Inside This Issue—Third Quarter 2008
A Year of "What If"
Over the past year or so, a number of events that once seemed unthinkable have come to pass. Huge financial institutions have become insolvent virtually overnight, leaving the financial landscape almost unrecognizable.
Credit Crisis Claims More Victims in Third Quarter—Fixed Income Sector Review
The corporate bond market's negative trend accelerated during the third quarter and underperformed duration-adjusted Treasuries by more than 1,000 basis points according to Lehman Brothers index data, leading to a total market-value loss of 7.8%.
Economic Update
The recession is unfolding in a way that portends an even deeper downturn than we had anticipated. We now believe that real GDP will contract by 2.5% in the fourth quarter before declining by another 2% in the first quarter of 2009.
International Bond Market Update
In the third quarter the financial crisis that originated on American shores finally filtered through to real economies around the globe, rendering decoupling a theory of the past.
Investment Results as of 9/30/08
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