Brian Fabbri CFA Hawaii Forecast Dinner 2/17/09

Searching for the Bottom
Brian Fabbri
Chief North America
Economist
New York
Time Warner
February, 2009
1
The Battle Between De-leveraging and Stimulative Policy
• 2009 shapes up to be a major tug of war between the forces of asset destruction caused by
financial de-leveraging and massive fiscal and monetary stimulus by the world’s
governments.
• In the past few years leverage blew out of proportion in a total disregard for risk by lenders
and borrowers causing housing bubbles in many countries. The bubble burst leaving the
industry in tatters and sent the rest of the economy into recession.
• Capital destruction in financial institutions and loss of confidence caused international
financial markets to freeze up and drove surviving bank’s into excessively tight lending
conditions.
• The credit crisis will deepen and prolong the present recession into the deepest and longest
recession of the post World War II era.
• Losses in financial and real estate wealth and obstacles to gaining credit terrorized
consumers into saving more and spending less. Businesses responded to plunging sales by
shelving plans for new investments and slashing payrolls.
• State and local governments revenue sources are shrinking causing budget dilemma for
them and greatly restricted spending.
• Falling domestic demand in the US sent import demand spiraling down and globalized the
economic slump.
• Global growth tumbled from more than 5% in 2007 to 3% in 2008 and it is forecast to drop
to 1% in 2009 mainly due to deep recessions in advanced countries and substantial cuts in
the growth rates of emerging markets.
• The dollar should appreciate as economic woes spread through Europe, Japan and other
advanced economies. As these economies weaken, US export growth will contract and
worsen the US recession.
2
• US fiscal and monetary policy makers met the crisis with unprecedented and massive stimulus
programs, other countries were much slower in responding to the threat consequently their
currencies plunged relative to the dollar.
• Government interest rates dropped to abnormally low levels reflecting the flight to quality and credit
premiums widened to punishingly high levels at year-end.
• Credit markets thawed at the beginning of 2009 as private investments in risky assets restarted
and as the Fed began purchasing $600 billion of agency and mortgage backed securities opening
the markets to high grade issuers.
• More fiscal stimulus is expected in 2009 and it will enlarge the Federal deficit to unprecedented
proportions as revenue growth slows, needs increase, and the costs of bailing out the Federal
agencies, purchasing unwanted mortgages, investing in surviving banks, and in distressed
industries propels the deficit toward $2 trillion.
• After lowering the funds rate to 0 to.25bp, the FOMC switched from an interest rate targeting
regime to expanding its balance sheet to fight the threat of deflation with future inflation.
• Inflation is forecast to dive in the next few months to -2% or more reflecting the plunge in
commodity and energy prices, decelerating labor costs associated with soaring unemployment and
a deeper negative output gap.
• Interest rates are forecast to rise in 2009, and credit spreads will widen in the next 12 months as
corporate and household delinquencies and bankruptcies increase.
• Corporate profits should continue declining this year and remain a drag on stocks.
• The recession won’t end until the housing sector returns to balance.
• The dollar will weaken when global investors re-embrace credit risk probably after the US economy
strengthens making other economies look attractive.
• Policy makers should win this tug of war causing global economic growth to accelerate in 2010, but
alas in the advanced countries growth is not expected to reach potential and asset returns will
probably be subdued.
Tight Conditions Continue in Money Markets Starting to Abate
4.0 5.0
4.5
3.5
4.0
3.0
3.5
2.5
3.0
2.0 2.5
TED Spread (RHS)
2.0
1.5
1.5
1.0
1.0
0.5
0.5
3-month LIBOR - OIS spread, %
0.0 0.0
Oct Feb Apr Jun Aug Oct Dec Feb Apr Jun Aug Oct Dec Feb
06 07 08 09
Source: Reuters Ecowin Pro, BNP Paribas
4
CDS:The Cost of Corporate Insurance is off its Peak but historically High
650 1600
Hi Yield (RHS)
600 1500
550 1400
500
1300
450
1200
400 Cross Over
1100
350
1000
300
900
250
200 800
Investment Grade
150 700
100 600
August September October November December January
08 09
5
Credit Expanded Abnormally In this Decade
15.0 1.50
Credit market instruments
(USD trn, RHS)
Personal Consumption (%y/y) 1.25
12.5
1.00
10.0
0.75
7.5
0.50
5.0
0.25
2.5 0.00
Bars mark recessions
0.0 -0.25
50 55 60 65 70 75 80 85 90 95 00 05
6
The Paradox of Prudence: Bank Lending Standards Tightening for
All Lending
90
Commercial Real Estate
80
70
60 Commercial & Industrial
50 Consumer - Credit Cards
40
30
20
10
0
-10 Mortgages
-20
Consumer - Other
-30
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
7
International Investors Slowed Corporate Purchases in 2008
500 2008 YTD AR (Nov)
TSY Bonds & Notes (Green)
Govt Agy Bonds (Blue)
400
Corporate Bonds (Red)
Equities (Black)
300
231bn
200
21bn
100
19bn
16bn
-100
99 00 01 02 03 04 05 06 07 08
8
World GDP Growth Expected to Slow Dramatically
8
Emerging Forecast
7
6
5
World
4
3
2 Advanced
1
0
-1
-2
-3
-4
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
9
Global Industrial Collapse
10.0
70
7.5 Global PMI Output 65

