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

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“I am fairly optimistic that this thing is winding saidJim Paulsen, chief investment strategist for Wells Fargo Capital “I’m also optimistic that the economy, at leasy for a period, will recover soonet and stronger than most have anticipated ... I think we’re goint to be growing in the second half ofthis year.” Paulsen made his remarke during a presentation at the Wells Fargop Theatre in the Colorado Convention The breakfast event was hosted by Denver Mayo John Hickenlooper also spoke about the city’ws efforts to stimulate the local U.S.
stocks have been climbinb since March, and consumer confidence is improving, Paulsen Reassuring “healthy players,” so they will begin investing and spendingmoney again, is key to stimulating the he said. “The most outstanding feature ofwhat we’vs been through isn’t so much the fundamental problemse that we have in the economy,” Paulsej said. “We do have those, they’rre serious. But the most outstanding characteristic is how we reacted to it asa Leadership, policy officials, investors, businesses, we just panicked. That’z what stands out about this morethan anything.
” The credit problemsd the nation faces are no differenft from the savings-and-loan problems of the 1990w or the farm and oil difficulties of the 1980s, he said. “Whenh you mix together the fundamental problemswith fear, you get a he said. A change in accounting ruleds a couple of years ago made credit problemszlook worse, he said. The new rules required financial institutionz to valueassets — such as loans — basee on current market prices, a practice known as “mark to market” accounting.
When credit marketxs froze up, the lack of bids for those typed of assets meant they had to be written down even if thebank hadn’t sold them and the underlyin fundamentals hadn’t changed. “What has made it seem so off-the-chartxs is not bad debtsw that arewritten off; we had a lot of that in otherr periods. It’s good debts that are beinyg written down in prics notbecause they’re not paying on time, not becausr credit analysis [says] they won’t pay off over but simply because of lack of current bids in the Paulsen said. In earlhy April, the Financial Accounting Standards Boardeasedc mark-to-market rules, which should help, he said.
Consumerx and businesses also are sittinh on vast amountsof cash, more so than at any time sinces the early 1980s, Paulsen said. Once they feel securs enough to beginspending it, that cash will accelerate the economicd recovery.