- Beta G.T. 1.0 the stock has a greater price validity in relation to the rest of the market.
- Beta 1.0 the stock is in line with the rest of the market
- Beta L.T. 1.0 the stock has less volatility than the rest of the market.
Typical Persons Carbon FootPrint
|Gas, Oil, and Coal||15%|
|Carbon in Car Manufacturing||7%|
|Food and Drink||5%|
|Clothes and Personnel Effects||4%|
- Consume less energy by using high-efficiency Energy Star appliances, lightbulbs, water heaters.
- Unplugging electronics when not in use
- Buy locally produced food and switch to a more vegetarian diet
- Make energy efficient transportation choices - use public transportation, buy fuel-efficient vehicles, drive slower
- Conserve water
- Recycle paper, plastics, aluminum, etc.
- Adobe Creative Cloud(Photoshop, InDesign, etc.) - online service
- Instagram - allow you to store and access data
- Dropbox- allow you to store and access data.
- Google Drive
- During War
- In a recession
- as a result of government surplus
- stimulus spending
How to Use the Debt to GDP RatioThe debt to GDP ratio allows investors in government bonds to compare debt levels between countries. For example, Germany's debt is $2.4 trillion; GDP is $2.9 trillion; so debt to GDP ratio is 83% Greece' debt is $434 billion; GDP is $318 billion; so debt to GDP ratio is 142% - high ratio indicates recession
A high DTCR compared to industry average shows weak financial strength.
A company's Debt to Capital Ratio should be L.T. 80% of the industry average.A measurement of a company's financial leverage, calculated as the company's debt divided by its total capital.
Shareholders Equity = ($shares) X (#shares) Debt to Capital Ratio = Interest-bearing Debt/shareholders' Equity + Interest-Bearing DebtDebt includes all short-term and long-term obligations. Total capital includes the company's debt and shareholders' equity, which includes common stock, preferred stock, minority interest and net debt. Interest-bearing debt includes bonds payable, bank loans, notes payable, etc. Non-interest bearing debt includes trade payable, accrued expenses, etc.
Debt/Equity Ratio = Long-term Debt /Value of Common Stock
- When analyzing a stock for purchase, a Dept/Equity ratio of less than 80% of industry average is considered good.
DividendsFor every share of a dividend stock that you own, you are paid a portion of the company's earnings. Annual Dividend : for example 20 cent per share; so once a year you will receive a check for 20 cents per share. Quarterly Dividend - ¼ of the annal dividend: so 5 cent of the annual is 20 cent a share.
Dividend Yield ratio (dividend price ratio or just dividend yield)The dividend yield or dividend-price ratio of a share is the dividend per share, divided by the price per share Indicates the relative value of a dividend payout for a dividend paying stock based off of the stock’s market value. Investors looking for stock with greatest dividend return relative to share cost will compare dividend ratio: the higher the better,
Annual Total Dividend Per share/cost per share X 100
EPS = indicates how much profit a company makes in a given time and how well management is using returned earnings to increase shareholders wealth.EPS is an indicator of a company's profitability and represents the portion of a company's profit allocated to each outstanding share of common stock. Companies with strong EPS numbers typically have strong stock prices, while companies with weak EPS numbers typically have weak stock prices. Calculate EPS by taking the net income a company produces—which is the money that is left over in the company once all of the appropriate expenses and taxes have been subtracted from the company’s revenue—and dividing it by the total number of outstanding shares of stock in the company. Calculation: EPS = net income - dividends on preferred stock / average outstanding common shares. Company A has a first quarter net income of $100 and $10 in average shares outstanding. No preferred stock.
EPS = $100/$10 = $10
The EPS Growth rate is an indicator of future prospects of a company. It is usually expressed as a percentage.
ESP year 2 - EPS year 1 == X/EPS year 1 X 100
- EPS should be at least 15% over 3 years
- EPS should be at least 20% over 5 years
- A negative EPS indicates negative growth.
Embodied Energy is the sum of all the energy required to produce any goods or services.
Equity = funds contributed by stockholders + retained earnings or losses
Components of the Expense Ratio
- The investment advisory fee or management fee is the money necessary to pay the manager(s) of the mutual fund. On average, this fee is about 0.50% to 1.0% annually of the fund's assets.
