RMCA Denver Feb 2009 Cut3

Denver – February 12, 2009

Peter C. Burley, CRE Vice President Research, Simpson Housing LLLP

Hopeful Prospects

Navigating the US and Regional Economies in 2009

The opinions expressed are those of the Speaker

And do not necessarily reflect the views of

Simpson Housing LLLP, its Related Entities, Properties, Partners, Senior

Management, Maintenance Personnel, Parking Attendants, or

Human Resources Staff, None of whom are likely to Agree with me anyway…

An Important Disclaimer

Another Important Disclaimer

Data and Analyses are Compiled from

Sources Deemed Reliable

But Not Guaranteed

No Offer or Solicitation Implied …

Subject to Change Without

Notice…

In Nominal Terms, A $14 Trillion Economy

1947Q1 1959Q3 1972Q1 1984Q3 1997Q1 2009Q30

2000

4000

6000

8000

10000

12000

14000

16000Total Gross Domestic Product (Nominal $Bil)

Source: Moody's Economy.com; Bureau of Economic Analysis

$237 Bil1947

$14.4 Trillion2008

Personal Consumptio

n

Fixed Investm

ent

Change in Private In

ventories

Net Exports

Government -10

0

10

20

30

40

50

60

70Nominal Contribution to GDP (Pct, Q1:2009)

Source: BEA, Moody's Economy.com

Consumers & Government Make up the Lion’s Share

Consumers & Government Make up the Lion’s Share

1947Q1 1959Q3 1972Q1 1984Q3 1997Q160

62

64

66

68

70

72Nominal Contribution to GDP (Pct, Q1:2009)

Source: BEA, Moody's Economy.com

Personal Consumption

In Inflation Adjusted Terms, an $11 Trillion Economy

1990Q1 1992Q3 1995Q1 1997Q3 2000Q1 2002Q3 2005Q1 2007Q3 2010Q17000

7500

8000

8500

9000

9500

10000

10500

11000

11500

12000Total Gross Domestic Product (Bil 2000 $, SAAR)

Tech Slumpand 9/11

Source: Moody's Economy.com; Bureau of Economic Analysis

1990-91 Recession

TheCurrent

Unpleasantness

1990Q1

1991Q1

1992Q1

1993Q1

1994Q1

1995Q1

1996Q1

1997Q1

1998Q1

1999Q1

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1-4

-2

0

2

4

6

8Gross Domestic Product (Annualized %)

Source: Moody's Economy.com; BEA

1990-91Recession Tech Slump

Post 9/11CurrentRecession

60-YearAverage

Trends in the US Economy Over Time

1990Q1

1991Q1

1992Q1

1993Q1

1994Q1

1995Q1

1996Q1

1997Q1

1998Q1

1999Q1

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1100

105

110

115

120

125

130

135

140Total Nonfarm Employment (Mil., SA)

Source: Moody's Economy.com; BLS

1990-91Recession

90sExpansion

Tech SlumpJobless Recovery

The CurrentRecession

A 140 Million Job Economy

1991Q1

1992Q1

1993Q1

1994Q1

1995Q1

1996Q1

1997Q1

1998Q1

1999Q1

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1-1.5

-1

-0.5

0

0.5

1

1.5 Change in Employment (Mil, Qtr)


Job Growth & Decline over the Past 20 Years

1990-91Recession

90s Expansion



1990Q1

1992Q3

1995Q1

1997Q3

2000Q1

2002Q3

2005Q1

2007Q3

2010Q13

4

5

6

7

8

9

10Unemployment Rate (%)

Source: Moody's Economy.com; BLS, CPS

1990-91Recession



90sExpansion

Unemployment Trends

1990Q1

1992Q3

1995Q1

1997Q3

2000Q1

2002Q3

2005Q1

2007Q3

2010Q13

4

5

6

7

8

9



7.6%

9%-plus

Unemployment Trends

1948Q1

1960Q3

1973Q1

1985Q3

1998Q12

3

4

5

6

7

8

9

10



7.6%

9%-plus

7.6%

10.7%

8.8%

Unemployment Trends

Some Important Unemployment Definitions

• “Officially” Unemployed – In the Labor Force and working or actively looking for work

