Finance Highlights 2008 1118 - Laserfiche WebLink

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UPDATE CIN SEPTEMBER'S MARKET VOLATILITY CDNT... January-Fepruary 2pf1$ iutyFAuB+ist 2007 2006.2006 Glnbal cred$ wncerns begin; Housing market Flight to quality; slowdown Liquidity dries up February2007 f 20022006 I J I First signs of subprime Housing market mn a rablems boom bubble ~B p appear Aggressive federal Reserve interest rate acts; Etonamrc. data weakening; financal firm lasses wntinue November-pbcember ?.a17 financial firmssuffer large lasses; lsrnminent C605 resign; Mapes far quick resolution fade September 2006 Unprecedented fnancia! turmai, FNMA & fHLMC placed under federal conservatorship; Large flrmsfall; Go~rnment tries to mitigate erlsis MarcFt-April 2Q06 Bear Stearns bLlyn4C; Fed opens dlsaount window The Treasury's Bailout Plan Faced with the possibility of a systemic collapse of the financial system, the Treasury Department and the Federal Reserve used every tool at their disposal in order to manage the crisis. In addition to essentially nationalizing several large firms and facilitating the takeovers of others, the Federal Reserve provided unprecedented levels of liquidityto the marketplace. The Treasury also formulated a $700 billion plan that will involve the government's purchase of impaired assets from the balance sheets of banks and investment firms, It is hoped that by purchasing these assets the government can restore liquidity to the banks, repair their credit standing, and reinvigorate their willingness to lend to businesses and consumers. The Treasury would hold the impaired assets until their marketvalue improves and then resell them, perhaps even earning a profit. The Treasury's plan received final congressional approval on October 3rd and implementation will begin shortly. While it is unknown how effective the plan will be, many market observers feel that at this point the Treasury's plan provides the best chance for a financial sector recovery and a limitto future damage caused to the broader economy. From Main Street to Wall Streetand Back Again The difficulty on Wall Street began with housing weakness on Main Street. This process has now come full circle as financial market volatility has contributed to a slowdown on Main Street. National economic reports reflect this, and the slowdown is even more evident in certain regions of the country such as the industrial Midwest, Florida, Arizona, Nevada and California. Housing market weakness has been exacerbated by high energy and food prices, a weakening job market, and a difficult credit environment. Forecasts for the remainder of the year call for much slower economic growth, and consumer confidence remains very poor. Since recent economic indicators do notyet reflect the impact of September's financial market events, the potential exists for growth to slow even more than previously predicted. Conclusion The ongoing financial market volatility and economic slowdown have justifiably worried investors, who have never experienced such market volatility and may be unsure how best to proceed in these difficult times. In this climate, it is important to put safety first. Please do not hesitate to contact us if you have any questions regarding this challenging market environment. Brian Perry, Vice President, Investment Strategist Page 3 ®2008. Chandler Asset Management, lnc, A Registered Investment Adviser