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Presented to: Greater San Antonio Chamber of Commerce San Antonio, September 27, 2011 Executive Vice President & Director of Research
Harvey Rosenblum
The views expressed are those of the speaker and should not necessarily be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System.
Overview
Dallas
100
98
96
94
Minneapolis Boston New York Philadelphia Kansas City Richmond Cleveland St. Louis Chicago San Francisco Atlanta
Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11
92
90 Dec-07
Dallas Boston New York Minneapolis Philadelphia Kansas City Richmond U.S. St. Louis Cleveland Chicago San Francisco Atlanta
t+12
t+18
t+24
t+30
t+36
t+42
t+48
t+54
Knifes Edge
Anaerobic Nightmare
'09 '10 '11
Texas outperforms
- Healthier banking system - No boom and bust housing cycle - Strong exports
Breaking Out of Recession: Gauging Texas Response to Fed Stimulus by David Luttrell and Harvey Rosenblum
Confidence Crisis
3-month Moving Avg.
140 125 110 95 80 65 50 35 20 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 Conference Board Consumer Confidence 85 75 65 55 45
August reading of Consumer Sentiment collapsed to the lowest level since 1980,
Conference Boards Consumer Confidence saw sharpest drop since Lehman (Oct. 08)!
still very soft demand and tighter standards for mortgage lending
May-08
Sep-08
Jan-09 May-09
Sep-09
Jan-10 May-10
Sep-10
Jan-11
May-11
Sep-11
Evolution of Inflation
Multiple bubbles burst:
Plosser, who did not support additional policy accommodation at this time.
Takeaways
Economic growth has slowed, maybe stalled Were on the edge
Recovery Caseys law: If something can go right, it should! Recession Murphys law: If something can go wrong, it will!
Additional Takeaways
Recession/ recovery not the right framework? Second Great Contraction a more realistic
thought process
Texas has outperformed other regions. WHY? o Healthier, better capitalized banks o Internationally competitive firms Key lesson: Ignore lobbying by TBTF banks for