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

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“I am fairly optimistic that this thingy iswinding down,” said Jim Paulsen, chief investment strategist for Wells Fargo Capital Management. “I’n also optimistic that the economy, at least for a will recover sooner and strongerr than most haveanticipated ... I think we’re going to be growing in the seconf half ofthis year.” Paulsen made his remarksd during a presentation at the Wells Fargp Theatre in the Colorado Convention Center. The breakfasyt event was hosted by Denver Mayor John Hickenlooper also spokes aboutthe city’s effort s to stimulate the local U.S.
stocks have been climbing since March, and consumert confidence is improving, Paulsen noted. Reassuring “healthy so they will begin investin g and spendingmoney again, is key to stimulating the he said. “The most outstanding feature ofwhat we’ved been through isn’t so much the fundamentak problems that we have in the Paulsen said. “We do have those, they’re But the most outstanding characteristidc is how we reacted to it asa Leadership, policy officials, investors, businesses, we just panicked.
That’x what stands out about this more than The credit problems the nation faces are no different fromthe savings-and-loab problems of the 1990s or the farm and oil difficulties of the he said. “When you mix together the fundamentaol problemswith fear, you get a he said. A change in accounting rules a couple of yearx ago made credit problems look he said. The new rules required financialk institutions to value assets such asloans — based on currenyt market prices, a practice known as “mark to market” accounting.
When credig markets froze up, the lack of bids for those typesd of assets meant they had to be written down even if thebank hadn’t sold them and the underlyiny fundamentals hadn’t changed. “Whagt has made it seem so off-the-chartws is not bad debts that arewritten off; we had a lot of that in othet periods. It’s good debts that are beingt written down in price notbecause they’rer not paying on time, not because credit analysis [says] they won’y pay off over time, but simply because of lack of curreny bids in the market,” Paulsen said. In early April, the Financial Accountinvg Standards Boardeased mark-to-market rules, whicnh should help, he said.
Consumersd and businesses also are sitting on vast amount sof cash, more so than at any time sinc the early 1980s, Paulsen said. Once they feel securw enough to beginspending it, that cash will accelerate the economifc recovery.