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Economic Update For Credit Unions Economic Update For Credit Unions

October 4, 2011

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U.S. Economy StallsHeadwinds:

Consumer Confidence Is The Lowest Since The Credit Crisis

More Than A Year Away From Any Meaningful Turnaround In The Housing Market

Food And Oil Prices Are Leveling Out But Still Volatile

The Unemployment Is Likely Not To Fall Back To Pre-Crisis Levels For Years

Sovereign Debt Issues

A Flood Of New Regulations Are On The Horizon

Odds Of A Recession Is Now 5 Out Of 10

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Consumer Confidence

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Unemployment Will Remain A Serious Problem

25 Million Americans Are Unemployed or UnderemployedAverage Duration 40 Weeks

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Older Workers Are More Likely To Delay Retirement

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Record Low Mortgage Rates

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Housing Market Index

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Gas Prices

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Gold Prices

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Has Kept Interest Rates Near Zero

Lent Over $3 Trillion Through The Discount Window

Purchased Hundreds Of Billions Of Dollars Of Fannie Mae And Freddie Mac Bonds

Monetizing Debt… Making Money Out Of Nothing At All

Selling Notes And Buying Treasuries

The Federal Reserve

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European Debt CrisisJapanArab UprisingIraqAfghanistanIran

International Worries

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Debt Crisis

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The European Web Of Debt

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Japan Is A Key Supplier To Electronics And Automotive Industries, Supply-Chain Disruptions Pose A Larger Risk

To Global Manufacturing Industries

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2011

Due To Strong Profit Growth, Corporations Are Flush With Cash

Business Investment Will Outpace The Overall Economy

Due To Low Dollar, The Export Sector Is Supporting Overall GDP Growth

The Private Sector Has Deleveraged

Any Recession Is Likely To Be Short And Shallow

Bright SpotsBright Spots

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U.S. Treasury Yields

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GDP Forecasts Risk For Recession Is Now At 50%

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Market OutlookWhat’s Happening In

The Stock Market?

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33Volatility Index Reached 90

Volatility Of The S&P 500Volatility Of The S&P 500

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Profits Up Amid Lower GDP Not Hiring Workers

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Total S&P 500 Companies’ Earnings Grew 19.45% On A Year-Over-Year Basis During The Quarter, Driven By Better-than-expected Earnings Growth In 9 Of 10 Equity Market Sectors.

Earnings Growth Rates Surpassed Expectations In Several More Economically Sensitive Sectors, Including Financials, Information Technology, Industrials, Energy, And Consumer Discretionary.

Corporate Earnings

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Financial Conditions Appear Strongly Accommodative

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January 1, 2000 To December 31, 2009

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September 1, 2010 To August 31, 2011

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March 9, 2009 To August 31, 2011

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Market Predictions

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Closing ThoughtsClosing Thoughts

2011 In The Next 20 Years We Will Witness The Largest Movement Of People Into The Middle Class In The History Of The World

Eastern Europe, China And India Are Already Leading the Way, With South America, And Africa Not Far Behind

The Internet Has Democratized Information The Likes Of Which Has Not Happened Since The Invention Of The Printing Press

Freedom Is On The March And Where It Succeeds Wealth Follows

The Future Is Ours For The Taking

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