9:19 am - Market Outlook by Bill Wermine

Dear Traders,

The US economy is facing a crisis that is conjuring up images of the calamities of the great depression of the 1930s. European and Asian stock markets are tumbling as terror and panic hits Wall St. When US lawmakers passed the 800 billion bailout bill on Friday the Dow reversed a 313 point gain to a 157 point loss.

In the last month the Dow has lost 12 % or 1.8 trillion USD.

The threats to the global economy are real and daunting. The collapse of Wall St's mighty financial institutions will have far reaching ramifications on every country in the synchronized global economy. The American economy is in deep trouble and the prospects for a quick recovery are dim. The so called meltdown is already happening and will take months before the full extent of the damage ignited by the sub prime mortage market is fully recovered.

Our AUD Man investments are safe. Our money is in segregated accounts administered by an independent trustee and regulated by the MAS, (monitary authority of Singapore.) Your Global Wrap account in Singapore is also solid as it operates under the same mandate. Phillip is a very conservative, prudently managed operation and has no exposure or high leverage to structured products such as Lehman/ Merril Lynch, Bear Sterns and many other financial institutions.
Man hedge funds also are conservatively managed and have low leverage. Man losses are minimal although many highly leveraged hedge funds have gone bust
Below is a letter to one of my clients who was concerned. For the August investors you should You should get a 4 % rebate of sales charges next week to be credited to your account. Losses in our funds are mainly because of the AUS dollar decline vs the RM . My chart shows heavy accumulation of the AUD at current levels by insiders. When the AUD recovers we should benefit.

Short selling bans does not affect us- Man short sells stock indexes/commodities in the futures markets but does not deal in individual shares. If the authorities close the commodity/ futures markets that would affect us. At this point there is no evidence they will do so.

The Man funds has weathered the worst of the current financial collapse and remember we have a capital guarantee unlike unit trust funds. I have confidence Man will again achieve new equity highs.

Next Sunday 12 October we are holding 2 presentations at the Best Western Seri Pacific Hotel (Formerly Pan Pacific Hotel) from 2 PM to 3 45 PM and 4 15 to 6 PM.
Title of the Presentation Is this the 1997/1998 collapse again and what can we do to protect ourselves?
We will discuss the world market outlook, futures trading opportunities in CPO and CI. We will also preview our next foundation course.
If interested to attend, please call Chong 03 2095 3991/ 016 662 0881. We are speaking Mandaran as well as English in this presentation
Maintain your cool in the face of turmoil and panic. Warren Buffet has been buying GE, Goldman Sachs as well as other quality blue chip shares. He is still maintaining his investment portfolios. Professionals are buying in the current environment.
Have a good week
Bill