1. ECONOMIC PREDICTIONS 2016 John P. Bott, II Parallax Investments, LLC March 12, 2016 Investments L.L.C. 1

2. John P. Bott, II Tri-Star Group a division of Calton & Associates, Inc. President and Chief Investment Officer of Parallax Investments, LLC Parallax Investments, LLC Phone: 713-400-4555 Fax: 713-400-4550 www.parallaxinvestments.us 5718 Westheimer Suite 955 Houston, TX 77057 713-400-4555 2

3. Economic Predictions for 2015 Short Term Interest Rates will rise by 25bp * Dollar continues to Rally * Gold great buy at $1,200 (not so far) Unemployment will hit 5.2% * Stock Market makes new all time highs (DOW) * Crude Oil pushes down to 39/bb * 10 Year Bond trades between 1.5% and 2.5% * U.S. Battles Deflation * Capacity Utilization continues to Rise European economy begins to recover with QE1 If FED begins to roll out of 4.5 T portfolio rates will rise sharply. (n/a) 3

4. Short Term Interest Rates will rise by 25bp Good Call The FED raises rates 25bps on December 16 th. 4

5. Dollar continues to Rally Good Call 5

6. Gold great buy at $1,200 Undecided 6

7. Unemployment will hit 5.2% Good Call 7

8. Stock Market makes new all time highs (DOW) Good Call The DOW hit an all time high of 18,351.36 on 5/19/15. 8

9. Crude Oil pushes down to 39/bb Good Call Hit a low of 34.19 on 12/21/15 9

10. 10 Year Treasury Bond trades between 1.5% and 2.5% Good Call Low of 1.6357 on 01/30/15. High of 2.4985 on 6/11/15 10

11. U.S. Battles Deflation Good Call PCE CPI PPI Export Import 11

12. Capacity Utilization continues to Rise Miss Dropped from 78.6685 to 76.4873 12

13. European economy begins to recover with QE1 Recovery has begun. EU began QE in March 2015 13 Eurozone Unemployment Rate Eurozone CPI Eurozone GDP

14. If FED begins to roll out of 4.5 T portfolio rates will rise sharply. (n/a) N/A The FED did not begin to roll out their portfolio 14 http://www.federalreserve.gov/monetarypolicy/quarterly-report-20150930.htm

15. Historic Prediction Accuracy 2007-2015 53/78 Correct 15 200720082009201020112012201320142015 Stocks will peak in the first quarter & Recession begins before year end Several Major U.S. Financial Institutions will no longer have same name or remain in business Several major U.S. Financial Hedge Funds and Insurance Companies will go out of business 300 banks will be taken over by the FDIC Fed QE2 is an Attempt to Drive Dollar Lower Short Term Interest Rates Will Remain at Zero Short term interest Rates will remain at zero Short Term Interest Rates will rise by 25bp Short Term interest rates fall below 4.25% Short Term interest rates will fall below 3.25% Short Term Interest Rates Will Hit Zero CPI will begin systemic deflation, down 1% for year Short Term Interest Rates Will Remain at Zero Fed QE3 is an Attempt to Drive Dollar Lower Dollar Continues to Push Lower Dollar continues pushing down Dollar continues to Rally Long Term interest rates will hover between 4.50% and 5.00% Long Term Rates low 3.5% and high 5% Long-Term Rates Between 1.5-3% Commodities will be lower than current 280 level at year end Long Term Rates Will Rise to a High of 5% Gold breaks $3,000 per ounce Gold great buy at $1,200 Housing will Continue to Decline Housing will continue to decline, over 25% in price 30 Year Mortgages Will Hit 4% Dow will test or break 7500 lows 30-Year Mortgage Rates Will Hit 5% Unemployment will hit 8%Unemployment will hit 6% Unemployment will hit 5.2% Investors learn about Credit Derivative Obligations Gold will break $1000 per ounce Gold breaks $1,200 per ounce Gold breaks $1,800 per ounce China turns out, not to be the “economy” we think Stock Market Weaker if no QE3 Stock Market Will Push to New All time Highs Stock Market makes new all time highs (DOW) Gold will hit a minimum of $800 per Ounce Oil prices will be flat again this year Oil Prices Will Hit $30 per Barrel Oil prices will hit $30 per barrel Gold breaks $2,000 per ounce Oil Prices Destroying World Economy Crude Oil Prices Will Push Down Crude Oil pushes downCrude Oil pushes down to 39/bb Oil prices will be flat again the year Yen will rally sharply against the U.S. Dollar Unemployment Will Hit 8.5% Unemployment will peak at 12% but bottom at 9.5% first Unemployment will hit 12%Long Term Rates Will Fall to 1.5% to 2% Long Bond Rates Will Trade at 2.0% to 2.5% 10 Year Bond trades between 2.5% and 3.5% 10 Year Bond trades between 1.5% and 2.5% The Yen will rally against the U.S. Dollar Stocks will be 25% lower by the end of the year Mark to Market will no longer be the driving factor in losses Fed will attempt to raise interest rates, withdraw quant ease Stock Market will trade in range 12,000 to 8,000, buy it for the long run at 8,000 Inflation Will Remain Very Low US Battles DeflationU.S. Battles Deflation Japanese Stock Market will Rally Unemployment over 6% by end of year Municipalities Will Begin to Meltdown Commercial Real Estate will bottom in Q3 2010 European Union will begin to disintegrate Economy Gets WorseCapacity Utilization begins to Rise Capacity Utilization continues to Rise Residential Real Estate will begin to fall again Battle Turns To Debt CeilingEuropean unemployment rates continue to rise European economy begins to recover with QE1 If FED begins to roll out of 4.5 T portfolio rates will rise sharply. (n/a)

