Poor bond performance in the US

		Bond returns have not very positive in the US since the beginning of the year. The US bond market was one of the worst of any country in local terms especially in the G10. You would think with all of the negative talk about the US economy yields would continue their fall, but the data suggests that fixed income managers are worried about inflation and excess supply. The only thing that helped the US market was the continued strength of the dollar. If that does not hold, there will be some significant bond investment problems.
	As of: 02/27/2009 J.P. MORGAN EMERGING MARKETS BOND INDEX-PLUS The J.P. Morgan Emerging Markets Bond-plus (EMBI+) Index measures total returns of external-currency-denominated debt instruments, including Brady bonds, loans, Eurobonds and US dollar-denominated local market issues. December 31, 1993=100. Idx Level Total Return (%) 2/26 1 week YTD 12 Mos. EMBI+ 388.74 0.24 -0.70 -10.48 Argentina 46.51 -0.24 -2.08 -56.56 Brazil 638.74 -0.40 -4.85 0.62 Bulgaria 629.33 -0.54 3.50 -8.01 Colombia 311.36 0.24 -1.90 -2.29 Ecuador 278.29 1.46 27.34 -66.54 Indonesia 81.09 -1.93 -8.43 -23.74 Mexico 370.77 0.97 -4.33 -2.38 Panama 651.12 0.40 0.15 -5.82 Peru 597.64 0.91 3.44 -0.89 Philippines 262.23 0.37 3.55 -0.45 Russia 412.70 -0.80 3.00 -14.64 South Africa 153.35 0.85 5.18 1.05 Turkey 267.34 1.44 -3.92 -5.73 Ukraine 100.12 -2.99 -7.17 -57.45 Venezuela 372.63 0.97 10.99 -33.45 Source: J.P. Morgan J.P. MORGAN OVERSEAS GOVERNMENT BOND INDEX Local Currency U.S. Dollar Yield Country Index Wkly % Chg YTD % Chg Index Wkly % Chg YTD % Chg % YTD Chg Australia 707.93 -0.19 -0.36 640.18 0.85 -6.69 3.89 0.20 Belgium 437.80 -0.01 -0.91 456.21 0.47 -9.11 3.91 0.25 Canada 578.73 -0.33 -1.38 604.94 0.95 -2.08 3.17 0.23 Denmark 513.72 -0.36 -1.09 533.68 0.11 -9.35 3.64 0.29 France 482.56 -0.21 -0.72 498.76 0.26 -8.93 3.51 0.18 Germany 366.65 -0.14 -0.08 374.99 0.33 -8.34 3.15 0.07 Italy 696.12 -0.47 0.24 531.40 0.00 -8.06 4.60 0.06 Japan 237.45 -0.03 -0.41 297.98 -4.45 -8.30 1.29 0.10 Netherlands 384.08 -0.12 -0.94 392.21 0.35 -9.13 3.62 0.21 Spain 628.66 0.13 -1.24 516.90 0.61 -9.41 4.04 0.29 Sweden 615.89 0.05 -1.06 398.33 -2.62 -12.46 2.53 0.25 U.K. 565.92 -0.99 -3.17 430.96 -0.63 -3.27 3.90 0.38 U.S. 457.68 -0.42 -3.55 457.68 -0.42 -3.55 2.87 0.66 Non-U.S. 381.66 -0.36 -0.62 373.24 -2.02 -7.98 2.59 0.10 Global 405.16 -0.23 -1.33 415.62 -1.63 -6.92 2.65 0.16 YTD-Year to date. Yields-Semi-annual. Dec. 31, 1987=100. Source: J.P. Morgan Government Bond Index