WEEKLY MARKET COMMENTARY
For the Week of December 17, 2007
Despite the Fed’s quarter-point cut in interest rates on Tuesday, the markets swept lower this week. The
Labor Department reported a 0.8 percent increase in the consumer price index, higher than the 0.6
percent analysts had expected. The Dow lost 2.08 percent for the week, ending at 13,339.85. The S&P
dropped 2.41 percent to close at 1,467.95, and the NASDAQ fell 2.60 percent to finish the week at
Source: Morningstar.com. * Past performance is no guarantee of future results. Indexes are unmanaged and
cannot be invested into directly. Three and five-year returns are annualized. The S&P, excluding “1 Week”
returns, is a reflection of return to an investor, by reinvesting dividends after the deduction of withholding tax.
Spending More – Retail sales grew 1.2 percent in November, with half of that gain coming from
gasoline prices. That compared to a 0.2 percent increase in October, according to the Commerce
Department. Economists had expected a 0.6 percent gain in retail sales. The November increase is the
largest since May 2007.
Real Estate, Gross and Net – Although the gross value of the average American’s primary residence
makes up 29 percent of a household’s total assets, the value of an average American’s home equity is
equal to only 19 percent of the household’s total net worth. Home mortgage debt nationwide has almost
doubled (up 91 percent) since the end of 2001 (Source: Federal Reserve, BTN Research).
Pretty Conservative – The Pension Benefit Guaranty Corporation (PBGC) insures the pension benefits
of 44 million American workers and retirees in 30,460 defined benefit pension plans. As of the end of the
2007 fiscal year, the PBGC was investing its $67 billion of assets in a 28 percent stock, 72 percent bond
asset allocation (Source: PBGC, BTN Research).
Bulls During a Bear Market – Even during the two and a half year bear market (2000-02) in which the
S&P 500 fell 49 percent, the stock index still experienced three separate bull runs while in the throes of
the longer-running bear market. Each of the 3 “up-periods” produced gains of at least 19 percent. The
bull runs were short-lived, as two of the three lasted less than a month and a half month each (Source:
Rate Freeze – The Bush administration released plans on Dec. 6 of a mortgage interest-rate freeze that
would benefit some portion of the 1.2 million adjustable rate subprime mortgages that are due to reset to
higher levels between Jan. 1, 2008, and July 31, 2010. The rate-freeze would cause the lower
introductory rates offered by the mortgages to continue for an additional five years (Source: Treasury
Department, BTN Research).
WEEKLY FOCUS - Who Needs Your Social Security Number?
Because Social Security numbers (SSN) are unique to
each individual, many businesses have made them the
method of choice for establishing identity on customer
accounts. That’s why having your SSN makes it so easy
for an identity thief to set up bogus accounts in your name
– and why you should push back on businesses who
demand it from you.
Who really needs your SSN? Your employer and your
bank or financial service company may require it to
comply with federal law, and if you use Medicare or
Medcaid, your doctor’s office will need your SSN to file
claims for those charges. Beyond that, few others actually
need your SSN. What they do need is some form of
identification. A driver’s license, state-issued identification or passport is usually preferred, and some
companies will ask for a second piece of ID to confirm your license. This can often take the form of a
birth certificate, credit card bill, bank statement, pay stub or company security badge. Just make sure
none of those documents contains your SSN.
Be prepared to offer these forms of identification when you decline to give your SSN. You may be told
that you cannot conduct business with the company without divulging your SSN. Ask for a supervisor –
and keep asking, on up the chain of command until you find someone who understands the importance
of guarding your SSN and agrees to accept other forms of identification. If that doesn’t work, consider
paying cash rather than establishing credit or billing account – or find another company to do business
On average, victims of identity theft spend 60 hours and $1,180 cleaning up the damage, according to
the Federal Trade Commission. Take the first step in protecting yourself by giving your SSN only to those
who truly – by law – need that information. If you have questions about how we use and protect your SSN
or when a requirement to provide your SSN is legitimate, please feel free to contact our office at any time.
* The Standard & Poor's 500 (S&P 500) is an unmanaged group of securities considered to be representative of
the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded
blue-chip stocks. 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
Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely
recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies
representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all
dividends. WMCSAI# 263919
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