(RHS)
5.0 60
55
2.5
50
0.0 45
OECD IP (% y/y) 40
-2.5
35
-5.0
30
-7.5 25
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
10
Eurozone: GDP & Economic Sentiment
120 GDP (% y/y, RHS)

4.5
115
110 3.5
105
2.5
100
95 1.5
90
0.5
85
80 -0.5
75
-1.5
70 EC Economic Sentiment
65 -2.5
86 88 90 92 94 96 98 00 02 04 06 08
11
Japan: PMI and Industrial Production
60 7.5
PMI
5.0
55
2.5
50
0.0
45 Six-month rate of change in production (3ma, %, RHS) -2.5
-5.0
40
-7.5
35
-10.0
30 -12.5
02 03 04 05 06 07 08
12
OECD Lead Indicators - I
13
Global Trade in Recession
400 175
Frieght Index, Baltic Exchange Dry (BDI) Deflated by WTI (RHS)
350 150
300 125
250 100
200 75
150 50
100 25
Total Trade (USD bn)
50 0
84 86 88 90 92 94 96 98 00 02 04 06 08
14
US Mired in Longest and Deepest Recession
since Post World War II
15
The ISM indexes are Now in Recession Territory
80
75
70
65 Non-manufacturing ISM
60
55
50
45
40
35
Manufacturing ISM
30
25
50 55 60 65 70 75 80 85 90 95 00 05
16
The Beige Book Weakness Indicator Implies GDP Growth will
Plunge
9 -20
8 Forecast -10
7 GDP (% y/y) 0
6 10
5 20
30
4
40
3
50
2
60
1
70
0 80
-1 90
-2 100
Bars mark recession Beige Book Number of "Weak"
-3 Words (Inverted, RHS) 110
-4 120
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
17
Business Investment Turns Off When Profits Slump
12.0 Business Investment in Equipment & Software (% y/y, RHS) 25
20
11.0
15
10.0
10
9.0 5
8.0 0
-5
7.0
-10
6.0
-15
Corporate Profits as % of GDP (%)
5.0 -20
50 55 60 65 70 75 80 85 90 95 00 05
18
Small Businesses Confidence and Investment Plans Plunging
42.5
NFIB capex expectations
40.0
37.5
35.0
32.5
30.0
27.5
25.0
22.5
20.0 Bars mark recession
17.5
15.0
86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
19
Business Investment in Structures (% y/y)
-30 Bars Mark Recession Business Investment in 15

