2009 Financial Market Update [Page 1]

MainStreet Advisors

MainStreet Advisors February 27, 2009 Financial Market Update [page 1]

Economic Update

New gross domestic product (GDP) numbers released this week show the U.S. recession is deepening at a faster pace than initially anticipated. Economic Indicators, Quarterly Change

Fourth GDP fell at a seasonally adjusted rate of 6.2%, representing the 8.0% steepest decline since a 6.4% drop in the first quarter of 1982. Falling

prices led to decreased inventories which helped contribute to the large 6.0% fourth-quarter contraction. Consumer spending, which comprises approximately 70% of the economy, declined at the fastest pace in nearly 4.0% 30 years. 2.0% Speaking before the Senate on Tuesday, Fed Chairmen Ben Bernanke explained that the deteriorating jobs market and tight lending conditions 0.0% have weakened consumer sentiment and spending. Additionally, businesses have cut capital spending due to the difficulty of obtaining -2.0% credit. Bernanke, and other monetary policy makers, expect a significant contraction in the first two quarters of this year with an anticipated return -4.0% to growth in the latter half of 2009. Q1 08 Q2 08 Q3 08 Q4 08

New U.S. state unemployment claims jumped to a 26-year high, driving Real GDP Core CPI* Unemployment Rate

total claims past the five million mark for the first time. Additionally, Source: Bureau of Economic Analysis, Bureau of Labor Statistics orders for durable goods, a future demand indicator, fell sharply in *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index January suggesting that consumer spending may remain weak in the coming months. Conditions such as these continue to weigh on U.S. Feb. 24th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.6% consumer confidence--to a 41-year low in February. The Conference Feb. 24th S&P/Case-Shiller Composite 20 Index, December 150.7 Board of Consumer Research found that many consumers believe that Feb. 24th Consumer Confidence Index, February 25.0 economic conditions will continue to worsen and cause further softening Feb. 25th MBA Purchase Applications 250.5 in the jobs market. Feb. 25th Existing Home Sales, January SAAR* 4.49M Feb. 25th EIA Petroleum Status Report, Wkly. Chg. 0.7M Barrels th The National Association of Realtors reported a 5.3% decline in existing- Feb. 26 Durable Goods New Orders, Jan. Mthly. Chg. -5.2% th home sales in January as buyers waited for additional information Feb. 26 Initial Jobless Claims ( Week ending 2/21) 667,000 th regarding the effects of the stimulus package. Despite this, existing- Feb. 26 New Home Sales, January 309,000 th 1,895 bcf home inventories fell to a two-year low, signaling that continued price Feb. 26 EIA Natural Gas Report, Wkly. Chg. Feb. 27th Real GDP, Q408 Quarterly Change SAAR* -6.2% declines have started to appeal to potential buyers. Feb. 27th GDP Price Index, Q408 Quarterly Change SAAR* 0.5% Feb. 27th NAPM-Chicago Bus Barometer Index, February 34.2 Feb. 27th Consumer Sentiment Index, January 56.3

Source: The Census Bureau of the Department of Commerce, Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, Bloomberg, The Wall Street Journal, The Conference Board, National Association of Home Builders. ppg Journal, The Conference Board, National Association of Home Builders.

MainStreet Advisors February 27, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week lower, particularly on the long-end, as concerns intensified that government debt supply will grow to Yield Curves

unprecedented levels as the U.S. borrows to fuel economic growth and 5.0% finance a $1.75 trillion budget deficit. The Federal Deposit Insurance Corp. approved on Friday an interim rule to guarantee new debt sold by banks that would later convert into common shares in an expansion of its 4.0% Temporary Liquidity Guarantee Program. The backing will be available to senior unsecured debt that converts into shares no later than the 3.0% guarantee’s expiration, which is June 30, 2012. Market participants suggest that this program will be funded by an additional supply of 2.0% government debt. Meanwhile, the Treasury Department said it is willing to convert up to $25 billion of its Citigroup preferred stock holdings into common stock in a move that would give the government a 36% share of 1.0% the bank. This capital injection makes the company’s bondholders more secure, which sparked an improvement in senior bond prices. However, 0.0% going forward, Citigroup still faces major challenges. Although the bank 2 yr 3 yr 5 yr 10 yr

is not being nationalized, they may see reduced cash flows due to U.S. Treasury Muni (Tax Equiv.)* deteriorating macro-economic conditions, which will, in effect, likely reduce the value of the company’s fixed income securities. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 2.20.09 2.27.09 Change 3 month T-Bill 0.00% 0.27% 0.27% 2-Year Treasury 0.90% 1.08% 0.18% 5-Year Treasury 1.54% 2.07% 0.53% 10-Year Treasury 2.20% 2.98% 0.78% 30-Year Treasury 2.63% 3.66% 1.03%

Source: Bloomberg, FTN Financial, The Wall Street Journal, US Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 2/26/2007 6/28/2007 2/27/2008 6/27/2008 2/25/2009 2/27/2008 6/27/2008 2/25/2009 2/26/2007 6/28/2007 10/25/2007 10/27/2008 10/25/2007 10/27/2008

Source: Merrill Lynch; February 27, 2009 Source: Merrill Lynch; February 27, 2009 MainStreet Advisors February 27, 2009 Financial Market Update [page 3]

Stock Market Update

The S&P 500 ended a roller coaster week well below the key support levels established in November. The S&P 500 closed Friday at 735.09, Weekly Change

down 34.96 points, or 4.54%, this week. The Dow Jones Industrial 0.0% Average also sank to new lows, ending the week at 7,062.93, down 302.74 points, or 4.11% for the week. However, the Nasdaq Composite -1.0% closed 1,377.84, 61.72 points above its November low, but down 4.40% for the week. -2.0% Bank nationalization rumors came to a head on Friday, when Citigroup (C) announced a plan for increased federal support. Under the plan, -3.0% according to Bloomberg, Citigroup would convert its preferred shares into common shares. This would give the U.S. government a stake in the -4.0% company of approximately 36%, with other preferred shareholders controlling about 38% and leaving current common equity holders with a -5.0% paltry 26% of the company. Prior to Friday morning’s announcement, shares of Citigroup were trading slightly higher than last week, but the -6.0% announced plan sent share plunging 39% to close at $1.50 a share. Large Cap Mid Cap Small Cap Int'l

Major money-center and regional banks sold off on the Citigroup news Source: Standard & Poor's, Russell Investment Company, MSCI with Bank of America (BAC) off 25%, Royal Bank of Scotland (RBS) off 20% and Wells Fargo (WFC) down 16%. JP Morgan (JPM) was little changed on Friday, proof that investors have confidence that the bank maintains its strong financial position.

General Electric (GE) announced Friday that it would slash its dividend Year to Date Change by one-third to $.10 a share from $.31 a share. The move would save the company about $9 billion a year in an attempt to salvage GE’s 0.0% coveted AAA debt rating, the highest rating available. In response to GE’s reduced dividend neither Moody’s nor S&P changed their outlook -5.0% G

-10.0%

Issue 2.20.09 2.27.09 Change -15.0% Dow Jones 7,365.67 7,062.93 -4.11% S&P 500 770.05 735.09 -4.54% NASDAQ 1,441.23 1,377.84 -4.40% -20.0% Russell 1000 Growth 341.94 325.77 -4.73% S&P MidCap 400 466.62 449.44 -3.68% -25.0% Russell 2000 410.96 389.02 -5.34% MSCI EAFE 1,047.71 1,007.42 -3.85% Large Cap Mid Cap Small Cap Int'l

MSCI EM 521.40 505.84 -2.98% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI Small Cap 88.08 84.44 -4.14%

Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital International, The Wall Street Journal, MarketWatch. MainStreet Advisors February 27, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Crude Oil futures flourished this week, hitting a one-month high on Thursday. The commodity slid for the first time in four sessions on Weekly Change

Friday after the government released another sobering round of 4.0% economic data, but crude contracts still managed to finish the week up 15% at $44.76 per barrel on the New York Mercantile Exchange. Many investors speculate that oil will test the $50-$52 price barrier heading into 3.0% the March 15th OPEC meeting, where the cartel will discuss whether or not to further cut production. 2.0%

Continuing a four-session skid, Gold futures ended Friday down a dime, marking a 6% decline on the week. Gold contracts fell to $942.50 at the 1.0% end of trading, signaling a sharp pullback after topping $1,000 one week ago. 0.0%

Copper ended its four-day positive run on Friday, also impacted by the dreary economic data that reflected a deepening global recession. -1.0% Contracts for May delivery fell 2.6% on the day, but the commodity was still up on the week, with the most actively traded contracts gaining 7.7%. DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

5.0%

1 Issue Previous Week Current Change 0.0% Gold 1,002.20 942.50 -5.96% -5.0% Crude Oil Futures 38.94 44.76 14.95%

Copper 1.43 1.54 7.69% -10.0% Sugar 19.92 19.70 -1.10% HFRX Equal Wtd. Strat. Index 1,015.81 1,011.54 -0.42% -15.0% HFRX Equity Hedge Index 998.29 988.42 -0.99% HFRX Equity Market Neutral 1,033.61 1,032.57 -0.10% -20.0% HFRX Event Driven 1,189.01 1,176.69 -1.04% -25.0% HFRX Merger Arbitrage 1,345.30 1,345.01 -0.02% Dow Jones AIG Commodity Index 102.88 105.99 3.02% -30.0% FTSE/NAREIT All REIT 62.61 62.19 -0.67% DJ AIG Index NAREIT HFRX Equal Wtd Index

1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

Past performance may not be indicative of future results and the performance of a specific individual account may vary substantially from performance presented herein. Therefore, no current or prospective client should assume that future performance will be profitable or equal the performance results reflected herein. In calculating account performance, MainStreet Advisors has relied upon information provided by various sources believed to be accurate and reliable but cannot be guaranteed. All past recommendations are available upon request. Investments in equities, fixed income, mutual funds, and exchange traded funds involve risk and may lose value.

Different types of investments involve varying degrees of risk, and there can be no assurance than any specific investment will be profitable. MainStreet Advisors investment strategies may involve portfolio turnover, which could negatively impact the next after-tax gain experienced by an individual client.

