Inside This Issue—Fourth Quarter 2008
2009 Outlook: Prudence & Opportunity
As we enter the New Year, the global economy and the financial markets face great uncertainty. The political and regulatory landscapes are undergoing meaningful and rapid changes amid already unprecedented and unconventional monetary policy—factors that will undoubtedly result in elevated levels of volatility.
Policymakers Fight to Revive Economy as 2008 Draws to a Close—Fixed Income Sector Review
The corporate bond market's negative trend continued through year-end but eased its negative pace when compared to the extreme weakness experienced in the third quarter. The sector experienced a market value gain of 3.98%, but underperformed duration-matched Treasuries by more than 560 basis points.
Economic Update
In 2008, Adam Smith's invisible hand formed a rock-hard fist and delivered a series of forceful punches that were felt across world financial markets and economies. From Adam Smith's point of view, this beating was well deserved.
International Bond Market Update
The myth of developed and emerging economies decoupling from the U.S. business cycle was finally laid to rest in 2008 as the financial crisis hit the global economy with full force.
Investment Results as of 12/31/08
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