Macroeconomic and market trends and global perspectives
Transcript of Macroeconomic and market trends and global perspectives
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Macroeconomic and market trends U.S. and global perspectives
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Daren Blomquist RealtyTrac
Marc Gaudart Experian
Michele Raneri Experian
Introducing:
@ExperianVision | #vision2015
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Global economic
and credit trends
Marc Gaudart
Experian
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Lending to consumers has grown across all continents in 2014
$4.7 Trillion
$800 Billion
$1.7 Trillion
$3.9 Trillion
$357B
+6.2%
+11.6%
+8.8%
+17.3%
+5.4%
$389 Billion
+4.5%
+7.8%
$454 Billion
Euromonitor consumer credit worldwide 2014 - estimates
Global consumer credit 2014, and % change from 2013
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What is going on today globally? Summary
2014 2015 forecast 2014 2015 forecast
U.S. 2.4 3.6 6.2 5.4
U.K. 2.6 2.7 6.3 5.5
Euro area 0.8 1.2 11.6 11.2
Em. and dev.
Europe 2.7 2.9 - -
Russia 0.6 -3.0 5.2 6.3
Latin America 1.2 1.3 - -
Mexico 2.1 3.2 4.8 4.5
Brazil 0.1 0.3 4.8 5.7
Japan 0.1 0.6 3.6 3.5
China 7.4 6.8 4.1 4.1
India 5.8 6.3 - -
GDP Growth (%) Unemployment (%)
Source: IMF - World Economic Outlook Projections, Consensus Economics, Focus Economics. The Economist
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The main influencers to the world economic outlook
Low oil prices U.S. recovery China deceleration in growth
Russia and CIS political situation
Eurozone QE program
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Key additional influencers in the European Union
What? Who? Why?
Anti-austerity movements
Greece
Spain
Italy
Questioning the relevance of
austerity measures and the
“financial and economic rules
of the game”
Nationalists movements
U.K.
France
Netherlands
Austria
Questioning the whole
“European project”
Both movements are gaining significant political traction with voters and could
significantly alter the future structure, organization and make up of Europe
The U.K. general elections in May 2015 will be the next big test
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Who will be the strong and weak performers in 2015?
Strong
Weak
U.S.
Mexico
Japan
U.K.
India
Germany
Spain
France
Italy
China
Brazil
Venezuela
Argentina
Colombia
Chile
Peru
Developing Asia Turkey
Russia
Canada
Greece
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ECB started a long time after the Fed and the Bank of England
ECB to buy one trillion euros in bonds in QE program ̶ % of bonds by European country
Could delay Fed’s plans to start increasing interest rates
Dollar appreciates against the Euro, leading to weaker inflationary pressures
Could this increase further U.S. consumer confidence?
Direct trade impact somewhat negative, but U.S. exports only account for 15% of U.S. GDP, and U.S. exports to Europe account for only 15% of total U.S. exports
Impact of the European Central Bank QE on U.S. economy
…and take advantage
of a weak Euro to
visit Europe
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Basel regulations are being adopted globally by committee members…
Basel II Basel 2.5 Basel III
Argentina
Australia
Brazil
Canada
Hong Kong
India
Indonesia
Japan
Korea
Mexico
Russia
Saudi Arabia
Singapore
South Africa
Switzerland
Turkey
United States
European Union
Source: BIS – Progress report on adoption of Basel regulatory framework – October 2014 Adoption completed Adoption in progress
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…as well as countries who are not committee members
Foundation Advanced
Bahrein
Bermuda
Taiwan
Egypt
Iceland
Liechtenstein
Malaysia
Morocco
New Zealand
Norway
Peru
Serbia
Thailand
Zimbabwe
Basel II Pillar I Credit Risk Internal Ratings Based approach
Source: BIS – Financial Stability Institute Survey – July 2013 Adoption completed Adoption in progress
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Stress testing approaches U.S., U.K. and European Union
Scenarios - Baseline
- Adverse
- Severely adverse
- Baseline
- Adverse
- Baseline
- Adverse
Key factors influencing
scenarios
US economy and Global
for 6 “global market
shock participants”
Europe, with global
impact increased in 2015
stress test
28 EU countries, some
global
Number of firms tested 30 (2014)
31 (2015)
8 (2014)
7 (2015)
123 (2014)
Number of failures 1 (conditional)+2 2*+1 (2014) 10*+14
Frequency of stress
tests
Annual Annual Varied
* Revised capital plans were approved at the time where the results where announced by the regulator
Note: Santander, RBS and HSBC are subject to the 3 regulators and the 3 stress test approaches
Federal Reserve Bank of England
European Banking
Authority
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Key global themes for the financial services industry
Regulation (e.g., Basel and stress testing)
Understanding affordability
Collections
Digital
Treating customers fairly
Fraud
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U.S. economic
and trends
Michele Raneri
Experian
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Preparing for
near future by
understanding the
current environment
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Confidence improving year-over-year
0
20
40
60
80
100
120
140
160
Recession
January: 102.9
Source: The Conference Board
Consumer confidence index
Up 23%
YoY
02,0004,0006,0008,000