- Administrative costs are the costs of record keeping, mailings, maintaining a customer service line, etc. (0.2-0.4%).
- The 12b-1 distribution fee (0.25-1.0%). This fee is used for marketing, advertising, and distribution services meant to sell the fund.
The extractive industries physically extract metals, minerals and aggregates from the earth. Extraction industries include the mining, quarrying, dredging, oil and gas extraction industries.
Mining can be defined as the extraction of metals and solid fossil fuel, and extraction can take place in either an underground mine or in an above ground mine, known as a surface mine, 'open-cast mine', 'open-pit' or just 'pit'.
Quarrying can be defined as the extraction of aggregates and industrial minerals above ground.
Dredging can be defined as the extraction of marine aggregate underwater.
Oil extraction can be defined as the extraction of liquid fossil fuel, and
gas extraction can be defined as the extraction of gaseous fossil fuel.
To avoid losing money in short investments, choose highly liquid stocksLiquidity in the financial markets refers to how easily a given financial instrument can be sold, and is a reflection of the number(s) of people involved in buying and selling the instrument. When many people are buying and selling a stock, we say that there is much liquidity. When only a few people are buying and selling, there is low liquidity. The more liquid the stock is, the ‘tighter’ the bid-ask spread. Purchasing highly liquid stocks minimizes the loss when stocks are sold immediately after purchasing. The bid-ask spread represents the minimum we must make not to lose money. And, the wider the bid-ask spread, the more lost immediately after purchase.
The Forest Stewardship Council's mission is to promote environmentally sound, socially beneficial and economically prosperous management of the world's forests.Their vision is to meet the current needs for forest products without compromising the health of the world’s forests for future generations.
Today the FSC is headquartered in Bonn, Germany, operating in more than 80 countries, wherever forests are present. In 1995, the US chapter of the FSC was established, and is now headquartered in Minneapolis, Minnesota.
How to become FSC CertifiedThe FSC has developed a set of 10 principles and 57 Criteria that apply to FSC-certified forests around the world. Forest management operations that meet the principles and criteria for the environmental, economic and social standards of the Forest Stewardship Council (FSC) are awarded certification.
WHY FORESTS ARE IMPORTANT
- Deforestation and forest destruction is the second leading cause of carbon pollution, causing 20% of total greenhouse gas emissions.
- Forests filter the water we drink and the air we breathe.
- Worldwide, 1.6 billion people rely on forests for their livelihoods, including food, clothing, or shelter.
- Forests are home to nearly half of the world's species, including some of the most endangered birds and mammals, such as orangutans, gorillas, pandas, Northern Spotted Owls and Marbled Murrelets.
- If the forward P/E ratio is lower than the current P/E ratio, it means analysts are expecting earnings to increase;
- If the forward P/E is higher than the current P/E ratio, analysts expect a decrease in earnings.
All employees of the eligible small employer are taken into account when determining FTEs except:
- owners of the small business, such as sole proprietors, partners, shareholders owning more than 2% of an S corporation or more than 5% of a C corporation;
- spouses of these owners
- family members of these owners, which include a child, grandchild, sibling or step-sibling, parent or ancestor of a parent, a step-parent, niece or nephew, aunt or uncle, son-in-law or daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law.
- A spouse of any of these family members should also not be counted as an employee.
- seasonal worker that provide services to the employer for no more than 120 days during the taxable year
Example of how to Calculate FTEFor the 2014 taxable year, an employer pays 1 FTE = 2080 hours in one year
- five employees wages for 2,080 hours each,
- three employees wages for 1,040 hours each
- one employee wages for 2,300 hours
- 10,400 hours for the five employees paid for 2,080 hours (5 x 2,080)
- 3,120 hours for the three employees paid for 1,040 hours (3 x 1,040)
- 2,080 hours for the one employee paid for 2,300 hours (lesser of 2,300 and 2,080)
This employer has seven FTEs
Halogenated flame retardants
Flame retardant chemicals are associated with a variety of serious health and environmental concernsHalogenated flame retardants have been associated with a variety of serious health concerns, including disruption of hormones, developmental and reproductive problems; create toxic, carcinogenic byproducts if burned, which may be associated with higher rates of cancer in firefighters; halogenated flame retardants build up in wildlife and are found throughout freshwater, marine, and terrestrial ecosystems globally, with the highest levels in top of the food chain predators like birds of prey and marine mammals and are associated with altered behaviors and decreased reproductive success in some species.
