1. Wells Fargo Economics Scott Anderson, Ph.D. Vice President Senior Economist Plunging Into The New Year Durango, CO January 9, 2008

2. U.S. Economy SevereRecession Worst in Post- War Period

10. U.S. Recession Comparisons PCE (%) NRFI (%) UE (PP) Jobs (%) Jobs (#, mil) ’73-’75-1.8%NA+4.1-2.0%-1.6 ’81-’82-0.8%NA+3.3-3.0%-2.7 ’90-’91-1.1%-8.2%+2.3-1.4%-1.5 ’08-’09-3.1%-12.3%+4.4-4.0%-5.5 Source: BEA; BLS; Wells Fargo Economics Peak to trough changes

12. A Credit Crisis In The Making

17. February 22, 2008 Copyright 2008 The New York Times Company Copyright 2008The New York Times Company

19. Banks Tightening Credit Across The Board

20. Senior Loan Officer Survey Credit Crunch

22. Little Appetite for Risk

23. Credit Spreads Near Record Peaks

24. Where Does This Leave the Housing Market?

32. Washington to the Rescue! Stimulus, Stimulus, and More Stimulus

33. Fed Activity Federal Funds Target Rate Source: Federal Reserve

35. Liquidity Improved But Still Abnormal! Despite Fed’s Extensive Credit Facilities and Lending

42. Inflation Turns into Deflation??