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HomeMy WebLinkAbout64131 (2)2013 City of Palm Desert , - �_� r�cr%�e��l< � ���c�e��Ir,2-��ll � ��rl ECONOMIC COMMENTARY According to the minutes of the Federal Reserve's March economic policy review, Fed o�cials are actively debating whether to wind down their $85 billion-a- month bond buying program after midyear. They have become increasingly concerned about the potential for instability to the financial system, a sudden rise in interest rates, and inflation. Repeated rounds of Quantitative Easing ("QE") have produced short-lived bounces that have pushed a weak U.S. economy from the verge of recession. QEs have also created a stock market "bubble", however, as elevated profit margins have created the illusion that stocks are reasonably priced. Obamacare may have a significant impact on consumer spending, which drives U.S. economic growth. Rising insurance premiums prompted by expanded health benefits; spiraling claim costs; the overseas outsourcing of R&D jobs to avoid the Medical Device Tax; the conversion of full-time jobs to part-time jobs to avoid the Obamacare mandate; reduced work hours for part-time jobs; higher payroll taxes; a reduction in flexible spending account caps; an increase in the threshold for the medical itemized deduction, will reduce the amount of disposable income that consumers have to spend. A federal bankruptcy judge has ruled that the City of Stockton, California can file for bankruptcy under Chapter 9. Seven other Califomia cities may also be headed in that direction. .%'au�.5: �a�, C'.C'.✓Ll.✓` : �` City Treasurer ' Certified California Municipal Treasurer PORTFOLIO STATISTICS Thousands of Dollars Month-End Book Value Month-End Market Value Paper Gain (Loss) Prior Year Book Variance Interest Earnings Yield-To-Maturity Weighted Maturity (Days) Effective Duration $ $ $ $ $ 197,943 $ 197,962 $ 19 $ (12,660) $ 56 $ 0.34% 29 0.02 201,340 $ 201,384 $ 44 $ (11,127) $ 52 $ 0.34% 28 0.02 198,185 $ 198,223 $ 38 $ (32,215) $ 55 $ 0.35% 29 0.03 Deputy City Treasurer Thomas W. Jeffrey, J.D., M.B.A. ��1���� ital Markets Team City Treasurer Paul S. Gibson, C.C.M.T. Investment O 192,086 $ 192,120 $ 34 $ (14,228) $ 54 $ 0.34% 31 0.03 The treasurer shall invest all pubiic monies in a manner that ensures safety of principal; sufficient liquidity to finance the City's expenditures; and the highest yield possible after the previous finro objectives have been met. 194,781 $ 194,809 $ 28 $ 1,165 $ 58 $ 0.37% 29 0.03 195,056 195,071 15 (828) 64 0.39% 30 0.04 All data as of March 31, 2013