shapeType75fBehindDocument1pWrapPolygonVertices8;8;(4731,0);(0,0);(0,21497);(21499,21497);(21499,0);(16604,0);(16604,14074);(4731,14074)posrelh0posrelv0pib
TEe 109 
November 2003 
"Projecting When Economic 
Cycles Change" 
Presented By: 

The Institute for Trend Research 
alan@ecotrends.org 
www.ecotrends.org 

ITR 
US, New York & the Mid-Atlantic Annual GSP Growth Rate 
9 	-------, 
shapeType75fBehindDocument1pWrapPolygonVertices8;34;(21500,0);(21432,0);(21432,375);(21174,375);(21174,4801);(15829,4801);(15829,3286);(15178,3286);(15178,4801);(10617,4801);(10617,9228);(5928,9228);(5928,4801);(1431,4801);(1431,375);(0,375);(0,21500);(390,21500);(390,12772);(7098,12772);(7098,17198);(7818,17198);(7818,18588);(8272,18588);(8272,17198);(9121,17198);(9121,12772);(20780,12772);(20780,17198);(21367,17198);(21367,3919);(21432,3919);(21432,4551);(21500,4551)posrelh0posrelv0pib
6~r-----~-r------------------------~r-----------~ 
3 I 	~ 	\'\ 	I --b-¥J 	- \l 	I 
o I 	'" \.Vf ~ 
-3+-----------------~nr------------------------------~ 
~+--._,--.__r_,--.__r--r_,_~--r_._~--._.__.--._,,_.~ 
1984 
1986 
1988 
1990 
-U.S. 
1992 	1994 
--New York 
1996 	1998 
- • Mid-Atlantic 
2000 
2002 
ITR 
Unemployment Rates 

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 
	II U.S. 	III New York 
2 
/ 
3 

			12MMT 	
				32 	
				28 	
				24 	
				20 	
				16 	
				12 	
			$9.248 	8 	
				4 	
				0 	
				-4 	
				·8 	
'02 		'03 	'04 		
ITR 
Company M 
Data Trends 
'00 
'01 
-2+-----~----~--~_r----_+----_+----~----~------r_--__+ 
4 
/ 
3MMT 
8 
7 
6 

5 
4 
3 
2 
o 
-1 
-12MMT 
														5 	
ITR 		US Industrial Production to Gross Domestic Product 			
					3112 Rates-of-Change 						
116 														116 	
112 														112 	
108 														108 	
104 														104 	
100 														100 	
															
96 														96 	
92 					-GDP 									92 	
					-USIP 									
88 														88 	
'80 	'82 	'84 	'86 	'88 	'90 	'92 	'94 	'96 	'98 	'00 	'02 	'04 		
'96 
'97 
'98 
'99 

shapeType75fBehindDocument1pWrapPolygonVertices8;10;(3809,0);(0,0);(0,20598);(8216,20598);(8216,21500);(21499,21500);(21499,10598);(5775,10598);(5775,11895);(3809,11895)posrelh0posrelv0pib
ITR 
GOODS & SERVICES AS A PERCENT OF GDP (real) 
Services 
Goods 
40~~~~~~~~~~~~~~~~~~~~~rl 
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 
/ 

RA TE-OF-CHANGE 
ITR 7 
ACTUAL MONTHLY DATA AS OF 10103 
ACTUAL MONTHLY DATA AS OF 910102 
- 1112 
3-MOS MOVING TOTAL (3MMT) AS OF 10103 
3-MOS MOVING TOTAL (3MMT) AS OF 10/02 
- 3112 
ANNUAL MOVING TOTAL (12MMT) AS OF 10/03 
AL MOVING TOTAL (12MMT) AS OF 10102 
- 12112 
shapeType75fBehindDocument1pWrapPolygonVertices8;6;(2621,0);(0,0);(0,21486);(21494,21486);(21494,3989);(2621,3989)posrelh0posrelv0pib
6 

• "U~;' 
8 

I 
I 
I 
I 
I 
I 
I 
ITR 
US Total Industrial Production 
12112 Rate-of-Change 
130 
shapeType75fBehindDocument1pWrapPolygonVertices8;14;(21202,0);(0,0);(0,21496);(590,21496);(590,10632);(1702,10632);(1702,13491);(2517,13491);(2517,10632);(3336,10632);(3336,14747);(21500,14747);(21500,11317);(21202,11317)posrelh0posrelv0pib

130 

120 
110 
100 II • 1/ 'I" 	\I \ I---\-A I - "H 	\ 1'-+100 
90 
80 
70:':~~:,~~'--'-'--'-'--'-'--'-'--'-'-'--'-'------ 
	1950 1955 	-,-,-1- 70 
1960 1965 1970 1975 1980 1985 1990 
1995 2000 2005 
120 
110 
90 
80 
/ 