10,00012,00014,00016,00018,00020,000
February: 18,140.44 Dow Jones Industrial Average
Up 14%
YoY
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-9.0
-6.0
-3.0
0.0
3.0
6.0
9.0
12.0
15.0
Real Gross Domestic Product (percent change from preceding period) 4Q14 =2.5%
Real GDP change
Source: Bureau of Economic Analysis, Economic Projections of Federal Reserve Board Members and Federal Reserve Bank Presidents, 2014
FOMC forecast
4Q15f: +2.8%
4Q16f: +2.75%
4Q17f: +2.4% 4Q08 = -8.3%
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0%
2%
4%
6%
8%
10%
12%Unemployment rate
Unemployment rates come down
Source: Bureau of Labor Statistics; Economic Projections of Federal Reserve Board Members and Federal Reserve Bank Presidents
FOMC forecast
2015f: 5.2-5.3.%
2016f: 5.0-5.2%
2017f: 4.9-5.3%
-1,000
-800
-600
-400
-200
0
200
400
600
Th
ou
sa
nd
s
1-Month Net Change
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Interest rates
0
1
2
3
4
5
6
7
8
9
10
0%
1%
2%
3%
4%
5%
6%
7%
8%
Recession Mortgage rate Home sales
Jan 2015 Data:
Mortgage: 3.67%
Home sales: 4.82M
Millions Interest rate
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$0.00
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
199
1
199
2
199
3
199
4
199
5
199
6
199
7
199
8
199
9
200
0
200
1
200
2
200
3
200
4
200
5
200
6
200
7
200
8
200
9
201
0
201
1
201
2
201
3
201
4
U.S. gas price (regular all formulations) February $2.274/gal
Drivers of gasoline prices
Source: U.S. Energy Information Administration
Feb 2015 Data:
YOY: -33%
10Yr: +20%
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U.S. credit trends
Michele Raneri
Experian
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Average VantageScore® Bankcard inquiries and originations
600
650
700
750
800
Bankcard inquiries Originations
Spread between inquiries and originations
61 32 34 52 60 49 54 70 85 66 61 67 86 58 51 67 57 45 54 59 52 46 46 54 48 44 41 51 40
2Q14:
40-point spread
Recession timeframe
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0%
10%
20%
30%
40%
50%
60%
70%
80%
2011 Q 4 2012 Q 4 2013 Q 4 2014 Q 4
Distribution of bankcard loan originations By VantageScore® band
A B C D F
$-
$20
$40
$60
$80
$100
$120
1Q
07
4Q
07
3Q
08
2Q
09
1Q
10
4Q
10
3Q
11
2Q
12
1Q
13
4Q
13
3Q
14
4Q14:
$89.72 BN
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Bankcard late stage delinquency rates
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
60-89 DPD 90-180 DPD
Percent balances
4Q14 Data:
60-89: 0.52%
90-180: 1.26%
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4Q14
Bankcard delinquency rates By state
High Low
Best/worst five states* 4Q14 national bankcard
60-89 DPD
1. Alaska 0.25%
2. Wyoming 0.32%
3. North Dakota 0.33%
4. Washington 0.37%
5. Vermont 0.40%
...
47. Alabama 0.63%
48. Florida 0.63%
49. Arizona 0.64%
50. Arkansas 0.66%
51. Mississippi 0.70% *Includes District of Columbia
Source: Experian IntelliViewSM
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Bankcard trades and utilization
0
100
200
300
400
500
600
1Q
06
2Q
06
3Q
06
4Q
06
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
Outstanding accounts 4Q14: 406.93M
0%
5%
10%
15%
20%
25%
30%
35%
40%Utilization 4Q14: 20.79%
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$-
$3
$6
$9
$12
$15
$18
$21
$24
$27
$30
1Q
07
3Q
07
1Q
08
3Q
08
1Q
09
3Q
09
1Q
10
3Q
10
1Q
11
3Q
11
1Q
12
3Q
12
1Q
13
3Q
13
1Q
14
3Q
14
Billio
ns
4Q14:
$27.53 BN
0%
10%
20%
30%
40%
50%
60%
Q411 Q412 Q413 Q414
Distribution of retail originations By VantageScore® band
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Retail late stage delinquency rates
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
60-89 DPD 90-180 DPD
4Q14 Data:
60-89: 0.96%
90-180: 2.17%
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4Q14
Retail delinquency rates By state
High Low
Best/worst five states* 4Q14 national retail
60-89 DPD
1. Alaska 0.50%
2. Wyoming 0.58%
3. Montana 0.64%
4. North Dakota 0.66%
5. Nebraska 0.72%
…
47. Alabama 1.10%
48. Arizona 1.10%
49. Louisiana 1.11%
50. Mississippi 1.13%
51. Arkansas 1.14%
*Includes District of Columbia
Source: Experian IntelliViewSM
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Retail trades and utilization
0
100
200
300
400
500
1Q
06
2Q
06
3Q
06
4Q
06
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
Outstanding accounts 4Q14: 221.94M
0%
5%
10%
15%
20%
25%
1Q
06
2Q
06
3Q
06
4Q
06
1Q
07
2Q
07
3Q
07
4Q
07
1Q
08
2Q
08
3Q
08
4Q
08
1Q
09
2Q
09
3Q
09
4Q
09
1Q
10
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
Utilization 4Q14: 16.12%
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Real estate
Market overview
Daren Blomquist
RealtyTrac
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U.S. home sales
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U.S. home prices
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Cash buyers
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Institutional investors
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Mortgage trends
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U.S. foreclosure activity
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U.S. foreclosure activity
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Home equity
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Home equity
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Affordability
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Resetting HELOCs
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