• Discouraged Workers – Have a Job-market Related reason for not currently looking

• Marginally Attached – Have Worked Recently, Aren’t Looking, But are Available

• Underemployed - P.T. for Economic Reasons; Have Settled for Part Time Work, Prefer Full-Time

Unemployment Trends

Unemployment Rate (%)

Source: Bureau of Labor Statistics

Officially Unemployed +Discouraged Workers +

P.T. for Economic Reasons

Officially Unemployed +Discouraged Workers

Officially Unemployed

'JUL 08 'AUG 08 'SEP 08 'OCT 08 'NOV '08 'DEC 08 'JAN 094

5

6

7

8

9

10

11

12

13

14

15

Official Unemployment Rate

Official Unemployment Rate + Discouraged Workers

Official Unemployment Rate + Discouraged Workers +Marginally Attached + Underemployed

Critical Dynamics in the Economy

The US Housing Market – Boom to Bust

The Subprime Crisis & Mortgage Market Meltdown

The Business Environment

Workers & Households

A Consumer Crisis


The US Housing Market

BOOM

Things Were Simply Wonderful: Sales Kept Rising

1999Q1

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q14

4.5

5

5.5

6

6.5

7

7.5

8

8.5

9

Existing New

Units Sold (Mil, SAAR)

Source: Moody's Economy.com; NAR; Census

2000Q1 2001Q2 2002Q3 2003Q4 2005Q11.5

1.6

1.7

1.8

1.9

2

2.1

2.2Total Housing Starts (Mil Units, SAAR)

Source: Moody's Economy.com; Census

Things Were Simply Wonderful: Builders Kept Building

2000Q1 2001Q2 2002Q3 2003Q4 2005Q11400

1600

1800

2000

2200

2400

2600

2800Real Estate Loans ($Bil., SA)

Source: Moody's Economy.com; Federal Reserve

Things Were Simply Wonderful: Lenders Kept Lending

2000Q1 2001Q2 2002Q3 2003Q4 2005Q167

67.5

68

68.5

69

69.5Homeownership Rate (%,SA)


Things Were Simply Wonderful: Ownership Kept Rising

1971Q2 1976Q2 1981Q2 1986Q2 1991Q2 1996Q2 2001Q2 2006Q24

6

8

10

12

14

16

18Mortgage Interest Rates (%,, NSA)

Source: Moody's Economy.com; Freddie Mac

30-Year Fixed

35-year average = 9.1%

Things Were Simply Wonderful: Rates Kept Falling

2000Q1 2001Q2 2002Q3 2003Q4 2005Q13.5

4

4.5

5

5.5

6

6.5

7

7.5

8

8.5


30-Year Fixed

Adjustable

Mortgage Interest Rates (%,SA)

Things Were Simply Wonderful: Rates Kept Falling

2000Q1 2001Q2 2002Q3 2003Q4 2005Q110

15

20

25

30

35

40Percent Adjustable Rate Mortgages (%,NSA)

Source: Moody's Economy.com; FHFB

Things Were Simply Wonderful: Buying Was Cheap

1990Q1

1992Q3

1995Q1

1997Q3

2000Q1

2002Q3

2005Q180

100

120

140

160

180

200

220

240Median Existing Home Price ($Ths, SAAR)

Source: NAR; Moody's Economy.com

135%1990-2005

Things Were Simply Wonderful: Prices Kept Rising

1990Q1

1992Q3

1995Q1

1997Q3

2000Q1

2002Q3

2005Q180

100

120

140

160

180

200

220



60%1999-2005

Things Were Simply Wonderful: Prices Kept Rising


The US Housing Market

BUST

It Couldn’t Last: Prices Outstrip Incomes

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1-5

0

5

10

15

20

25Annualized Growth Income vs Home Prices

Source: Moody's Economy.com;NAR;Census

Median Home Price

Median Household Income

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2100

105

110

115

120

125

130

135

140Housing Affordability Index

Source: Moody's Economy.com; NAR

It Couldn’t Last: Affordability Began to Slide

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

4

4.5

5

5.5

6

6.5

7

7.5

8

8.5

9

Existing New

New & Existing Home Sales (Mil Units, SAAR)