Isource: ITR's EcoTrendsl 
ITR 
US Total Industrial Production 
12/12 Rate-of-Change 
130 

120 
110 
100 
90 
80 
ro 	ro 
1900 1905 1910 1915 1920 1925 1930 1935 1940 1945 1950 
Isource: ITR's EcoTrendsl 
130 
120 
110 
100 
90 
80 
9 

shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21462,0);(0,0);(0,21499);(21462,21499)posrelh0posrelv0pib
shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21486,0);(0,0);(0,21500);(21486,21500)posrelh0posrelv0pib
shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21488,0);(0,0);(0,21400);(21488,21400)posrelh0posrelv0pib
ITR 																		10 	
					US Industrial Production Index 								
					Forecast Through December 2003 									
						12/12 Rate-of-Change 										
115 																	115 		
110 																	110 		
105 																	105 		
100 																	100 		
																			
95 	Dee 1997: 105.8- 	106.2 												95 		
	Dee 1998: 103.4- 	104.6 														
90 + 	Dee 1999: 102.8- 	104.0 											+ 90 		
	Dee 2000: 103.6- 	104.4 														
	Dee 2001: 100.5- 	101.4 														
85 + 	Dee 2002: 	96.9 - 	97.8 											+ 85 		
	Dee 2003: 103.9- 	104.9 														
80L 												~80 		
	'86 	'88 	'90 	'92 		'94 	'96 	'98 		'00 		'02 	'04 				
													ISource: ITR's EcoTrendsl 	
														
																		/ 	
																		--, 	
																		11 	
ITR 					US Industrial Production Index 								
					Forecast Through December 2004 									
						Annual Average Index 										
140 I 														I 140 		
130 													t 		130 		
120 + 												t 	t 		120 		
110 t 						/ 	.~ 					110 		
100 														100 		
90 														90 		
									Dee 2003: 	-0.4 	to 0.4 				
80 + 				"./ 		Dee 2004: 		3.6 	to 4.6 	+ 80 		
						Dee 2005: 		1.0 	to 2.0 			
									Dee 2006: 		2.1 	to 3.3 				
70t:: 						Dee 2007: 		3.5 	to 51~70 		
60 												---,- 60 		
	'86 	'88 	'90 	'92 	'94 	'96 	'98 	'00 	'02 		'04 	'06 	'08 				
													ISource: ITR's EcoTrendsl 	

• •• ~,I~, 
ITR 
Company M to US Industrial Production 
12112 Rates-of-Change 
Sales 
Index 	
108 	
107 	
106 	
105 	
104 	
103 	
102 	
101 	
100 	
99 	
98 	
97 	
96 	
95 	
'02 	'03 	'04 	
260 
240 
220 
200 
180 
160 
140 
120 
100 I A I 	V 	- 	VU 
	80 				1.0 	I 

	60 + 	-Sales 
	40 + 	--US Production 
	20 	__
o 
'97 
'98 
'99 
'00 
'01 
/ 
ITR 
Co. L to US Industrial Production 
12112 Rates-of-Change 
Sales 	
120 	
115 	
110 	
105 	
100 	
95 	
90 	
85 	
80 	
'94 	
-Sales 
Index 	
112 	
109 	
106 	
103 	
100 	
97 	
94 	
91 	
88 	
'02 	'03 	'04 	
shapeType75fBehindDocument1pWrapPolygonVertices8;6;(21498,0);(0,0);(0,13518);(11376,13518);(11376,21492);(21498,21492)posrelh0posrelv0pib
-US Production 
'95 
'96 
'97 
'98 
'99 
'00 
'01 
12 
13 
....• 

• 
• 
• 
II 
• 
• 

ITR 
"All a statesman can do is to listen to the footsteps of God as 
he walks through history, and get hold of the hem of His cloak 
and walk with Him a few steps of the way." 
Otto yon Bismarck 
" ... But most contemporary politicians or business executives 
do not consider that they are walking through history. Is it 
any wonder, then, that few of them make history?" 
Henry Kissinger 
14 
/ 
15 I .~. ?;: ;UQ. (;~. 
0/~~~(" 
sy~.' 
- ( 
ITR 
Four Phases 
Expansion? 
Bankrupt? 
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- Phase A 	--Phase B 
Phase C 	- Phase D 
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2) rr+>: T 
~eJlVvV 
I/-U c;. ;' ~ '::;:: ~ 
-~ . 
&-,--' 

j/oV 
f/1> 
?6'6- 

· .'~ 

ITR 

Management Objectives: 
Phase Late D • Recession I Early A ~ Early Recovery 

16 

I 
I 
I 
I 
I 

/ 

ITR 

1.	Prepare training programs 
2.	Negotiate union contracts if possible 
3.	Develop advertising & marketing programs 
4.	Enter or Renegotiate into long-term leases 
5.	Concentrate on cost reduction programs 
6.	Look for additional vendors 
7.	Capital expenditures & acquisitions considered in 
light of market-by-market potential 
Management Objectives: 
Phase Late A - Recovery: 
1.	Start to phase out marginal opportunities 
2.	Build inventories in the system 
3.	Continue placing capital equipment orders 
4.	Hire "top" people 
5.	Implement training programs 
6.	Add sales staff 
7.	Introduce new product lines 
8.	Begin advertising and sales promotions 
9.	Implement plans for facilities' expansion 
10.	Update standard costs 

