Economic

1
Economic Capital Markets Presentation To
Beard Miller Company February 25, 2008

• Presented by
• Morris Segall, President
• SPG Trend Advisors

2
THE ECONOMY

• Its past subprime

3
Gross Domestic Product2000Q1 through 2007Q4
Source Bureau of Economic Analysis
4
Contributions to GDP Growth by Component, 2007Q4
Source Bureau of Economic Analysis
5
Consumer Credit
6
Contributions to Gross Investment Growth by
Component, 2007Q4
Source Bureau of Economic Analysis
7
Corporate Profits (SAAR)2001Q1 through 2007Q3
Source BEA
8
Corporate Profits After Tax with IVA CCA
Adjustments
Source Bureau of Economic Analysis
9
Annual Average Changes in Non-Farm Productivity
Source Bureau of Labor Statistics
10
ISM Manufacturing Report on Business Jan
2006-Jan 2008
Source Institute for Supply Management
11
Manufacturers Durable Goods Orders
Shipments(excluding transportation)Book to Bill
Ratio
Source U.S. Census Bureau
12
Philadelphia Federal Reserve Business Outlook
Survey
Source Federal Reserve Bank of Philadelphia
13
New Home Sales Units Sold vs. Length on Market
Prices Thousands
Months Market
Source U.S. Census Bureau
14
Average National New Home Sale Prices
Source US Census Bureau
15
Existing Home Sales
16
Mortgage Bankers Association Delinquency Rates,
Subprime Mortgage Loans, 2005Q1 through 2007Q3
Source Economy.com
17
US Balance of Trade Deficit
Sources Bureau of Economic Analysis
18
Import Price Index
Source BEA Import Index
19
NYMEX Crude Oil Future Prices in U.S.
DollarsJanuary 1995 through January 2008
Source Energy Information Administration
20
Value of the Dollar (Broad Dollar Index) January
1999 through January 2008
Source Federal Reserve Board
Broad Dollar Index a weighted average of the
foreign exchange value of the U.S. dollar
against the currencies of a broad group of major
U.S. trading partners.
21
Net Change in U.S. JobsJanuary 2000 through
January 2008
Source Bureau of Labor Statistics
22
National Nonfarm Employment by Industry Sector
GroupsJanuary 2007 v. January 2008 Absolute
Change
Source Economy.com, Bureau of Labor Statistics
23
Average Hourly Compensation
Source Bureau of Labor Statistics
24
Source Bureau of Labor Statistics
25
U.S. Personal Savings Rate 2002 through 2007
Source Bureau of Economic Analysis
26
Capital Markets

• Wheres the love?

27
SP 500 v. MS EAFE, Russell 2000 NASDAQ
Composite Indices 2003-2008
28
Investment Returns as of February 22, 2008
Source Wall Street Journal, Barrons,
Kitco.com, Dow Jones and CASAM CISDM

• DJ Equity All REIT TR
• CASAM CISDM Fund of Funds Index

29
US Treasury Yield Curve as of February 22, 2008
Source Federal Reserve Board
30
Conclusions

• Chances of recession in 2008 are now at least 50
  for the first half of this year
• Increased near term economic and market
  pressures include
• stubbornly high inflation in energy, food and
  basic services
• weakening corporate profits
• increased unemployment
• declining corporate capital and consumer spending

31
Conclusions continued

• Diminishing State and Local Government spending
• Reduced economic contribution from exports as
  overseas economic growth slows
• Continued credit pressures in residential housing
  and consumer lending spreading to commercial
  construction financing
• The Fed will continue to face a stagflationary
  economic environment extending its dilemma in
  monetary policy.

32
Conclusions continued

• However, a bottoming of the housing cycle and an
  abatement in bank credit losses in Q3/Q4 of this
  year could set the stage for a cyclical economic
  improvement and potentially a strong equity
  market rally late this year and into 2009.
  However election issues and continued secular
  problems facing this country may limit the equity
  market gains past next year.

33
Thank You

• You can always reach me at msegall_at_spgtrend.com
• Also, if you need us in a hurry, we are at
  410.522.7243
• Please contact us when you require economic and
  capital markets research policy analysis.