Oct 2009 Unemployment Update

25

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Kettle1

Unemployed: 27 Weeks and Over (Thousands)

6000

5000

4000

3000

2000

1000

0

Unemployment length

30

Ave Weeks Unemployed Median Weeks Unemployed

20

15

10

5

0

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Kettle1

% of Unemployed for Greater Than 27 Weeks

40%

35%

30%

25%

20%

15%

10%

5%

0%

Unemployed: 27 Weeks and Over YOY % ∆

200%

150%

100%

50%

0%

-50%

Kettle1

Assumption and Data Sources: The 2008 employment projection was based on a 40/60 split between the growth phase and the recovery phase as detailed in the table below. The historical trend tends towards a 60/40 split, but given the leveraged based nature of this recession I felt a 40/60 split was more likely to be representative.

Recession

Duration (L)

1944 1949 1953 1957 1960 1970 1974 1980 1981 1990 2001

28 16 15 16 10 9 14 5 20 17 29

High Point (H)

Decline (D)

Growth Phase (H/L)

Recovery Phase (D/L)

10 6 6 8 4 6 6 2 8 11 20

57.1% 62.5% 60.0% 50.0% 60.0% 33.3% 57.1% 60.0% 60.0% 35.3% 31.0%

35.7% 37.5% 40.0% 50.0% 40.0% 66.7% 42.9% 40.0% 40.0% 64.7% 69.0%

(Months)

16 10 9 8 6 3 8 3 12 6 9

BLS Data: http://www.bls.gov/webapps/legacy/cesbtab1.htm 2008p(1) assumes Total Non-Farm Employment peak decline on a YOY basis as of july 2009 2008p(2) assumes Total Non-Farm Employment peak decline on a YOY basis as of Dec 2009 2008p(3) assumes Total Non-Farm Employment peak decline on a YOY basis as of June 2010

Kettle1

Total Non-Farm Non Employment YOY % ∆ for the past 6 recessions

Months

0.0% 0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

30

32

34

36

-0.5% -1.0% -1.5% -2.0% -2.5% -3.0% -3.5% -4.0% -4.5% 1970

1974

1981

1990

2001

2008

2008p(1)

38

40

Kettle1

2008 Recession YOY % ∆ Total Non-Farm Employment

-1.00% -1.50% -2.00% -2.50% -3.00% -3.50% -4.00% -4.50% -5.00% 2008

2008p(1)

2008p(2)

2008p(3)

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

-0.50%

Apr-08

0.00%

Kettle1

2008 Recession Cumulative jobs lost, Total Non Non-Farm Employment

20,000,000 18,000,000 16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000 2,000,000

2008

2008p(1)

2008p(2)

2008p(3)

Oct-13

Jul-13

Apr-13

Jan-13

Oct-12

Jul-12

Apr-12

Jan-12

Oct-11

Jul-11

Apr-11

Jan-11

Oct-10

Jul-10

Apr-10

Jan-10

Oct-09

Jul-09

Apr-09

Jan-09

Oct-08

Jul-08

Apr-08

0

Kettle1

U6 Vs Total Non Non-Farm Employment YOY % ∆ for each 80% U6/U3 are being heavily manipulated. As of April Total Non Farm Employment (TNF) and the U series diverged. As of April 09, the rate or U6/U3 growth decreased, while the rate of job losses in TNF continued to accelerate .

60%

Real U3 is closer to 12% and real U6 is closer to 20% at the moment

40%

20%

-20%

-40%

-60%

Seasonally Adjusted U6 YOY % D

Seasonally Adjusted total NON Farm Employment YOY % D (Scaled 10X)

Sep-09

Aug-09

Jul-09

Jun-09

May-09

Apr-09

Mar-09

Feb-09

Jan-09

Dec-08

Nov-08

Oct-08

Sep-08

Aug-08

Jul-08

Jun-08

May-08

Apr-08

Mar-08

Feb-08

Jan-08

0%