MainStreet Advisors displays its performance results in addition to the market index that it believes represents a similar strategy in terms of asset allocation (stocks, bonds), generally accepted investment objectives (growth, income, or balanced), style benchmarks (growth, value, or core), geographic allocations (US, Foreign, or Global), sector allocation potential, and cap size objective (small cap, mid cap, or large cap). The index is shown in order for clients to make a comparison of performance for the designated time period. However, the indices shown above may not completely reflect the risk or volatility of the overall market or of the risk taken by the MainStreet Advisors program. The indexes shown are not intended to be an absolute benchmark for the MainStreet Advisors program due to the fact that clients may not be able to duplicate exact holdings in the indexes shown, MainStreet Advisors programs may reallocate some or all assets in the program to cash in response to market conditions, and MainStreet Advisors programs utilize a flexible management strategy with regard to equity selection, cap size, style, and asset allocation. It should be noted that market indices are always fully invested and holdings are limited to the index charter. The market index used for comparison is an unmanaged index and is a common measure of performance of the relevant stock markets. They are not available for direct investment.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors March 6, 2009 Financial Market Update [page 1]

Economic Update

Unemployment data released on Friday showed that labor markets are continuing their downward trend, leaving no end in sight to the bleak Economic Indicators, Quarterly Change

economic landscape. The unemployment rate, calculated using 8.0% household surveys, jumped 0.5% to a 25-year high of 8.1%. A

Morningstar report confirms that the U.S. economy lost 651,000 jobs in 6.0% February, marking the fourth month in a row of 600,000-plus job losses. The large decline in labor is a result of companies responding quickly to 4.0% decreasing demand and increasing costs. 2.0% Another report released by the Department of Labor shows non-farm business productivity falling 0.4% in the fourth quarter. The Wall Street 0.0% Journal reported that even though productivity was negative, the fact that the decrease was slight in the face of a severe recession is encouraging. -2.0% Unit labor costs, an important inflationary gauge, jumped 5.7% in the final quarter of 2008. However, these costs are up just 1.8% from a year ago -4.0% suggesting that inflation remains under control. Q1 08 Q2 08 Q3 08 Q4 08

The Bureau of Economic Analysis announced on Monday that personal Real GDP Core CPI* Unemployment Rate

income increased $44.8 billion (0.4%) and disposable personal income Source: Bureau of Economic Analysis, Bureau of Labor Statistics (DPI) increased $183.0 billion (1.7%) in January. Personal consumption *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index expenditures also increased in January by 0.6%. According to the report, pay raises for federal civilian and military personal aided the monthly Mar. 2nd Personal Income, Jan. Monthly Chg. 0.4% increases. Mar. 2nd Consumer Spending, Jan. Monthly Chg. 0.6% Mar. 2nd ISM Mfg. Index - Level, February 35.8 The Institute for Supply Management released data on industry Mar. 2nd Construction Spending, Jan. Monthly Chg. -3.3% performance this week. Arts, Entertainment, and Recreation was the Mar. 3rd Domestic Motor Vehicle Sales, February 6.4M only industry to report growth. Mar. 3rd ICSC-Goldman Same Store Sales, Wkly. Chg. -0.6% Mar. 3rd Pending Home Sales, Jan. Monthly Chg. -7.7% th Prospects for near-term improvement in economic conditions appear to Mar. 4 MBA Purchase Applications 236.4 th be poor. The Wall Street Journal reports that many CFOs expect the Mar. 4 Announced Layoffs, February 186,350 th -697,000 recession to continue for another 14 months. Mar. 4 Non-farm Payrolls, Feb. Monthly Chg. Mar. 4th ISM Non-Mfg. Index, February 41.6 Mar. 4th EIA Petroleum Status Report, Wkly. Chg. -0.7M Barrels Mar. 5th Initial Jobless Claims, Wkly. Chg. 369,000 Mar. 5th Non-farm Productivity, Q4 08 -0.4% Mar. 5th Non-farm Unit Labor Costs, Q4 08 5.7% Mar. 5th EIA Natural Gas Report, Wkly. Chg. -102 bcf Source: The Census Bureau of the Department of Commerce, Bureau of Economic Analysis, U.S. th Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, Bloomberg, The Wall Street Mar. 6 Unemployment Rate, February 8.1% Journal, The Conference Board, National Association of Home Builders. Mar. 6th Consumer Credit, January Change $1.8B MainStreet Advisors March 6, 2009 Financial Market Update [page 2]

Bond Market Update

The bond market proved very resilient this week as details regarding tax increases, universal healthcare, and President Obama's spending plan Yield Curves

became clearer to investors. Ongoing fears over the health of the 5.0% banking sector continued to push investors towards government bonds in another round of safe haven buying. For the week, yields on the benchmark 10 and 30 year US Treasuries declined by 19 and 21 basis 4.0% points respectively. Despite the rise in Treasury bond prices this week, intraday volatility was very large. Prices stayed relatively neutral until 3.0% Wednesday, when worries about the government's ability to pay for the announced mortgage bailout package sent bond yields up nearly 15 bps. 2.0% Thursday saw flight to quality buying in just as large an amount as the day prior. But by Friday, fears of the GM bailout, rising government deficits, more weak economic data releases and unemployment topping 1.0% 8% contributed to a modest sell-off. Overseas, the Bank of England cut their benchmark short term rate to 0.5% and stepped up their quantitative 0.0% easing measures. The European Central Bank dropped their rate to 2 yr 3 yr 5 yr 10 yr

1.5%. U.S. Treasury Muni (Tax Equiv.)*

Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 2.27.09 3.6.09 Change 3 month T-Bill 0.26% 0.21% -0.05% 2-Year Treasury 1.00% 0.91% -0.09% 5-Year Treasury 1.99% 1.83% -0.16% 10-Year Treasury 3.02% 2.83% -0.19% 30-Year Treasury 3.71% 3.50% -0.21%

Source: Bloomberg, FTN Financial, The Wall Street Journal, US Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 3/6/2007 7/5/2007 3/6/2008 7/7/2008 3/4/2009 3/6/2008 7/7/2008 3/4/2009 3/6/2007 7/5/2007 11/2/2007 11/4/2008 11/2/2007 11/4/2008

Source: Merrill Lynch; March 6, 2009 Source: Merrill Lynch; March 6, 2009 MainStreet Advisors March 6, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks ended a difficult week on a positive note with a rally late Friday to close in positive territory. However, all the major stock indexes ending Weekly Change

the week down with the Dow Jones Industrial Average closing at 0.0% 6,626.94, down 435.99 points or 6.17% and the broader S&P 500 closing at 683.38, down 51.71 points or 7.03%. The DJIA and S&P 500 are now down for the year 24.49% and 24.34%, respectively. The declines were -2.0% led by the financial sector, which lost 18.68% of its value over the week and now has lost over 50% of its value in 2009. Healthcare and -4.0% consumer staples lead for the week, losing just 3.0% and 3.19%, respectively. -6.0% The Wall Street Journal reported on Monday that the federal government planned to revamp the bailout of insurance giant, American International -8.0% Group (AIG). The new plan provides an additional $30 billion of TARP funds and eases the financial strain on AIG caused by steep interest and dividend payments to the government. After reporting dismal February -10.0% sales numbers on Tuesday, General Motors's (GM) auditor raised doubts about the company’s ability to continue existing as a going concern. The Large Cap Mid Cap Small Cap Int'l

announcement coincided with announcements from GM executives that Source: Standard & Poor's, Russell Investment Company, MSCI they are more open to an expedited bankruptcy orchestrated and financed by the government.

After cutting its dividend for the first time in 71 years, General Electric (GE) failed to overcome speculation that losses from its GE Capital finance unit would threaten the company’s coveted AAA rating. Shares Year to Date Change of GE's equity came under pressure on Wednesday before paring its losses Thursday and Friday. Wells Fargo announced Friday that it would 0.0% cut its dividend to $.05 per share from $.34 per share to allow the company to retain an additional $5 billion each year. Investors cheered -5.0% the move and sent shares of the San Francisco based bank up $0.49 or 6.03% on Friday. -10.0%

Issue 2.27.09 3.6.09 Change -15.0% Dow Jones 7,062.93 6,626.94 -6.17% S&P 500 735.09 683.38 -7.03% -20.0% NASDAQ 1,377.84 1,293.85 -6.10% Russell 1000 Growth 325.77 308.51 -5.30% -25.0% S&P MidCap 400 449.44 408.13 -9.19% Russell 2000 389.02 351.05 -9.76% -30.0% MSCI EAFE 1,007.42 935.58 -7.13% MSCI EM 505.84 488.15 -3.50% Large Cap Mid Cap Small Cap Int'l

MSCI Small Cap 84.44 81.63 -3.33% Source: Standard & Poor's, Russell Investment Company, MSCI

Alternative Investments Market Update

After declining for eight consecutive sessions, Gold regained strength, climbing 2.3% on Thursday and 1.6% on Friday. Bloomberg reported Weekly Change

that the directional change was likely due to investors seeking 2.0% alternatives to stocks and government bonds as they responded to the latest weak unemployment data. Crude oil rose to a five week high, 0.0% climbing 4.4% on Friday, while the US dollar weakened against the euro. -2.0%

The New York Times reported that the billionaire financier Carl Icahn -4.0% invested an additional $250 million into the Icahn Fund Ltd., which was down approximately 33% at the end of January. This infusion is an -6.0% attempt to avoid selling shares as investors request more than $1 billion -8.0% in redemptions. -10.0%

-12.0%

-14.0%

DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

5.0%

1 0.0% Issue Previous Week Current Change Gold 942.50 942.70 0.02% -5.0%

Crude Oil Futures 44.76 45.52 1.70% -10.0% Copper 1.54 1.69 9.74% -15.0% Sugar 19.70 19.30 -2.03% HFRX Equal Wtd. Strat. Index 1,011.54 1,008.41 -0.31% -20.0% HFRX Equity Hedge Index 988.42 990.89 0.25% -25.0% HFRX Equity Market Neutral 1,032.57 1,029.28 -0.32% -30.0% HFRX Event Driven 1,176.69 1,171.15 -0.47% HFRX Merger Arbitrage 1,345.01 1,339.47 -0.41% -35.0% Dow Jones AIG Commodity Index 105.99 105.83 -0.15% -40.0% FTSE/NAREIT All REIT 62.19 54.73 -12.00% DJ AIG Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors March 13, 2009 Financial Market Update [page 1]

Economic Update

Consumer confidence has started to improve modestly as economic policy measures provide some encouragement, according to the Economic Indicators, Quarterly Change

Reuters/University of Michigan Surveys of Consumers. The preliminary 8.0% March reading for the Consumer Sentiment Index increased 0.3 points to

56.6, surpassing consensus expectations as perception of government 6.0% policy increased by the strongest monthly gain on record. Despite the slight increase, consumers remain aware of the challenges facing the 4.0% economy. Reuters reported that consumers’ assessment of current economic conditions is at the weakest level since November. The RBC 2.0% CASH Index, a measure of consumer attitudes towards the economy, personal financial situations, savings, and confidence to make large 0.0% investments, showed a very slight increase in consumer confidence as well. While consumers continue to be weary, signs of stabilizing -2.0% confidence are encouraging and suggest a possible bottoming of consumer sentiment. -4.0% Q1 08 Q2 08 Q3 08 Q4 08 The U.S. trade deficit narrowed for a sixth consecutive month in January to the lowest level since 2002 amid further softening in consumer Real GDP Core CPI* Unemployment Rate

demand. The U.S. Department of Commerce announced that the Source: Bureau of Economic Analysis, Bureau of Labor Statistics approximate $36.0 billion deficit resulted from a $7.6 billion decline in *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index exports and an $11.5 billion decrease in imports. A deepening of the recession suggests that trade activity may remain sluggish in the coming Mar. 10th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.2% months. Mar. 10th Wholesale Inventories, Jan. Monthly Chg. -0.7% Mar. 11th MBA Purchase Applications 294.3 Data released this week showed that the unemployment rate exceeded Mar. 11th EIA Petroleum Status Report, Wkly. Chg. 0.7M Barrels 10% in four states—Michigan, South Carolina, California, and Rhode Mar. 12th Retail Sales, Feb. Monthly Chg. -2.7% Island. A recent survey conducted by Bloomberg showed economists Mar. 12th Initial Jobless Claims 654,000 th project the jobless rate will hit 9.4% in 2009 and remain elevated into Mar. 12 RBC Cash Index, March 8.2 th 2011. However, the U.S. Department of Commerce reported that Mar. 12 Business Inventories, Jan. Monthly Chg. -1.1% th consumer spending has shown signs of stabilizing. Excluding auto- Mar. 12 EIA Natural Gas Report, Wkly. Chg. -112 bcf th -36.0B related sales, retail sales advanced 0.7% last month marking the second Mar. 13 International Trade Balance Level, January th Export Prices, Feb. Monthly Chg. -0.1% monthly gain. A pickup in consumer spending should help counteract Mar. 13 Mar. 13th Import Prices, Feb. Monthly Chg. -0.2% further expected declines in business spending, causing some Mar. 13th Consumer Sentiment Index, March 56.6 economists to revise their estimates for gross domestic product slightly upwards, according to the Wall Street Journal.

