Conference Call 10/21/08

•Federal Reserve: Industrial Production through Sep -2.8% (last decline like that since 73, 74) may be (in part) because of hurricanes

•-1.2% for retail sales, which is an accurate forecast for 3rd q

•Housing starts -6.3%

•3rd q and 4th q will be weak

•Good news: energy prices -1.9%

•Lower energy costs, at current fuel prices, it adds 75bil over next 2 quarters that will be available for consumers to spend., gas prices are like a tax cut for the consumer.

•2 stage plan: buy NOW : Hypermarket food centers, packed foods and meats, healthcare services, household products, biotech, food distributers

•Start to add traditional plunge industries: Fin services, cons durables, and tech stocks

•“the last 2 weeks is as ugly as a stock market can get”

Building Permits

Initial Jobless Claims

Housing Starts

CPI YoY

CPI YoY ex. Food and Energy

PPI YoY

PPI YoY ex. Food and Energy