If you haven't 
already 
Early 03 

17 

I 
I 
I 
I 
I 
I 
I 
I 
I 
I 
I 
I 
I 
I 

/ 
ITR· 
Management Objectives: 
18 
Phase Early B - Gr()wth~ 
I. Accelerate training 
2.	Continue to build inventory 
3.	Increase prices 
4.	Find the answers to "what next" 
2003 - 2004 
5.	Consider outside manufacturing sources if internal resources 
becoming tight 
6.	Check the process flow for possible future bottlenecks 
7.	Open distribution centers 
8.	Use improved cash flow for corporate governance. 
ITR 
Management Objectives: 
Phase Late B Early C - Prosperity:. 
1. Stay in stock 
20041 and again 
in 2008 
2. Penetrate new OEM accounts 
3.	Develop plan for lower activity in traditional, mature markets 
4.	Begin missionary efforts into new markets 
5.	Consider taking on subcontract work if the backside of the cycle looks 
recessionary 
6.	Freeze all expansion plans 
7.	Spin off undesirable operations 
8.	Stay realistic - beware linear budgets 
9.	Consider selling the business in a climate of maximum "goodwill" 
19 

I 
20 
I 
ITR 
Management Objectives: 

I 

/ 
Phase Late C - \Varning: 
1.	Begin work force reductions 
2.	Reduce advertising 
3.	Cut training 
4.	Weed out inferior products 
5.	Reduce inventories 
2005 
6.	Avoid long-term purchase commitments - late in the price cycle 
7.	Set budget reduction goals by dept. 
8.	Encourage distributors to decrease inventory 
9.	Concentrate on cash and the balance sheet 
10.	De-Emphasize commodity products/services in anticipation of 
diminishing margins 
ITR 
Management Objectives: 
21 
I 
I 
I 
I 
I 
I 
Phase Early D - Recession: 
1. Continue force reduction 
2.	Reduce virtually all advertising 
3.	Continue to avoid long-term purchase commitments 
4.	Review all lease agreements 
5.	Increase the requirements for justification of capital equipment 
6.	Eliminate all overtime 
7. Reduce overhead labor 
8.	Combine departments with like capabilities and reduce management 
9.	Select targets of opportunity where price will get the business 
I 
I 

ITR 	US Industrial Production to Paper & Products Production 
12112 Rates-of-Change 
Index 		Production 	
108 		108 	
106 		106 	
104 		104 	
102 		102 	
100 		100 	
			
98 		98 	
	-USIP 		
96 		96 	
	- Paper Production 		

w 																W 
	'90 	'91 	'92 	'93 	'94 	'95 	'96 	'97 	'98 	'99 	'00 	'01 	'02 	'03 	'04 
22 
/ 
ITR 
US Industrial Production to Printing Production Index 
12112 Rates-of-Change 
115 
110 
shapeType75fBehindDocument1pWrapPolygonVertices8;8;(21499,0);(0,0);(0,20858);(20717,20858);(20717,21493);(21238,21493);(21238,11390);(21499,11390)posrelh0posrelv0pib
23 
105 
100 
95 
90 
-Index 
-Printing 

1970 
1975 
1980 
1985 
1990 
1995 
2000 
2005 
115 

/ 
ITR 
US Industrial Production Index to Foods Production 
12112 Rates-of-Change 
i 
i 
24 
I 
Index 
120 
Production 
108 
I 
106 

115 

-USIP 
90+- 	"L- 	-. 	-~F~OrOO~P~rOO~~~li~on~------_,r_------._------._~96 
1970 
1975 
1980 
1985 
1990 
1995 
2000 
2005 
I 

ITR 
US Industrial Production to Heavy Duty Truck Production 
12112 Rates-of-Change 
Trucks 														Index 	
200 															115 	
180 															112 	
160 															109 	
140 															106 	
120 															103 	
100 															100 	
																
80 															97 	
60 															94 	
40 															91 	
'80 	'82 	'84 	'86 	'88 	'90 	'92 	'94 	'96 	'98 	'00 	'02 	'04 		
2S 
I 
I 
I 
I 
I 
I 
I 
I 

