Looking For the Bottom

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Looking For the Bottom

• Presented by
• Mark M. Zandi,Chief Economist

March 27, 2009
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A Very Severe Economic Downturn
Recessions since World War II
3
From Coast-to-Coast
At Risk
Expansion
In Recession
Recovery
4
Printing Money
Federal Reserves balance sheet, bil
5
Fiscal Stimulus Will Shore Up the Job Market
Unemployment rate
6
More Refinancings and Modifications On the Way
Fannie/Freddie Mortgages Outstanding, bil,
year-end 08
7
The Financial Stability Plan Addresses This
Projected losses on credit market instruments,
bil
At risk mortgages 20,000,000 Foreclosure
rate 50 Foreclosed mortgages 10,000,000 Loss
rate 50 Mortgage loss 1 trillion
Corporate
Commercial mortgages
Consumer loans
Residential mortgages
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A Massive Global Response
Stimulus as a of GDP, 2009, Source IMF
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A Looming Fiscal Crisis
Federal debt to GDP ratio under the Presidents
budget
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Restoring Faith
Consumer confidence, 1985 100
Source Conference Board
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A Timeline to Recovery
Major Financial Failures Abate
Employment Bottoms
Foreclosures Peak
Stock Market Bottoms
House Prices Resume Rising
Fed Tightens
Housing Starts Bottom
08q1
08q2
08q3
08q4
09q1
09q2
10q1
10q2
09q3
09q4
10q3
10q4
Oil Prices Peak
Home Sales Bottom
Jobless Rate Peaks
House Prices Bottom
Self Sustaining Expansion Begins
Rises
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