Weekly Economic Update for the Week of September 8y 5, 2008

Quote of the week. “We cannot control the evil tongues of others; but a good life enables us to disregard them.”– Cato the Elder

6.1%? Really? Yes, that is America’s jobless rate – and last week’s unexpected jump in jobless claims was a harbinger. The Labor Department noted that the economy lost 84,000 jobs in August (the eighth consecutive month of job losses) on its way to the highest unemployment rate in five years. Data like this would seem to discourage the Federal Reserve from raising interest rates.¹

Factory orders rise again. A bright light last week: factory orders increased for the fifth month in a row, up 1.3% for August and exceeding economists’ expectations. Transportation orders went up 3.2% after a 1.8% decrease in July.²

Oil prices keep falling. Oil futures sank under $107 per barrel Friday, closing at $106.23 on the New York Mercantile Exchange. That is a five-month low. Oil prices slipped 8% last week, while the dollar climbed to a 2008 high-water mark against the euro.³

Foreclosures rise, defaults don’t. That news comes from the Mortgage Bankers Association, which announced that 2.75% of all mortgages were in foreclosure at the end of 2Q2008, compared to 2.47% at the conclusion of the first quarter. However, the number of mortgage delinquencies dropped for the first time in two years.⁴

September starts weakly. The August jobless data and poor retail sales reports prompted a big selloff Thursday that took the major indices decisively into the red for the week.

% Change	Y-T-D	1-Year	5-Yr Avg
DJIA	-15.41	-18.58	+3.61
NASDAQ	-14.95	-13.85	+4.28
S&P 500	-15.39	-18.51	+4.33

(Source: CNNMoney.com, 9/5/08) ⁵

Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly. These returns do not include dividends.

Riddle of the week. Marie and Andy were married 21 years ago. Andy was three times as old as Marie. Today, he is twice as old as she is. How old was Marie on her wedding day?

Answer: None – the month of June has 30 days.

These views are those of Peter Montoya Inc., and should not be construed as investment advice. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx^®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. The market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards.

Citations. ¹ reuters.com/article/topNews/idUSN0439189920080905 [9/5/08]

² washingtonpost.com/wp-dyn/content/article/2008/09/03/AR2008090301149.html [9/3/08]

³ bloomberg.com/apps/news?pid=20601087&sid=aq.BlGgOwaEo&refer=home [9/6/08]

⁴ nytimes.com/2008/09/06/business/06lend.html?ref=business [9/5/08]

⁵ money.cnn.com/data/markets/dow/? [9/5/08]

⁵ money.cnn.com/data/markets/nasdaq/? [9/5/08]

⁵ money.cnn.com/data/markets/sandp/? [9/5/08]

⁵ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F5%2F07&mode=add&symb=DJIA [9/5/08]

⁵ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F5%2F03&mode=add&symb=DJIA [9/5/08]

⁵ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F5%2F07&mode=add&symb=COMP [9/5/08]

⁵ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F5%2F03&mode=add&symb=COMP [9/5/08]

⁵ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F5%2F07&mode=add&symb=SPX [9/5/08]

⁵ money.cnn.com/quote/historical/historical.html?pg=hi&close_date=9%2F5%2F03&mode=add&symb=SPX [9/5/08]