ITR US Industrial Production to Fabricated Metal Products Production 
12/12 Rates-of-Change 
115 					
110 					
105 					
100 					
					
95 					
90 					
85 					
80 					
1970 	1975 	1980 	
/ 					
-USIP 
		115 	
		110 	
		105 	
		100 	
		95 	
		90 	
		85 	
		80 	
2000 	2005 	
26 

27 
-Fabricated Metals 
76 
1990 
1995 
1985 
ITR 
US Industrial Production to Plastics Materials Production 
12/12 Rates-of-Change 
Production 
148 
Index 						
120 						
115 						
110 						
105 						
100 						
95 						
90 						
85 						
1970 		1975 	1980 	
shapeType75fBehindDocument1pWrapPolygonVertices8;6;(21499,0);(20653,0);(20653,188);(0,188);(0,21494);(21499,21494)posrelh0posrelv0pib
-USIP 
-Production 
+---'---'---'---r--'r--'---,---'---'---r---,---,---,--~64 
1990 
1985 
1995 
2000 
2005 

28 
I 
ITR 
US Industrial Production to Equipment & Software Investment 
12112 Rates-of-Change 
Investment 
124 

I 
I 
I 
i 
88 
i 
/ 
I 
Index 
116 
92 
-USiP 
-imestment 
88+,--~--~---,----,---,---,---.---.---.---,---~--~---+82 
	'80 	'82 	'84 	'86 	'88 	'90 	'92 	'94 	'96 	'98 	'00 	'02 	'04 
Index 		
120 			
115 			
110 			
105 			
100 			
95 			
90 			
85 			
1970 	1975 	
	Production 	
		140 	
		130 	
		120 	
		110 	
		100 	
		90 	
		80 	
		70 	
2000 	2005 	
29 
ITR US Industrial Production to Communication Equipment Production 
12/12 Rates-of-Change 
shapeType75fBehindDocument1pWrapPolygonVertices8;8;(21497,0);(0,0);(0,20743);(4253,20743);(4253,19091);(20397,19091);(20397,21495);(21497,21495)posrelh0posrelv0pib
- Production 
1980 
1985 
1990 
1995 

/ 
ITR 
US Industrial Production to Hospital Expenditures 
12/12 Rates-of-Change 
Index 
112 
Expenditures 
120 
109 
shapeType75fBehindDocument1pWrapPolygonVertices8;18;(20700,0);(1043,0);(1043,3378);(1410,3378);(1410,12802);(0,12802);(0,14733);(982,14733);(982,21496);(4175,21496);(4175,16784);(17689,16784);(17689,20049);(19103,20049);(19103,14733);(21500,14733);(21500,13890);(20700,13890)posrelh0posrelv0pib
106 . 
103 
97 
--us IP 
-Hospital Expenditures 
94+-,-,-,--,-,-,-,-,-,,-,-,-,-,-,-,--,-,-,-,-,-,,-,-,-,-+90 
'80 '82 
'84 '86 '88 '90 '92 '94 '96 '98 '00 '02 '04 
ITR 												31 	
			Nondefense Capital Goods New Orders 				
					Billions of $ 							
R-O-C 										MMT 	
120 	1/12 					Sep '00 					1450 	
											105.2 		
											102.7 		
100 												1250 	
80 												1050 	
									Mar'02 				
							Dee '00 					
60 												850 	
											$663.4 		
40 												650 	
20 												450 	
	'94 	'95 	'96 	'97 	'98 	'99 	'00 	'01 	'02 	'03 	'04 		

30 
115 
110 
105 
9~ 

ITR 

Company M to Durable Goods New Orders (W/O Aircraft) 
12112 Rates-of-Change 

32 

shapeType75fBehindDocument1pWrapPolygonVertices8;10;(21498,0);(19326,0);(19326,1019);(0,1019);(0,14717);(13678,14717);(13678,21496);(20193,21496);(20193,8825);(21498,8825)posrelh0posrelv0pib
- DURABLE GOODS 
Sales 	
220 		
200 		
180 		
160 		
140 		
120 		
100 		
80 		
60 		
40 		
20 		
0 		
	'97 	
/ 		

- Sales 

'98 

'99 

'00 

'01 

			Goods 	
				118 	
				115 	
				112 	
				109 	
				106 	
				103 	
				100 	
				97 	
				94 	
				91 	
				88 	
				85 	
'02 			'03 		

ITR 

Durable Goods New Orders to Durable Goods Inventories 
Rates-of-Change 

33 

shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21496,0);(0,0);(0,21498);(21496,21498)posrelh0posrelv0pib
-Orders 12/12 
-Inventories 1112 

