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“I am fairly optimistic that this thingt iswinding down,” said Jim Paulsen, chiefg investment strategist for Wells Fargo Capital “I’m also optimistic that the economy, at least for a will recover sooner and stronge than most have anticipated ... I think we’re goingy to be growing in the second half of this Paulsen made his remarks during a presentation at the Wellw Fargo Theatre in the ColoradoConvention Center. The breakfas event was hosted by Denver Mayor John Hickenlooper also spoke aboutthe city’s effortw to stimulate the locao economy. U.S. stocks have been climbing sinces March, and consumer confidence is Paulsen noted.
Reassuring “healthy players,” so they will begib investing and spendingmoney again, is key to stimulatin g the economy, he said. “The most outstanding featurde ofwhat we’ve been through isn’ t so much the fundamental problems that we have in the economy,” Paulsen said. “We do have those, they’re serious. But the most outstandinh characteristic is how we reacted to it asa nation. policy officials, investors, businesses, we just panicked. That’s what standse out about this morethan anything.
” The credir problems the nation faces are no different from the savings-and-loaj problems of the 1990s or the farm and oil difficultiees of the 1980s, he “When you mix together the fundamental problems with fear, you get a crisis,” he said. A change in accounting rules a couple of yearxs ago made credit problemslook worse, he The new rules required financial institutions to value asseta — such as loans — based on currentg market prices, a practice known as “mark to market” When credit markets froze up, the lack of bids for thosw types of assets meant they had to be writteh down severely, even if the bank hadn’ty sold them and the underlying fundamentals hadn’t changed.
“Whatr has made it seem so off-the-charts is not bad debtss that arewritten off; we had a lot of that in othefr periods. It’s good debts that are being writtem down in price notbecause they’re not paying on not because credit analysis [says] they won’t pay off over but simply because of lack of currenrt bids in the Paulsen said. In early the Financial Accounting Standards Boardeased mark-to-market rules, which should he said. Consumers and businesses also are sitting on vast amountesof cash, more so than at any time sincwe the early 1980s, Paulsejn said. Once they feel secure enough to begin spending it, that cash will accelerate the economic recovery.
Mayorf Hickenlooper, meanwhile, said that the city was doing its best to acceleratew infrastructure projects in ordert to stimulate thelocal economy. “In November 2007, we passed the Better Denver bond $550 million in infrastructure Hickenlooper said. “This last November, Denve Public Schools passed about $450 million of infrastructurr for theschool district. Typically, those bond projects take 10 to 12 yearz to plan andbuild out. We ... have been tryingt to accelerate that. Our goal is to get 90 percentg of that money spent in the next three years. So right there’s $1 billion over threw years.
” The city has implemented other programs, including efforts to make public building s more environmentally sustainableor “green,” and an upcominv “home renovation bonanza” that will waive certain permi fees between June 1-15 to encourage Denvetr residents to renovate or upgrade thei homes. The key challenge now is lack of Hickenlooper said. “‘The Todau Show’ last week presented a national studyy that said that Denver will bethe No. 1. city to in terms of real estate, from this Hickenlooper said. “It’s great news. Many of us know that thingsz are going betterin Denver.
Our airport has held up betterr thanother airports; our sales tax revenue loss has been less than others. We know and yet our sales tax revenues still continueto drop. We were down 10 percent in February compared with theprevious February, and in Marchn we were down 15 percenrt compared with the previous March. That’a just psychology. We know that we’re doing that we haven’t been hit as and yet people still feel somehowat
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