Friday, March 7, 2014

The US Oil Boom


The Forbes list of the world's richest people came out a few days ago and on that list are: George Bishop (GeoSouthern in South Texas oil), Rodney Lewis (Lewis Energy San Antonia TX), and Daniel Harrison III. (I could list more but my space is somewhat limited.) Last year the Forbes list had 1,426 billionaires and this year there are 1,645. Their average net worth was $4.2 billion last year and this year it is $4.7 billion. 

Now you say, "Jerry, those are just the rich folks. What about the working stiff?" OK, up in North Dakota, because of the oil boom, they have the lowest foreclosure rate in the country - 1.56% - and the state also has the lowest 'overdues' - 2.61% or of 55,566 mortgages in the state they have fewer than 1,400 that are delinquent. Wyoming is also doing about the same. The National Association of Home Builders tell us that these two states are 'well over' the normal homebuilding demand. Just for reference the state of new Jersey has a foreclosure rate of 11.87%.


Two other items deal with economic growth.

The Federal Reserve reported today that the net worth of American households rose to a new all-time record high ($80.66 trillion in Q4 of last year). In Q1 of 2009, a cyclical low, the amount was $55.71 trillion. An increase of $25 trillion in 4+ years. Now that means that, on an inflation-adjusted basis, the average household has made a complete recovery from the Great Recession of 2007-2009. 

As for rest of the world: the MSCI world index has reached a new record high. According to data from the World Federation of Exchanges the value of world stocks hit $65.3 trillion which recaptured the equity value which was lost during the global recession of 2008-2009. 

Just soon food for thought,

Jerry

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