--- 

120 							
115 							
110 							
105 							
100 							
95 							
90 							
85 							
80 							
75 							
1960 	1965 	1970 		1975 	

1980 

1985 

1990 

1995 

		120 	
		115 	
		110 	
		105 	
		100 	
		95 	
		90 	
		85 	
		80 	
		75 	
2000 	2005 	

JTR 
Short-Term Interest Rates 
R-O-C 
205 
shapeType75fBehindDocument1pWrapPolygonVertices8;16;(21498,0);(0,0);(0,7562);(61,7562);(61,19375);(862,19375);(862,18974);(12665,18974);(12665,21497);(18843,21497);(18843,11543);(20880,11543);(20880,19375);(21189,19375);(21189,10479);(21498,10479)posrelh0posrelv0pib

1.20 
-75 -t--,---,-----,----,-----,-----,---,---,---,--.---,---r------r----,--+ 0 

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '~O '01 '02 '03 '04 
Isource: ITR's EcoTreudsl 
/ 

ITR 
EASIER SAID THAN KNOWN 
"Greenspan hints at interest rate cut" - Nashville Banner 
"Change unlikely in interest rates: Greenspan dampens speculation on cut" - 
Baltimore Sun 
"Cautious Greenspan hints at a cut in rates" - Newark Star Ledger 
"Greenspan: little risk of recession" - USA Today 
"Greenspan: Uncertainty abounds" - NH Union Leader 
"If I say something which you understand fully in this regard", he told a Senator, "I 
probably made a mistake" - Associated Press 
34 
MMA 
24 
35 

/ 
ITR 
Interest Rate Comparison 

1995 
2000 
	20 	
	18 	
	16 	
	14 	
	12 	
	10 	
	8 	
	6 	
	4 	
	2 	
	0 	
2005 	
18+-------------~-~-----------------------------------+ 
16+--------------.~H_--------------------------------_+ 

10+---~.~----~~~~~H---~'~_r--------------------_+ 
8~---_+~hr~~--------~~~~~~--~~~~L-~----_+ 

0+'-,,-,,-,,-,,-,,-,,,-,,-,,-,,-,,-,,-,,-,,,,,,-,,-,,_+ 
1970 
1975 
1980 
1985 
1990 
-PRIME RATE 
-FUND RATE 
ITR 
Federal Funds Target Rate to the US Economy 
FFUNDS 
200 
NEW ORDERS 
140 
175 
shapeType75fBehindDocument1pWrapPolygonVertices8;16;(20639,0);(857,0);(857,10351);(0,10351);(0,11463);(857,11463);(857,20703);(4850,20703);(4850,17352);(13082,17352);(13082,21500);(20639,21500);(20639,11463);(21500,11463);(21500,10351);(20639,10351)posrelh0posrelv0pib
150 
125 
75 
50 
-FFUNDS 
-NEW ORDERS 
25 +-",-,-",-"",---,--",--,----r-r,--,----",-"r-r,-""-,--,--,,,,+ 70 
1970 
2000 
2005 
1975 
1980 
1985 
1990 
1995 
36 
37 
130 
120 
110 
90 
80 

ITR 
US Industrial Production to Corporate Bond Prices 
12112 Rates-of-Change 
Index 
115 
Bonds 
130 

--Corporate Bonds 
85 +--,-----,-----,-----,---,--,--,--,--,--.,--.,-------,----,---,--'- 70 
1970 
1975 
1980 
1985 
1990 
1995 
2000 
2005 
[source: ITR's Ecoirendsl 
/ 
M2 Money Supply 
Trillions of 82$ 
ITR 		
R-O-C 		
110 			
108 			
106 			
104 			
102 			
100 			
98 			
96 			
94 			
92 			
90 			
	'93 	'94 	
									MMA 	
										4.2 	
										4.0 	
									105.9 	3.8 	
									104.8 		
										3.6 	
										3.4 	
									$3.226 		
										3.2 	
										3.0 	
										2.8 	
											
										2.6 	
										2.4 	
						---,- 			22 	
'95 	'96 	'97 	'98 	'99 	'00 	'01 	'02 	'03 	'04 		
shapeType75fBehindDocument1pWrapPolygonVertices8;6;(21497,0);(0,0);(0,21496);(16704,21496);(16704,14494);(21497,14494)posrelh0posrelv0pib
[source: ITR's EcoTrends[ 
38 
39 

	ITR 												40 	
					Company M to M2 Money Supply 					
						12/12 Rates-of-Change 					
	240 												114 	
	220 					n 				112 	
	200 									110 	
	180 									108 	
	160 												106 	
	140 												104 	
	120 												102 	
	100 												100 	
														
