1. New America Foundation Tom Gallagher, CFA ISI Group September 23, 2008 Confronting Economic Meltdown

2. ISI Group Source: Federal Reserve Board. Source: ISI. Reluctance by banks to lend is a major headwind for the economy.

3. ISI Group Source: Federal Reserve Board. Reluctance by banks to lend is part of a broader deleveraging of the US economy.

4. ISI Group Public Sector Recapitalizations Of Financial Sector, Developed Countries Source: Reinhart and Rogoff AEA. Financial crises usually require nontraditional policy responses.

5. ISI Group 3-month Treasury bills fell close to zero for 3 days last week…

6. ISI Group … which havent been seen since the 1930s.

7. ISI Group Financial rescues may be necessary but have costs – higher Treasury rates and a weaker dollar.