SOBER OUTLOOK from WELLS FARGO

Following their recent Financial Services Conference in Boston, Karla M. Wyatt of Wells Fargo Home Mortgage emailed me the following gloomy comments:

"We continue to antipate subpar growth in 2010, with both the pace and composition of the expansion being very different than what we are used to or what we may wish.  We are far from a sustainable growth trend in line with our historical experience.  The expected pace of the expansion is characterized by real growth of 2.0 percent in the second half of 2010 with inflation (core PCE deflator) at just 1.2 percent.  Positive contributions to growth will likely come from rising consumer spending, business investment - particularly equipment and software, and of course, federal spending.  The problem remains that the recovery represents a different type of cycle with the added complication of atypical behavior among core sectors ... especially consumer spending and housing."