	80 												98 	
	60 												96 	
	40 				-Sales 							94 	
	20 				-Money 							92 	
	0 												90 	
			'97 		'98 	'99 	'00 	'01 	'02 		'03 		
/ 														
ITR 				
R-O-C 			
104 				
103 				
102 				
101 				
100 				
99 				
98 				
97 				
96 				
95 				
94 				
93 				
	'90 	'91 	
U.S. Composite Leading Indicator 
1996 = 100 
MMA 
145 
1112 
shapeType75fBehindDocument1pWrapPolygonVertices8;12;(18989,0);(6306,0);(6306,1864);(0,1864);(0,21496);(18409,21496);(18409,8201);(21497,8201);(21497,7327);(18858,7327);(18858,2233);(18989,2233)posrelh0posrelv0pib
140 
102.2 135 
100.8 
120 
115 
11\.3 110 
105 
100 
95 
+---,---,---,---,---,---,---,---,---,--,---,---,---,---,---+ 90 
'92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 
Isource: ITR's ECOTrendsl 
41 
130 

ITR 
Purchasing Managers Index 
ISM 
42 
shapeType75fBehindDocument1pWrapPolygonVertices8;8;(864,0);(0,0);(0,21495);(21498,21495);(21498,0);(20691,0);(20691,312);(864,312)posrelh0posrelv0pib
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 
ISource: ITR's EcoTrendsl 
ITR 											43 	
		Company M 	to Purchasing Managers Index 					
				Rates-of-Change 							
240 											135 		
220 											130 		
200 											125 		
180 											120 		
160 											115 	\, 	
140 											110 		
120 											105 		
100 											100 		
80 											95 		
60 											90 		
40 											85 		
20 							U 			80 		
0 											75 		
	'97 		'98 	'99 	'00 	'01 	'02 		'03 			

/ 

/ 

	44 	
lTR 		
ITR Leading Indicator 	
120 	120 	
115 	115 	
110 	110 	
105 	105 	
100 	100 	
95 	95 	
90 	90 	

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 

Isource: ITR's EcoTrcDdsl 

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shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21500,0);(0,0);(0,21489);(21500,21489)posrelh0posrelv0pib

ITR 

R-O-C 
145 

130 

115 

85 

70 

55 

40 

25 

Stock Prices Index 
Index, 1941 - 43 = 10 

Nay '99 

Oct '00 

	45 	
	MMA 	
	3800 	
	3400 	
115.2 		
	3000 	
	2600 	
88.6 	2200 	
	1800 	
	1400 	
929.0 	1000 	
	600 	

10+---,--,---,---,--,,--,---,--,,--,---,---.--,---,---,--+200 

'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 

ISource:ITR's EcoTrendsl 

ITR 
Stock Prices Index 
12/12 Rate-of-Change 
46 
150 
150 
shapeType75fBehindDocument1pWrapPolygonVertices8;16;(20612,0);(885,0);(885,12852);(0,12852);(0,13611);(885,13611);(885,20741);(251,20741);(251,21495);(21246,21495);(21246,20741);(20612,20741);(20612,13611);(21497,13611);(21497,12852);(20612,12852)posrelh0posrelv0pib
140 
140 
130 
130 
120 
120 
110 
110 
90 
90 
80 
80 
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 
Isource: ITR's EcoTrendsl 
/ 
ITR 					Stock Prices Index to Total Retail Sales 			47 	
								12/12 Rates-of-Change 						
Stocks 															Retail Sales 	
150 																	110 	
140 																	108 	
130 																	106 	
120 																	104 	
110 																	102 	
100 																	100 	
																		
90 																	98 	
												-Stocks 					
80 																	96 	
												- Retail Sales 				
70 																	94 	
'80 	'82 	'84 	'86 	'88 	'90 	'92 	'94 	'96 	'98 	'00 	'02 	'04 		

		48 	
Oct '00 	1600 	
		1400 	
		1200 	
		1000 	
		800 	
		600 	
		400 	
		200 	
ITR 
Stock Prices Index 
S&P 500, 1941-43 = 10 
1600 
-3MMA 
-12MMA 
1975 1980 
1985 1990 1995 2000 2005 
Isource: ITR's EcoTrendsl 
/ 
1200 
Bonds? 
shapeType75fBehindDocument1pWrapPolygonVertices8;6;(21497,0);(12880,0);(12880,16777);(0,16777);(0,21496);(21497,21496)posrelh0posrelv0pib
1400 
Five consecutive years double digit growth 
Individual Stocks 
1000 
Real Estate 
800 
600 
400 
200 
O+'~"-'''''''''''''-'''''TT""-,,,,,,,,,,,,,-,rr+O 
1960 1965 1970 
ITR 										49 	
	New Homes Sales Median Price to Stock Prices Index 		
					Data Trends 						
Homes 								Prices 	
220 										1500 	
200 										1350 	
180 	--New Homes 							1200 	
160 	-Stock Prices Index 							1050 	
140 										900 	
120 										750 	
100 										600 	
80 										450 	
60 										300 	
40 										150 	
20 										0 	
1965 	1970 	1975 	1980 	1985 	1990 	1995 	2000 	2005 	