Source: Moody's Economy.com; NAR; Census

8.5 Mil UnitsQ3:2005

5.3 Mil UnitsQ1:2009

It Couldn’t Last: Demand Began to Ebb

2005 2007 Nov Jan Mar May Jul Sept Nov p0.6

0.8

1

1.2

1.4

1.6

1.8

2

2.2

2.4

2.6

2.8

West

Northeast

South

Midwest

Existing Home Sales (Mil. Units, SAAR)

Source: Nat'l Assoc Realtors

It Couldn’t Last: Sales Slowed Across the Country

And Mortgage Activity is Has Slowed

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q40

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Re-Fi

Purchase

Mortgage Originations ($Trillion, SAAR)

Source: Moody's Economy.com; FRB

2004Q1

2005Q2

2006Q3

2007Q4

2009Q1160

170

180

190

200

210

220



-22.5%2005-2009

-7.8%2009-2010

The US Housing Market: The Drop in Prices

The US Housing Market: Prices Around the USA

-40 -35 -30 -25 -20 -15 -10 -5 0

Boston

Chicago

Denver

Las Vegas

Los Angeles

Miami

New York

San Diego

San Francisco

Washington

% change year ago% change from peak

Change in Home Prices (Pct, Year Ago, Peak)

Source: Moody's Economy.com; S&P/Case Shiller

Inventories of Unsold Homes Have Risen Sharply

20052006

2007Nov

Dec Jan

Feb Mar

Apr May

Jun Jul

Aug Sept

Oct rNov p

0

2

4

6

8

10

12Months of Supply Existing Home Inventory

Soure: Nat'l Assoc Realtors

Builders Have Pulled Back … Way Back

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q40.6

0.8

1

1.2

1.4

1.6

1.8

2

2.2

2.4Starts & Permits (Mil. Units, SAAR)

StartsPermits

Soure: Moody's Economy.com; Census

Builders Have Pulled Back … Way Back

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q16

6.2

6.4

6.6

6.8

7

7.2

7.4

7.6

7.8Construction Employment (Mil, SA)



The Subprime Crisis

Subprime Lending Made Home Buying Easy

•Credit to borrowers who do not meet prime underwriting guidelines.

•Heightened perceived risk of default due to:

history of loan delinquency or default bankruptcylimited debt experience

•Almost All Made as ARMs, Subject to Reset

•Most Packaged and Traded as High-Yield Asset-Backed Securities

1994 1995 1996 1997 1998 1999 2000 2001 2002 20030

50

100

150

200

250

300

350Subprime Mortgage Originations ($Bil)

Source: Fed. Res. Bank NY

Subprime Lending Made Home Buying Easy

2003Q1 2004Q2 2005Q3 2006Q4 2008Q13.5

4

4.5

5

5.5

6

6.5

7Mortgage Interest Rates (%,, NSA)


30-Year Fixed

Adjustable

Until Adjustable Rate Mortgages Started to Reset

And Some Borrowers Were Not Prepared

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q44

6

8

10

12

14

16

18

20

22Total Loans Overdue (%,SA)

Source: Moody's Economy.com; MBA

Subprime

All Loans

1998Q1 1999Q2 2000Q3 2001Q4 2003Q1 2004Q2 2005Q3 2006Q4 2008Q11

1.5

2

2.5

3

3.5

4

4.5

5Subprime Loans in Foreclosure (%,SA)

Source: Moody's Economy.com; MBA

And Homes Were Being Lost

Subprime Lending And Convoluted Debt Swaps

"With this complicated intertwining of bets of great magnitude, no one could be sure of the financial position of anyone else-or even of one's own position. Not surprisingly, the credit markets froze."

