February 2013 Personal Income and Outlays, and Consumer Debt

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Bureau of Economic Analysis (BEA) data showed that personal income increased $143.2 billion (1.1 percent), and disposable personal income (DPI) increased $127.8 billion (1.1 percent) in February. Personal consumption expenditures (PCE) increased $77.2 billion (0.7 percent) -- the fastest rate in five months. Real (inflation-adjusted) DPI increased 0.7 percent while real PCE increased 0.3 percent.

“Despite the expiry of the payroll tax cut and higher gasoline prices, we’re now likely to see the fastest quarterly gain in real consumption in two years,” said Paul Ashworth, chief U.S. economist at Capital Economics.

“Yet the composition of spending also suggests some caution is in order,” MarketWatch’s Jeffrey Bartash noted. “Virtually all of the increase in spending in February, for example, was devoted to perishable items such as gasoline and food.” 

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We continue to be concerned about a couple of observations related to income and expenditures. First, the rate of year-over-year growth in both DPI and PCE has been slowing since July 2011. DPI growth peaked in February 2011 (we ignore December 2012 as an aberration), but PCE continued upward for another five months before it, too, rolled over. Second, although the rising trend in nominal personal income is apparently still in place, real per-capita income has stagnated well below the recessionary peak. As ZeroHedge pointed out recently, real per-capita disposable personal income in February was on par with levels first seen in December 2006.

When one realizes employment growth (especially in the private sector) is slowing and real wages are declining, the observations above come as no great shock; indeed they should be expected. Consumption cannot grow indefinitely if wages are not rising to support it; true, savings can be drawn down for a time, but -- with the U.S. saving rate once again near record-low levels in February -- we suspect consumers do not have much more equity “freeboard” left from which to draw. We conclude, then, that the economy is more fragile than is commonly understood. To quote analyst Lance Roberts, “As PCE goes -- so goes the economy.” While official data do not show another recession is necessarily imminent, the economy remains at risk. 

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Total consumer debt outstanding (CDO) rose by a seasonally adjusted $18.1 billion (+7.8 percent annualized) in February. Revolving (mostly credit card) debt increased by $0.5 billion (+0.8 percent annualized), while non-revolving debt increased by $17.6 billion (+10.9 percent annualized). 

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In February, the total non-seasonally adjusted change in non-revolving debt amounted to $2.5 billion. Since federal student loans grew by $4.2 billion, the other categories of non-revolving debt declined overall. Relative to February 2012, federal student loans contributed over 70 percent of the total growth in consumer credit outstanding.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

March 2013 Employment Report

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According to the Bureau of Labor Statistics’s (BLS) establishment survey, non-farm payroll employment rose by a meager 88,000 in March. The unemployment rate (based upon the BLS’s household survey) edged down by 0.1 percentage point to 7.6 percent. Trade, Transportation & Utilities and Financial Activities were the two private supersectors reporting contraction in employment. Government employment contracted at the federal and local levels. The change in total non-farm payroll employment for January was revised from +119,000 to +148,000, and the change for February was revised from +236,000 to +268,000. 

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Reaction to the report ranged from “Kaboom!” (not in a positive sense) to “The best awful employment report I've ever seen.” Good news first:

·   Temporary jobs increased by 20,300.

·   Construction added 18,000 jobs.

·   The number of people unemployed for five weeks or less fell by 203,000 to 2,464,000.

·   The index of aggregate hours worked in the economy surged 0.3 percentage point (from 97.9 to 98.2).

·   The average workweek increased by 0.1 hour, to 34.6 hours.

·   Overtime increased by 0.1 hour, to 3.4 hours.

·   The official (“U-3”) unemployment rate declined to a new post-recession low of 7.6 percent.

·   The U-6 unemployment rate, which includes discouraged workers, fell 0.5 percentage point (from 14.3 to 13.8 percent).

·   Because January and February’s estimates were revised upward (by a combined 61,000 jobs), this estimate could also be revised higher.

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Now for the bad news:

·   With expectations of 190,000 new jobs (the lowest forecast was 100,000), this report represented the biggest “miss” to expectations since December 2009 and the worst “print” since June 2012.

