ECONOMIC & BOND MARKET QUARTERLY UPDATE - First Quarter 2007


Inside This Issue - First Quarter 2007

> The New Face of Leverage in the Financial System

The degree of leverage built into the financial system today has created its own unique risks, some of which have recently begun to reveal themselves to investors.

> All Eyes on the Housing Market—Fixed Income Sector Review

Corporate bonds earned 1.48% on a total return basis for the first quarter, matching the performance of Treasuries, as the yield advantage in corporate bonds was offset by spread widening.

> Economic Update

Former Fed Chairman Greenspan unsettled the investor community last quarter when he said that this economic cycle is “long at the tooth” and that the likelihood of a recession is probably around one-third.

> Dwight News

Keith McCarthy joins Dwight as Municipal Bond Sector Manager

Investment Results as of 3/31/07 [login required]

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