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10 Scary Numbers from Q4 2012

There were plenty of disconcerting statistics during the last three months

Jeremy Glaser 8 January, 2013 | 6:00AM

The fourth quarter of 2012 was dominated by several big news items such as the US election and the fiscal cliff. Despite some bumpiness along the way, most global markets were solidly higher for the year. But as implied by the volatility in the market, there were still plenty of things to draw investor concerns. Every quarter, I take a look at some scary numbers that jumped out at me. Here are some notable ones for the most recent three-month period.

1.01: Price/fair value ratio for all 200+ UK and European stocks rated by Morningstar's analysts. Stocks as a whole are fully valued, meaning investors aren't getting a margin of safety to protect themselves if anything goes wrong. Not a reassuring thought. 

0.2%: Estimate for the eurozone's growth rate in 2013 according to an October report by the IMF. This is already down from July's estimate of 0.7%. This could very well move lower as European economies continue to struggle. 

5%Yield on Spanish 10-year bonds. Spanish bonds are well off their euro-crisis highs following this summer's European Central Bank pledge to keep the eurozone together, but rates are still disconcertingly high as Spain's underlying competitiveness issues remain unresolved. 

5.6%: The International Monetary Fund's estimate for emerging-markets gross domestic product growth in 2013, slightly better than the 2012 level but still well below 2010 (7.4%) and 2011 (6.2%) levels. 

$1.5: Size of fine (in billions) UBS (UBSN) handed over to regulators to settle charges that the bank manipulated LIBOR, a key interest rate. This was the latest in a series of run-ins global banks had with regulators in 2012. 

-11%: Drop in sales of Microsoft (MSFT)-powered laptops during the holidays according to market research firm NPD Group. Many tech firms had hoped that the launch of Windows 8 would help reignite interest in PCs, but so far the response has been muted. 

$8.8: Billions of dollars in write-offs that Hewlett-Packard (HPQ) took in November as a result of its acquisition of Autonomy in 2011. The failure of this deal is another reminder that empire-building, transformational deals rarely turn out well in the end.

13: Days since the US government hit the debt ceiling according to the Treasury Department. The Treasury is undertaking some extraordinary measures to create some extra room under the ceiling, but those measures could run dry as soon as February.

0: Approximate chance that the debt-ceiling debate will get resolved without extreme partisan bickering. 

$2.9Size (in trillions) of the Fed's balance sheet, up from $869 billion in August 2007. This incredibly accommodative monetary policy has helped keep the US economy growing. But reversing this trend and shrinking the balance sheet without cutting off the recovery or stoking inflation will be a hard balancing act.

The original version of this article was published on Morningstar.com, a sister site to Morningstar.co.uk.

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Securities Mentioned in Article
Security NamePriceChange (%)Morningstar
Rating
Hewlett-Packard Co31.93 USD-1.72
Microsoft Corporation40.01 USD-0.97
UBS AG17.87 CHF2.11
About Author

Jeremy Glaser  is markets editor for Morningstar.com, the sister site of Morningstar.co.uk.