Joseph Stiglitz

Critical Dynamics in the Financial & Economic Crisis

Excess Inventory Price Declines Refinancing Issues

Mtg ForeclosuresBank LossesBank Capital Depleted

Liquidity CrunchBank Failures

Fed Actions

TARPHope NowOther H.O. Programs

Econ Stim '08

More Fed Action


The Investor Response

19961997

19981999

20002001

20022003

20042005

20062007

2008*0

500

1000

1500

2000

2500

3000

3500

AgencyNonAgency

Mortgage Securities Issuance ($Bil)

Source: Securities Industry and Financial Markets Assoc

Some Mortgage Backed Securities Issuance Stopped

Issuers and Holders of Mortgage Backed Debt Weakened

6/30/2005

11/21/2005

4/18/2006

9/8/2006

2/2/2007

6/27/2007

11/16/2007

0

20

40

60

80

100

120

140

160

180Bear Stearns (daily closing price, $/Share)

NYSE

$171.50

JP Morgan Offer$2.00 (later $10)

4/1/2005

8/23/2005

1/17/2006

6/9/2006

10/31/2006

3/28/2007

8/20/2007

1/11/20080

5

10

15

20

25

30

35

40

45

50Countrywide Financial Corp (daily close, $/shr)

NYSE

Issuers and Holders of Mortgage Backed Debt Weakened


The Lender Response

Banks Have Clamped Down

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q4-10

0

10

20

30

40

50

60

70

80Net % of Banks Tightening Standards for Mortgage Loans


2005Q4 2006Q2 2006Q4 2007Q2 2007Q4 2008Q2 2008Q4-1

0

1

2

3

4

5

6

7

8C&I, RE Loans (% Chg)

Source: Moody's Economy.com;FRB

C&I

RE


2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q3-1.5

-1

-0.5

0

0.5

1

1.5

2Consumer Credit Outstanding (% Chg)

Source: Moody's Economy.com;FRB



The Business Environment

2006Q1 2006Q3 2007Q1 2007Q3 2008Q1 2008Q31650

1700

1750

1800

1850

1900

1950Corporate Profits Before Taxes ($Bil., SAAR)

Source: Moody's Economy.com;BEA

Profits Have Slumped

And, Financial Markets Remain Wary….and Weary

1/3/2005 10/18/2005 8/4/2006 5/23/2007 3/10/2008 12/22/20087000

8000

9000

10000

11000

12000

13000

14000

15000Dow Jones Industrial Average

Source: NYSE

Businesses have grown pessimistic….

12-Sep-08

26-Sep-08

10-Oct-

08

24-Oct-

08

19-Dec-

08

2-Jan-09

16-Jan-09

30-Jan-09-35

-30

-25

-20

-15

-10

-5

0

5

10

15Moody's Economy.com Survey of Business Confidence (Index)

Source: Moody's Economy.com

Cutting Back, Preserving Workforce, Reducing Costs

Pay CutsSalary Freezes

Reduced RaisesReduced Hours, Overtime

Unpaid Furloughs

Pension Contribution Freezes/Cuts401(k) Contribution Freezes/Cuts


Pay Cuts

FedExCaterpillarGymboree

YRC Worldwide Trucking

Salary Freezes

Dow Jones & Co. Publishing


Reduced Raises

Half of 620 Companies surveyedBy Hewitt Associates

Report that average raises willDrop below 3%

Source: L.A. Times, 1/15/2009


Unpaid Furloughs

State of California

Gannett Co. Publishing


Layoffs Remain the Favored Strategy

Mass Layoff Events – All Industries (#,SA)

Source: Moody’s Economy.com; BLS

'2006JUNJUN

'2007JUN

'2008JUN

DECDEC

800

1000

1200

1400

1600

1800

2000

2200

2400Major Layoff Annoucements (#)

Source: Bureau of Labor Statistics

Who is Laying Off This Month ?

Source: CNN/Reuters

Circuit City – 30,000Caterpillar – 20,000Nissan – 20,000Pfizer – 19,500Alcoa – 13,500Boeing – 10,000 GM – 10,000TDK – 8,000Sprint Nextel – 8,000Home Depot – 7,000ING – 7,000Macy’s – 7,000Philips Electronics – 6,000Motorola – 4,000Hertz – 4,000Honda – 3,100EMC – 2,400Barclay’s – 2,100Cessna – 2,000MeadWestvaco Corp – 2,000Cigna – 1,100

Selected Layoff Announcements in January/February 2009

Saks – 1,100Walgreens – 1,000Schlumberger – 1,000Cummins - 800Autodesk - 750Logitech - 500Neiman Marcus - 375Ethan Allen - 350New York & Co - 350Barnes & Noble - 100Google - 100World Wrestling Ent - 60

The Result of Mounting Layoffs is Mounting UE Claims

7-Jan-01

23-Dec-

01

8-Dec-

02

23-Nov-03

7-Nov-04

23-Oct-

05

8-Oct-

06

23-Sep-07

7-Sep-08250000

300000

350000

400000

450000

500000

550000

600000Initial Claims for Unemployment Benefits (#/Wk,

Source: Moody's Economy.com; Employment Training Admin.