Easier -20 Structures (% y/y, RHS)
10
-10
5
0
0
10
20 -5
30 Small Companies -10

40 Medium & Large -15
Companies
50
-20
60
SLO Standards for Commercial -25
70
Tighter
& Industrial Loans (6-quarter lag)

80 -30
90 -35
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
20
Higher Energy Costs Sank Consumer Confidence Now UR Is
30 105
WTI Price (USDpb, Inverted)
40 100
UoM Consumer Confidence (RHS)
50 95
60
90
70
85
80
80
90
75
100 Katrina effect
70
110
120 65
130 60
140 55
04 05 06 07 08
21
Credit is Now Being Withdrawn from Households
13 20.0
Personal Consumption (%y/y)
12
17.5
11
10 15.0
9
8 12.5
7
10.0
6
5 7.5
4
3 5.0
2 Credit market instruments (% y/y, RHS) 2.5

1
0 0.0
55 60 65 70 75 80 85 90 95 00 05
22
Other, % of Total Assets
Household Wealth Is Declining
25
20 Real Estate Assets (% y/y)
15
10
-5
-10 Bars mark recessions Financial Assets (% y/y)
-15
55 60 65 70 75 80 85 90 95 00 05
23
Household Wealth & Savings Rate
-1 70
0
60
1
2
50
3
4 Savings Rate (%)
40
5 Net Worth (USD, trn, RHS)
6 30
7
20
8
9
10
10
11 0
86 88 90 92 94 96 98 00 02 04 06 08
24
Inventories of Unsold Cars are Soaring
2000 5.5
Unit auto inventory change
1900 Inventory Level (k, SA) 5.0
1800 4.5
Inventory / Sales
1700 Ratio (RHS) 4.0
1600 3.5
1500 3.0
1400 2.5
1300 2.0
1200 1.5
1100 1.0
1000 Bars mark recessions 0.5
900 0.0
68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
25
Housing Starts vs. New Home Sales
70 60
60 Housing Starts (% y/y, RHS) 50
50 40
40 30
30 20
20 10
10 0
0 -10
-10 -20
-20 -30
New Homes Sales (% y/y)
-30 -40
-40 -50
-50 -60
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
26
High Inventories of Unsold Homes Imply More Price Declines
-20 5.0
-15 4.5
-10
4.0
-5
Median Existing Home Price (% y/y, inverted) 3.5
0
3.0
5
2.5
10
15 2.0
Resale Inventory (mn, RHS)

20 1.5
68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
27
Foreclosures Surge
1500 4000
Annualised Defaults (k)
1250 3500
Auctions (k)
1000 3000
750 REOs (k) 2500
500 2000
250 1500
Total Foreclosure Filings (k, RHS)

0 1000
06 07 08
28
Mortgage Applications Are Falling Again
650 10000
600 9000
550 Purchase 8000

Refinance (RHS)
500 7000
450 6000
400 5000
350 4000
300 3000
250 2000
200 1000
150 0
97 98 99 00 01 02 03 04 05 06 07 08
29
New Mortgage Creation is Plunging
1.25
USD trn Total
1.00
Commercial banks
0.75
0.50
0.25
0.00
-0.25
ABS Issuers
-0.50
88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
30
State and Local Savings Plunging
75
USD bn Net state and local government saving
50
25
-25
-50
-75
-100
-125
64 66 68 70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
31
The Labor Market is Deteriorating Rapidly
11 250
Unemployment Rate (%) RHS (2000=100)
10 225
9 Continuing Claims 200

(4wma, RHS)
8 peak = 7.8% 175
7 150
6 125
5 Initial Claims 100

(4wma, RHS)
4 75
Bars Mark Recessions

3 50
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
32
Monthly Average Payroll Job Losses Are Third Largest
600
monthly change
500
400
300
200
100
-100
-200
-300 Bars mark recessions