Source: The Census Bureau of the Department of Commerce, Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, Bloomberg, The Wall Street Journal, Reuters, Royal Bank of Canada. MainStreet Advisors March 13, 2009 Financial Market Update [page 2]

Bond Market Update

Although U.S. Treasuries rose earlier in the week amid successful 10- and 30-year auctions, the government debt market finished the week Yield Curves

lower, particularly on the long-end. World stock market gains sapped 5.0% demand for Treasuries and China’s Premier Wen Jiabao expressed concern about the safety of U.S. government debt. China, the largest holder of U.S. Treasuries, is asking “the U.S. to maintain its good credit, 4.0% to honor its promises and to guarantee the safety of China’s assets.” Comments from China can move markets because any large-scale 3.0% selling would increase bond yields dramatically, which would subsequently lift borrowing costs for the U.S. government, consumers 2.0% and companies. Concern has risen this year about the value of Treasuries after their steep rally in 2007 and 2008. The U.S. government has sharply increased bond supply as it seeks to restore growth and pay 1.0% for record budget deficits. This increase in supply will likely put upward pressure on yields and decrease the value of bonds. A longer-term 0.0% worry for foreign investors is that all of the aggressive economic stimulus 2 yr 3 yr 5 yr 10 yr

and monetary policies will fuel inflation risks, which would hurt the value U.S. Treasury Muni (Tax Equiv.)* of the dollar and cut into the return on Treasuries when converted back to foreign currencies, according to the Wall Street Journal. However, China Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin has continued the buy U.S. government debt. It increased Treasury

Issue 3.6.09 3.13.09 Change 3 month T-Bill 0.21% 0.20% -0.01% 2-Year Treasury 0.91% 0.98% 0.07% 5-Year Treasury 1.83% 1.87% 0.04% 10-Year Treasury 2.83% 2.89% 0.06% 30-Year Treasury 3.50% 3.66% 0.16%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 3/12/2007 7/11/2007 11/8/2007 3/12/2008 7/11/2008 3/10/2009 3/10/2009 3/12/2007 7/11/2007 11/8/2007 3/12/2008 7/11/2008 11/10/2008 11/10/2008

Source: Merrill Lynch; March 6, 2009 Source: Merrill Lynch; March 6, 2009 MainStreet Advisors March 13, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks posted their biggest weekly gain since November by rising four days in a row on renewed hope that banks have seen the worst of the Weekly Change

credit crisis. The Dow Jones Industrial Average lost 78 points on 14.0% Monday but gained for the rest of the week to close at 7,223.98 up 597.04 points, or 9.01%. The broader S&P 500 gained 73.17 points, or 12.0% 10.71%, to end the week at 756.55. 10.0% The rally started on Tuesday after Citigroup (C) announced that it earned a profit in both January and February. The sentiments were echoed on 8.0% Thursday by Bank of America (BAC) CEO, Ken Lewis. Major money- 6.0% center banks, Citigroup, Bank of America and JP Morgan (JPM) rose for

the week, gaining 72.82%, 83.44% and 49.09%, respectively. General 4.0% Electric (GE), the subject of recent Wall Street speculation over the size of losses sustained at its GE Capital unit, had its debt downgraded one 2.0% notch to AA+. The stock rallied 13% on the news as the market feared the downgrade would be larger than one-notch, according to the Wall 0.0% Street Journal. Large Cap Mid Cap Small Cap Int'l

The Switzerland-based pharmaceuticals company, Roche (ROG) agreed Source: Standard & Poor's, Russell Investment Company, MSCI to acquire the 44% of Genentech (DNA) it does not already own for $95.00 per share. The merger values the South San Francisco-based biotechnology firm at approximately $46.7 billion, according to the Wall Street Journal. Drug makers, Merck (MRK) and Schering-Plough (SGP) announced they had agreed to combine under the Merck name. Under the deal, according to Reuters, Schering Plough shareholders would Year to Date Change receive $10.50 in cash and 0.5767 Merck shares for every share of Schering. The deal places a 34% premium on Schering’s March 6 0.0% closing price. -5.0% Stocks in Asia and Europe rallied on the bank optimism as well, with the Nikkei 225 gaining 6.3% in Japan and the FTSE 100 gained 6.3% in the U.K. The U.K. based bank, Barclays PLC participated in the broad -10.0% based bank rally gaining 14.35% on the week. -15.0%

Issue 3.6.09 3.13.09 Change Dow Jones 6,626.94 7,223.98 9.01% -20.0% S&P 500 683.38 756.55 10.71% NASDAQ 1,293.85 1,431.50 10.64% -25.0% Russell 1000 Growth 308.51 336.03 8.92% S&P MidCap 400 408.13 456.71 11.90% Large Cap Mid Cap Small Cap Int'l

Russell 2000 351.05 393.09 11.98% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EAFE 935.58 958.40 2.44% MSCI EM 488.15 515.97 5.70% MSCI Small Cap 81.63 81.30 -0.40%

Alternative Investments Market Update

Crude oil prices declined on Friday after the International Energy Agency (EIA) and the Organization of Petroleum Exporting Countries (OPEC) Weekly Change

reduced their global demand forecasts due to the recession in major 25.0% consuming countries. According to Bloomberg, the IEA, which advises 28 developed nations on energy policy, decreased its consumption outlook 0.3% to 84.4 million barrels a day. OPEC decreased their 20.0% estimate for 2009 by 520,000 barrels to 84.6 barrels a day. OPEC ministers will meet in Vienna on March 15th to discuss reducing 15.0% production. Since September, production has been cut by 4.2 million barrels. Crude oil prices finished the day down 1.7%; however, they finished the week up 1.6% and are up 3.7% year to date. 10.0%

According to a survey conducted by InvestHedge Billion Dollar Club, the 5.0% fund of hedge funds industry contracted by about 30% last year. It was estimated that fund of funds industry represents about half of hedge fund assets, and it totals approximately $1.8 trillion spread out across 557 0.0% funds. UBS Global Asset Management was ranked as the largest fund, with $34 billion as of December 31st. DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

5.0%

1 Issue Previous Week Current Change 0.0% Gold 942.70 930.10 -1.34% -5.0% Crude Oil Futures 45.52 46.25 1.60%

Copper 1.69 1.66 -1.78% -10.0% Sugar 19.30 18.98 -1.66% HFRX Equal Wtd. Strat. Index 1,008.41 1,009.44 0.10% -15.0% HFRX Equity Hedge Index 990.89 985.25 -0.57% HFRX Equity Market Neutral 1,029.28 1,025.32 -0.38% -20.0% HFRX Event Driven 1,171.15 1,180.26 0.78% -25.0% HFRX Merger Arbitrage 1,339.47 1,352.41 0.97% Dow Jones AIG Commodity Index 105.83 105.94 0.10% -30.0% FTSE/NAREIT All REIT 54.73 66.53 21.56% DJ AIG Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors March 20, 2009 Financial Market Update [page 1]

Economic Update

Ongoing economic challenges contributed to the Federal Reserve’s decision to infuse as much as $1.15 trillion into the financial system Economic Indicators, Quarterly Change

through a combination of bond purchases. The Fed acknowledged that, 8.0% while the economy is likely to remain weak in the near-term, it believes

that recent policy actions will support a gradual economic recovery. 6.0% Expectations for inflation remain subdued and the Fed noted that inflation may linger awhile below levels that promote economic growth. The U.S. 4.0% Department of Labor reported that the Consumer Price Index advanced 0.4% in February, up a modest 0.2% in the last year. Excluding food and 2.0% energy, prices increased 0.2% for the month and 1.8% for the one-year period ending in February. 0.0%

Signs of continued economic slack are most evident in the jobs market. -2.0% The U.S. Department of Labor reported that the number of people collecting unemployment benefits reached a record high of 5.47 million, -4.0% for the week ending March 7th. Americans making jobless claims for the Q1 08 Q2 08 Q3 08 Q4 08 first time surpassed 600,000 for the seventh consecutive week, according to Bloomberg. Real GDP Core CPI* Unemployment Rate

Source: Bureau of Economic Analysis, Bureau of Labor Statistics Housing starts surprisingly picked up in February, marking the first month *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index of positive activity in home construction since June 2008. The U.S. Department of Commerce announced that housing starts soared 22.2% Mar. 16th Empire State Mfg Survey, March -38.2 since January to a seasonally adjusted annual rate of 583,000, far Mar. 16th Frgn Dmnd for LT US Securities, January -43.0B exceeding consensus estimates. However, housing starts were 47.3% Mar. 16th Industrial Production, Feb. Monthly Chg. -1.4% below February 2008, reflecting how mounting inventories and weak Mar. 16th Housing Market Index, March 9.0 home sales have impacted new construction. A survey by the National Mar. 17th ICSC-Goldman Same Store Sales, Wkly. Chg. -0.1% Association of Home Builders released this week showed that builder Mar. 17th Housing Starts, February 583,000 th confidence remained unchanged in March as builders wait to see how Mar. 17 Producer Price Index, Feb. Monthly Chg. 0.1% th the economic stimulus package will impact potential buyers. Mar. 18 MBA Purchase Applications 257.1 Mar. 18th Consumer Price Index, Feb. Monthly Chg. 0.4% th 2.0M Barrels The Conference Board Leading Economic Index declined 0.4% in Mar. 18 EIA Petroleum Status Report, Wkly. Chg. th Initial Jobless Claims 646,000 February after a minor increase in January. The Index fell at a Mar. 19 Mar. 19th Leading Indicators, Feb. Monthly. Chg. -0.4% seasonally adjusted annual rate of 4.1% for the six-month period ending Mar. 19th Philidelphia Fed Survey, March -35.0 in February, a significantly faster rate than for the six months ending Mar. 19th EIA Natural Gas Report, Wkly. Chg. -30 bcf January. However, six of the ten indicators advanced for the month.