Employers are Cutting Back

2006M5

2006M9

2007M1

2007M5

2007M9

2008M1

2008M5

2008M9

2009M1-600

-500

-400

-300

-200

-100

0

100

200

300 Thousands of Jobs



The Household Environment

Wages, Salaries Have Swooned

2004Q1 2005Q2 2006Q3 2007Q4 2009Q12.2

2.4

2.6

2.8

3

3.2

3.4

Wages & Salaries (Year-Over-Year Pct)


Household Assets Have Crashed

2004Q1 2005Q2 2006Q3 2007Q4 2009Q142000

44000

46000

48000

50000

52000

54000

56000Household Net Worth ($Bil2000, SA)


Household Liabilities Remain at All-Time Highs

2004Q1 2005Q2 2006Q3 2007Q4 2009Q110000

10500

11000

11500

12000

12500

13000

13500

14000

14500

15000Household Liabilities ($Bil SA)


Household Debt Burdens Remain High

2004Q1 2005Q2 2006Q3 2007Q4 2009Q113.4

13.5

13.6

13.7

13.8

13.9

14

14.1

14.2

14.3

14.4

14.5Household Debt Service Burden (% of Disposable Income, SA)


Household Cash Flow Has Shrunk

2004Q1 2005Q2 2006Q3 2007Q4 2009Q19000

9100

9200

9300

9400

9500

9600

9700

9800

9900Household Cash Flow ($Bil 2000 SA)

Source: Moody's Economy.com; FRB; IRS

Consumers Are Running Behind

2004Q1 2005Q2 2006Q3 2007Q4 2009Q11

1.2

1.4

1.6

1.8

2

2.2

2.4Pct of Accounts Delinquent 30 Days ($ Volume)

Source: Moody's Economy.com; ABA

Consumer Confidence has Collapsed

2004Q1 2005Q2 2006Q3 2007Q4 2009Q140

50

60

70

80

90

100

110Consumer Confidence (Index)

Source: Moody's Economy.com; Conference Board

Retail Sales Have Hit The Skids

2004Q1 2005Q2 2006Q3 2007Q4 2009Q1-6

-5

-4

-3

-2

-1

0

1

2

3

4Total Retail Sales (% Chg)

Source: Moody's Economy.com; BOC

Retailers Are Discounting Like Crazy

2004Q1 2005Q2 2006Q3 2007Q4 2009Q11.5

2

2.5

3

3.5

4

4.5

5

5.5Consumer Price Index (YOY%)


But, Discounting Isn’t Helping A Whole Lot

2004Q1 2005Q2 2006Q3 2007Q4 2009Q110

11

12

13

14

15

16

17

18Vehicle Sales (Mil Units, SAAR)

Source: Moody's Economy.com; BEA

Monetary Policy Actions: A Near Zero Funds Rate

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q40

1

2

3

4

5

6

7Federal Funds Rate (%)


The Troubled Asset Relief Program (TARP)

Designed to Provide Relief to Financial Institutionsby Acquiring Troubled Mortgage-Backed Assets,

Guaranteeing Assets,And Recapitalizing Banks Through Preferred Stock

(or Not…..)

$700 Billion($350 Billion X 2)


Outlays Through January 30, 2009

Citigroup - $50 B in Preferred Stock; $306 B GuaranteesB of A - $45 B in Preferred Stock; $118B in Guarantees

AIG - $40B in Preferred StockJP Morgan Chase - $25B In Preferred Stock

Wells Fargo - $25B in Preferred StockGoldman Sachs - $10B in Preferred StockMorgan Stanley - $10B in Preferred StockPNC Fin Svcs - $7.5B in Preferred StockUS Bancorp - $6.6B in Preferred Stock

GMAC - $5 B in Preferred StockCapital One - $3.5B in Preferred Stock

American Express - $3.4B in Preferred Stock

Bank of New York Mellon - $3B in Asset Guarantees


Oh, Yeah…..

