Gic pp 8 27 final

McVEAN Trading & Investments, LLC

TWENTY ONE QUARTERS AND COUNTING HOW LONG CAN THIS EXPANSION LAST? Michael Drury Chief Economist McVean Trading and Investments, LLC

VIRTUAL SUMMER SERIES THE GLOBAL INTERDEPENDENCE CENTER Aug 27, 2014 Past Performance Is Not Necessarily Indicative Of Future Results.

0

REAL GDP

CURRENT QUARTER % CHANGE FROM YEAR AGO 10.0%

8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0% Mar-60

Mar-64

Mar-68

Mar-72

Mar-76

Mar-80

Mar-84

Mar-88

Mar-92

Mar-96

Past Performance Is Not Necessarily Indicative Of Future Results.

Mar-00

Mar-04

Mar-08

Mar-12

1

REAL FINAL SALES

CURRENT QUARTER % CHANGE FROM YEAR AGO 8.0%

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

Past Performance Is Not Necessarily Indicative Of Future Results.

2

REAL FINAL SALES

CURRENT QUARTER % CHANGE; SEASONALLY ADJUSTED, ANNUAL RATE

5.0

4.0

3.0

2.0

1.0

0.0

-1.0

-2.0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012 2013 2013 2013 2013 2014 2014 Past Performance Is Not Necessarily Indicative Of Future Results.

3

AGGREGATE HOURS WORKED VS AVERAGE HOURLY EARNINGS 3 MONTH AVERAGE % CHANGE FROM YEAR AGO

6.0%

4.5%

4.0%

4.0%

2.0%

3.5%

0.0%

3.0%

-2.0%

2.5%

-4.0%

2.0%

-6.0%

1.5%

-8.0% Jan-85

1.0% Jan-89

Jan-93

Jan-97

AGGREGATE HOURS WORKED

Jan-01

Jan-05

Jan-09

AVERAGE HOURLY EARNINGS (right)

Past Performance Is Not Necessarily Indicative Of Future Results.

Jan-13

Jul 2014

4

HOUSING STARTS 3 MONTH AVERAGE

2.4

2.000

2.1

1.750

1.8

1.500

1.5

1.250

1.2

1.000

0.9

0.750

0.6

0.500

0.3 Mar-90

0.250 Mar-92

Mar-94

Mar-96

Mar-98

Mar-00

Housing Starts 3 Mo Avg

Mar-02

Mar-04

Mar-06

Mar-08

Single Housing Starts 3 Mo Avg

Past Performance Is Not Necessarily Indicative Of Future Results.

Mar-10

Mar-12

Mar-14

Jul 2014 5

LIGHT VEHICLE SALES

3 MONTH AVERAGE IN MILLIONS 20

18

16

14

12

10

8

Past Performance Is Not Necessarily Indicative Of Future Results.

6

HOUSEHOLD BALANCE; 4 QUARTER AVERAGE PERCENT OF GROSS DOMESTIC PRODUCT

6.0%

4.0%

2.0%

0.0%

-2.0%

-4.0%

-6.0% Jan-61

Jan-65

Jan-69

Jan-73

Jan-77

Jan-81

Jan-85

Jan-89

Jan-93

Jan-97

(Personal income – (Outlays + Residential Investment)) / Gross Domestic Product Past Performance Is Not Necessarily Indicative Of Future Results.

Jan-01

Jan-05

Jan-09

Jan-13

Q2 2014

7

DOMESTIC CORPORATE PROFITS

CURRENT QUARTER % CHANGE FROM YEAR AGO 80%

60%

40%

20%

0%

-20%

-40% Mar-82

Mar-86

Mar-90

Mar-94

Mar-98

Mar-02

Mar-06

Mar-10

Mar-14

Q1 2014 Past Performance Is Not Necessarily Indicative Of Future Results.

8

DOMESTIC CORPORATE PROFITS VS CAPITAL INVESTMENT AS A % OF GDP 12%

16.0%

15.0% 10% 14.0%

8%

13.0%

12.0% 6% 11.0%

4% Mar-74

Mar-79

Mar-84

Mar-89

Mar-94

DOMESTIC CORPORATE PROFITS

Mar-99

Mar-04

CAPITAL INVESTMENT

Past Performance Is Not Necessarily Indicative Of Future Results.