Source: The Census Bureau of the Department of Commerce, Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, Bloomberg, The Wall Street Journal, Reuters, National Association of Home Builders, The Conference Board of Consumer Research. MainStreet Advisors March 20, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week higher, particularly in the two- to 10- year maturity range. Treasury 10-year notes experienced their largest Yield Curves

weekly gain since December amid the Federal Reserve’s announcement 5.0% to purchase as much as $300 billion in two- to 10-year government debt. The announcement on Wednesday spurred an epic rally and the greatest one-day surge in 10-year Treasuries in more than four decades, 4.0% according to Bloomberg. However, bonds retreated Thursday and Friday as investors began to question whether the buying program’s impact will 3.0% be long-lasting, given the small size of the plan relative to the Treasury market, which is nearly $6 trillion. While the Fed’s program may keep 2.0% bond yields in a relatively low range, rising supply may temper the decline in yields going forward, according to some market participants. 1.0% The Fed joined the Bank of England and the Bank of Japan this year to buy government debt as a way to increase money supply to combat the 0.0% recession. By buying Treasuries and increasing the size of its programs 2 yr 3 yr 5 yr 10 yr

to buy mortgage-backed securities and agency bonds, the Fed aims to U.S. Treasury Muni (Tax Equiv.)* lower mortgage rates and reduce the premium that corporations need to pay to secure funding from the capital markets. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 3.13.09 3.20.09 Change 3 month T-Bill 0.20% 0.22% 0.02% 2-Year Treasury 0.98% 0.89% -0.09% 5-Year Treasury 1.87% 1.66% -0.21% 10-Year Treasury 2.89% 2.65% -0.24% 30-Year Treasury 3.66% 3.65% -0.01%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 3/19/2007 7/18/2007 3/19/2008 7/18/2008 3/17/2009 3/19/2008 7/18/2008 3/17/2009 3/19/2007 7/18/2007 11/15/2007 11/17/2008 11/15/2007 11/17/2008

Source: Merrill Lynch; March 6, 2009 Source: Merrill Lynch; March 6, 2009 MainStreet Advisors March 20, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks continued their rally this week, but with less vigor than last week’s rally. The Dow Jones Industrial Average, after reaching an intraday peak Weekly Change

of 7,571.08 on Wednesday, ended the week at 7,278.38, 54.04 points or 12.0% 0.75% higher than last week. The broader S&P 500 finished the week at 768.54, 1.58% higher than last week with an intraday high of 802.98 on 10.0% Wednesday.

8.0% American International Group (AIG) stirred mob-like furor over $165 million in retention bonuses it paid to employees in its Financial Products Group. The key employees entered into contracts a year ago, as they 6.0% were needed to help AIG unwind the complex derivative positions on the company’s books. Politicians demanded the bonuses be paid back and 4.0% proposed a 90% tax on any bonuses received by individuals earning more than $250,000 at any financial institution that received federal 2.0% bailout money. 0.0% In a sign of strength for the technology sector, software maker, Oracle (ORCL), announced that it would pay is first dividend in the company’s Large Cap Mid Cap Small Cap Int'l

history, according to the Wall Street Journal. Oracle would pay its Source: Standard & Poor's, Russell Investment Company, MSCI shareholders a quarterly dividend of five cents a share, a total annual payout of about $1 billion.

The rally in financial shares ended this week as the sector lost 14.83% on Thursday and Friday, enough to erase gains made earlier in the week. However, health care stocks lost the most this week, down 2.4% as a Year to Date Change group, while utilities gained 7.32% and materials and energy stocks both gained over 3.6%. 0.0%

-5.0%

Issue 3.13.09 3.20.09 Change Dow Jones 7,223.98 7,278.38 0.75% -10.0% S&P 500 756.55 768.54 1.58% NASDAQ 1,431.50 1,457.27 1.80% -15.0% Russell 1000 Growth 336.03 341.66 1.68% S&P MidCap 400 456.71 464.38 1.68% Russell 2000 393.09 400.11 1.79% -20.0% MSCI EAFE 958.40 1,067.45 11.38% MSCI EM 515.97 557.46 8.04% -25.0% MSCI Small Cap 81.30 89.94 10.63% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors March 20, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

The Dow Jones AIG Commodity Index returned 6.48% for the week, which was likely supported by the weakening dollar and strengthening Weekly Change

equity markets. Crude oil, up 10.40% since Monday, climbed in excess 8.0% of $50/barrel on Thursday to close at a 3 month high. Bloomberg reported that the Fed’s recently announced treasuries plan spurred 6.0% expectations of a recovery in oil demand. China, the world’s biggest gold producer, announced plans to increase its underground gold reserves by 4.0% 800 metric tons and raise production to 290 tons this year, following last year’s output of 282 tons. 2.0% According to the Wall Street Journal, finance ministers of 20 of the world’s leading countries faced difficulty deciding how best to regulate 0.0% hedge funds during their conference on repairing the global financial system. The US and UK favor increase disclosure regarding their -2.0% activity; however, countries such as France and Germany are pushing for a more strict regulatory regime, almost to the level seen with banks. -4.0%

DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

5.0%

1 Issue Previous Week Current Change 0.0% Gold 930.10 956.20 2.81% -5.0% Crude Oil Futures 46.25 51.06 10.40%

Copper 1.66 1.80 8.43% -10.0% Sugar 18.98 20.17 6.27% HFRX Equal Wtd. Strat. Index 1,009.44 1,004.65 -0.47% -15.0% HFRX Equity Hedge Index 985.25 996.60 1.15% HFRX Equity Market Neutral 1,025.32 1,010.83 -1.41% -20.0% HFRX Event Driven 1,180.26 1,180.61 0.03% -25.0% HFRX Merger Arbitrage 1,352.41 1,349.89 -0.19% Dow Jones AIG Commodity Index 105.94 112.81 6.48% -30.0% FTSE/NAREIT All REIT 66.53 64.23 -3.46% DJ AIG Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors March 27, 2009 Financial Market Update [page 1]

Economic Update

Data released this week suggests the beginning of an economic recovery, despite ongoing challenges. Consumer confidence increased Economic Indicators, Quarterly Change again in March, according to the Reuters/University of Michigan Surveys of Consumers. Although consumer sentiment lingers near record lows, 7.0% consumers have become increasingly confident in government economic policy. However, Reuters acknowledged that consumers reporting 5.0% declines in income during the last year increased and that the surveys 3.0% did not indicate expectations for personal finances to improve in the near- term. The U.S. Department of Commerce reported that personal income 1.0% decreased 0.2% in February, while personal spending advanced 0.2%. -1.0% This marked the second month of increased spending following declines since July 2008. The report also indicated that personal savings as a -3.0% percentage of personal income swelled to 4.2% last month. The higher -5.0% savings rate is understandable given continued softness in the jobs market, yet this could delay economic growth because consumer -7.0% spending comprises approximately 70% of gross domestic product Q1 08 Q2 08 Q3 08 Q4 08 (GDP). The Commerce Department reported that GDP contracted at a 6.3% annual rate in the fourth quarter, down slightly from earlier Real GDP Core CPI* Unemployment Rate

estimates of 6.2%. According to the Wall Street Journal, economists are Source: Bureau of Economic Analysis, Bureau of Labor Statistics projecting an equally weak first quarter—advance estimates will be *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index released late April. Durable goods orders soared 3.4% in February, beating consensus estimates of a 2.0% decline. January durable goods Mar. 23rd Existing Home Sales, February SAAR* 4.72M orders were revised significantly lower, making it difficult for economists Mar. 24th ICSC-Goldman Same Store Sales, Wkly. Chg. -0.4% to determine whether the manufacturing sector is recovering. Mar. 24th State Street Investor Confidence Index, March 70.0 Mar. 25th MBA Purchase Applications 267.9 Activity in the housing market picked up in February as falling prices Mar. 25th Durable Goods New Orders, Feb. Monthly Chg. 3.4% began to attract buyers. The National Association of Realtors (NAR) Mar. 25th New Home Sales, February 337,000 th announced that sales of existing-homes surged 5.1% to a seasonally Mar. 25 EIA Petroleum Status Report, Wkly. Chg. 3.3M Barrels th adjusted annual rate of 4.72 million. The NAR attributed 40% to 50% of Mar. 26 GDP Price Index, Q408 Quarterly Change SAAR* 0.5% th the acceleration to sales of distressed homes, which typically sell at a Mar. 26 Real GDP, Q408 Quarterly Change SAAR* -6.3% th 652,000 20% discount to normal market value. The Commerce Department Mar. 26 Initial Jobless Claims ( Week ending 3/21) th Corporate Profits, After Tax, Q408 Yearly Chg. -36.3% reported that new-home sales advanced 4.7% to a seasonally adjusted Mar. 26 Mar. 26th EIA Natural Gas Report, Wkly. Chg. 3 bcf annual rate of 337,000, the first gain in activity since July 2008. While Mar. 27th Consumer Spending, Feb. Monthly Chg. 0.2% sales remain considerably below February 2008, the signs of renewed Mar. 27th Personal Income, Feb. Monthly Chg. -0.2% momentum suggest the housing market may be in a bottoming process. th Mar. 27 Core PCE Price Index, Feb. Monthly Chg. 0.2% Mar. 27th Consumer Sentiment Index, March 57.3 Source: The Census Bureau of the Department of Commerce, Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, Bloomberg, The Wall Street Journal, Reuters, National Association of Realtors. MainStreet Advisors March 27, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week modestly lower, as a bout of profit- taking forced bonds to give up earlier gains, according to traders. Bond Yield Curves

prices rose on Wednesday as the Federal Reserve began its first round 6.0% of targeted purchases of Treasuries since the early 1960s, buying $7.5

billion of the securities. The central bank also bought notes on Friday 5.0% with maturities ranging from two to three years. In an attempt to improve credit markets and revive economic growth, the Fed plans to purchase 4.0% up to $300 billion in notes and bonds over the next six months. Traders said prices may still have some upside potential in coming days amid 3.0% three more rounds of bond purchases next week. Bonds may be further supported by demand from companies and funds seeking to acquire 2.0% liquid assets for distributions at quarter end, especially Treasury Bills and other short-dated notes. Also, buying related to portfolio rebalancing 1.0% among bond funds in response to month-end adjustments in benchmark indexes may lend some support, according to the Wall Street Journal. 0.0% Meanwhile, Japanese government bonds, the best-performing sovereign 2 yr 3 yr 5 yr 10 yr

debt in dollar terms over the last six months, are expected to slump as U.S. Treasury Muni (Tax Equiv.)* supply increases significantly. The Japanese central bank plans to fund at least 10 trillion Yen ($102 billion) of Prime Minister Taro Aso’s Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin proposed stimulus spending through increased sales of government debt. Issue 3.20.09 3.27.09 Change 3 month T-Bill 0.22% 0.15% -0.07% 2-Year Treasury 0.89% 0.90% 0.01% 5-Year Treasury 1.66% 1.80% 0.14% 10-Year Treasury 2.65% 2.76% 0.11% 30-Year Treasury 3.65% 3.66% 0.01%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 3/26/2007 7/25/2007 3/27/2008 7/25/2008 3/24/2009 3/27/2008 7/25/2008 3/24/2009 3/26/2007 7/25/2007 11/22/2007 11/24/2008 11/22/2007 11/24/2008

