PRESS RELEASE

For Immediate Release Tuesday, March 18, 2008

Contact: Noel LaBine 763-477-3086

Wells Fargo Investment Strategist warns of quick
recovery from Fearsession

   

At a recent monthly meeting of the local chapter of the National Association of Industrial and Office Properties (NAIOP), noted Investment Strategist for Wells Capital Management, James Paulsen, warns of Fearsession. This event was held at the Marriott Hotel in the Opus Park in Minnetonka , and Noel LaBine, Executive Director of the Wright County Partnership, attended.

Using data from a number of sources, Paulsen proved that our economy is fundamentally very healthy. The sector of our economy that is hurting, or in recession, includes housing and auto manufacturing. This sector only makes up 7% of our economy. The remaining 93% of the economy has shown a 3.8% growth comparing the last quarter to a year prior. Moreover, the fundamental financial data of non-financial corporations overall show excellent numbers with large amounts of cash on hand. The data further makes the case that we are not in a recession because it shows that the inventories are at record lows. In other words, most companies have to keep on buying products to keep on doing business, which is a guarantee that the economy will keep pumping along. And by most assessments that is exactly what they will be doing, since they have had 12 quarters of back-to-back double-digit quarterly profit increases. Overall, the strength of the aggregate balance sheets hasn't been this strong since WWII.

Paulsen blames most of the fear mongering on the media, who have been spending an inordinate amount of ink on the sub-prime mortgage fiasco. Hence, he has coined the term, “Fearsession”. Nevertheless, Wall Street is also panicked, because so many of the major players there have had to write down large losses in the weakened housing market.

Also, it bears to keep in mind that although consumer demand is down about 1%, this fact along with the weak dollar is causing significant positive overall affects on the U.S. foreign trade balance. Our foreign trade balance hasn't been this positive in almost 20 years. This phenomenon will add a lot of strength to shoring up an already strong economy. And there are signs that the home-building recession is probably hitting bottom. For one thing, the home builder's stock index appears to have bottomed out with significant increases in the index in the last quarter. In most past recessions, including the 1987 recession and the 1990 savings and loan fiasco, this increase in the home builder's index has occurred with the end of those recessions. Another notable is that the home builder's affordability index is up 25%. The multiple efforts to heal the sub-prime mortgage fiasco should soon start to make a difference, and there are some people familiar with the industry, who expect full recovery to that sector within the next few months.

Meanwhile, there is over $4 Trillion in money markets, because the Fearsession has so many investors unwilling to make an investment. Paulsen cautions investors to not wait too long. The Fearsession could end very quickly, since fundamentally it is flawed.

The Partnership exists to enhance the business climate of Wright County and to help create more jobs in Wright County . The strategies the Partnership uses to achieve its mission include being an information resource and finding technical assistance; aiding business development through Business Retention & Expansion visits, providing financing resources, and providing business information and training through seminars and workshops. Also, the Partnership markets Wright County to business site locators, and maintains an excellent website, which includes a listing of commercial and industrial property available in Wright County (see www.wrightpartnership.org ). The Partnership also assists with Workforce Development and has gathered economic statistical information, which is available on its website.