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10 th Annual Economic Forecast Breakfast

10 th Annual Economic Forecast Breakfast. Thursday, December 10, 2010. Predictions for 2010. Predictions for 2010. Predictions for 2010. Royal Banks of Missouri Economic Forecast Breakfast. Residential Real Estate. Why Are Buyer’s Fence Sitting?. Availability of credit Market confidence

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10 th Annual Economic Forecast Breakfast

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  1. 10th Annual Economic Forecast Breakfast Thursday, December 10, 2010

  2. Predictions for 2010

  3. Predictions for 2010

  4. Predictions for 2010

  5. Royal Banks of MissouriEconomic Forecast Breakfast Residential Real Estate

  6. Why Are Buyer’s Fence Sitting? • Availability of credit • Market confidence • Employment security • Confidence in the economy overall

  7. It’s A Great Time To Buy • Most affordable housing prices in years • Great selection of homes available • Motivated sellers • Record-low mortgage rates

  8. So here’s what we have come through….

  9. St. Louis County Single Family HomesNumber of Homes For Sale vs. Sold Vs. Pended

  10. St. Louis County Single Family Homes Average Price comparison 3 years – List price/Sold price

  11. St. Louis County Single Family Homes Inventory absorption over 3 years

  12. St. Louis Metro Single Family Homes 3-year comparison of permits issued 2008 – 2010 St. Louis County St. Charles County 2008 2009 2010 2008 2009 2010 YTD 10/31 393 331 375 1068 990 1248 Annual 465 432 1279 1279 Jefferson County Franklin County 2008 2009 2010 2008 2009 2010 YTD 10/31 496 452 448 83 124 116 Annual 562 561 136 154 HBA of St. Louis & Eastern MO

  13. Comparison of Multiple Family Homes St. Louis City Permits Issued 2008 - 2010 HBA of St. Louis & Eastern MO

  14. St. Louis County Foreclosures Year-to-Date

  15. MLS Market at a Glance 2010 St. Louis County 1/1/10 thru 10/31/10

  16. MLS Market at a Glance 2010 St. Louis City 1/1/10 thru 10/31/10

  17. MLS Market at a Glance 2010 St. Charles County 1/1/10 thru 10/31/10

  18. MLS Market at a Glance 2010 Jefferson County 1/1/10 thru 10/31/10

  19. MLS Market at a Glance 2010 Franklin County 1/1/10 thru 10/31/10

  20. Going for the Gold! Presented byBob Hardcastle

  21. Bob HardcastleDelta Investment Services, Inc. Securities & Advisory Services offered through VSR Financial Services, Inc., Member FINRA/SIPC A Registered Investment Adviser Delta Investment Services and VSR Financial are unrelated entities

  22. WHY BUY AT THE TOP? Metals • U.S. Dollar • $600 billion purchases of treasuries • Volatility in the market worldwide • Emerging markets GOLD PLATINUM PALLADIUM SILVER

  23. Danger Signs • War • Korea • Afghanistan/Iraq • Will it hit U.S. • What effect will it have on U.S. markets? • Europe • Portugal • Ireland • Greece • Spain

  24. Bonds • Last year government • This year corporate • Floating rate bonds

  25. Signs of Recovery • Small cap • Mid cap

  26. What Could Be The LeadingInvestor Opportunities • Metals • Silver • Palladium • Platinum • Gold • Emerging Markets • China • Pacific Rim • Australia • Canada • U.S. • Infrastructure • Small & mid cap

  27. Money Talk Radio • Sunday mornings • 8 to 10 am • KFNS 590AM (The Fan) • Also stream online at kfns.com

  28. Money Talk TV • Charter CCIN • Channel 3 in the city • Channel 8 in the county • Thursdays & Friday at 2pm • Sundays at 4pm

  29. Money Talk Cruise 2012 • Pacific Coast • Celebrity’s Century • May 5th thru May 13th, 2012 • Passports are required

  30. Happy Holidays!

  31. 10th Annual Royal Banks Economic Outlook The St. Louis Economic Outlook for 2011 December 9, 2010 William R. Emmons Assistant Vice President and Economist Division of Banking Supervision and Regulation Federal Reserve Bank of St. Louis William.R.Emmons@stls.frb.org 33 20m

  32. The St. Louis Economic Outlook For 2011 • The national economy • The view from the Fed • Risks to the national outlook • The St. Louis economy • The bad news: Jobs • The (relatively) good news: Housing and banking conditions 34

  33. Important Reminder • These comments do not necessarily reflect the views of the Federal Reserve Bank of St. Louis or of the Federal Reserve System. 35