16. Economic Predictions for 2016 Short Term Interest Rates will rise to 75bp Dollar continues to Rally Gold great buy at $1,000 Unemployment will hit 4.7% Stock Market begins downward move 10 Year Bond trades between 1.5% and 2.5% Russia and Middle East go to war, to raise oil prices Crude Oil temporarily rally’s to $60 CRB bottoms at 163 European economy begins to recover with QE and strong dollar Hillary Clinton will not win the Democratic nomination 16

17. US National Debt As of March 10th th, 2016 US National Debt is $19,108,064,334,131 Based on current US population estimates that is $59,133 of debt per person. 17 http://www.usdebtclock.org/

18. Three Legs of the Economic Recovery 18 Bank Capital Ratios Small Business and Job Creation Mark to Market Modification

19. THE FED BETWEEN A ROCK AND A HARD PLACE 19

20. Reasons To Raise 20

21. Unemployment Rate 4.9% 21

22. Initial Jobless Claims 278,000 22

23. Monthly Gain in Nonfarm Payrolls 242,000 23 0

24. University of Michigan Consumer Sentiment 91.7 24

25. Reasons Not To Raise 25

26. Crude Oil Futures 36.53 26

27. CRB Commodity Index 171.58 27

28. Underemployment Rate (U6) 2009-Present 9.7% 28

29. Underemployment Rate (U6) 1994-Present 9.7% 29

30. Labor Force Participation Rate 62.9% 30 1978 Levels

31. US Auto Sales Total Annualized 17.43M 31

32. US New One Family Houses Sold Annual Total 494,000 32

33. US Existing Home Sales (SAAR) 5.47M 33

34. ISM Prices Paid 38.5 34

35. Export Price Index YoY % Change -5.7% 35 0

36. Import Price Index YoY % Change -6.2% 36 0

37. Producer Price Index YoY % Change -1.2% 37 0

38. Consumer Price Index YoY % Change 1.4% 38 2

39. Personal Consumption Expenditure Core Price Index YoY 1.67% 39 2

40. WHAT I THINK THE FED SHOULD DO 40 The dollar The economy (GDP) Inversion of yield curve They should not raise rates because it will put us at a competitive disadvantage in trade.

41. WHAT I THINK THE FED WILL DO 41 They feel employment is what it should be but it is not The inflation rate is still stable Political pressure They will raise rates twice.

42. Disclaimer The preceding presentation has been prepared for informational purposes only. It does not constitute an offer, recommendation, or solicitation to buy or sell, nor is it an official confirmation of terms. The above is based on information generally available to the public from sources reasonably believed to be reliable. Note that for any collateralized mortgage product, (CMO), the yield and average life will fluctuate depending on the actual rate at which mortgage holders prepay the mortgages underlying the CMO and changes in the current interest rates. Past performance is not indicative of future returns. Parallax investments, LLC makes no representations or warranties, express or implied as to the accuracy or completeness of the above information or that any returns indicated will be achieved. Parallax Investments, LLC is a Registered Investment Advisor, in the State of Texas, and offers securities through Calton & Associates, Inc. member FINRA/SIPC. Parallax Investments, LLC acts in a principal capacity when trading securities in your accounts through Calton & Associates, Inc. Investments L.L.C. 42