first investment group March 26, Economic Update Steve Frantz Senior Managing Director Chief Investment Officer

2 Post WWII Recessions Typically Last 10 Months Average back to 1945 = 10 months 2009 = 15 months Source: National Bureau of Economic Research, Merrill Lynch

3 Recessions Last 18 Months On Average Back to 1855 Average back to 1855 = 18 months Source: National Bureau of Economic Research, Merrill Lynch

4 Stock Market Bottoms 60-70% Of The Way Through A Recession *Average of , , , , and 2001 recessions Shaded area represents recession period Source: National Bureau of Economic Research, Merrill Lynch S&P 500 indexed to 100 at start of recession* Start of recession End of recession

5 Why So Severe? Source: BEA, JPMorgan Asset Management

6 What Has Been The Primary Driver? Source: Census Bureau, FactSet, EcoWin, JPMorgan Asset Management Source: (top chart) Census Bureau, FactSet, EcoWin, JPMorgan Asset Management Source: (bottom chart) Census Bureau, Federal Reserve Board, BEA, JPMorgan Asset Management

7 Tightest Mortgage Standards On Record *In the latest survey, the residential mortgages lending standard was separated into 3 questions: prime (which came in at 74.0%), nontraditional (at 84.4%), and subprime (at 85.7%). Total is weighted sum of lending policy and demand responses for Prime, Nontraditional and Subprime loans, combined according to the share of banks reporting each characteristic. Source: Mortgage Bankers Associations, Merrill Lynch Fed Sr Loan Officer Survey: Bank tightening standards for mortgages to individuals (percent) Tighter Tighter lending standards Tightest lending standards on record! Easier Easiest lending standards

8 Omaha Housing Market Avg. List Price Residential Closed $172,147$176,412$178,324$180,570$166,738$164,251 Avg. Sales Price Residential Closed $166,822$172,251$178,578$177,526$165,929$163,235 Avg. Market Time Residential Closed Avg. Sales Closed as % of Avg. List Price 97%98%100%98%100%99% Total Volume$1.59B$1.93B$1.79B$1.95B$1.74B$1.60B Source: Omaha Board of Realtors, MLS Data

9 US Debt-To-Income Ration Rose As Much In The Past 7 Years As It Did In The Previous 39 Years Source: Mortgage Bankers Associations, Merrill Lynch Household Debt-to-Income Ratio (percent) = 63% 2001 = 101% Peak = 139%

10 National Debt as a Percent of GDP Source: zFacts.com % 80% 70% 60% 50% 40% 30% 20% 10% 0% The National Debt as a Percent of Gross Domestic Product (Data from whitehouse.gov) 2008 OMB Budget Prediction Truman Ike Kennedy LBJ Nixon Ford Bush Reagan Clinton W. Bush zFacts.com

Forecast  1Q GDP Worst for Economy  Modestly Positive GDP by 4Q  Unemployment Peaks 3Q above 8%  Equities – End Year Higher  Treasuries – End Year Lower  Oil Prices Higher by End of Year  Housing Market Bottoms – 2Q/3Q 2009 First Investment Group investment products are: *Not FDIC insured *May go down in value *Not financial institution guaranteed *Not a deposit *Not insured by any federal government agency.

first investment group March 26, Economic Update Steve Frantz Senior Managing Director Chief Investment Officer