Economic Outlook, Potential Threats and Opportunities for Financial Services

1
Economic Outlook, Potential Threats and
Opportunities for Financial Services

• Presented by Dr. Richard W. Rahn
• The International Funds Conference 2009
• Ritz Carlton, Grand Cayman, Cayman Islands
• January 9, 2009

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Real GDP
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Real Global GDP Growth
4
Selected Commodity Prices
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U.S. Household Debt
6
Home Prices
7
Housing Starts
8
Housing Affordability Index(Assuming 5 Mortgage)
9
MBS Yield
10
Conventional 30-Year Mortgage Rates
Source Bloomberg Encima Global
11
Trade Balance
12
Federal Spending vs. Revenue
13
Federal Budget Surplus or Deficit
14
Central Bank Policy Rates
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U.S. Monetary Base(52-Week Rate of Change)
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M0 Velocity(GDP/M0)
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M1 Velocity(GDP/M1)
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U.S. Real GDP Forecast
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Global Economic Forecast
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Government Spending and Economic Performance
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CONCLUSIONS

• ACTIONS OF ECONOMIC POLICY MAKERS WILL BE
  PARAMOUNT IN DETERMINING THE PERFORMANCE OF BOTH
  INVESTMENT VEHICLES AND COMPANIES IN 2009
• THOSE IN GOVERNMENT MAKING THE DECISIONS WILL
  RARELY UNDERSTAND THE FULL IMPACT AND
  CONSEQUENCES OF THEIR ACTIONS
• THUS THOSE IN THE INVESTMENT COMMUNITY HAVING THE
  BEST POLITICAL/ECONOMIC INTELLIGENCE AND THE BEST
  ANALYTICAL TEAM TO UNDERSTAND AND EVALUATE THE
  INTELLIGENCE WILL MORE THAN EVER BE ABLE TO MAKE
  THE MOST PROFITABLE DECISIONS