  34. What I Said Last Year (Dec. 10, 2009).... • Dec. 2010 Update • Employment: 1,300 jobs added in St. Louis metro area during 12 months through Oct. 2010 (+0.1% increase). • At this pace, regaining the Feb. 2008 peak will take 57 years. • Pace has slowed since Spring. • Housing: St. Louis and US house prices are (still) falling. • Mortgage distress remains severe. • Building permits flat from year ago; still down more than 70% from peak in 2005. • CRE: St. Louis metro office and industrial vacancy rates have increased from year ago. • Majority of STL banks have higher CRE past-due rates now than a year ago. • The St. Louis economy is likely to recover slowly during 2010. • St. Louis labor market will remain soft. • Housing and mortgage weakness likely to linger beyond 2010. • Commercial real-estate markets will suffer from the weak recovery. 36

  35. The View From the Fed • Slow recovery underway • Little change in unemployment likely during 2011 • Low inflation • Uncertainty and caution are holding back the recovery 37

  36. Ben Bernanke: The Current Economic Trajectory Is “Unacceptable“ Percent Highest projection by an FOMC member FOMC unemployment projection Acceptable unemployment range But why would core inflation rise if unemployment remains elevated? Acceptable inflation range Vertical shading represents NBER recession periods FOMC core-inflation projection Lowest projection by an FOMC member 38 Source: Federal Reserve Board Projections for fourth quarter of 2010-13, as of Nov. 2010

  37. The Fed‘s Current Monetary-Policy Strategy* • Boost asset prices • Maintain stable inflation expectations • Increase confidence in the recovery • *These are the views of the presenter, not necessarily those of the Federal Reserve Bank of St. Louis or the Federal Reserve System. 39

  38. Risks to the Outlook • Failure to achieve “take-off velocity” • Unemployment flat or higher • Lower inflation • Renewed turbulence—Overseas… in Congress… financial markets • Renewed weakness in real-estate markets in the context of household balance-sheet deleveraging 40

  39. The St. Louis Economy • The bad news: Jobs • No evidence of sustained hiring • Labor force has been shrinking—discouraged workers? • The (relatively) good news: Housing and banking conditions • We didn’t have a crazy housing boom • House prices falling relatively slowly here • Mortgage distress is bad, not horrible • Banks generally in decent condition 41

  40. St. Louis Job Market Has Stalled US Index levels equal 100 in 1997 St. Louis metro area Vertical shading represents NBER recession periods 42 Source: Bureau of Labor Statistics St. Louis: Monthly through Oct. 2010; US: Monthly through Nov. 2010

  41. St. Louis Unemployment Remains Close to US Because Our Labor Force Is Shrinking Percent St. Louis metro area US Vertical shading represents NBER recession periods 43 Source: Bureau of Labor Statistics St. Louis: Monthly through Oct. 2010; US: Monthly through Nov. 2010

  42. St. Louis Went Up Less, Is Falling Less Ratio US St. Louis metro area 44 Sources: Zillow.com; Bureau of Economic Analysis Quarterly through Q3.2010

  43. Near-Term Pressures On Residential and Commercial RE Prices Remain Downward CRE: Price index equals 100 in 2000; Home values: Dollars per square foot National CRE price index US home values per square foot St. Louis metro area home values per square foot 45 Sources: MIT Center for Real Estate; Zillow.com Quarterly through Q3.2010

  44. Share of Mortgages 30+ Days Delinquent or in Foreclosure: Oct. 2005 Lincoln County Jersey County Madison County St. Charles County Warren County St. Louis County City St. Clair County Franklin County Jefferson County Monroe County Washington County Source: Lender Processing Services (LPS) 46

  45. Share of Mortgages 30+ Days Delinquent or in Foreclosure: Oct. 2006 Lincoln County Jersey County Madison County St. Charles County Warren County St. Louis County City St. Clair County Franklin County Jefferson County Monroe County Washington County Source: Lender Processing Services (LPS) 47

  46. Share of Mortgages 30+ Days Delinquent or in Foreclosure: Oct. 2007 Lincoln County Jersey County Madison County St. Charles County Warren County St. Louis County City St. Clair County Franklin County Jefferson County Monroe County Washington County Source: Lender Processing Services (LPS) 48

  47. Share of Mortgages 30+ Days Delinquent or in Foreclosure: Oct. 2008 Lincoln County Jersey County Madison County St. Charles County Warren County St. Louis County City St. Clair County Franklin County Jefferson County Monroe County Washington County Source: Lender Processing Services (LPS) 49

  48. Share of Mortgages 30+ Days Delinquent or in Foreclosure: Oct. 2009 Lincoln County Jersey County Madison County St. Charles County Warren County St. Louis County City St. Clair County Franklin County Jefferson County Monroe County Washington County Source: Lender Processing Services (LPS) 50

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