The Home Affordable Modification Program (HAMP), as part of the Making Home Affordable program, assists homeowners in crisis to modify their mortgage to make their payments more affordable. So far, more than 1 million homeowners have received a permanent modification through the Home Affordable Modification Program (HAMP). Homeowner should contact their mortgage company to see if they participate in the HAMP program. If they don’t, homeowner should asked their mortgage company if they have an alternative program.
Who is Eligible for HAMP?
- You obtained your mortgage on or before January 1, 2009.
- You owe up to $729,750 on your primary residence or single unit rental property
- You owe up to $934,200 on a 2-unit rental property; $1,129,250 on a 3-unit rental property; or $1,403,400 on a 4-unit rental property
- The property has not been condemned
- You have a financial hardship and are either delinquent or in danger of falling behind on your mortgage payments (non-owner occupants must be delinquent in order to qualify).
- You have sufficient, documented income to support a modified payment.
- You must not have been convicted within the last 10 years of felony larceny, theft, fraud or forgery, money laundering or tax evasion, in connection with a mortgage or real estate transaction.Homeowners who are applying for a modification on a home that is not their primary residence, but the property is currently rented or the homeowner intends to rent it.
HUD AS A LENDING FACILITATORHUD assists people of low- and mid-level incomes to acquire loans to purchase housing primarily through the Federal Housing Administration (FHA) insured mortgage programs. The FDA, which is part of HUD, administers various single family mortgage insurance programs. These programs operate through FHA-approved lending institutions which submit applications to have the property appraised and have the buyer's credit approved. These lenders fund the mortgage loans which the Department insures. HUD does not make direct loans to help people buy homes.
COUNSELING SERVICESHUD offers counseling services for potential homeowners and supports organizations that offer advice on renting, default, foreclosure avoidance, credit issues or reverse mortgage
- Accumulators - High pressure hydraulic fluid vessels used to store pressurized fluid.
- Hydraulic drive pump/motors - the hydraulic drive uses the pressurized fluid to rotate the wheels. The hydraulic drive re-pressurizes the hydraulic fluid by using the momentum of the vehicle.
A Hydraulic Hybrid has -
- Higher Fuel efficiency
- Lower emissions
- Reduced operating costs
- Better acceleration performance
- methane (CH4), also known as natural gas,
- ethane (C2H6)
- propane (C3H8)
- butane (C4H10)
- Price Inflation is when prices get higher or it takes more money to buy the same item.
- Monetary Inflation is an increase in the money supply commonly referred to as the government (printing money) which generally results in price inflation.
Calculation the annual inflation rate of a loaf of bread:
- January 2014 - cost of loaf of bread is $1.00
- January 2015 - cost of loaf of bread is $1.02
- 1.02 - 1.00 / 1.02 = .02 X 100 =
- 2% inflation rate of a loaf of bread over this 12 month period.
- Managing the nation's money supply through monetary policy to achieve the sometimes-conflicting goals of maximum employment
- Stabilizing prices, including prevention of either inflation or deflation
- Controlling long-term interest rates. For example, since 2008 interest rates have been kept low in order to increase consumer spending and stimulate economic growth.
- Increases in the money supply. Long Term.
- Temporary shortage of goods, either due to a natural disaster like Hurricane Katrina and Hurricane Sandy. Short Term.
- The effects of an organized cartel that is purposely restricting supply and artificially raising prices. Short Term. For instance, in 2008, OPEC exerted its influence by cutting production and driving up prices.
- Too much money, not enough goods
- Company's costs go up so they increase prices.
- Interest Rates go up
- Employment goes up
- Sign of growing/good economy
- Productivity induced - such as when there are major productivity enhancements like the invention of the assembly line or the completion of the transcontinental railroad or the onset of cheap productive capacity in China.
- Collapsing stock market which destroy paper assets - 2008
- Plugging oil prices
- Reduction in supply of money
- Reduction in available credit
- When the GDP is growing fast in terms of real money
- weak economy
- falling prices
- shrinking employment
- shrinking income
- lack of spending power
- An IPO is when a company initially offers shares of stocks to the public (going public).Through this process, a private company transforms into a public company.
- IPOs can be issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded.