Source: Merrill Lynch; March 6, 2009 Source: Merrill Lynch; March 6, 2009 MainStreet Advisors March 27, 2009 Financial Market Update [page 3]

Stock Market Update

Domestic stock markets closed higher for the third consecutive week despite some weakness on Friday. Most of the week's gains can be Weekly Change

attributed to a surge in momentum on Monday, which drove the Dow 8.0% Jones Industrial Average, the S&P 500 and the NASDAQ indices to climb more than 6.7%. Stocks were volatile throughout the week, yet major indices were able to hold onto gains for the third consecutive week. The 6.0% recent bear-market rally has March positioned to hold the third best monthly returns for the stock market since 1950. Since the uptick, 10% of year-to-date losses have been erased. Some investors speculate that next Friday’s slew of data reports, including unemployment, quarterly 4.0% earnings, and housing data, could test the current favorable market sentiment. 2.0% Bank of America (BAC) and JPMorgan (JPM) lost 3.2% and 5.8% respectively on Friday, eroding some of the recent rally that resulted after announcements that they were profitable in January and February. 0.0% General Motors Corporation (GM) posted a 6.2% gain after rumors surfaced that the automaker is working to restructure its European Large Cap Mid Cap Small Cap Int'l

operations to raise capital. Amazon (AMZN) dropped 4.3% after a Source: Standard & Poor's, Russell Investment Company, MSCI downgrade from “conviction buy” at Goldman Sachs, indicating that they no longer consider the shares an attractive buy.

European equity markets ended lower on Friday amid a warning from AIR France-KLM regarding expected losses in both the first and second quarters, which put downward pressure on airline stocks. Technology Year to Date Change firms also retreated following a profit warning from Accenture (ACN). Barclays (BARC), however, rallied after a stress test of its books 0.0% indicated that the firm will not need to raise more capital to sustain itself, lifting the stock over 24% by the end of trading Friday. -4.0% Issue 3.20.09 3.27.09 Change Dow Jones 7,278.38 7,776.18 6.84% S&P 500 768.54 815.94 6.17% -8.0% NASDAQ 1,457.27 1,545.20 6.03% Russell 1000 Growth 341.66 360.45 5.50% S&P MidCap 400 464.38 498.83 7.42% -12.0% Russell 2000 400.11 429 7.22% MSCI EAFE 1,067.45 1,104.18 3.44% MSCI EM 557.46 599.73 7.58% -16.0% MSCI Small Cap 89.94 92.51 2.86% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors March 27, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

After settling on Thursday at $54.34 per barrel, its highest level since November, crude oil futures lost some ground on Friday. According to Weekly Change

the Wall Street Journal, many market participants feel that Friday’s action 3.0% represented a brief pause before crude oil prices continue higher. Light trading volume also resulted as investors weighed a report from tanker 2.0% tracker Petrologistics showing that OPEC was producing about one million barrels a day above its quota in March. 1.0% Copper and other metals fell this week as the dollar’s recent gains put a strain on demand for commodities as an inflationary hedge, according to 0.0% Bloomberg. The dollar’s weekly gain was larger than any seen in the last five weeks. The increase came as investors fled the euro and pound on -1.0% fears that Europe’s recession may be deepening. -2.0% Bloomberg also reported that emerging market exchange-traded funds (ETFs) attracted $1.6 billion in net inflows in the week ended March 25th, -3.0% suggesting that hedge funds are using the ETFs to raise risk levels. The reports suggests that hedge funds, among some of the most active DJ AIG Index NAREIT HFRX Equal Wtd Index

traders of ETFs, are speculating that recent government efforts are going Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research to be successful in reviving global economic growth.

Year to Date Change

5.0%

1 Issue Previous Week Current Change 0.0% Gold 956.20 925.30 -3.23% -5.0% Crude Oil Futures 51.06 52.38 2.59%

Copper 1.80 1.84 2.22% -10.0% Sugar 20.17 21.65 7.34% HFRX Equal Wtd. Strat. Index 1,004.65 1,007.55 0.29% -15.0% HFRX Equity Hedge Index 996.60 1,011.75 1.52% HFRX Equity Market Neutral 1,010.83 1,012.16 0.13% -20.0% HFRX Event Driven 1,180.61 1,191.46 0.92% -25.0% HFRX Merger Arbitrage 1,349.89 1,351.45 0.12% Dow Jones AIG Commodity Index 112.81 110.18 -2.33% -30.0% FTSE/NAREIT All REIT 64.23 66.11 2.93% DJ AIG Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors April 3, 2009 Financial Market Update [page 1]

Economic Update

Global leaders of the Group of 20 nations (G-20) gathered in London this week to discuss strengthening the world economy and regulation of Economic Indicators, Quarterly Change global finance. Though details were vague, the G-20 pledged its commitment to doing whatever possible to reflate the economy. The 7.0% summit concluded with a tone of partnership and a decision to turn to the International Monetary Fund (IMF), with leaders planning to increase the 5.0% fund’s lending capacity to $1 trillion. According to the IMF, this 3.0% commitment will enable it to provide “significant new financing and a broad mandate for action.” Days earlier, the Paris-based Organization 1.0% for Economic Cooperation and Development (OECD) announced -1.0% downward revisions to its world economic forecast for 2009. The OECD expects that the global economy will contract by 2.75% and that world -3.0% trade volumes will decrease by 13.2% as tightness in lending conditions -5.0% and low confidence continue to weigh on economic output and employment. -7.0% Q1 08 Q2 08 Q3 08 Q4 08 Economic data released this week suggest that economic challenges will linger in the U.S., despite recent signs of slight improvements. The U.S. Real GDP Core CPI* Unemployment Rate

Department of Labor reported that payrolls shed 663,000 jobs in March, Source: Bureau of Economic Analysis, Bureau of Labor Statistics driving the unemployment rate to a 25-year high of 8.5%. Job losses for *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index January were revised significantly lower, bringing total losses since the recession began in December 2007 to 5.1 million jobs—3.3 occurred in Mar. 31st ICSC-Goldman Same Store Sales, Wkly. Chg. 1.1% the last five months. The Wall Street Journal noted that if heavy job Mar. 31st S&P/Case-Shiller Composite 20 Index, January 146.4 losses persist, consumers are likely to avoid spending on big-ticket Mar. 31st Consumer Confidence Index, March 26.0 items, which typically lead economic recoveries. Ongoing concerns Apr. 1st Domestic Motor Vehicle Sales, March 6.9M about the labor market as well as the near-term economic outlook Apr. 1st MBA Purchase Applications 268 continued to guide consumer sentiment for the month. Consumer Apr. 1st Announced Layoffs, March 150,411 st confidence improved modestly in March but remains near record lows, Apr. 1 ISM Mfg. Index - Level, March 36.3 st according to the Conference Board of Consumer Research. Apr. 1 Construction Spending, Feb. Monthly Chg. -0.9% Apr. 1st Pending Home Sales, Feb. Monthly Chg. 2.1% st 2.8M Barrels The Institute of Supply Management reported that activity in the non- Apr. 1 EIA Petroleum Status Report, Wkly. Chg. nd Initial Jobless Claims ( Week ending 3/28) 669,000 manufacturing sectors contracted at an accelerated rate in March, while Apr. 2 Apr. 2nd Factory Orders, Feb. Monthly Chg. 1.8% “rapid decline in manufacturing appears to have moderated somewhat.” Apr. 2nd EIA Natural Gas Report, Wkly. Chg. 0 bcf Five of the eighteen manufacturing industries surveyed reported Apr. 3rd Non-farm Payrolls, March Monthly Chg. -663,000 expectations of benefiting from the economic stimulus. rd Apr. 3 Unemployment Rate, March 8.5% Apr. 3rd ISM Non-Mfg. Index, March 40.8 Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, International Monetary Fund, The Conference Board, Institute of Supply Management, Organization for Economic Cooperation & Development. MainStreet Advisors April 3, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week modestly lower, as investors cut bond holdings in anticipation of next week’s auction of an estimated $59 billion Yield Curves

in notes and TIPS, part of a record amount of debt the government is 6.0% likely to issue this year. Ten-year notes declined again, contributing to a

1.7% loss in U.S. government securities, according to Merrill Lynch’s 5.0% U.S. Treasury Master Index. Treasuries extended losses on Friday after

Fed Chairman Bernanke said in a speech that the central bank must 4.0% retain the flexibility to withdraw its record injection of credit into the economy to keep inflation in check when the crisis subsides. This is 3.0% significant because it reinforces the fact that the Fed will need to eventually sell Treasuries, which will then increase interest rates, 2.0% according to Bloomberg. The spread between yields on 10-year TIPS and notes, which reflects traders’ outlook for consumer prices, closed at 1.0% 1.41%, suggesting that investors expect very low inflation over the next ten years. This spread has averaged 2.26% over the last five years. 0.0% Meanwhile, emerging market governments and companies borrowed 2 yr 3 yr 5 yr 10 yr

more in the international bond markets this week than at any other time U.S. Treasury Muni (Tax Equiv.)* in the past two years, as interest costs dropped significantly. Investor confidence was bolstered by a pledge from the Group of 20 nations to Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin quadruple the resources of the IMF.

Issue 3.27.09 4.3.09 Change 3 month T-Bill 0.15% 0.21% 0.06% 2-Year Treasury 0.90% 0.96% 0.06% 5-Year Treasury 1.80% 1.87% 0.07% 10-Year Treasury 2.76% 2.91% 0.15% 30-Year Treasury 3.66% 3.70% 0.04%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/1/2009 4/2/2007 8/2/2007 4/4/2008 8/4/2008 4/1/2009 4/2/2007 8/2/2007 4/4/2008 8/4/2008 12/1/2008 12/1/2008 11/30/2007 11/30/2007

Source: Merrill Lynch; March 6, 2009 Source: Merrill Lynch; March 6, 2009 MainStreet Advisors April 3, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks posted their fourth straight weekly gain, with the Dow Jones Industrial Average up 241.41 points, or 3.1% to end the week at Weekly Change

8,017.59. The broader S&P 500 gained 26.56 points, or 3.26% to finish 8.0% at 842.50. Stocks in Europe posted similar gains as those in the U.S., the FTSE 100 gained 3.35% this week and the broader DJ Euro Stoxx 50 Index gained 3.78% this week. Stocks in Japan gained as well, with the 6.0% NIKKEI 225 adding 1.42%.

