Economic Outlook and Market Update August 2012

Jack Ablin, CFA Chief Investment Officer (312) 461-7756

U.S. Economic Slowdown 2

U.S. Economic Slowdown 3

1 U.S. Economic Slowdown 4

U.S. Manufacturing Rebound 5

U.S. Manufacturing Rebound 6

2 U.S. Manufacturing Rebound 7

Global Housing Cycle 8

Global Housing Cycle 9

3 Global Housing Cycle 10

The U.S. of Europe 11

The U.S. of Europe 12

4 The U.S. of Europe 13

Europe: Past, Present and Future 14

Europe: Past, Present and Future 15

5 Europe: Past, Present and Future 16

Europe: Past, Present and Future 17

Europe: Past, Present and Future 18

6 Europe: Past, Present and Future 19

Income Inequality and Education 20

$3,000 The History of Consumer Credit (is $ bils.)

$2,500

$2,000 Revolving Credit Introduced - Enabled Consumers to Carry a Balance

"BankAmericard", later $1,500 known as "Visa" Introduced

$1,000 American Express Card Debut Diner's Club Card Debut $500

Source: Chart #0315 $0 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010

Income Inequality and Education 21

7 Income Inequality and Education 22

Educational Attainment by Income 100%

80%

60%

40% Postgraduate Total College Graduate College Nongraduate

20%

Source: Gallup Chart #0482

0% < $20k $20k - $30k - $40k - $50k - $75k - $100k - $150k - $250k - > $500k $30k $40k $50k $75k $100k $150k $250k $500k

Financial Repression 23

Financial Repression 24

8 Financial Repression 25

Equity Strategy 26

Valuation Economy

Momentum

Liquidity August 2012 Psychology

Equity Strategy 27

9 Equity Strategy 28

Equity Strategy 29

Equity Strategy 30

10 Equity Strategy 31

Investment Strategy 32

Investment Strategy 33

11 Investment Strategy 34

Investment Strategy 35

Investment Strategy 36

12 Investment Strategy 37

Investment Strategy 38

Investment Strategy 39

13 Disclosure 40

Jack Ablin is Chief Investment Officer for Harris Private , A Part of BMO Financial Group. M&I Wealth Management offers products and services through various affiliates of BMO Financial Corp., including Marshall & Ilsley Trust Company N.A., M&I Investment Management Corp., M&I Financial Advisors, Inc. (member FINRA/SIPC, maintaining its principal offices at 111 E. Kilbourn Ave., , WI 53202), North Star Trust Company and Taplin, Canida & Habacht, LLC. M&I Wealth Management and Harris Private Bank are trade names used by various subsidiary financial service providers of BMO Financial Corp. BMO and BMO Financial Group are trade names used by . coverage is underwritten by a number of insurers. Insurance products are the obligation of the insurance company. Not all products and services are available in every state and/or location.

** The information and opinions in this publication are based on sources believed to be reliable, but are not represented as accurate or complete. Opinions expressed are current as of the date of the publication and subject to change. This report does not constitute a solicitation to buy or sell securities. Small cap and international investing, especially in emerging markets, poses higher risks. Past performance is not indicative of future results.

*** Harris Private Bank is a trade name used by various financial service providers in BMO Harris Bank N.A. Banking products and services are provided by BMO Harris N.A. and its affiliates. Members FDIC. Not all products and services offered in every state and/or location.

Investment products are NOT FDIC INSURED – MAY LOSE VALUE – CARRY NO BANK GUARANTEE Banking products and services are provided by BMO Harris Bank N.A. Member FDIC.

14