- A company can raise money by issuing either debt or equity.
- Initial public offering (IPO) or stock market launch is a type of public offering in which shares of stock in a company are usually sold to institutional investors, who help determine what type of security to issue (common or preferred), the best offering price and the time to bring it to market, in turn sell to the general public, on a securities exchange, for the first time.
- LEED AP Building Design + Construction (LEED AP BD+C)
The criteria for assessing LEED Fellow nominees are based on five major dimensions of green building and sustainability that have been identified as mastery elements.
- Technical Proficiency
- Education and Mentoring
- Correlation is Positive when the values increase together, and
- Correlation is Negative when one value decreases as the other increases
- 1 is a perfect positive correlation
- 0 is no correlation (the values don't seem linked at all)
- -1 is a perfect negative correlation
- Step 1: Find the mean of x, and the mean of y
- Step 2: Subtract the mean of x from every x value (call them "a"), do the same for y (call them "b")
- Step 3: Calculate: a × b, a2 and b2 for every value
- Step 4: Sum up a × b, sum up a2 and sum up b2
- Step 5: Divide the sum of a × b by the square root of [(sum of a2) × (sum of b2)]
Market capitalization = company's shares outstanding X current market price of one share.
- Outstanding shares are stocks currently held by investors, including restricted shares owned by the company's officers and insiders, as well as those held by the public.
- Restricted shares are insider holdings that are under some other kind of sales restriction.
- Large Cap: $10 billion and greater
- Mid Cap: $2 billion to $10 billion
- Small Cap: Less than $2 billion
NAV = Assets - Liabilities
- Assets = $100
- Liabilities = $10
- NAV = $90
- Mutual funds and Unit Investment Trusts (UITs) generally must calculate their NAV at least once every business day, typically after the major U.S. exchanges close.
- A closed-end fund, whose shares generally are not "redeemable"—that is, not required to be repurchased by the fund—is not subject to this requirement.
- That is, the price that investors pay to purchase mutual fund and most UTI shares is the approximate per share NAV, plus any fees that the fund imposes at purchase (such as sales loads or purchase fees).
- The price that investors receive on redemptions is the approximate per share NAV at redemption, minus any fees that the fund deducts at that time (such as deferred sales loads or redemption fees).
- The redemption is the return of an investor's principal in a fixed income security, such as a preferred stock or bond; or the sale of units in a mutual fund.
Net income is the bottom line, net profit or net earnings.Net income is the main source of compensation to shareholders through dividends and share buybacks.
- If a company does not generate enough profits to compensate owners, the value of shares will drop.
- If a company is profitable and growing, prices
Net Income = TotalExample - Total Expenses Total revenue - $100
- Subtract cost of Goods Sold - $10
- Subtract operating expense: rent, salary, utilities, depreciations, preferred - $20 dividends
- Subtract interest expense - $5
- Subtract taxes - $5
NET INCOME - $60
Net Income Margin = Net income x 100 ÷ Total Sales Revenue.
Total Sales Revenue = total sales revenue and other revenue for a particular period.A high net profit margin indicates a profitable company that is effective at converting revenue into actual profit. It is often recommend that when considering purchasing a stock, the NIM should be 20% above the industry average Net Income A company's total earnings (or profit). Net income is calculated by taking revenues and adjusting for the cost of doing business, depreciation, interest, taxes and other expenses.
Net Income = Total Revenue - Cost of inventory - Operating Expenses - Interest Expenses - Taxes
- Revenue is the amount of money a company is allowed to recognize from the sale of its goods, services, or intellectual property.
- Interest expense is the cost of debt that has occurred during a specified period of time.
Indicator of a company's efficiency.
A good company has constant strong earnings and cash flow.
The higher the Net Profit Margin, the better it is
Net Profit Margin = net profits/sales
= bottom line/total sales
Net profit margin is the ratio of net profits to sales. It is a good indicator of a company's efficiency because it takes into account all expenses of the company. A high ratio indicates a more profitable company.
For example, if a company has a 20% profit margin, it means the company has a net income of $.20 for each $1.0 of sales.
- The highest R-value per inch, which means the greatest energy efficiency performance or R-value of any building insulation product on the market
- Polyiso on a roof deck significantly reduces energy costs
- Exclusive third-party, thermal performance certification
- Only high-thermal foam to meet both FM 4450 and UL 1256 fire tests
- Nationwide availability
- Polyiso is stable over a large temperature range (-100°F to +250°F) and can be used as a component in roof systems utilizing hot asphalt.