General Motors - $13.4 B in Preferred Stock Chrysler - $4 B in Preferred Stock

Term Asset-Backed Securities Loan Facility (TALF)

Designed to Stimulate Credit MarketsBy Issuing Loans on Asset-Backed Securities

Loans May be Auto Loans, Student Loans,Credit Card Loans or Small Business Loans

$200 Billion (beginning February 2009)

American Recovery and Reinvestment Act of 2009

Combined Direct Stimulus and Tax Cuts To:

Generate Renewed DemandCreate Employment

Invest in Economic Growth

$800 - $900 Billion

American Recovery and Reinvestment Act of 2009

Proposed Elements of the Stimulus Plan

• Infrastructure Improvements• (Education Facilities Modernization)• Renewable Energy Investment• (Health Care Records Modernization)• Science, Research Technology• Medicaid Assistance to States• Unemployment Benefits Extensions• COBRA Credits• Food Stamps• Household Tax Cuts/Credits• Business Tax Credits and Offsets

The Likely Effects of the Stimulus Plan

•Create Jobs, Boost Incomes

•Hiring Incentives w/ Business Tax Cuts, Credits, etc.

•Boost Spending

The Likely Effects of the Stimulus Plan: Employment Growth

2006Q4

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4-1.5

-1

-0.5

0

0.5

1Employment Change (Mil.,SA)


2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q34.5

5

5.5

6

6.5

7

7.5

8

8.5

9

9.5Unemployment Rate (%)


The Likely Effects of the Stimulus Plan: Unemployment

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q14

4.5

5

5.5

6

6.5

7

7.5Total Home Sales (Mil Units, SAAR)

Source: Moody's Economy.com; NAR; BOC

The Likely Effects of the Stimulus Plan: Housing Markets

2007Q1 2008Q2 2009Q3 2010Q4 2012Q14000

4100

4200

4300

4400

4500

4600

4700

4800

4900Total Retail Sales ($Bil., SAAR)


The Likely Effects of the Stimulus Plan: Spending

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1-6

-4

-2

0

2

4

6

8GDP (Annualized %)


The Likely Effects of the Stimulus Plan: GDP Growth

The Likely Effects of NO Stimulus Plan: Employment Growth

2006Q4

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4-2

-1.5

-1

-0.5

0

0.5

1Employment Change (Mil.,SA)


w/Stimulus

w/o Stimulus

The Likely Effects of NO Stimulus Plan: Unemployment

2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q34

5

6

7

8

9

10

11



w/Stimulus

w/o Stimulus

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q14

4.5

5

5.5

6

6.5

7

7.5

With StimulusWithout Stimulus

Total Home Sales (Mil Units, SAAR)

Source: Moody's Economy.com; NAR; BOC

The Likely Effects of the Stimulus Plan: Housing Markets

The Likely Effects of the Stimulus Plan: Spending

2007Q1 2008Q2 2009Q3 2010Q4 2012Q14000

4100

4200

4300

4400

4500

4600

4700

4800

4900

5000Total Retail Sales ($Bil., SAAR)


w/o Stimulus

w/Stimulus

The Likely Effects of the Stimulus Plan: GDP

2007Q1

2007Q2

2007Q3

2007Q4

2008Q1

2008Q2

2008Q3

2008Q4

2009Q1

2009Q2

2009Q3

2009Q4

2010Q1

2010Q2

2010Q3

2010Q4

2011Q1

2011Q2

2011Q3

2011Q4

2012Q1-6

-4

-2

0

2

4

6

8GDP (Annualized %)


w/Stimulus

w/o Stimulus

The View from Denver: Employment Trends Similar to US

2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q4-7

-6

-5

-4

-3

-2

-1

0

1

2

3

Denver

US

Employment Growth (Ann %)


The View from Denver: Mirroring, Bettering the US

1995Q1 1997Q3 2000Q1 2002Q3 2005Q1 2007Q3 2010Q190

95

100

105

110

115

120Relative Employment Trends (Index, 1997Q3=100)


Forecast

The View from Denver: Unemployment Rises Rapidly

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q42

3

4

5

6

7

8

Denver

US

Unemployment Rate (%)