·   The ratio of employed persons to the entire population remained mired in the range seen since late 2009. So, despite the enormous expansion of the Federal Reserve’s balance sheet and the trillions spent on fiscal stimulus, there has been no meaningful change in the proportion of the population finding work.

·   The number of people not in the labor force jumped by 663,000 (taking the total to a new all-time high of 90.0 million). I.e., 90.0 million people who could otherwise contribute to the workforce have chosen (at least for now) to not actively seek employment.

·   The labor force also shrank by 496,000, which is the primary reason why the above-mentioned U-3 and U-6 unemployment rates dropped. Were it not for people dropping out of the labor force, the U-3 unemployment rate would be (depending upon one’s assumptions) well over 10 percent. 

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·   The civilian labor force participation rate (the share of the entire U.S. population 16 years and older working or seeking work) dropped by 0.2 percentage point to a new 30-year low of 63.3 percent.

·   Average hourly earnings dropped by a penny relative to February. Moreover, the annual percentage increase in average hourly earnings of production and non-supervisory employees shrank back to 1.8 percent. With the price index for urban consumers rising at an annualized pace of 2.0 percent in February, wages are once again falling behind in real terms (i.e., wage increases are not keeping up with official estimates of price inflation). 

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·   Full-time employment rose by just 62,000 jobs, while part-time employment shed 350,000. 

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·   Withholding taxes were at record levels in March, not surprising since payroll tax rates jumped at the beginning of the year. As analyst Mike Shedlock put it, “Add in increases in state taxes and the average Joe has been hammered pretty badly.” 

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Employment is converging with the previous peak at a slower pace than all prior recessions going back to 1973; circles in the chart above indicate when previous recoveries reached their corresponding pre-recessionary employment highs. The economy still has 2.86 million fewer jobs than at the January 2008 peak. 

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The figure above presents a variety of forecasts related to when employment might return to the January 2008 peak (dashed line) or converge with the number of jobs that likely would exist had the recession not occurred (gray line). At March’s rate of job gains, it will take until December 2015 to recapture January 2008’s employment level (i.e., without adjusting for population growth).

Bottom line: If there is one good piece of news, it is that the total number of employed people went up. The problem is that, adjusted for population over the last year, the U.S. economy is one million jobs “in the hole,” or about 250,000 jobs worse than last month.

Bob Eisenbeis, chief monetary economist at Cumberland Advisors hazarded a guess about how, and how quickly, the employment picture could influence the Federal Open Market Committee’s (FOMC) monetary policy decisions. “FOMC policy makers have emphatically stated that they will maintain an accommodative monetary policy until the [U-3] unemployment rate reaches 6.5 percent,” wrote Eisenbeis. “However, in recent speeches and testimony, Chairman Bernanke has also stated that the 6.5 percent number is only a guidepost and conditions in the labor market more broadly will ultimately determine if and when the Committee will begin to change its policy. This raises the obvious question, what are those conditions, and what will the Committee be looking at beyond just the 6.5 percent rate?”

“…[F]or the FOMC to act,” continued Eisenbeis, “it will have to see marked improvement in conditions for part-time workers and evidence that they are moving from part-time to full-time employment. There will have to be substantial gains in youth and minority employment, and job-creation numbers stronger than the 200,000 per month we have observed recently, before the FOMC could justify a move from accommodation. Two caveats to this general conclusion are warranted, however. The first is that it is assumed that inflation remains relatively benign and in the 2.0-2.5 percent range and inflation expectations are well-anchored. The second is that it is possible that the FOMC may cease reinvesting maturing assets, as it has so indicated, several months before making changes in the federal funds rate. We don’t expect these moves to take place until, at the earliest, near the end of 2014 or well into 2015.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

March 2013 ISM Reports

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As foretold by several regional reports (especially the Chicago Business Barometer), the most-closely followed nationwide manufacturing diffusion index expanded in March, but at a much slower rate than in February. The Institute for Supply Management’s (ISM) PMI registered 51.3 percent, a decrease of 2.9 percentage points from February's seasonally adjusted reading of 54.2 percent (50 percent is the breakpoint between contraction and expansion). March’s PMI represented the biggest miss to expectations (of 54.0) in 13 months -- below the lowest estimate, in fact -- driven by a collapse in new orders (from 57.8 to 51.4 percent). Respondent quotes were mixed, with one Wood Products respondent saying, "Market continues to be strong, and our production is exceeding plans at this time." 