Stocks posted strong gains on Thursday fueled by optimism that new accounting rules would ease the burden on banks weighed down by toxic 4.0% assets. The rule changes will alter the definition of decline in an asset’s value considered “other than temporary.” The Wall Street Journal reports that the banks will have more room to avoid write-downs of those assets 2.0% with thinly traded markets that banks intend to hold to maturity. The CFA Institute, whose members are made up of portfolio managers and financial analysts, oppose the rule change claiming that the new rules 0.0% give corporations too much discretion to determine the value of its illiquid securities. Large Cap Mid Cap Small Cap Int'l

Source: Standard & Poor's, Russell Investment Company, MSCI The Obama administration’s auto task force, under the threat to withhold further funding, announced that General Motor’s (GM) Rick Wagoner would step down from his post as chairman and CEO. The administration simultaneously announced its displeasure with the restructuring plans GM and Chrylser submitted in February. On Thursday, CarMax (KMX) announced that it earned $0.17 a share on Year to Date Change revenue declines of 2 in the fourth quarter, better than the $0.2 a share that analysts expected. Earnings increased $0.07, or 70% from the year 0.0% ago period, but sale decreased by 28, according to Marketwatch. The stock rose over 6% on Thursday, but gave back those gains on Friday as -2.0% analysts digested the earnings announcement.

-4.0% Issue 3.27.09 4.3.09 Change Dow Jones 7,776.18 8,017.59 3.10% -6.0% S&P 500 815.94 842.50 3.26% NASDAQ 1,545.20 1,621.87 4.96% Russell 1000 Growth 360.45 373.34 3.58% -8.0% S&P MidCap 400 498.83 524.51 5.15% Russell 2000 429 456.13 6.32% -10.0% MSCI EAFE 1,104.18 1,134.73 2.77% MSCI EM 599.73 613.07 2.22% Large Cap Mid Cap Small Cap Int'l

MSCI Small Cap 92.51 95.02 2.71% Source: Standard & Poor's, Russell Investment Company, MSCI

Alternative Investments Market Update

The New York Times reported that, despite the bear market in 2008, the top 25 hedge fund managers earned a total of $11.6 billion for the year. Weekly Change

Topping the list is James H. Simons, a former math professor now 4.0% working for Renaissance Technologies, who earned $2.5 billion with a computer-driven trading strategy. John A. Paulson and George Soros came in second and third place, respectively, earning $2 billion and $1.1 3.0% billion. The top 25 most successful hedge fund managers were down in performance by roughly half from 2007, where they reaped an aggregate of $22.5 billion. That year, a manager needed to earn at least $360 million to make the list, whereas it was merely $75 million in 2008. 2.0% Nevertheless, this year’s payout still topped every year prior to 2006.

Sugar prices fell the most in a month, according to Bloomberg, largely on 1.0% speculation that India, the world’s second largest producer, may restore a higher level of output. Traders appear to believe that a recent increase in sugar prices may entice Indian farmers to plant more. It is believed that 0.0% India will export 14.5 million metric tons this year, down from 26.4 million metric tons last year. DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

5.0%

Current1 Issue Previous Week Change 0.0% Gold 925.30 897.30 -3.03%

Crude Oil Futures 52.38 52.51 0.25% -5.0% Copper 1.84 2.00 8.70% Sugar 21.65 21.90 1.15% -10.0% HFRX Equal Wtd. Strat. Index 1,007.55 1,008.36 0.08% HFRX Equity Hedge Index 1,011.75 1,018.05 0.62% -15.0% HFRX Equity Market Neutral 1,012.16 1,012.40 0.02% HFRX Event Driven 1,191.46 1,183.96 -0.63% -20.0% HFRX Merger Arbitrage 1,351.45 1,358.37 0.51% Dow Jones AIG Commodity Index 110.18 113.68 3.17% -25.0% FTSE/NAREIT All REIT 66.11 66.97 1.30% DJ AIG Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors April 9, 2009 Financial Market Update [page 1]

Economic Update

The Labor Department reported on Thursday that the number of Americans filing first-time claims for unemployment insurance exceeded Economic Indicators, Quarterly Change 600,000 for a 10th straight week, an indicator that the labor market remains in a weakened state. However, first-time jobless claims were 7.0% lower than initially expected, revised to 654,000 from an earlier estimate of 674,000. 5.0% 3.0% Data released on Thursday from the Commerce Department revealed that the U.S. trade deficit in February unexpectedly contracted to the 1.0% lowest level in nine years. The gap fell to $26 billion, fading nearly 28% -1.0% from $36.2 billion in January. Imports fell 5.1% while exports climbed from a two-year low. The decline is being attributed to a sharp decrease -3.0% in demand for Asian cars, toys and electronics. Bloomberg reports that -5.0% the smaller gap may be reason enough for economists to trim the projected drop in first quarter growth. An additional report from the Labor -7.0% Department showed the price of goods imported into the U.S. rising 0.5% Q1 08 Q2 08 Q3 08 Q4 08 in March. Real GDP Core CPI* Unemployment Rate

Federal Reserve Chairman Ben Bernanke’s plan to boost the housing Source: Bureau of Economic Analysis, Bureau of Labor Statistics market moved fixed U.S. mortgage rates higher this week. The average *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index rate on a 30-year home loan increased to 4.87% this week from 4.78% a week earlier. Bloomberg reported an increase in mortgage applications Apr. 7th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.6% in the U.S., now up to its highest level in three months. Apr. 7th Consumer Credit Outstanding, Feb. Monthly Chg. -7.4B Apr. 8th MBA Purchase Applications 297.7 The Bank of England decided not to change its benchmark interest rate Apr. 8th Wholesale Inventories, Feb. Monthly Chg. -0.6% and said it will continue buying government bonds in an effort to fight the Apr. 8th EIA Petroleum Status Report, Wkly. Chg. 1.7M Barrels deep recession. The rate, at 0.5%, is the lowest since the bank was Apr. 9th International Trade Balance Level, February -26.0B th founded in 1694. The nine-member Monetary Policy Committee agreed Apr. 9 Initial Jobless Claims ( Week ending 4/4) 654,000 th to continue a three-month program that has the UK bank purchasing Apr. 9 Export Prices, March Monthly Chg. -0.6% th $110 billion worth of assets to bolster the economy. Apr. 9 Import Prices, March Monthly Chg. 0.5% Apr. 9th RBC Cash Index, January 38.3 Apr. 9th EIA Natural Gas Report, Wkly. Chg. -143 bcf

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, International Monetary Fund, The Conference Board, Institute of Supply Management, Organization for Economic Cooperation & Development. MainStreet Advisors April 9, 2009 Financial Market Update [page 2]

Bond Market Update

US Treasuries sold off this week after a lackluster start from equities quickly turned into a multi-day rally. A kickoff to earnings season may Yield Curves

have sparked the modest decline in equities on Monday, but both the 10 6.0% and 30 year Treasury bonds sold off significantly and gold declined by

nearly 3% to begin the week. Also on Monday, Ford retired nearly $9.9 5.0% billion of long-term debt in an offering with existing bond holders. This

move is expected to put pressure on GM and Chrysler to improve their 4.0% balance sheets and is estimated to save Ford nearly $600 million in annual interest expenses. The middle part of the week was fairly quiet 3.0% for Treasury prices, despite the announcement that the Term Asset Repurchase Program (TARP) may be expanded to insurance companies. 2.0% On Friday, the stock markets cheered Wells Fargo’s pre-announced first quarter earning of a record $3 billion, further depressing bonds. This 1.0% week the Treasury had sold nearly $59 billion in notes, which is more than the $36 billion in notes that the Federal Reserve has purchased 0.0% since they began their quantitative easing efforts on March 25. 2 yr 3 yr 5 yr 10 yr

U.S. Treasury Muni (Tax Equiv.)*

Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 4.2.09 4.9.09 Change 3 month T-Bill 0.21% 0.18% -0.03% 2-Year Treasury 0.96% 0.96% 0.00% 5-Year Treasury 1.87% 1.90% 0.03% 10-Year Treasury 2.91% 2.96% 0.05% 30-Year Treasury 3.70% 3.76% 0.06%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/1/2009 4/2/2007 8/2/2007 4/4/2008 8/4/2008 4/1/2009 4/2/2007 8/2/2007 4/4/2008 8/4/2008 12/1/2008 12/1/2008 11/30/2007 11/30/2007

Source: Merrill Lynch; April 9, 2009 Source: Merrill Lynch; April 9, 2009 MainStreet Advisors April 9, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks pared early week losses on Thursday to end their fifth straight week of gains. The Dow Jones Industrial Average ended the holiday- Weekly Change

shortened week at 8,083.38, up 105.30 or 1.32%. The broader S&P 500 4.0% gained 1.67% this week to close at 856.55 and the technology-heavy Nasdaq Composite Index gained 1.89%.

2.0% Alcoa (AA) kicked off first quarter earnings season with dismal news on Tuesday when it announced that it lost 61 cents a share in the first quarter, worse than the 51 cents a share, on average, predicted by analysts. Declines in aluminum prices weighed on the company’s bottom 0.0% line during the quarter. Stocks lost 2.39%, as measured by the S&P 500, on the worry that more earnings disappointments were on the horizon. -2.0% However, sentiment changed on Thursday when Wells Fargo & Co (WFC) preannounced better than expected first quarter earnings. Wells announced that it expects net income of $0.55 a share in the first quarter -4.0% of 2009, well above the $0.25 a share expected by analysts. Wells gained over 31% on the news and sent financial stocks soaring over Large Cap Mid Cap Small Cap Int'l

15%. Source: Standard & Poor's, Russell Investment Company, MSCI

In international news, Barclays PLC (ADR:BCS) gained over 16% on the news it entered an agreement to raise cash by selling its iShares ETF unit for $4.4 billion to private equity firm CVC Capital Partners, according to Reuters. The deal is expected to increase Barclays’ Tier 1 Capital Ratio, a key measure of bank solvency, to 7.2% from 6.7%. The deal Year to Date Change has a 45 day “go shop” provision allowing Barclays to seek better offers for the iShares unit. 0.0%

-2.0%

-4.0%

Issue 4.2.09 4.9.09 Change -6.0% Dow Jones 8,017.59 8,083.38 0.82% S&P 500 842.50 856.56 1.67% -8.0% NASDAQ 1,621.87 1,652.54 1.89% Russell 1000 Growth 373.34 377.78 1.19% -10.0% S&P MidCap 400 524.51 536.43 2.27% Russell 2000 456.13 468.2 2.65% -12.0% MSCI EAFE 1,134.73 1,098.82 -3.16% MSCI EM 613.07 610.22 -0.47% Large Cap Mid Cap Small Cap Int'l

MSCI Small Cap 95.02 93.54 -1.56% Source: Standard & Poor's, Russell Investment Company, MSCI

Alternative Investments Market Update

Bloomberg reported that crude oil rose more than $2 per barrel on Thursday after the encouraging Wells Fargo earnings report. The 5.8% Weekly Change

gain was also attributed to a report showing a smaller than expected 1.0% increase in U.S. supplies. Domestic supplies increased 1.65 million barrels to 361.1 million last week, the highest since July 1993. Stockpiles at Cushing, Oklahoma, the location where West Texas 0.5% Intermediate crude is delivered, fell 878,000 barrels to 29.98 million last week. This marks the lowest level since December 26th, although still well above the five year average of 20.5 million. Because of the supply glut, May contracts of oil are trading at a discount to June, which is a 0.0% situation known as contango.