- Polyiso has low density, good adhesion to facers, low water absorption and low vapor transmission.
- Polyiso is not affected by oil-based waterproofing compounds, insecticides or fertilizers when properly protected.
A preferred stock is a class of ownership in a corporation.
- Preferred dividends are paid before common stock dividends.
- If the company enters into bankruptcy, preferred stock shareholders are paid from company assets first.
- Most preferred stocks have fixed dividends; common stocks dividends are usually not fixed.
- Preferred stock owners do not have voting rights; common shareholders have voting rights.
- Preferred shares are typically less volatile than common shares and offer investors a steadier flow of dividends.
- Preferred stocks are less risky than common stock.
- Preferred stock owners often have the right to convert that preferred stock into common stock at a prearranged price.
- Companies trading below one and a half times book value are deemed to be value stocks.
- Companies trading higher than one and a half times book value should be considered expensive.
- 1 year P/E should be LT 10
- 5 year P/E should be LT 20
P/E = Stock Price per Share/ Earnings per Share (EPS) for a 12 month period (usually the last 12 months, or trailing twelve months (TTM))High P/E - Companies with a high P/E ratio are typically growth stocks. A high P/E indicates companies with good growth potential because investors are willing to pay a premium for future profits. Often these stocks are considered overvalued. Low P/E - A lower P/E ratio indicates either a bargain, a troubled company, or a very steady consistent company. Zero P/E - Companies with a zero P/E are losing money Forward P/E - The forward P/E uses the estimates of Wall Street analysts of what the company’s next earnings per share report will be instead of using the company’s last reported earnings per share (TTM).
- If the forward P/E is lower than the P/E TTM it means future earnings are expected to be higher than the recently completed annual earnings and the stock is about to become a bargain.
- If the forward P/E is higher than the P/E TTM, it means the company is expected to earn less over the coming year than it did in the past year.
- Generally a PEG of less than 1 is considered an undervalued stock.
- While a higher PEG indicates that the stock is overvalued
PEG Ratio = P/E ratio/Annual EPS Growth
- Inflation Rate of 2.5%
- Nominal GDP = 10 million
- Real GDP = $10 million - ($10 million * .025) = 9.75 million
FACTS ABOUT THE REAL GDP
- Real GDP is an indicator of the health of the economy.
- The consensus is that 2.5-3.5% per year growth in real GDP is the range of best overall benefit; enough to provide for corporate profit and jobs growth yet moderate enough to not incite undue inflationary concerns.
- If the economy is just coming out of recession, it is OK for the GDP figure to jump into the 6-8% range briefly, but investors will look for the long-term rate to stay near the 3% level.
- The general definition of an economic recession is two consecutive quarters of negative real GDP growth.
Retail Sales is closely watched by both economists and investors
Retail Sales reflects the current state of the economy (coincident indicator); it is also considered an indicator of impending inflation.
- Increasing retail sales indicates the economy is up, which means better business for retailers, their suppliers and the manufacturers of those goods. Ultimately this leads to more employment and better wages, and ultimately more consumer spending and better retail sales.
- When Retail Sales are down, this indicates a slow economy; in other words, if consumers feel uncertain about their financial future and decide to hold off buying new stoves or sweaters, and the economy slows down, which can lead to recession.
- The Fed can influence the money supply by modifying reserve requirements, which is the amount of funds banks must hold against deposits in bank accounts. By lowering the reserve requirements, banks can loan more money, which increases the overall supply of money in the economy. Conversely, by raising the banks' reserve requirements, the Fed can decrease the size of the money supply.
- The Fed can also alter the money supply by changing short-term interest rates. By lowering (or raising) the discount rate that banks pay on short-term loans from the Federal Reserve Bank, the Fed can effectively increase (or decrease) the liquidity of money. Lower rates increase the money supply and boost economic activity; however, declines in interest rates fuel inflation.
- The Fed can affect the money supply by conducting open market operations, which affects the federal funds rate. In open operations, the Fed buys and sells government securities in the open market. If the Fed wants to increase the money supply, it buys government bonds, which supplies the securities dealers who sell the bonds with cash, increasing the overall money supply. Conversely, if the Fed wants to decrease the money supply, it sells bonds from its account, thus taking in cash and removing money from the economic system.