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The pace of growth in the service sector paralleled that in the manufacturing sector. The non-manufacturing index (now known simply as the “NMI”) registered 54.4 percent, 1.6 percentage points lower than February’s 56.0 percent (expectations were for a much smaller 0.5 percentage point drop, making March’s NMI print the biggest “miss” in a year). The NMI was dragged lower as a result of significantly slower growth in new orders, employment, and “net” exports. “The majority of respondents' comments continue to be positive about business conditions,” said Anthony Nieves, chair of ISM’s Non-manufacturing Business Survey Committee. “However, there is an underlying concern regarding the uncertainty of the future economy." 

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Wood Products reported a solid, broad-based pickup in activity. Paper Products expanded as well, with only backlogged orders offsetting the other sub-indices. Only the employment sub-index provided a drag on Real Estate. Construction exhibited growth across most sub-indices, while Ag & Forestry contracted.

Input price increases greatly outweighed decreases. Roughly 30 commodities were up in price, compared to just six commodities whose prices declined. Relevant commodities up in price included lumber (including pine and treated); plywood; corrugated boxes; natural gas; and roofing products and shingles. Gasoline and diesel fuel were listed as both up and down in price. No relevant commodities were in short supply.

Although the ISM surveys quantify opinion instead of facts or data, certain elements have good (e.g., manufacturing new orders) to excellent (e.g., non-manufacturing business activity and new orders) track records in spotting an incipient recession. So, where to from here? At least one well-respected blogger believes disaster is lurking around the corner (see here and here); his opinion cannot be ignored now that Goldman Sachs’ Global Leading Indicator has moved into “slowdown” territory. But because service business activity and new orders are well inside expansion territory, Steven Hansen, of Econintersect.com, believes the general upward trend of ISM services seen over the last few years remains “in play.”

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment. 

February 2013 Manufacturers’ Shipments, Inventories and New Orders

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According to the U.S. Census Bureau, the value of manufactured-goods shipments increased $4.3 billion or 0.9 percent to $489.3 billion in February (the highest level since the series was first published on a NAICS basis in 1992).

Shipments of manufactured durable goods increased $2.2 billion or 1.0 percent to $229.5 billion, led by transportation equipment. Nondurable goods shipments increased $2.2 billion or 0.8 percent to $259.8 billion, led by petroleum and coal products. Forest products shipments advanced by 0.7 (Wood) and 0.2 (Paper) percent. 

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Data from the Association of American Railroads (AAR) and the American Trucking Associations’ (ATA) advance seasonally adjusted For-Hire Truck Tonnage Index help round out the picture on goods shipments. AAR reported a 16.9 percent decrease in not-seasonally adjusted rail shipments in February (relative to January), and a 1.1 percent drop from a year earlier; on a trend-line basis, total shipments were off 3.7 percent from a year earlier. Excluding coal carloads, year-over-year shipments were up 1.5 percent. Seasonal adjustments reversed the 16.9 percent January-to-February decrease, changing it to a 2.3 percent increase. Rail shipments of forest-related products were higher in February than a year earlier, thanks largely to a 10.4 percent jump in lumber and wood products shipments. The ATA’s advance index showed a 0.6 percent expansion in February. 

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Inventories increased $1.1 billion or 0.2 percent to $620.0 billion, also the highest level since the series was first published on a NAICS basis. The inventories-to-shipments ratio was 1.27, down from 1.28 in January.

Inventories of durable goods increased $1.8 billion or 0.5 percent to $377.2 billion, again led by transportation equipment. Nondurable goods inventories decreased $0.7 billion or 0.3 percent to $242.8 billion; petroleum and coal products drove the decrease. Forest products inventories rose by 1.1 (Wood) and 0.1 (Paper) percent. 

