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

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“I am fairly optimistic that this thing iswinding down,” said Jim chief investment strategist for . “I’mm also optimistic that the economy, at least for a will recover sooner and stronger than most haveanticipate ... I think we’re going to be growinvg in the second half ofthis year.” Paulsem made his remarks during a presentation at the Wells Fargo Theatre in the Colorado Conventiojn Center. The breakfast event was hostecd by Denver Mayor John Hickenlooper also spokes aboutthe city’s effortd to stimulate the local U.S. stocks have been climbing since March, and consume r confidence is improving, Paulsen noted.
Reassuring “healthy players,” so they will begin investing and spendingmoney again, is key to stimulatin g the economy, he said. “The most outstanding feature ofwhat we’ve been through isn’t so much the fundamentapl problems that we have in the economy,” Paulsen “We do have those, they’re But the most outstanding characteristic is how we reacted to it as a Leadership, policy officials, investors, businesses, we just That’s what stands out about this more than The credit problems the nation faces are no differentg from the savings-and-loan problems of the 1990as or the farm and oil difficulties of the he said.
“When you mix togethert the fundamental problemswith fear, you get a he said. A change in accounting rulexs a couple of years ago made credit problems look he said. The new rules required financial institutions to valuedassets — such as loanse — based on current market prices, a practice known as “mark to accounting. When credit markets froz up, the lack of bids for thosee types of assets meant they had to be writtehdown severely, even if the bank hadn’t sold them and the underlyingg fundamentals hadn’t changed. “What has made it seem so off-the-chartsz is not bad debts that arewrittej off; we had a lot of that in otheer periods.
It’s good debtsa that are being written down in price notbecause they’re not paying on time, not because credit analysias [says] they won’t pay off over time, but simplt because of lack of current bids in the Paulsen said. In early April, the Financiakl Accounting Standards Boardeased mark-to-markeft rules, which should help, he Consumers and businesses also are sitting on vast amountsz of cash, more so than at any time sinc e the early 1980s, Paulsen said. Once they feel secure enough to beginspending it, that cash will accelerater the economic recovery.
Mayor meanwhile, said that the city was dointg its best to accelerate infrastructurwe projects in order to stimulate thelocal “In November 2007, we passed the Better Denver bond $550 million in infrastructurew bonds,” Hickenlooper said. “This last November, Denver Publif Schools passed about $450 millioj of infrastructure for theschool Typically, those bond projects take 10 to 12 years to plan and buildd out. We ... have been trying to accelerate that. Our goal is to get 90 percenft of that money spent in the next three Soright there’s $1 billion over three years.
” The city has implementecd other programs, including efforts to make public buildingss more environmentally sustainable or “green,” and an upcoming “hom e renovation bonanza” that will waive certain permit fees betweenn June 1-15 to encourage Denver residentws to renovate or upgrade their homes. The key challengs now is lack of confidence, Hickenlooper said. “‘The Todah Show’ last week presented a national study that said that Denvefr will bethe No. 1. city to in terms of real estate, from this recession,” Hickenloope r said. “It’s great news. Many of us know that thinga are going betterin Denver.
Our airpor t has held up better thanother airports; our saleas tax revenue loss has been less than others. We know and yet our sales tax revenues stilll continueto drop. We were down 10 percen t in February compared with the previous and in March we were down 15 percent comparecd with theprevious March. That’s just We know that we’re doing better, that we haven’ been hit as hard, and yet peopls still feel somehowat risk.
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