Retained Earnings = Initial RE + Net Income - Dividends
- How much profit a company generates with the money shareholders have invested
- The amount of net income returned as a percentage of shareholders equity.
- A firm's efficiency at generating profits and using investment funds to generate earnings growth.
- A ROA of five percent is considered good.
ROA = (Net Income/Average Total Assets)
- Net income is derived from the income statement of the company and is the profit after taxes.
- Total assets are read from the balance sheet and include cash and cash-equivalent items such as receivables, inventories, land, capital equipment as depreciated, and the value of intellectual property such as patents.
- Average Total Assets = (beginning of the assets + end of year assets)/2
- A ROA of 20% means that the company produces $1 of profit for every $5 it has invested in its assets
- An increasing ROA indicates a business is continuing to earn an increasing profit on each dollar of investment.
- A falling ROA indicates trouble in a company.
- How much profit a company generates with the money shareholders have invested
- The amount of net income returned as a percentage of shareholders equity.
- A firm's efficiency at generating profits and using investment funds to generate earnings growth.
- ROE tends to tell us how effectively an organization is taking advantage of its base of equity, or capital.
A ROE of 15-20% is considered good.
ROE = Net Income After Taxes for past 12 months / Stockholders' Equity
- Stockholders' Equity = total assets - total liabilities OR
- Stockholders' Equity = share capital + retained earnings - Treasury Shares.
- Shareholder's equity does not include preferred shares
- Net income is for the full fiscal year (before dividends paid to common stockholders but after dividends to preferred stock).
(Sales year 2 – Sales year 1) / Sales year 1 = Sales GrowthRevenue per Share – Revenue per share does not take into account expenses or taxes. It is a helpful ratio when comparing sales return per share between companies in a similar industry, where companies with higher revenue per share ratios earn more money on their equity.
|Magnitude||Effect||Estimated Number Per Year|
|2.5 or less||Usually not felt||~3,300,000|
|2.5 to 5.4||Often felt, but only causes minor damage.||~49,000|
|5.5 to 6.0||Slight damage to buildings and other structures.||~6,200|
|6.1 to 6.9||May cause a lot of damage in very populated areas.||800|
|7.0 to 7.9||Major earthquake. Serious damage.||120|
|8.0 or greater||Can totally destroy communities near the epicenter.||≤1|
Compares the sales/revenues of retail stores (retail chain's established outlets) that have been open for at least one year.
- Same-store sales allow investors to determine what portion of new sales has come from sales growth and what portion can be attributed to the opening of new stores.
- An increase in same-store sales may indicate that existing customers are coming back more frequently.
- The key is that the firm is seeing an increase in revenue without resorting to opening new stores.
Basically, a Tax Credit is worth more that a Tax Deduction
- A tax credit lowers your tax bill dollar for dollar.
- A deduction shaves money off your taxable income, so the value depends on your tax bracket. So, how much you get back with a deduction, depends on your tax bill.
- Payment of the minimum wage;
- Overtime pay for time worked over 40 hours in a workweek;
- Restrictions on the employment of children; and
- A Federal, state, or local government agency
- A hospital; or an institution primarily engaged in the care of the sick, the aged, or the mentally ill or developmentally disabled who live on the premises; (it does not matter if the hospital or institution is public or private or is operated for profit or not-for-profit)
- A pre-school; elementary or secondary school or institution of higher learning (e.g., college); or a school for mentally or physically handicapped or gifted children (it does not matter if the school or institution is public or private or operated for profit or not for profit)
- A company/organization with annual dollar volume of sales or receipts in the amount of $500,000 or more
Electric TransformerElectronic transformers can be used both in commercial and in your homes, its usually used in the residential arena because it only allows so much support to the lighting system before needing additional transformers. Advantages:
- it is much smaller in size than a magnetic transformer and aesthetically more pleasing
- compatible with dimming options
- less expensive
- more versatile in use, you can fit them in smaller places
- has a shorter life span than a magnetic ballast
- can not have long runs of lights; without additional support the electronic transformer can push enough power down the line for 6-8 ft from the source
Magnetic TransformerThough magnetic transformers can be used in both the residential and commercial applications they are most often used in commercial spaces. It steps down 120VAC or (277+ for commercial) line voltage to 12VAC or 24VAC. Advantages:
- provides additional boosts
- has a higher capacity to support more circuits than that of an electronic transformer
- a longer life span
- aesthetically not pleasing; its heavy, big and harder to hide
- has to be closer to the source
Treasury notes and bonds are sold by the U.S. Treasury Department to pay for the U.S. debt. Essentially they are loans to the government.