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New orders for manufactured goods increased $14.5 billion or 3.0 percent to $492.0 billion in February -- the highest nominal level since the series was first published on a NAICS basis. Expectations for the headline number were just slightly lower, at 2.9 percent. Excluding transportation, however, new orders increased by only 0.3 percent.

New orders for durable goods increased $12.3 billion or 5.6 percent to $232.2 billion, led by transportation equipment, while nondurable goods orders increased $2.2 billion or 0.8 percent to $259.8 billion.

Although the Census Bureau’s February 2013 estimate of new orders for manufactured goods set a new record in nominal terms, converting to real, inflation-adjusted terms reveals a quite different story. On that basis, new orders have recouped only about two-thirds of the loss incurred since December 2007 and are still almost 4 percent below January 2000 levels. More worrisome for the future is the observation that new orders appear to have flattened out in real terms.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

March 2013 Monthly Average Crude Oil Price

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The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil turned lower in March, retreating by $2.27 (2.4 percent) to $93.05 per barrel. That drop was concurrent with a slight strengthening of the dollar and a continued increase in already-plentiful crude stocks, but occurred despite the lagged impacts of a jump in consumption of 516,000 barrels per day (BPD) -- to 18.6 million BPD -- during January.

The monthly average price spread between Brent crude (the predominant grade used in Europe) and WTI expanded in February (March Brent data was not yet available when this was written), to $20.70 per barrel. Brent and WTI prices had been essentially identical until the end of 2010. 

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The jump in consumption (mentioned above) and revisions to 4Q2012 U.S. GDP estimates showing growth instead of contraction were credited with pushing futures prices higher. “GDP is better than earlier estimates and a strong economy is bullish for oil,” said Michael Lynch, president of Strategic Energy & Economic Research. Not everyone is quite so upbeat, however. “Although the overwhelming evidence appears to be that there are improvements in the economy, the picture isn’t a robust one,” said Addison Armstrong, director of market research at Tradition Energy. “The jobless claims took some of the support out of the market.”

For the first time in nearly 40 years, the United States dropped out of first place among the world’s largest oil importers; China surpassed the United States in December. That same month, North Dakota, Ohio and Pennsylvania together produced 1.5 million barrels of oil a day -- more than Iran exported. Those data points demonstrate that a dramatic shift is occurring in how energy is being produced and consumed around the world -- a shift that could lead to far-reaching changes in the geopolitical order.

"A dramatic expansion of U.S. production could…push global spare capacity to exceed 8 million barrels per day, at which point OPEC could lose price control and crude oil prices would drop, possibly sharply," the National Intelligence Council, the U.S. intelligence community's internal think tank, said in its “Global Trends 2030” report in December. "Such a drop would take a heavy toll on many energy producers who are increasingly dependent on relatively high energy prices to balance their budgets."

With some analysts predicting that oil prices could drop as low as $70 to $90 a barrel -- down from the current price of nearly $110 per barrel of Brent crude oil -- a “scramble” among OPEC members for market share could ensue, said Edward Morse, an energy analyst with Citigroup and co-author of a recent report on titled “Energy 2020: Independence Day.”

Analysts say OPEC heavyweight Saudi Arabia, which controls vast reserves of oil and needs $71 a barrel to meet its budget, according to the International Monetary Fund, will do everything it can to remain the market-maker. But in that role, it will face new challenges  “Over time, it should become increasingly challenging for Saudi Arabia to ‘overproduce’ and bring down prices to punish wayward OPEC members; without this disciplinary mechanism, it is unclear whether OPEC can remain cohesive,” according to the Citigroup report.

Longer term (e.g., by 2020), cheaper heavy oil from Canada, freed from the so-called oil sands by new recovery technologies, could push similar oil from Venezuela out of the U.S. Gulf Coast market, according to forecasts. Those forecasts assume the Obama administration will approve construction of the Keystone XL pipeline, a decision the administration appears to be in no hurry to make.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

March 2013 Currency Exchange Rates

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In March the U.S. dollar appreciated “across the board:” by 3.0 percent (monthly average basis) against the euro, 1.9 percent against the yen and 1.4 percent relative to Canada’s loonie. On a trade-weighted index basis, the dollar strengthened by 0.9 percent against a basket of 26 currencies. 