6 mma
-400
-500
55 60 65 70 75 80 85 90 95 00 05
-533k
33
US Recession Caught Up with the rest of the World
62.5 30
60.0 Exports (% y/y, 3mma, RHS) 25
57.5 20
55.0 15
52.5 10
50.0 5
47.5 0
45.0 -5
42.5 -10
40.0 -15
ISM Export Orders (3mma)
37.5 -20
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08
34
The Paradox of Thrift: the Savings Rate Rises With the UR
15.0 11
12.5 10
10.0 9
7.5 8
Savings Rate (%)
5.0 7
2.5 6
0.0 5
UR (%, RHS)
-2.5 Bars mark recessions 4
-5.0 3
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
35
The Present Recession Is Already the Third Longest
17
Length of Recession in months
Nov '73 Jul '81
16
15
14
Dec '07
13
12
Nov '48 Dec '69
11
Jul '53 Apr '60
10
9
Feb '45
Aug '57 Jul '90 Mar '00
8
7
Jan '80
6
36
GDP Forecast: A Longer Recession and Shallower Recovery
10.0
8.0
6.0
4.0
2.0
0.0
% q/q ar
-2.0
BNPP Forecast
-4.0 % y/y
-6.0
Bars Mark Recessions
-8.0
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
37
GDP Price Deflator (% q/q) Fell in Q4 2008
15.0 30
% q/q, AR
GDP Price Deflator
12.5 25
10.0 20
7.5 15
5.0 10
2.5 5
0.0 0
-2.5 NGDP (RHS) -5

-5.0 -10
50 55 60 65 70 75 80 85 90 95 00 05
38
Inflation Indexes Soon Flash Deflation Signals
39
US:CPI inflation with Core CPI & West Texas IntermediateWTI
oil(RHS)
prices
6 150
WTI (% y/y, RHS) Forecast
125
5 CPI (% y/y)
100
4
75
3 50
2 25
0
1 Core CPI (% y/y)
-25
0
-50
-1 -75
96 97 98 99 00 01 02 03 04 05 06 07 08
40
US: Food Prices (% y/y)
40 7
CRB Commodity Food Prices
30 (% y/y, lag-3) 6
20 5
10 4
0 3
-10 2
-20 1
US CPI Food (% y/y RHS)
-30 0
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
41
US: When Output GAP Turns Negative Inflation Declines
5.0 6
Output Gap (%) Forecast

