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The US economy, three things you need to know
- 2. …Three things you need to know… The US stock market has reached a major landmark Four US banks fail Federal Reserve stress test The gap between rich and poor
- 3. reached a major landmark Dow Jones Industrials: + 6.5%
- 4. The US stock market has reached a major landmark The S&P 500: + 9%
- 5. The US stock market has reached a major landmark Nasdaq: +14%
- 6. Warning! Four US banks fail Federal Reserve stress test!
- 7. The failed banks Citigroup: 4.9% SunTrust: 4.8% Ally Financial: 4.4% Metlife: 6%
- 8. Not all the banks scored bad Bank of New York Mellon: 13.1%
- 9. Not all the banks scored bad State Street: 12.5%
- 10. Not all the banks scored bad American Express 10.8%
- 11. The gap between rich and poor Most heavily across a large swath of the South
- 12. Highest income disparity counties: Texas Louisiana Georgia South Carolina Republican governors
- 13. The Gini coefficient • Gini of 0: complete equality • Gini of 1: one household has all the income
- 14. The Gini coefficient From 0.207 in Loving County to 0.645 in East Carrol Parish The median Gini for US counties: 0.430 New York: 0.601
- 15. Conclusion The US stock market has reached a major landmark -> consumer confidence is growing in the US economy Some US banks could not withstand a similar crisis like the one in 2008 The gap between rich and poor is the widest in Republican States
Editor's Notes
- Hello everyone! I’m Sarah Dominguez, a student from Belgium and today I will tell you something more about the three things you need to know about the US economy at the beginning of 2012.
- So my slidecast is about three important things.The first item I will discuss is “the US stock market has reached a major landmark”The second topic is about “Four US banks fail Federal Reserve stress test”And The third and last item is ‘the gap between rich and poor’
- The first thing you need to know about the US economy at the beginning of 2012 is that the US stock market has reached a major landmark.The Dow Jones Industrials is up 6.5% this year. The Dow average closed above 13,000 for the first time since 19 May 2008.What this number implies is that the financial crisis, that we were all losing sleep over, it never happened because now the US economy is back!Analysts say it reflects a growing confidence in the US economy.
- While the Dow has added 6.5% this year, other measures of market performance have performed even better.For example the S&P 500 went up 9%
- And also the Nasdaq composite, which is dominated by technology stocks went up 14%So the first point about the US economy is that there is no longer a crisis at the beginning of 2012. But watch out! Not everything is going so good and that brings us to the second topic
- Four US banks fail Federal Reserve stress test!For the people who don’t know what a stress test is, well a stress test is designed to show if banks could withstand a financial shock.So 4 US banks couldn’t withstand a similar crisis like the one in 2008.
- The four banks are: Citigroup, that’s the 3th largest US bank / SunTrust / Ally Financial and MetlifeThe strength of banks is assessed by a capital ratio. When this capital ratio is 5% that means they have just enough buffer against financial troubles. So the higher the ratio, the better!As you can see on the slide these banks scored under or around the 5% so they could not withstand a financial crisis.
- But ofcourse not all the US banks scored bad, here are the three banks who have the best scores.The first is the Bank of New York Mellon: they scored a ratio from 13.1%
- The second bank which scored good is State Street, they have a ratio from 12.5%
- And the third place goes to American Express with a ratio from 10.8%
- Now, we have arrived at the last thing you need to know about the US economy. “ The gap between rich and poor”The gap between rich and poor in the US is concentrated most heavily in the South and is least apparent in the Midwest.
- The countries with the highest income disparity are:TexasLouisianaGeorgiaSouth CarolinaImportant notice is that all these states are states with Republican governors.
- To measure the income inequality, they use the “Gini coefficient” kienieco-ohfishentA Gini of 0 indicates complete equality, where all households have the same amount of incomeA Gini of 1 means one household has all the income.
- The index ranged from 0.207 in Loving County to 0.645 in East Carroll Parish -> You can conclude that the income inequity is less in Loving county and most in East Carroll Parish.The median Gini for US counties is 0.430The New York County, home of the nation’s largest city, have a Gini of 0.601.
- Now you are aware of the three most important things to know about the US economy at the beginning of 2012, according to me.First of all, that the US stock market has reached a major landmark, so the consumer confidence is growingSecond thing is that some US banks couldn’t withstand a similar crisis like in 2008And the third and last thing, the gap between rich and poor is the widest in Republican StatesI hope you’ve enjoyed my presentation and you’ve learned something about the US economy. Thank you for listening!