Three giant private equity firms, the Blackstone Group, Kohlberg Kravis -0.5% Roberts, and the Carlyle Group, are all intending to bid on the cellphone operations that Verizon Wireless is selling as a result of the acquisition of Alltel. The New York Times reported that the business for sale services -1.0% 2.1 million customers in over 20 states and could achieve a bid as high as $3.5 billion. Verizon acquired Alltel in January from Goldman Sachs DJ AIG Index NAREIT HFRX Equal Wtd Index

and TPG for $28 billion. Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

5.0%

Current1 Issue Previous Week Change 0.0% Gold 897.30 883.30 -1.56%

Crude Oil Futures 52.51 52.24 -0.51% -5.0% Copper 2.00 2.07 3.50% Sugar 21.90 21.70 -0.91% -10.0% HFRX Equal Wtd. Strat. Index 1,008.36 1,008.74 0.04% HFRX Equity Hedge Index 1,018.05 1,019.35 0.13% -15.0% HFRX Equity Market Neutral 1,012.40 1,008.17 -0.42% HFRX Event Driven 1,183.96 1,183.78 -0.02% -20.0% HFRX Merger Arbitrage 1,358.37 1,351.55 -0.50% Dow Jones AIG Commodity Index 113.68 113.12 -0.49% -25.0% FTSE/NAREIT All REIT 66.97 67.30 0.49% DJ AIG Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors April 17, 2009 Financial Market Update [page 1]

Economic Update

U.S. consumer sentiment unexpectedly rebounded in April, as shown by the preliminary reading of the Reuters/University of Michigan Surveys of Economic Indicators, Quarterly Change Consumers. The 61.9-point reading was the strongest since the Lehman Brothers fallout and ensuing global economic recession. Consumers 7.0% have also become slightly more positive about current economic conditions yet the majority believes a recovery will be gradual. In 5.0% addition, the surveys showed that consumers are more pessimistic about 3.0% their personal financial situations. Such sentiment was reflected in the U.S. Department of Commerce’s March retail sales report, which 1.0% reflected a 1.1% decline as consumers continued to respond to mounting -1.0% job losses. Softened consumer spending signaled that current economic challenges remain despite less negative economic data. -3.0%

-5.0% The Consumer Price Index (CPI) decreased 0.1% in March, according to the U.S. Department of Labor. However, the index declined 0.4% on an -7.0% annual basis, marking the first 12-month decline since 1955. Continued Q1 08 Q2 08 Q3 08 Q4 08 declines in prices have furthered concerns of a deflationary environment. Indeed, the Federal Reserve’s beige book released on Wednesday noted Real GDP Core CPI* Unemployment Rate

widespread downward pressure on prices, including wages and salaries. Source: Bureau of Economic Analysis, Bureau of Labor Statistics The Labor Department reported that the Producer Price Index (PPI) fell *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index 1.2% in March, down 3.5% on an annual basis. Excluding foods and energy, producer prices remained flat from the previous month. Apr. 14th ICSC-Goldman Same Store Sales, Wkly. Chg. 80.0% Apr. 14th Producer Price Index, March Monthly Chg. -1.2% On Friday the Labor Department reported that unemployment climbed in Apr. 14th Retail Sales, March Monthly Chg. -1.1% most states during March. Both California and North Carolina posted the Apr. 14th Business Inventories, Feb. Monthly Chg. -1.3% highest levels since formal data began in 1976, reaching 11.2% and Apr. 15th MBA Purchase Applications 264.1 10.8%, respectively. Twelve states reported unemployment above the Apr. 15th Consumer Price Index, March Monthly Chg. -0.1% th national average of 8.5%. Michigan experienced the highest rate of Apr. 15 Empire State Mfg Survey, April -14.7 th unemployment at 11.4% amid further weakening in the auto industry. Apr. 15 Frgn Dmnd for LT US Securities, February 22.0B th Separately, the national report showed that initial claims of state Apr. 15 Industrial Production, March Monthly Chg. -1.5% th 5.6M Barrels unemployment benefits declined by 53,000 people to 610,000 in the Apr. 15 EIA Petroleum Status Report, Wkly. Chg. th Housing Market Index, April 14.0 week ending April 11th. This brought the four-week moving average Apr. 15 Apr. 16th Housing Starts, March 510,000 down for the first time in 2009, according to the Wall Street Journal. Apr. 16th Initial Jobless Claims ( Week ending 4/11) 610,000 Apr. 16th Philidelphia Fed Survey, April -24.4 Apr. 16th EIA Natural Gas Report, Wkly. Chg. 21 bcf Apr. 17th Consumer Sentiment Index, April 61.9 Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Reuters. MainStreet Advisors April 17, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week mostly unchanged, after a small rally earlier in the week. A spell of selling on Friday following better than Yield Curves

expected earnings, improvement in consumer sentiment, and some 6.0% technical breaches pushed prices lower. Hedge-related selling from

companies issuing new debt also pressured Treasuries. In what is 5.0% known as “rate lock selling”, companies tend to sell government bonds to

hedge against the risk of rising interest rates. Treasury yields may hold at 4.0% current low levels because the “severe” recession may last through 2009, according to PIMCO, the world’s largest bond fund manager. The 3.0% company expects 10-year notes to yield somewhere between 2% and 3% over the next year. Central bank purchases have been the major 2.0% catalyst in moving rates lower this year as the Fed plans to buy $300 billion of Treasuries in an effort to lower mortgage rates and revive 1.0% business and consumer lending. Meanwhile, JP Morgan issued $3 billion in new debt without the backing of the U.S. government, the first 0.0% such issuance for the company since August of last year. The company 2 yr 3 yr 5 yr 10 yr

is the third participant in the Federal Deposit Insurance Corporation’s U.S. Treasury Muni (Tax Equiv.)* (FDIC) debt guarantee program to test the credit markets without the government’s support. Goldman Sachs and GE Capital both issued Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin unsecured debt earlier, a sign that investors are now more willing to purchase non-FDIC backed bonds from some of the stronger institutions. Issue 4.10.09 4.17.09 Change 3 month T-Bill 0.18% 0.13% -0.05% 2-Year Treasury 0.96% 0.91% -0.05% 5-Year Treasury 1.90% 1.79% -0.11% 10-Year Treasury 2.96% 2.86% -0.10% 30-Year Treasury 3.76% 3.72% -0.04%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/16/2007 8/15/2007 4/17/2008 8/15/2008 4/15/2009 4/17/2008 8/15/2008 4/15/2009 4/16/2007 8/15/2007 12/13/2007 12/12/2008 12/13/2007 12/12/2008

Source: Merrill Lynch; April 9, 2009 Source: Merrill Lynch; April 9, 2009 MainStreet Advisors April 17, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks extended their rally for a sixth straight week as earnings season got into full swing. The Dow Jones Industrial Average added 0.59% or Weekly Change

47.95 points to finish the week at 8,131.33. The broader S&P 500 closed 5.0% Friday at 869.60, up 13.04 points or 1.52% higher for the week.

Better than expected earnings reports from J.P. Morgan (JPM) and 4.0% Citigroup (C), helped buoy the markets this week. After the market closed on Monday, Goldman Sachs reported strong first-quarter 3.0% earnings, according to the Wall Street Journal. Goldman announced on Tuesday morning that it raised $5 billion of common stock in an effort to raise cash to help pay back the $10 billion government loan received last 2.0% fall. Investors focused on the dilutive effect of the additional common stock and sent Goldman shares lower by 12%. Later in the week, 1.0% markets rallied on positive earnings news from J.P. Morgan and Citigroup. The banks reported earnings that beat analyst estimates due partly from reduced write-downs of toxic assets and more favorable 0.0% accounting treatment of some of those assets. Large Cap Mid Cap Small Cap Int'l

Internet search giant Google, Inc (GOOG) and diversified manufacturer, Source: Standard & Poor's, Russell Investment Company, MSCI General Electric (GE) both announced results at the close of the market on Thursday. Google’s results exceeded analysts’ expectations, but the company warned that consumers are still not spending, according to Reuters. Bloomberg reported that General Electric beat expectations as well, but GE’s finance arm was the main contributor to the company’s 36% year-over-year earnings decline. Year to Date Change

Emerging markets paused this week, as measured by the iShares MSCI 4.0% Emerging Markets ETF (EEM). The fund added just 0.57%, after a rally of over 40% off the lows made on March 2nd. 2.0%

0.0%

Issue 4.10.09 4.17.09 Change -2.0% Dow Jones 8,083.38 8,131.33 0.59% S&P 500 856.56 869.60 1.52% -4.0% NASDAQ 1,652.54 1,673.07 1.24% Russell 1000 Growth 377.78 382.66 1.29% -6.0% S&P MidCap 400 536.43 550.2 2.57% Russell 2000 468.2 479.37 2.39% -8.0% MSCI EAFE 1,098.82 1,148.92 4.56% MSCI EM 610.22 648.39 6.26% Large Cap Mid Cap Small Cap Int'l

MSCI Small Cap 93.54 99.33 6.20% Source: Standard & Poor's, Russell Investment Company, MSCI

Alternative Investments Market Update

According to Bloomberg, copper futures rose for the fifth consecutive week, extending its longest rally in a year. The activity was likely spurred Weekly Change

by revived prospects of global economic growth and metal demand. 20.0% Copper futures for July gained $1.85, or 0.8%, to $2.1975/lb. A significant portion of demand comes from China, which has pledged 4 trillion yuan ($585 billion) in economic stimulus spending. Copper prices 16.0% have gained 56% year to date. Sugar prices rose on Friday for the first time in four days as India, the world’s largest consumer of the sweetener, 12.0% signaled that imports may increase amid a production shortfall. Sugar prices have appreciated 16% year to date. 8.0% The Wall Street Journal reported on Thursday that JPMorgan Chase & Co reported a write-down of $462 million on its private equity portfolio 4.0% after posting a company wide net profit of $2.1 billion. The private equity arm, known as One Equity Partners, experienced a net loss of $280 million for the first quarter. In 2008, the same division posted net income 0.0% of $57 million in the same quarter. The results are still better than results seen in the previous quarter, where the PE arm posted a net loss of $682 DJ AIG Index NAREIT HFRX Equal Wtd Index

million on a $1.1 billion write-down. Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