2.5 5
0.0 4
-2.5 3
-5.0 2
-7.5 1
Core CPI (% y/y, RHS)
-10.0 0
90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
42
US: CPI Forecasts
7 Forecast
6
CPI Core (% y/y)
5
1
CPI (% y/y)
0
Bars mark recession
-1
-2
82 84 86 88 90 92 94 96 98 00 02 04 06 08 10
43
Governments Are Finally Fighting the Global
Recession Vigorously
44
Policy Rates: US is a Few Steps Ahead of the Rest
8
% Forecast
7
5 UK
3
ECB
2
US
1 Japan
-1
98 99 00 01 02 03 04 05 06 07 08 09 10
45
The Fed’s Regime Change: from interest rate targeting to balance
sheet Expansion
2.50 % 6.00
USD trn
2.25 Target Fed Funds (RHS)
Total Assets
5.00
2.00
1.75
4.00
1.50
1.25 3.00
1.00
2.00
0.75
0.50
1.00
0.25 Excess Reserves
0.00 0.00
04 05 06 07 08
46
Monetary Growth Rose and Fell with the Fed’s Assets
15.0 2.50
Federal Reserve Assets (USD trn, RHS)
12.5 2.25
10.0 2.00
7.5 1.75
M2 (% 3m/3m)
5.0 1.50
2.5 1.25
0.0 1.00
-2.5 0.75
-5.0 M1 (% 3m/3m) 0.50
-7.5 0.25
-10.0 0.00
01 02 03 04 05 06 07 08
47
Bank Lending Increased in Q4 and declined in January
12.5 % 3m/3m
Commercial Real Estate
10.0
Business
7.5
5.0
2.5
0.0
-2.5
Consumer
-5.0
Mortgages
-7.5
04 05 06 07 08
48
The Global Liquidity Trap: Excess Reserves in US Banks Are
Soaring But Banks Choose Not to Lend
900
USD bn
800
700
600
500
400
300
200
100
0
w2 w6 w10 w14 w18 w22 w26 w30 w34 w38 w42 w46 w50 w2
08 09
49
The Federal Budget Deficit is Going to Get Much Bigger
250 3
USD bn Forecast
2
0
1
-250
0
-500
-1
-750 -2
-3
-1000
% of GDP (RHS) -4
-1250
-5
-1500
-6
-1750 -7
97 98 99 00 01 02 03 04 05 06 07 08 09 10
50
US House & Senate Stimulus Plan
American Recovery & Investment Act of 2009
900
Senate - Total Estimate
800
House - Total Estimate
700
600
500
400
300
200 House
Senate
100
0
09 10 11 12 13 14
51
Revenues vs. Spending in Senate Stimulus Plan
600
500 Spending - Total Estimate
400 Revenue - Total Estimate
300
Revenue
Spending
200
100
-100
09 10 11 12 13 14
52
New Treasury Issuance Expected to Soar
600
Treasury Financing by Quarter (USD bn)
500 Forecast
400
300
200
100
-100
-200
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
53
Markets Still Upset
54
Treasury Yields Firmly Bid as Equities Suffer
1700 7.0
1600 6.5
S&P 500
1500 6.0
1400 5.5
1300 5.0
1200 4.5
1100 4.0
1000 3.5
10yr Note Yield (RHS)
900 3.0
800 2.5
700 2.0
98 99 00 01 02 03 04 05 06 07 08
55
Average Weekly Increases in the Fed’s Custody Holdings
of US Treasury and GSE Securities for Foreign Official &
International Institutions
20
USD bn (13-week moving average)
15 Treasury
10
-5 Agency
-10
-15
00 01 02 03 04 05 06 07 08
56
BNP Paribas Interest Rates Forecasts
7
BNP Paribas
Forecast
6
US 10-Year Treasury
5
2
Fed Funds Target
0
00 01 02 03 04 05 06 07 08 09 10
57
Business Bankruptcies Are Increasing
14000 2250
Hurricane Katrina
13000 2000
12000 High Yield Spread (bp, RHS) 1750
11000 1500
10000 1250
9000 1000
8000 750
7000 500
6000 250
5000 0
Number of Business Bankruptcy Filings (3 months ending)
4000 -250
95 96 97 98 99 00 01 02 03 04 05 06 07 08
58
Credit Spreads Reflect Rising Risk Premium
32.5 18
30.0 Baa Rated (RHS) 17
27.5 16
25.0 15
22.5 High Yield 14
20.0 13
17.5 12
15.0 11
12.5 10
10.0 9
7.5 8
5.0 7
2.5 6
0.0 Bars mark recessions Aaa rated (RHS) 5
-2.5 4
70 72 74 76 78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08
59
S&P Business Cycle Peak
500 Prices Decline During Recessions
120 Business Cycle Peak
110
1990
100 2001
1981
90
1969
80
70
1973
60
months 2007
50
0 2 4 6 8 10 12 14 16 18 20 22 24 26
60
Corporate Profits Have Declined for 4 quarters
70
60
Non-fin Corporate Profits (%, y/y)
50
40
30
20
10
0
-10
-20
-30
-40 Bars mark recessions
S&P 500 (% y/y)
-50
65 70 75 80 85 90 95 00 05 10
61
P/Es in the latter period Rose as a Result
15.0 50
P/E Ratio - S&P500 (RHS)
12.5 45
Average 14.2
Average 20.7 40
10.0
35
7.5
30
5.0
25
2.5
20
0.0
GDP (% y/y) 15
-2.5 10
-5.0 5
50 55 60 65 70 75 80 85 90 95 00 05
62
Potential Growth Slows Significantly in the Future
5.5 Bars mark recessions
Forecast
5.0
4.5
4.0 Potential GDP (% y/y)
3.5
3.0
2.5
2.0
1.5
1.0
0.5 Potential Labour Force (% y/y)
0.0
50 55 60 65 70 75 80 85 90 95 00 05 10
63
EUR/USD & Rate Differential
1.60 -3.5
1.55 Forecast -3.0
1.50 -2.5
EUR/USD
-2.0
1.45
-1.5
1.40
-1.0
1.35
-0.5
1.30
0.0
1.25 0.5
Real Rates USD
1.20 minus EUR (RHS, 1.0
Inverted, %)
1.15 1.5
Jan May Sep Jan May Sep Jan May Sep Jan May Sep Jan May Sep
05 06 07 08 09
64
Economic Forecasts
Economic Forecasts (% y/y)*

