7.83%
6% - 10%
Bond Market Returns
5.70%
+/- 2%

5. Economic Problems For President

6. Wage Disparity

7. Declining Middle Class
Middle Class Share of Wealth By Country
DATA SOURCE: 2015 CREDIT SUISSE GLOBAL WEALTH REPORT

8. Cause of the Declining Middle Class
Up 33%
Up 8%
Down 1%
U.S. Bureau of Labor Statistics

9. Growing Worker/CEO Disparity

10. CEO’s Not Worried About Inflation

11. Open to Interpretation

12. Timeless Political Sayings…
“Any American who is prepared to run for president should automatically, by definition, be disqualified from ever doing so” - Gore Vidal
“Do you ever get the feeling that the only reason we have elections is to find out if the polls were right?” - Robert Orben
“The best thing about this group of candidates is that only one of them can win” - Will Rogers

13. Econ 101 Basic Formula - Recycled
Price Inflation +
Long Term Wage Growth =
Labor Productivity +
Change in Labor Share of Income

14. Declining Productivity

15. Productivity Since Recession End

16. New Not Always Better

17. Partial Solution-Demand Stimulator

18. Shrinking Labor Force **

19. Labor Decline World-Wide
Not Just a U.S. Problem

20. Negative Rates Frustrating FED

21. Declining Corporate Profits

22. Weak Business Investment

23. Over- Extended Stock Market

24. Overvalued???
Standard & Poor’s

25. Price to Sales - DANGER DANGER !!!

26. Rule of 20 Violated

27. Stock Market Loss Moderator

28. Technical Investing Technique

29. Don’t Be A Sheep

30. Timeless Political Sayings…
“Politicians say they're beefing up our economy. Most don't know beef from pork” - Harold Lowman
“Politics is the gentle art of getting votes from the poor and campaign funds from the rich, by promising to protect each from the other” - Oscar Ameringer
“Democracy is being allowed to vote for the candidate you dislike least” - Robert Byrne

31. Wisconsin Political Sign

32. International Problems For President

33. Growing Arsenal

34. International Problems For President
Euro Breakup - Brexit
Turkey/NATO Conflict
Ukraine/Russia Conflict
China Debt Crisis
Syria Humanitarian Crisis
Climate Change Disasters
And Many Others!

35. Domestic Problems For President
Wage Disparity
Aging Population
Cyber Attacks!
Lack of Business Investment
Pension Fund Crisis
Shadow Banking Loan Crisis
Agriculture Lending Crisis

37. 2017 Economic and Market Forecast

38. Forecasting Philosophy
Fall Seven Times
Get Up Eight!

39. Determination
Assumption

40. Recession Predictors Update
Description
Economic Trend
Business Cycle – Spread Between Junk and Treasury
Positive
Treasury Curve Slope
Neutral to Negative
Oil Price
Positive to Neutral
Leading Economic Indicators
Neutral
Chicago Fed National Activity Index
Neutral to Negative

41. Recession Probability? ***
20%

42. GDP (Gross Domestic Product)
2017 Fearless Forecast
By End 2017
GDP (Gross Domestic Product)
1.75% - 2.0%
Inflation (Core CPI)
2.0%
Unemployment Rate
4.9%
Federal Funds Rate
1.0%
Stock Market Returns
-5% - +5%
Bond Market Returns
- 2% - + 2%

43. My Life Described

44. Voting Anguish-Last Word

45. Have a Great Conference!!!
Summary…..
Have a Great Conference!!!