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Canada: Real GDP growth regained in January (+0.2 percent) the ground lost in December (-0.2 percent). Manufacturing was the largest contributor to January’s GDP uptick even though manufacturing sales edged lower, the fourth drop in five months.

The view forward is rather cloudy. On one hand, Canada’s finance minister released a plan that would eliminate the deficit in two years by limiting spending growth (and assuming a continued economic recovery). The list of nations is very short that would be in that position and, ordinarily, such a plan would boost the loonie’s “stock.” As Everbank’s Mike Meyer put it, however, “A good portion of Canada’s expansion over the next year hinges on increased business investment since consumer spending (via retail trade) has done a lot of the heavy lifting recently.”

On the other hand, outgoing Bank of Canada Governor Mark Carney renewed his commitment to maintaining the country’s “ultra low” interest rates. According to strategists at both UBS and Citigroup, international investors have responded to the news by starting to move out of the Canadian dollar in search of higher yields. Strategists have cut their estimates for the loonie by over 2 percent during the first quarter. Those expectations may soften further if investors begin to suspect Canadian banks are in trouble and take seriously the possibility of a forced, Cyprus-style “bail-in” (see Europe section below) from depositors’ accounts.

Europe: The euro took a real hit after the European Commission’s leadership decided to recapitalize Cyprus’ troubled banking sector by confiscating bank depositors’ funds (known as a “bail-in”). Details have been very fluid, but (at the time of this writing, at least) it appears that accounts containing more than €100,000 will have 60 percent of the funds in excess of that €100,000 threshold transferred to ownership by the bank in which the funds are deposited.

Originally billed as targeting the offshore funds of wealthy, tax-evading Russians, the policy has instead devastated Cypriot businesses and senior citizens who retired to the island with their life savings. In fact, Russian citizens appear to have been among the least affected; they used Russia-based branches of Cypriot banks to repatriate their cash during the bank holiday. Many politically well-connected Cypriots also escaped essentially unscathed, perhaps including the current President Nicos Anastasiades himself. Anastasiades’ family businesses allegedly transferred “dozens of millions” from their Laiki Bank accounts to London a week in advance of the depositor haircuts.

Now that what was done to Cyprus may be replicated elsewhere in Europe (and even Canada, as noted above), keeping funds in any Eurozone bank is becoming a riskier proposition. Unless and until faith is restored in Europe’s banking system, the euro could continue to weaken against the dollar.

Japan: Data out of Japan was a mixed bag: Although GDP was revised to show modest growth (+0.2 percent, from the previous estimate of -0.4 percent) during the final three months of 2012, core machinery orders fell 13.1 percent in January (relative to December). The country’s February trade balance ran a deficit for an eighth month (the longest spell since 1980) and, by some accounts, hit a seasonally adjusted all-time high deficit. Moreover, Japan's industrial production confounded expectations for a sizeable gain and instead showed a surprise contraction (-0.1 percent) in February.

With the Tankan survey of business sentiment showing broad pessimism among large Japanese companies during the January-through-March period, and the government pledging to implement policies that weaken the yen, we see no real reason for the yen to reverse course against the dollar.

China: The debate continues over whether China’s economy is expanding or contracting. HSBC’s Flash PMI for China printed above expectations at 50.4 (50 is the breakpoint between contraction and expansion), but February’s year-over-year change in electricity production calls that assumption of modest expansion into question. The PMI posted for March came in at 51.6, though, which caused Everbank’s Chuck Butler to conclude “the Chinese recovery is being sustained [which is] a good thing for global growth.” Bloomberg was less enthusiastic, observing that China’s economic data show the weakest start since 2009.

Of greater implication for the dollar is the revelation that Australia and China have entered into a trade agreement enabling direct convertibility of the Australian dollar into Chinese yuan, without U.S. dollar intermediation. Past deals between China and other countries involved currency swap arrangements, so the outright convertibility of the yuan and Australian dollar is unique -- for now. This is just the latest of many steps China has taken in the past few years to chip away at the U.S. dollar’s reserve currency status.

