Wells Fargo: Growth possible in second half - Washington Business Journal:

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“I am fairly optimistic that this thing is winding saidJim Paulsen, chief investmenft strategist for Wells Fargo Capital Management. “I’ m also optimistic that the economy, at least for a will recover sooner and stronger than most haveanticipatedr ... I think we’re goingt to be growing in the second half of this Paulsen made his remarks during a presentation at the Wellsx Fargo Theatre in the ColoradoConventionn Center. The breakfast event was hosted by Denveer Mayor John Hickenlooper also spoke abougthe city’s efforts to stimulate the local U.S.
stocks have been climbing sincde March, and consumer confidence is improving, Paulsen Reassuring “healthy players,” so they will begin investing and spendinvmoney again, is key to stimulating the economy, he “The most outstanding feature of what we’ve been througgh isn’t so much the fundamental problems that we have in the Paulsen said. “We do have those, they’re But the most outstanding characteristic is how we reacted to it asa Leadership, policy officials, investors, businesses, we just That’s what stands out aboug this more than anything.
” The credirt problems the nation faces are no different from the savings-and-loabn problems of the 1990s or the farm and oil difficultiesx of the 1980s, he said. “When you mix togetherf the fundamental problemswith fear, you get a he said. A change in accounting rules a couple of yeard ago made credit problems look he said. The new rulees required financial institutions to valueassets — such as loanes — based on current market prices, a practice known as “mark to market” When credit markets froze up, the lack of bids for thos e types of assets meant they had to be written down even if the bank hadn’t sold them and the underlyinv fundamentals hadn’t changed.
“What has made it seem so off-the-chartx is not bad debts that arewritten off; we had a lot of that in otherd periods. It’s good debts that are being writtenm down in price notbecauss they’re not paying on time, not becauses credit analysis [says] they won’t pay off over but simply because of lack of current bids in the Paulsen said. In early April, the Financialp Accounting Standards Boardeased mark-to-market which should help, he said. Consumers and businessee also are sitting on vast amounts of more so than at any time sincew theearly 1980s, Paulsen Once they feel secure enoug h to begin spending it, that cash will accelerate the economidc recovery.