1. The Fed Challenge Rony Byas, Tina Byrne, Tashdid Hasan, Changhyon Hwang, Vincent Lo November 10, 2008

2. Source : Federal Reserve Bank of New York GDP Contracts in the Third Quarter

3. Consumer Confidence Plummets in October Source : The Conference Board

4. Consumer Spending Continues to Decrease Monthly and YoY % Change Real Disposable Income Personal Consumption Expenditures RDI 0.1% PCE -0.4% 3 rd Quarter Source : Federal Reserve Bank of St. Louis Shaded areas indicate US recessions

5. Source : Federal Reserve Bank of St. Louis Unemployment Rate Continues to Rise October 6.5 Shaded areas indicate US recessions

6. Nonfarm Payroll Employment Continues to Decline Monthly and YoY % Change Source : Federal Reserve Bank of St. Louis Monthly Change (Left Scale) % Change Year Over Year (Right Scale) Shaded areas indicate US recessions October -240,000

7. ISM Manufacturing Index Experiences a Sharp Plunge Source : Federal Reserve Bank of St. Louis Shaded areas indicate US recessions October 38.9

8. Housing Starts on a Steep Decline Monthly Change (Thousands of Units) Source : U.S. Census Bureau 544K 817K

9. Housing Prices Have Been on a Gradual Decline Case-Shiller 10 and 20 Composite YoY % Source : Standard and Poor’s 17.7% 16.6%

10. U.S. Home Foreclosure Filings on the Rise Monthly Change Source : RealtyTrac September 266,000

11. Housing Problems Concentrated in Key Areas of the Country Source : First American CoreLogic

12. Difference Between 3-Month LIBOR Rate and 3-Month Treasury Yield Source : Bloomberg Credit crisis begins Lehman Brothers files for bankruptcy TARP passed

13. Commercial Paper Market in Distress Source : The Federal Reserve Board Risk premiums have been elevated.... and issuance of new commercial paper has declined.

14. Numerous Programs Have Been Implemented to Restore Economic Stability Source : Credit Suisse

15. Inflation Starting to Moderate Core CPI and Core PCE YoY% Change Source : Federal Reserve Bank of St. Louis Shaded areas indicate US recessions 2.4% 2.5% Core PCE Core CPI October

16. Inflation Expectations Have Been Easing 10-Year TIPS Spread Source : The Federal Reserve Board 97 bps