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Introducing the Daily Market Commentary

As part of SunCorpís continuing effort to help our members keep up with market developments, I have been asked to write a Daily Market Commentary. This commentary will be posted in the Rate Section of the SunCorp home page. I endeavor to get the letter of the day posted early, and where necessary will be making updates to my opening comments as the trading day progress. As one-time Fed Chairman Arthur Burns liked to say, ďForecast well, but forecast often.Ē

I have been in the marketable securities business (meaning bonds of all types and descriptions) for over 30 years. I am fascinated by the interactions in the marketplace and enjoy summarizing my thoughts every day as my preparation to assist members in their investment decisions. I have been involved with the publication of this type of market news letter for over ten years. Most recently, I produced a daily commentary for Western Bridge FCU.

My commentary is intended to identify the key issues of the day, but to do so in a more light-hearted delivery than you might have seen in other places. I figure that if we didnít laugh at the craziness of the markets, weíd go crazy. I attempt to survey the news and commentary that comes across my monitors on a continuing basis. I lean pretty heavily on Bloomberg input, as this service has been the bond marketís friend since its early days in the early 1980ís. You have to hand it to Mayor Bloomberg. He has tethered the bond community almost inescapably to the Bloomberg service. He has earned this trust by keeping the Bloomberg platform tweaked and upgraded almost daily. Bloomberg is to bonds what Google is to everything else.

I am not an Investment Advisor. While I have my opinions about the direction of interest rates, I try to make it clear that these are my personal views and are not the official policy of SunCorp. I develop my ideas about rate direction through my many years of trying to wrestle with the market. I am not always right, but I am never in doubt.

Movies are one of my passions. You will often see references to movies in my work. Given the diffusion of programming available to American viewers, movies are still a common thread to which all of us can relate. (Providing, of course, you like the same movies I do).

My contact information is listed at the bottom of each commentary. I encourage you to reach out to me with any comment or question you might have. If you think I am off-base in my thinking, I would like to hear about it. If you agree, I am always happy to hear that as well.

In a quick nod to the markets right now, all eyes are on Europe. If the Europeans canít get their budget mess in order, the chances of a recession over there are very good. Some market mavens think that such a recession is not necessarily contagious to the U.S. I hope thatís true, but I am worried that the U.S. could be pulled into another economic downturn as Europe contracts. Itís not that economic activity in the U.S. is not important, of course, but for now, you will see a lot of my commentary focused on what Europe is doing, or not doing, as the case may be.

I hope you find that the Daily Market Commentary provides enlightenment as well as a chuckle or two. Happy reading!

Jeff Smith
Director of Investment Sales
SunCorp
jsmith@suncorp.coop

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