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Wells Fargo Economics Navigating the Aftermath Scott Anderson, Ph.D. Vice President | Senior Economist U.S. Outlook Durango, Colorado Friday, January 8, 2010 © 2009 Wells Fargo Bank, N.A. All rights reserved.
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11 The Great Recession of 2008 - 2009
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88 Bank Credit Crisis: Not Out of the Woods Yet
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18 Demand And Supply Factors Limit Credit Growth!
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19 U.S. Growth Resumes in Q3
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25 Housing Market Hits Bottom
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29 The Fed Soothes the Financial Crisis – Focus Shifts to Exit Strategy
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31 Liquidity Almost Back to Normal!
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33 Fed Funds Increases Historically Lag Unemployment Peak Peak Unemployment Rate First Fed Funds Rate Increase Months Lag May-759.0%Apr-7611 Dec-8210.8%May-835 Jun-927.8%Feb-9420 Jul-036.2%Jun-0411 Avg. Lag11.8
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35 Fiscal Stimulus a Major Factor
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37 Worries Grow Over Government Deficits and Debt
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38 Large Downside Risks Remain
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Small Business Current Conditions Revenues weaken further in Q4 Financial situation worsens Cash-flow remains poor Capital spending still weak, cutting slows Employment conditions worsen in Q4 Credit becomes more difficult to obtain
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47 Growth in Year Following End of Recessions Average Increase* Outlook 2010 Real GDP5.8%2.8% Industrial Production9.6%6.4% Housing Starts20.3%36.2% Corporate Profits30.4%18.1% S&P 50014.1%5.2% * Past nine recessions
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