- Treasury notes are issued in terms of 2, 3, 5, and 10 years
- Treasury bonds are issued in terms of 30 years.
- Treasury bills are issued in terms of one year or less.
Treasury note and yields can impact mortgage ratesTreasury note and bond yields change every day and are resold on the open market. If the bond prices drops, this indicates there is not a lot of demand for Treasury notes and bonds, and that the yields increased. This makes it more expensive to buy a home, because mortgage interest rates rise. That lessens demand for homes, which puts downward pressure on home prices. This slows economic growth. Conversely, low yields on U.S. Treasury notes mean lower rates on mortgages, which can stimulate the real estate market, which stimulates the economy. Worth noting the Treasury Yields Only Affect Fixed-Rate Mortgages
Historical FactOn June 1, 2012, the yield on the 10-year Treasury note dropped briefly during intra-day trading to 1.442%, the lowest in 200 years. By the end of the day, the rate closed just a bit higher, at 1.47%. Nevertheless, this forced mortgage interest rates down to record lows. Why was the Treasury yield so low? Investors were panicked by a lower-than-expected U.S. employment report, and by ongoing worries about the eurozone debt crisis. They sold stocks, driving the Dow down 275 points. They put their cash into the only safe haven, U.S. Treasury notes. (Gold, the safe haven in 2011, was down thanks to lower economic growth in China and the other emerging market countries.)
- Buyer purchases a bond at its par value (principle value) of $1000 carrying a 7% yield or coupon. Meaning the bond would pay $70 in interest.
- Later in the year, interest rates (yeilds) go up to 8% on the $1000 bonds ($80 a year in interest).
- The bond the buyer purchased at 7% yield is now valued at a lower price -a discount - of only $875.
What happens to the economy when Treasury Yields go up
- Interest rates on consumer and business loans go up
- Higher yields can increase the value of the dollar
- Higher fixed-rate mortgages (10-year yield affects 15-year mortgages, and the 30-year yield impacts 30-year mortgages) housing less affordable, depressing the housing market because it means you have to buy a smaller, less expensive home.
- Slows GDP
- Feds raise the Fed funds rate.
- When Federal Reserve increases its target for the federal funds rate (in other words, if it tightens monetary policy), or even if investors merely expect the fed funds rate to go up
- In 2013, yields rose 75% between May and August alone. Investors sold off Treasuries when the Federal Reserve announced it would taper its Quantitative Easing policy. In December, it began reducing its $85 billion a month purchases of Treasuries and mortgage-backed securities. The Fed cut back as the global economy improves.
- When yields are high, it means investors don't want the debt, so the country must pay more to get them to buy it. This can be a downward spiral. High interest rates make it more expensive for the country to borrow. This increases fiscal spending, which creates a larger budget deficit, which creates more debt.Yield Rates stay low when
- Foreign investors, notably China, Japan and oil-producing countries, need dollars to keep their economies functioning. The best way to collect dollars is by buying Treasury products. The popularity of Treasuries have kept yields below 6% for the last five years.
- There is economic uncertainty
- mortgage interest rates are low
- There s a lot of demand for the debt
The U.S. national/public/national debt is the total amount of money that the United States federal government owes to creditors as a result of federal government shortfalls, or deficit budgets in which the government's expenses exceed its revenues. Government's creditors include all individuals, businesses, governments and other organizations that own U.S. government debt securities (Treasuries notes, bills, bonds).