Mar-09

10.0% Mar-14

Q2 2014 9

CORPORATE VS GOVERNMENT BALANCE; 4 QUARTER AVERAGE PERCENT OF GROSS DOMESTIC PRODUCT

10.0%

5.0%

0.0%

-5.0%

-10.0%

-15.0% Mar-61

Mar-65

Mar-69

Mar-73

Mar-77

Mar-81

Mar-85

Corporate Balance

Mar-89

Mar-93

Mar-97

Government Balance

Past Performance Is Not Necessarily Indicative Of Future Results.

Mar-01

Mar-05

Mar-09

Mar-13

Q2 2014

10

REAL GDP

4 QUARTER AVERAGE % CHANGE FROM YEAR AGO 6.00%

4.00%

2.00%

0.00%

-2.00%

-4.00%

-6.00% Mar-00

Mar-02

Mar-04

REAL GDP

Mar-06

Mar-08

PRIVATE SECTOR

Mar-10

GOVERNMENT

Past Performance Is Not Necessarily Indicative Of Future Results.

Mar-12

Mar-14

Q2 2014

11

2013 GLOBAL GDP $74 TRILLION

NAFTA $19.9T

EUROPE $18.5T

Brazil+Russia+ Argentina+Opec $8.1T

China $9.2T

Japan+South Korea+Taiwan $6.7T

Other $11.6T

Past Performance Is Not Necessarily Indicative Of Future Results.

12

EUROPE GDP GROWTH 7.5%

5.0%

2.5%

0.0%

-2.5%

-5.0%

-7.5% US

Japan

Eurozone

Q1 2014

France

Italy

Germany

Q2 2014

Past Performance Is Not Necessarily Indicative Of Future Results.

13

EUROPEAN INFLATION RATES

CURRENT MONTH % CHANGE FROM YEAR AGO 2

1.5

1

0.5

0

-0.5

-1

-1.5 February 2014 Inflation

August 2014 Inflation

Past Performance Is Not Necessarily Indicative Of Future Results.

14

CHINA GDP GROWTH

CURRENT QUARTER %CH FROM YEAR AGO 13.0

12.0

12.0

10.0

11.0

8.0

10.0

6.0

9.0

4.0

8.0

2.0

7.0

0.0

6.0 Mar-02

-2.0 Mar-03

Mar-04

Mar-05

Mar-06

Mar-07

Mar-08

REAL GDP (LHS)

Mar-09

Mar-10

Mar-11

GDP DEFLATOR (RHS)

Past Performance Is Not Necessarily Indicative Of Future Results.

Mar-12

Mar-13

Mar-14

Q2 2014 15

CHINA GDP GROWTH

CURRENT QUARTER % CH FROM PREVIOUS QUARTER SAAR 15.0

10.0

5.0

0.0

-5.0

-10.0 Mar-10

Mar-11

Mar-12 DEFLATOR

Mar-13 REAL

Past Performance Is Not Necessarily Indicative Of Future Results.

Mar-14

Q2 2014 16

CHINA RAILROAD FREIGHT VS ELECTRICITY PRODUCTION 3 MONTH AVERAGE %CH FROM YEAR AGO

35.0%

30.0%

25.0%

20.0%

15.0%

10.0%

5.0%

0.0%

-5.0%

-10.0% Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

RAIL

Jan-07

Jan-08

Jan-09

Jan-10

Jan-11

ELECTRICITY PRODUCTION

Past Performance Is Not Necessarily Indicative Of Future Results.

Jan-12

Jan-13

Jan-14

Jun 2014 17

CHINA EXPORTS VS IMPORTS AS A % OF GROSS DOMESTIC PRODUCT

66.0%

49.5%

33.0%

16.5%

0.0%

-16.5%

-33.0% Jan-00

Jan-01

Jan-02

Jan-03

Jan-04

Jan-05

Jan-06

Jan-07

EXPORTS

Jan-08

Jan-09

Jan-10

IMPORTS

Past Performance Is Not Necessarily Indicative Of Future Results.

Jan-11

Jan-12

Jan-13

Jan-14

July 2014 18