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Weekly Commentary
June 2, 2008

Here’s What You’ll Find in This Week’s Commentary:
Yes, We Have No Bananas!
Virtual Summer Jobs…What’s This?

Yes, We Have No Bananas…
Back in 1979, before GDP growth had turned negative, Alfred Kahn, President Carter’s Chief
Economist made a professional faux pas. He uttered the “R” word within earshot of the national
press. Higher-ups in the White House quickly put the hammer to Dr. Kahn, suggesting that he never
use the “R” word again.

To his credit, Alfred Kahn did not back down. He announced that from then on he would refer to the
recession as a “banana.” He then began to say things like, “I think we are in for a serious banana.” He
was funny, and he was right. Wow. What a turnaround.
     How can this be? How can it be so wrong to use the word “recession” in 1979, but also wrong
        not to use it 2008? Remember a couple of weeks ago when Bush refused to use the R word?
        The press was all over this. The world has surely turned upside-down.
     The good news is that politicians and the press, no matter how negative or positive they talk,
        can’t actually change the direction of the economy. Recessions and recoveries are caused by
        good and bad policy, not press conferences.

Kahn was right because the Federal Reserve had become tight enough to cause a recession. But all the
talk of a recession today will be proved wrong because the Fed is not tight. In fact, the past 7 years of
monetary policy has been the most accommodative since the 1970s.

As a result, no matter how much all this negative talk undermines economic emotions, and drives down
consumer confidence, a recession is highly unlikely. The Fed is accommodative, tax rates are still low
and productivity remains strong. As a result, the economy will prove resilient once again. Yes, we
have no bananas!

   Returns through 05/30/08                           1-Week                Y-T-D               1-Year              3-Year   5-Year         10-Year
 Dow Jones Industrials                                 1.27%               -4.72%               -7.30%               6.23%   7.39%           3.57%
 NASDAQ Composite                                      3.19%               -4.89%               -2.70%               6.72%   9.59%           3.56%
 Standard & Poor's 500                                 1.78%               -4.63%               -8.49%               5.32%   7.76%           2.53%
 MSCI EAFE IL*                                         0.75%               -9.15%              -15.08%               8.54%   11.36%          1.62%
 Source: Morningstar, BigCharts.com, Yahoo.Finance.com, MSCI.com                                                                      *IL: in local currency

 The performance data quoted represents past performance. Indicies are unmanaged and cannot be invested into directly.
 3, 5 and 10-year returns are annualized. Assumes dividends are not reinvested.




Virtual Summer Jobs Pay Off~
What does all this mean? I actually read the article and still only had the vaguest idea except to say that
I thought it would make an interesting human interest story for all of you to read and enjoy. Here it
goes!
    1. Turns out that if you are a computer savvy, young person these days with no prospects of the
        usual summer job you need not fear.
    2. You can make up to $35,000.00 a year by being for example a fashion designer for virtual
        characters.
    3. One young lady makes fairy wings and dresses for other peoples fairies (they aren’t real fairies
        of course– they are virtual fairies).
    4. Other young people are making a name for themselves as architects and real estate moguls in
        the virtual world . Virtual people need housing too!
    5. It is seemingly quite lucrative and fun as well.
You get to do almost anything in the virtual world that you can do in the real one without ever leaving
your computer! This is good news because summer jobs are supposedly in short supply with only
about a third of teens expecting to find work this summer.

If you think all this is nonsense then just check out these figures; The virtual world boasts some
722,000 players and allows money made online to be withdrawn from real banks and with players
spending close to $1.5 million on virtual clothes, jewelry, homes, cars and real estate. So, the world is
imaginary but the jobs and income are not. Who knew! Move over minimum wage – the reality is that you can
make more money this summer in the virtual world!
If you would like to review your portfolio, give us a call.
Best regards,

Jan, Brian & Lorie Graber

P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would
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their permission to be added.

To view past commentaries, please visit our website at www.GraberWealth.com.

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Securities offered through LPL Financial, Member FINRA/SIPC
* 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.
* The 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 MSCI EAFE IL is an unmanaged group of securities considered representative of the non-U.S. stock market in
general.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

The above indexes are unmanaged indexes, which cannot be invested into directly. Past performances is no guarantee
of future results. This information is for informational purposes only and is not intended to provide specific advice or
recommendations for any individual. Before making any financial commitments, please consult with your financial
professional.

				
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