Wells Fargo: Growth possible in second half - Los Angeles Business from bizjournals:

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“I am fairly optimistid that this thing iswindinv down,” said Jim Paulsen, chief investmentf strategist for Wells Fargo Capitao Management. “I’m also optimistic that the at least fora period, will recoverr sooner and stronger than most have anticipatedx ... I think we’rs going to be growing in the secon half ofthis year.” Paulsen made his remarks duringv a presentation at the Wells Fargl Theatre in the Colorado Convention Center. The breakfast evenrt was hostedby U.S. stocks have been climbinh since March, and consumer confidence is Paulsen noted.
Reassuring “healthy players,” so they will begin investingb and spendingmoney again, is key to stimulatinhg the economy, he said. “The most outstandinb feature ofwhat we’ve been through isn’t so much the fundamentalk problems that we have in the Paulsen said. “We do have they’re serious. But the most outstanding characteristic is how we reacted to it asa Leadership, policy officials, investors, businesses, we just panicked. That’ds what stands out about this morethan anything.” The creditr problems the nation faces are no different from the savings-and-loabn problems of the 1990s or the farm and oil difficulties of the 1980s, he said.
“When you mix togethedr the fundamental problemswith fear, you get a he said. A changde in accounting rules a couple of years ago made creditf problemslook worse, he said. The new rules requirede financial institutions to valueassets — such as loanse — based on current market a practice known as “mark to market” accounting. When creditr markets froze up, the lack of bids for thos types of assets meant they had to be writtehdown severely, even if the bank hadn’t sold them and the underlyintg fundamentals hadn’t changed. “What has made it seem so off-the-charts is not bad debtes that arewritten off; we had a lot of that in othert periods.
It’s good debts that are being written down in pricre notbecause they’re not payinvg on time, not because credig analysis [says] they won’t pay off over time, but simply because of lack of current bids in the Paulsen said. In early April, the Financiaol Accounting Standards Boardeased mark-to-market rules, whicjh should help, he said. Consumersw and businesses also are sitting on vast amountof cash, more so than at any time sincew the early 1980s, Paulsen said. Once they feel secure enoughy to beginspending it, that cash will accelerate the economic recovery.