The Federal Financing Bank (FFB) is a government corporation, created by Congress in 1973 under the general supervision of the Secretary of the Treasury. The Federal Financing Bank was created to centralize, reduce the cost of, and efficiently manage federal borrowing. FFB was established to centralize and reduce the cost of federal borrowing as well as federally-assisted borrowing from the public. Obligations are issued to the public by the Federal Financing Bank (FFB) to finance its operations. Obligations are limited to $15 billion unless otherwise authorized by the Appropriations Acts, (the legislative motion (bill) that authorizes the government to spend money). Currently the U.S. debt limit is $17.2 trillion debt; until 15 March 2015.The Current National Debt is almost $18 Trillion Dollars (Feb. 2015) There are two components of gross national debt:
- Debt held by the public. This includes is all federal debt securites issued by the U.S. Treasury that is held by individuals, corporations, state or local governments, Federal Reserve Banks, foreign governments, and other entities outside the United States Government less Federal Financing Bank securities. Types of securities held by the public include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities. Debt held by the public excludes the portion of the debt that is held by government accounts.
- Debt held by government accounts or intergovernmental debt/holdings. Government Account Series Treasuries (GAS) are the principal form of intergovernmental debt holdings - the loans to the government agencies the government borrowed from. When there is a federal government budget deficit, the government borrows from agencies that have a surplus, like the Social Security fund, promising to repay the money at a later time.
Normal Yield CurveA normal yield curve is one in which longer maturity bonds have a higher yield compared to shorter-term bonds due to the risks associated with time. Normally the yield curve is upward sloping showing that, all else being equal, a bond with a longer maturity pays a higher yield than the same bond with a shorter maturity. From the great depression through to today, the yield curve has spent the majority of its time in the shape of a normal upward sloping curve.
Inverted Yield CurveAn inverted yield curve is one in which the shorter-term yields are higher than the longer-term yields. An inverted yield curve, particularly a sharply inverted curve, is often followed by economic slowdown—or an outright recession —as well as less future demand for money and lower interest rates along all points of the yield curve.
Flat or Humped Yield CurveA flat (or humped) yield curve is one in which the shorter- and longer-term yields are very close to each other, this is generally a sign of a pending, or ongoing economic slowdown and that investors are unsure about future economic growth and inflation. Historically, economic slowdown and lower interest rates (and thus an inverted curve) follow a period of flattening yields. THE STEEP YIELD CURVE The slope of the yield curve is also important: the greater the slope, the greater the gap between short- and long-term rates. A steep positive curve may indicates that investors are expecting strong future economic growth and higher future inflation (and thus higher interest rates). If interest rates are predicted to rise in the future, investors will demand a higher rate of return when buying longer term bonds. If the longer term bonds are not paying a higher rate of interest , investors will just buy shorter term bonds. Often times, when the economy is coming out of a recession, future interest rate expectations will increase. This is because economic recoveries are normally accompanied by corporations wanting to borrow more (for investment) which increases the demand for money, putting upward pressure on interest rates. Since 1990, a normal yield curve has yields on 30-year Treasury bonds typically 2.3 percentage points (also known as 230 basis points) higher than the yield on three-month Treasury bills, according to data from the U.S. Treasury. When this “spread” gets wider than that—causing the slope of the yield curve to steepen—long-term bond investors are sending a message about what they think about economic growth and inflation. A steep yield curve is generally found at the beginning of a period of economic expansion. At that point, economic stagnation will have depressed short-term interest rates, which were likely lowered by the Fed as a way to stimulate the economy. But as the economy begins to grow again, one of the first signs of recovery is an increased demand for capital, which many believe leads to inflation. At this point in the economic cycle long-term bond investors fear being locked into low rates, which could erode future buying power if inflation sets in. As a result, they demand greater compensation—in the form of higher rates—for their long-term commitment. That’s why the spread between three-month Treasury bills and 30-year Treasury bonds usually expands beyond the “normal” 230 basis points. After all, while short-term lenders can wait for their T-bills to mature in a matter of months, giving them the flexibility to buy higher-yielding securities should the opportunity arise, longer term investors don’t have that luxury. TREASURY YIELD Curves PREDICTED THE 2008and 2001 Recessions In January 2006, the yield curve started to flatten. This meant that investors did not require a higher yield for longer term notes. On January 3, 2006 the yield on the 1-year note was 4.38%, a bit higher than the yield of 4.37% on the 10-year note. This was the dreaded inverted yield curve. It predicted the 2008 recession. In April 2000, an inverted yield curve also predicted the 2001 recession. When investors believe the economy is slumping, they would rather keep the longer 10-year note than buy and sell the shorter 1-year note, which may do worse next year when the note is due.