2008 2009 2010 2008 2008 2009 2009
Q3 Q4 Q1 Q2
US
GDP 1.3 -2.7 0.3 0.7 -0.2 -1.8 -3.3
CPI 3.8 -0.8 1.9 5.3 1.5 -0.3 -1.2
Eurozone
GDP 1.0 -1.1 0.7 0.6 -0.1 -1.3 -1.3
CPI 3.3 1.2 1.3 3.8 2.5 1.9 0.9
Japan
GDP 0.4 -0.9 1.1 -0.1 -0.7 -1.8 -1.0
CPI 1.4 0.0 0.4 2.2 1.2 0.5 0.0
Source: BNP Paribas
65
Interest Rate & FX Forecasts
Interest Rate Forecasts (%)*
Spot Q1 '09 Q2 '09 Q3 '09 Q4 '09
US
Fed Funds 0.25 0.25 0.25 0.25 0.25
2-year 0.75 0.75 0.90 1.20 1.50
10-year 2.31 2.40 2.90 3.50 3.70
Eurozone
Refi 2.50 1.50 1.00 1.00 1.00
2-year 1.50 1.30 1.25 1.40 1.60
10-year 3.00 2.90 3.00 3.25 3.50
Japan
ODR 0.30 0.30 0.30 0.30 0.30
Call Rate 0.10 0.10 0.10 0.10 0.10
2-year 0.39 0.35 0.35 0.35 0.35
10-year 1.24 1.00 1.10 1.20 1.30
Source: BNP Paribas * End Period
FX Forecasts*
Spot Q1 '09 Q2 '09 Q3 '09 Q4 '09
EUR/USD 1.32 1.30 1.20 1.22 1.24
USD/JPY 89 80 78 86 92
GBP/USD 1.46 1.44 1.40 1.45 1.48
Source: BNP Paribas *End Period
66
Disclaimer
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Brian Fabbri CFA Hawaii Forecast Dinner 2/17/09

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Brian Fabbri CFA Hawaii Forecast Dinner 2/17/09

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Searching for the Bottom

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

50 Consumer - Credit Cards

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

7.5 Global PMI Output 65

Source: Reuters Ecowin Pro, BNP Paribas

120 GDP (% y/y, RHS)

Source: Reuters Ecowin Pro, BNP Paribas

45 Six-month rate of change in production (3ma, %, RHS) -2.5

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

-30 Bars Mark Recession Business Investment in 15

30 Small Companies -10

& Industrial Loans (6-quarter lag)

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

2 Credit market instruments (% y/y, RHS) 2.5

Source: Reuters Ecowin Pro, BNP Paribas

20 Real Estate Assets (% y/y)

-10 Bars mark recessions Financial Assets (% y/y)

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Resale Inventory (mn, RHS)

Source: Reuters Ecowin Pro, BNP Paribas

750 REOs (k) 2500

Total Foreclosure Filings (k, RHS)

Source: Reuters Ecowin Pro, BNP Paribas

550 Purchase 8000

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

9 Continuing Claims 200

5 Initial Claims 100

Bars Mark Recessions

Source: Reuters Ecowin Pro, BNP Paribas

-300 Bars mark recessions

60.0 Exports (% y/y, 3mma, RHS) 25

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

-2.5 NGDP (RHS) -5

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Output Gap (%) Forecast

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

Source: Reuters Ecowin Pro, BNP Paribas

-5.0 M1 (% 3m/3m) 0.50

Source: Reuters Ecowin Pro, BNP Paribas