Source: Moody's Economy.com;BOC

The View from Denver: A Well-Diversified Economy

0 2 4 6 8 10 12 14 16 18

Constrn

Mfg

TCU

Wholesale

Retail

Information

Financial

Pro/Bus Svc

Edu/Hlth Svc

Leisure Svc

Other Svc

Govt

Denver

US

Percent of Total Employment


The View from Colorado: Denver Is a Popular Destination

Survey says Denver is most popular place to liveSurvey says Denver is most popular place to live

Percentage of Americans who say they want to live in this city or metropolitan area:Percentage of Americans who say they want to live in this city or metropolitan area:

Most popularMost popular Least popular Least popular

Denver: 43%Denver: 43% Detroit: 8% Detroit: 8%

San Diego: 40% Cleveland: 10% San Diego: 40% Cleveland: 10%

Seattle: 38% Cincinnati: 13% Seattle: 38% Cincinnati: 13%

Orlando: 34% Kansas City: 15% Orlando: 34% Kansas City: 15% San Francisco: 34% Pittsburgh: 17%

Tampa: 34% Minneapolis: 16% Tampa: 34% Minneapolis: 16% Source: Pew Research CenterSource: Pew Research Center

2000Q1

2001Q1

2002Q1

2003Q1

2004Q1

2005Q1

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1

2012Q1-5

0

5

10

15

20

25

30

35 Net Migration (Ths., SAAR)

Source: OED/Policy Group, March 2008

Forecast

The View from Denver: A Popular Destination

The View from Denver: Wages Remain Barely Positive

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q4-4

-2

0

2

4

6

8

10

12

14

16

Wages & Salaries

Disposable Income

Wages, Salaries, Disposable Income (YOY%)

Source: Moody's Economy.com; BEA; BOC

The View from Denver: Incomes Swing Cyclically

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q4-4

-2

0

2

4

6

8

10

12

Denver

US

Median Household Income (YOY%)

Source: Moody's Economy.com;BOC

The View from Denver: Home Sales Track Nation

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q4-30

-20

-10

0

10

20

30

Denver

US

Single Family Home Sales (YOY%)

Source: Moody's Economy.com; NAR;BOC

The View from Denver: Home Prices Did Not Boom

2000Q1 2001Q2 2002Q3 2003Q4 2005Q1 2006Q2 2007Q3 2008Q4-20

-15

-10

-5

0

5

10

15

20

Denver

US

Median Single Family Home Price (YOY%)

Source: Moody's Economy.com; NAR

The View from Denver: Foreclosures Briefly Spiked Here

19882000

20062007

0

1000

2000

3000

4000

5000

6000Foreclosure Filings

Source: OED/Policy Group, March 2008

A Denver Forecast

A Denver Forecast: Employment Growth

2005Q2

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1

2012Q1-20

-15

-10

-5

0

5

10

15Employment Change (Ths., SAAR)


Forecast

A Denver Forecast: Employment Growth

2006Q1

2007Q1

2008Q1

2009Q1

2010Q1

2011Q1

2012Q1-20

-15

-10

-5

0

5

10

Tourism Education & Health Services,Professional & Business ServicesInformationTransportation & UtilitiesManufacturing

Major Sector Employment Change (Ths., SA)


2000Q1

2001Q2

2002Q3

2003Q4

2005Q1

2006Q2

2007Q3

2008Q4

2010Q1

2011Q22

3

4

5

6

7

8

9Unemployment (%)

Forecast

Source: Moody's Economy.com;BLS

A Denver Forecast: Unemployment

2007Q1

2007Q3

2008Q1

2008Q3

2009Q1

2009Q3

2010Q1

2010Q33

4

5

6

7

8

9

10Unemployment (%)

Forecast

Source: Moody's Economy.com;BLS

US

Denver

A Denver Forecast: Unemployment

A Denver Forecast: Wages & Salaries

2000Q1

2001Q2

2002Q3

2003Q4

2005Q1

2006Q2

2007Q3

2008Q4

2010Q1

2011Q2-4

-2

0

2

4

6

8

10

12

14

16Wages & Salaries (YOY%)


Forecast

RMCA Denver Feb 2009 Cut3

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Transcript of RMCA Denver Feb 2009 Cut3