	Sales 		
		2.6 		
		2.4 		
		22 		
		2.0 	\. 	
		1.8 		
		1.6 		
		1.4 		
		1.2 		
	-,--- 	1.0 		
'02 	'04 			
lTR 
Retail Sales Excluding Automobiles 
	50 	
	MMT 	
	2.8 	
	2.6 	
	2.4 	
104.2 		
103.3 	2.2 	
	2.0 	
	1.8 	
1.630 	1.6 	
	1.4 	
	1.2 	
R-O-C 
108 
Feb '00 
shapeType75fBehindDocument1pWrapPolygonVertices8;8;(19769,0);(0,0);(0,21495);(19449,21495);(19449,11733);(21499,11733);(21499,10813);(19769,10813)posrelh0posrelv0pib
Dee '01 
92 +--.--,-----.----,--,---.--,---,---,---,---.--.------.----,--+ 0.8 
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 
Isource:ITR's EcoTrendsl 
/ 
ITR 
Consumer Expectations and Retail Sales 
Expectations 
120 
110 
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100 
90 
80 
70 
60 
--EXPECTATIONS 
-- RETAIL SALES 
50 
40+--.---.----,---.--.-.--.--.--.-----.--.---.---.--,-- 
'92 
'90 
'94 
'96 
'98 
'00 
1.0 
51 

shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21498,0);(0,0);(0,21500);(21498,21500)posrelh0posrelv0pib

ITR 

Housing Starts (1/12) 

52 

1oo-------------------------------------------- 100 
75+--+------------------------------------------------+75 

-50+-----1-----r----+----+---~----r_----+_----+_----~-50 

-New York 
- Mid Atlantic 
/ 

1996 

1997 

1998 
-U.S. 

1999 

2000 

2001 

2002 

2003 

2004 

shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21498,0);(0,0);(0,21436);(21498,21436)posrelh0posrelv0pib
ITR 							53 	
				Housing Starts 			
				Millions of Units 			
R-O-C 							MMT 	
145 							3.3 	
130 							3.0 	
115 					1l1.O 	2.7 	
					107.2 		
100 							2.4 	
85 							2.1 	
70 					1.764 	1.8 	
55 							1.5 	
								
40 							1.2 	
25 							0.9 	
10 +---,------,----,---,--,--,----,-------,--,----.--,--.------.-----.--+ 0.6 
'90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 
Isource: ITR's EcoTrendsl 

ITR 
Housing Starts to Corporate Bond Prices 
12112 Rates-of-Change 
54 

Bonds 
140 
Housing 
180 
160 
130 
60 
shapeType75fBehindDocument1pWrapPolygonVertices8;8;(21498,0);(0,0);(0,20785);(11772,20785);(11772,21498);(14002,21498);(14002,18832);(21498,18832)posrelh0posrelv0pib
80 
-Housing 
70+--.--.--.--.--.--.--.--,,-,,--,--,--,--,--,--,--,--.--,~40 
1960 
1965 
1970 
1975 
1980 
1985 
1990 
1995 
2000 
2005 
55 
Isource: ITR's .ECOTrendsl 
130 
120 
110 
90 
80 
70 
60 
/ 
ITR 
Housing Starts to Appliance Market Production 
12/12 Rates-of-Change 
Starts 
120 

Production 
140 
shapeType75fBehindDocument1pWrapPolygonVertices8;18;(20690,0);(805,0);(805,8503);(0,8503);(0,9327);(744,9327);(744,20673);(184,20673);(184,21497);(21250,21497);(21250,20673);(9443,20673);(9443,11690);(20690,11690);(20690,9327);(21499,9327);(21499,8503);(20690,8503)posrelh0posrelv0pib
115 
110 
105 
95 
90 
85 
-Starts 
-Appliance Production 
80 
'90 '91 	'92 	'93 	'94 '95 '96 	'97 	'98 	'99 	'00 '01 	'02 '03 	'04 

ITR 																56 	
						Construction Markets 							
						12112 Rates-of-Change 							
130 																130 	
120 																120 	
			i"\ 														
			.. , 														
110 		.: .. 										:~\ 			110 	
													. 				
100 																100 	
																	
90 																90 	
80 							-- Office Buildings 							80 	
							-- Public Construction 							
70 							- - - - Private Educational Buildings 					70 	
60 																60 	
	'90 	'91 	'92 	'93 	'94 	'95 	'96 	'97 	'98 	'99 	'00 	'01 	'02 	'03 	'04 		
/ 																	

