Welcome to the MONEYLETTER Hotline for March 5, 2008

Wall Street this past week has been a tale of two markets. Last Friday, the 29th, the market ended the week with a huge drop for the S&P 500 of 2.7% for the day. The market was close to touching its lows for the year set on January 22nd. This week the market approached the lows and then rallied. Today the market managed a true gain despite disappointment over a rescue for one of the threatened bond insurers.

The gloom of Friday has not turned into the optimism of Wednesday, but the tone is certainly better. What happened is a change in the economic news, instead of the news being bad and worse than expected, this week the news has been bad, but as expected or better. Do we detect, as we have suggested, that the market has already discounted some of the bad news we are going to receive this first half of the year?

We have argued that we believe the recession, if indeed we have one, will be of the mild kind, and this is important. It is so because the selling we have seen around the world, particularly in Asia, has resulted because of fears that the U.S. recession would be deep, and therefore deal a serious blow to the various Asian economies. The news this week so far will not quell those fears, but it should ease them some. The net effect of the news, reporting on the last month's activity, is that if the economy is reversing, it is doing so very, very slowly. The credit crunch and $100 a barrel oil are doing serious damage, but there are also forces of growth, such as exports, that are offsetting some of the damage. We believe that situation will hold, allowing the stimulus to be felt as the year proceeds. This is why we continue to recommend patience.

There is no change in our recommended allocations.

New Fund Ratings – For domestic stock funds, Fidelity Leveraged Company is now rated Buy. For international stock funds, two funds are rated Buy: T. Rowe Price New Asia and Fidelity China Region.

The Economy – The Fed's Beige Book, reporting on the economy through mid-February, told us the economy was weakening but no more than that. Inflation pressures were confined to food and energy. Most important, the monthly survey reports on activity were better than expected. They depict an economy at zero growth. We see the economy holding close to zero over the next 4-5 months.

The Stock Market – Wall Street is preoccupied by the credit crunch and the condition of the banking system. It will take time for the news about either to get better. Meanwhile, we have seen some recognition that foreign economies are weathering the storms here fairly well. We may see overseas markets acting better. We also believe the domestic market presents attractive opportunities. We continue to favor equities.

The Bond Market --

The Select Portfolio – There is no change for this portfolio.

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