The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.

February 2013 U.S. Construction

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Overall construction spending in the United States increased by 1.2 percent during February, to a seasonally adjusted and annualized rate (SAAR) of $885.1 billion. Private residential spending exhibited the largest gain (2.2 percent), although the other categories “came along for the ride.”

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Total housing starts were nearly unchanged in February, rising to 917,000 units SAAR (+7,000 units or 0.8 percent relative to January). The absolute increase was about evenly split between the single-family (+3,000 units or 0.5 percent) and multi-family sectors (+4,000 units or 1.4 percent).

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February’s “raw” starts aligned with their seasonally adjusted counterparts. Total unadjusted starts rose off their lowest level since March 2012 in February, thanks primarily to a 2,200 unit (5.6 percent) increase in the single-family category. Starts were up 25.6 percent over year-earlier levels.

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Sales of new single-family homes dropped by 20,000 units (-4.6 percent) to 411,000 (SAAR). The median price of new homes sold advanced, however, by 3.0 percent, to $246,800. Although the change in single-unit starts (+3,000) exceeded that of sales (-20,000), the three-month average starts-to-sales ratio fell back to 1.47 in February.

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Single-unit completions advanced by 3.6 percent, while the inventory of new single-family homes ticked higher in both months-of-sales (by 0.2 month, to 4.4 months) and absolute (+2,000 units) terms.

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Existing home sales advanced to 4.98 million units (+40,000 units or 0.8 percent, SAAR) in February. The share of total sales comprised of new homes fell back to 7.6 percent. The median price of previously owned homes sold in February also rose by $3,000 (1.8 percent), to $173,600.

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Housing affordability jumped back to a near-record high as the median price of existing homes for sale dropped by $6,200 (-3.4 percent) in January. Simultaneously, however, Standard & Poor’s reported that the 10- and 20-City Composites in the S&P/Case-Shiller Home Price indices posted respective monthly gains of 0.2 and 0.1 percent in January (7.3 and 8.1 percent, respectively, relative to a year earlier).

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“The two headline composites posted their highest year-over-year increases since summer 2006,” said David Blitzer, chair of the Index Committee at S&P Dow Jones Indices. “This marks the highest increase since the housing bubble burst.

“After more than two years of consecutive year-over-year declines, New York reversed trend and posted a positive return in January. The Southwest (Phoenix and Las Vegas) plus San Francisco posted the highest annual increases; they were also among the hardest hit by the housing bust. Atlanta and Dallas recorded their highest year-over-year gains.

“Economic data continues to support the housing recovery. Single-family home building permits and housing starts posted double-digit year-over-year increases in February 2013. Despite a slight uptick in foreclosure filings, numbers are still down 25 percent year-over-year. Steady employment and low borrowing rates pushed inventories down to their lowest post-recession levels.”

Some are arguing that the Federal Reserve’s monetary policies are leading to higher housing prices (especially single-family units). As reported by ZeroHedge, “Blackstone Group LP, the world’s largest private equity firm, plowed over $3.5 billion into the housing market, according to Bloomberg, to gobble up 20,000 vacant and foreclosed single-family homes. It just fattened up a credit line to $2.1 billion to do more of the same. Colony Capital LLC, which already owns 7,000 [units], is putting $2.2 billion to work.

“‘We recognized that prices were moving faster than people expected,’ explained Devin Peterson, a Blackstone real estate associate, to Bloomberg. Despite that, they’re still ‘finding opportunities to buy.’ They might not be able to rent them out very quickly, but they’d rather not be ‘missing out on a few points in home price appreciation.’ The race to buy is on. The next housing bubble is inflating,” Zerohedge concluded.

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Although builders’ confidence in the residential market held steady or softened during the past couple of months, the number of permits applied for nudged higher on a SAAR basis in February. Total permits rose to 946,000 units (+42,000 units or 4.6 percent), mainly on the strength of multi-family units (+26,000 units or 8.1 percent, to 346,000 units); single-family units also rose by a more meager 16,000 units (+2.7 percent), to 600,000 units. Total permits were 28.5 percent higher in February than a year earlier.

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The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.