ITR 
FEDERAL BUDGET ANALYSIS 
SURPLUS 
300 
PERCENT 
30 
200 
100 
shapeType75fBehindDocument1pWrapPolygonVertices8;8;(21497,0);(0,0);(0,7166);(13590,7166);(13590,21500);(19536,21500);(19536,4095);(21497,4095)posrelh0posrelv0pib
-100 
-SURPLUS - BILS. OF $ 
-200 
-PERCENT OF GDP 
·300+--+--~~-1--+--+--~-r-1--+--+--~-r~--+--+--+--r~~+--+--+-30 
1900 	1910 
1920 
1930 	1940 
1950 
1960 	1970 
1980 	1990 	2000 

57 
20 
10 
-10 
·20 

TTR 													58 	
			Annual Federal Deficit History 					
					Billions of Dollars 							
320 													320 	
280 													280 	
240 													240 	
200 													200 	
160 													160 	
120 													120 	
80 													80 	
40 													40 	
							Civil War 						
0 													0 	
-40 - 													-40 	
	1800 	1810 	1820 	1830 	1840 	1850 	1860 	1870 	1880 	1890 	1900 	1910 	
/ 
ITR Fed. Government Cash Account to US Industrial Production Index 
Data Trends 
Index 
Cash 
480 
165 
shapeType75fBehindDocument1pWrapPolygonVertices8;6;(21497,0);(9632,0);(9632,14958);(0,14958);(0,21495);(21497,21495)posrelh0posrelv0pib
150 
135 
--Index - Annual Averaqe 
120 
--Cash - Bils. Of $ Monthly 
105 
90 
75 
60 
45 
30 
15 
o 
-15 +----.--,--.-----,----,----.-----,--,----,---,--,----.-~~,_-_,_--_,_-_, -240 
	1960 	1965 	1970 	1975 	1980 	1985 	1990 	1995 	2000 	2005 
59 

420 
360 
300 
240 
180 
120 
60 
o 
-60 
-120 
-180 

ITR 	National Defense Expenditures to Defense Capital Goods N.O. 
12/12 Rates-of Change 
Expe nditures 		
120 			
116 			
112 			
108 			
104 			
100 			
96 			
92 			
88 			
1970 	1975 	
shapeType75fBehindDocument1pWrapPolygonVertices8;10;(20711,0);(0,0);(0,21496);(2629,21496);(2629,17439);(20711,17439);(20711,11271);(21498,11271);(21498,10041);(20711,10041)posrelh0posrelv0pib
- Expenditures 
-Orders 

1980 
1985 
1990 
1995 
2000 
2005 
/ 
shapeType75fBehindDocument1pWrapPolygonVertices8;14;(7893,0);(2187,0);(2187,6564);(0,6564);(0,21497);(21497,21497);(21497,7144);(17781,7144);(17781,7788);(7828,7788);(7828,7271);(7430,7271);(7430,2122);(7893,2122)posrelh0posrelv0pib
32.5 
~.~ 
~ ~i1S J,}us 1, Current Prices 
~ f percft off'0r1d GDP 
2\ 2.0 1.5 1.5 
ITR 
Orders 
175 
60 
160 
145 
130 
115 
85 
70 
61 

ITR 
/ 
ITR 

Things You Ought To Know About China 
Banking Crisis 
Under-funded Welfare Liabilities 
Incredible Pension Liabilities 
Deficit - Public Debt 
Negative Demographics 
High Unemployment - civil unrest 
7 ofthe 10 most polluted cities 
Environmental laws selectively applied 
Public Debt as a percent of GDP for 2002 
	1 ••• -1 	_ --- ------ ---. --·----l
I 
oUS 
	I 	I 
CD France 
I 
• Germany ••••••••• 
I 
II Canada 
I 

62 
63 

CD Italy 
o China 
OJapan 

('0':~':?" ".(',., .. ···';::;·\iif~i " .i~-" 	.'J5·:;jJ
	I 	I 
I 
1 

I 

I 

o 

20 

40 

60 

80 

100 

120 

140 

160 

shapeType75fBehindDocument1pWrapPolygonVertices8;4;(21479,0);(0,0);(0,21500);(21479,21500)posrelh0posrelv0pib
I 

ITR 
lTR 

Needed:. 
True Commercial Banking 
Independent Judiciary 
True Corporate Profitability 
Ba~kruptcy 
The WTO and YOU 
Exports by Nation 
Billions of US Dollars 
Source: IMFIWPO 

64 
6S 

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		$974.1 		
1000 						
900 						
800 						
700 						
600 						
500 						
400 						
300 						
200 						
100 						
0 						
	Q US 	II Germany 	o Japan 	

	o UK II France 	[J China II Italy 	0 Canada