08/13/2007

Dear Uncle Sam, Please Send Money

Hello:

The credit crunch bit down harder last week as it borrowers found it harder to qualify for a mortgage. On Friday, a major bank in France announced that some of its hedge funds were affected by the sub-prime mortgage situation in the United States. It is a small world in good times and in bad times. Suffice it to say that the problems in the mortgage market are now not confined to the United States.

Luckily, the Federal Reserve Bank came to the rescue by making more funds available to borrow, although the Federal Open Market Committee (FOMC) gave no indication last week that they are ready to lower interest rates. It is long time between now and the September meeting of the FOMC. Perhaps the Fed will reconsider its interest rate policy by then.

Our philosophy is that it is better to wear safety goggles than an eye-patch. If your organization is concerned about the recent market volatility, please feel free to pass this email along to the investment policy decision makers.

Terri G. Millson, CIMA, CIMC President

Ray Dicius, CSA, GEPC LPL Branch Manager