2.0%

1 Issue Previous Week Current Change 0.0% Gold 883.30 867.90 -1.74% -2.0% Crude Oil Futures 52.24 50.33 -3.66%

Copper 2.07 2.20 6.28% -4.0% Sugar 21.70 21.50 -0.92% HFRX Equal Wtd. Strat. Index 1,008.74 1,009.71 0.10% -6.0% HFRX Equity Hedge Index 1,019.35 1,026.21 0.67% HFRX Equity Market Neutral 1,008.17 1,004.42 -0.37% -8.0% HFRX Event Driven 1,183.78 1,184.56 0.07% -10.0% HFRX Merger Arbitrage 1,351.55 1,352.56 0.07% Dow Jones AIG Commodity Index 113.12 113.58 0.40% -12.0% FTSE/NAREIT All REIT 67.30 78.33 16.39% DJ AIG Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors April 24, 2009 Financial Market Update [page 1]

Economic Update

New projections, released in the International Monetary Fund’s (IMF) April World Economic Outlook, have the global economy contracting at a Economic Indicators, Quarterly Change revised rate of 1.3% in 2009, with a slow recovery expected to take hold next year. The report cautioned, however, that the 2010 projected 7.0% growth of 1.9% will be slow relative to past economic recoveries. The revisions come as a result of a continuing collapse in confidence and 5.0% demand. IMF Chief Economist Olivier Blanchard stressed that the strong 3.0% recovery policies that have been developed should allow the global economy to trend upward by the end of this year with unemployment 1.0% cresting late in 2010. -1.0%

Finance chiefs from the Group of Seven met on Friday to ensure that -3.0% stimulus policies are maintained until signs of an economic recovery are -5.0% evident. Members discussed the effects that unemployment, deflation, and toxic bank assets are continuing to have on the economy. -7.0% Q1 08 Q2 08 Q3 08 Q4 08 Government economic reports issued this week indicate that the economy is still facing tough conditions. The number of Americans filing Real GDP Core CPI* Unemployment Rate

first-time applications for unemployment insurance rose last week to Source: Bureau of Economic Analysis, Bureau of Labor Statistics 640,000 and March sales of previously owned homes fell more than *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index forecast. Additionally, the Commerce Department reported Friday that durable-goods orders resumed their downward trend in March. Apr. 20th Leading Indicators, March Monthly Chg. 0.3% Manufacturers’ orders for long-lasting goods decreased by 0.8% last Apr. 21st ICSC-Goldman Same Store Sales, Wkly. Chg. -0.4% month to a seasonally adjusted $161.19 billion. Despite the discouraging Apr. 21st State Street Investor Confidence Index, April 79.6 economic data, Bloomberg reported Friday that U.S. consumer Apr. 22nd MBA Purchase Applications 253.0 confidence advanced this month to the highest level since the bankruptcy Apr. 22nd EIA Petroleum Status Report, Wkly. Chg. 3.9M Barrels of Lehman brothers Holdings Inc. in September of 2008. Apr. 23rd Initial Jobless Claims ( Week ending 4/18) 640,000 Apr. 23rd Existing Home Sales, March SAAR* 4.57M rd The Bank of Canada cut its key lending rate to a record low of 0.25% this Apr. 23 EIA Natural Gas Report, Wkly. Chg. 46 bcf th week and announced that it plans to keep it there for more than a year. Apr. 24 Durable Goods New Orders, March Monthly Chg. -0.8% th 356,000 Additionally, Japan unveiled a 15.4 trillion yen ($160 billion) stimulus Apr. 24 New Home Sales, March package this month, suggesting that sentiment concerning the global economy remains pessimistic.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, The International Monetary Fund, The Conference Board, The National Associtaion of Realtors. MainStreet Advisors April 24, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week lower, after a small rally earlier in the week. A spell of selling on Friday following better than expected durable Yield Curves

goods orders and new home sales pushed prices lower. The Treasury’s 5.0% announcement to sell $101 billion in new debt next week also pressured government bonds. Corporate and municipal debt new issuance remained strong as California, the Metropolitan Transportation Authority 4.0% of New York, and AT&T brought new deals to the market. In a sign that investors are focusing on the higher yields of corporate debt, companies 3.0% sold approximately $444 billion of bonds this year, compared with $325 billion during the same period last year, according to Bloomberg. The 2.0% considerable amount of new supply from the Treasury, corporate, and municipal sectors will likely pressure the fixed income markets in the near-term. Meanwhile, corporate borrowing costs fell this week to the 1.0% lowest levels since October amid signs that government efforts to support the credit markets are beginning to take affect. The spread, or 0.0% extra yield, on corporate bonds relative to Treasuries fell to 6.98%, down 2 yr 3 yr 5 yr 10 yr

from 8.96% in December, according to Merrill Lynch’s U.S. Corporate U.S. Treasury Muni (Tax Equiv.)* and High Yield Index. Spurred by investor’s increased comfort purchasing riskier debt with higher yields, the cost for companies to issue Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin new debt has fallen significantly since the beginning of the year.

Issue 4.17.09 4.24.09 Change 3 month T-Bill 0.13% 0.10% -0.03% 2-Year Treasury 0.91% 0.99% 0.08% 5-Year Treasury 1.79% 1.96% 0.17% 10-Year Treasury 2.86% 3.03% 0.17% 30-Year Treasury 3.72% 3.89% 0.17%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/23/2007 8/22/2007 4/24/2008 8/22/2008 4/22/2009 4/24/2008 8/22/2008 4/22/2009 4/23/2007 8/22/2007 12/20/2007 12/19/2008 12/20/2007 12/19/2008

Source: Merrill Lynch; April 9, 2009 Source: Merrill Lynch; April 9, 2009 MainStreet Advisors April 24, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks posted slight declines for the first week in seven following declines on Monday when the Dow Jones Industrial Average lost 289.60 Weekly Change

points or 3.6%. Gains made after Treasury Secretary Geithner 0.2% announced that the “vast majority” of banks have enough capital to survive were not enough to the recover Monday’s loss. The DJIA ended 0.0% the week at 8,076.29, lower by 55.04 points or 0.68%. The broader S&P 500 shed 3.37 points or 0.39% to end the week at 866.23. -0.2%

Oracle (ORCL) thwarted merger talks between Sun Microsystems -0.4% (SUNW) and IBM (IBM) when it struck a deal to purchase Sun for $7.38 -0.6% billion, according to the Wall Street Journal.

-0.8% In earnings news this week, Bank of America (BAC) announced that it earned $4.2 billion in the first quarter; however the stock lost 24% as -1.0% investors focused on the comments by chairman and CEO Ken Lewis, who warned of increasing credit losses. Yahoo! Inc. (YHOO) announced -1.2% a 78% quarterly drop in its profit and said it would slash 5% of its workforce. Apple (AAPL) announced a better-than-expected 15% rise in Large Cap Mid Cap Small Cap Int'l

profit on strong demand for iPhones and iPods. Profit fell at Microsoft Source: Standard & Poor's, Russell Investment Company, MSCI (MSFT) by a better-than-expected 32% in the first quarter as revenues declined in nearly all of its businesses. General Motors (GM) announced that it would extend its normal two-week re-tooling period to a two month shut-down over the summer. The extended break is expected to help GM to reduce its 113-day supply of cars and 123-day supply of trucks, according to the Wall Street Journal. Year to Date Change

4.0%

2.0%

0.0%

-2.0% Issue 4.17.09 4.24.09 Change Dow Jones 8,131.33 8,076.29 -0.68% -4.0% S&P 500 869.60 866.23 -0.39% NASDAQ 1,673.07 1,694.29 1.27% -6.0% Russell 1000 Growth 382.66 383.87 0.32% -8.0% S&P MidCap 400 550.2 550.32 0.02% Russell 2000 479.37 478.74 -0.13% -10.0% MSCI EAFE 1,148.92 1,137.08 -1.03% MSCI EM 648.39 639.75 -1.33% Large Cap Mid Cap Small Cap Int'l

MSCI Small Cap 99.33 99.52 0.19% Source: Standard & Poor's, Russell Investment Company, MSCI

Alternative Investments Market Update

Crude oil prices for June delivery gained nearly $2 per barrel on Friday with light sweet crude settling at $51.55 per barrel and North Sea Brent Weekly Change

crude settling at $51.67 per barrel. The encouragement was likely due to 1.0% a report from the U.S. Department of Commerce indicating that durable good orders fell less than expected. However, there was also 0.5% discouraging news earlier in the week when U.S. government data showed that petroleum demand is its weakest in almost ten years and 0.0% the highest supply levels in almost nineteen years. The Wall Street Journal also reported that, in terms of supply, commercial oil inventories -0.5% in the industrialized world are higher than in 1998 when crude prices -1.0% plummeted to $10 per barrel.

-1.5%

-2.0%

-2.5%

DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

2.0%

1 Issue Previous Week Current Change 0.0%

Gold 867.90 914.10 5.32% -2.0% Crude Oil Futures 50.33 48.85 -2.94% Copper 2.20 2.05 -6.82% -4.0% Sugar 21.50 21.50 0.00% -6.0% HFRX Equal Wtd. Strat. Index 1,009.71 1,015.71 0.59% -8.0% HFRX Equity Hedge Index 1,026.21 1,022.71 -0.34% HFRX Equity Market Neutral 1,004.42 1,009.76 0.53% -10.0% HFRX Event Driven 1,184.56 1,195.44 0.92% -12.0% HFRX Merger Arbitrage 1,352.56 1,349.88 -0.20% Dow Jones AIG Commodity Index 113.58 111.03 -2.24% -14.0% FTSE/NAREIT All REIT 78.33 77.75 -0.74% DJ AIG Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors May 1, 2009 Financial Market Update [page 1]

Economic Update

Economic data released this week showed GDP falling at a steeper than expected rate of 6.1%. According to the Wall Street Journal, the decline Economic Indicators, Quarterly Change can be largely attributed to a pullback in production on the producer side after a similar pullback on the consumer side in the latter half of 2008. 7.0% Businesses slashed production to empty excess product stockpiles in store shelves, warehouses, and car dealers’ lots. Economists estimate 5.0% that the correction should put the economy in a better position to stabilize 3.0% by the third quarter. 1.0% In a report released by the Commerce Department on Thursday, -1.0% consumer spending, a large percentage of U.S. economic activity, declined 0.2% from last month. Due to large losses in the stock and -3.0% housing markets, consumers are storing cash, which has elevated the -5.0% national savings rate to 4.2% from February’s 4%. Many economists believe that spending will remain at low levels through the remainder of -7.0% the year further increasing the national savings level. Q1 08 Q2 08 Q3 08 Q4 08

The Labor Department released employment statistics Thursday Real GDP Core CPI* Unemployment Rate

revealing that initial jobless claims fell 14,000 to 631,000 in the week Source: Bureau of Economic Analysis, Bureau of Labor Statistics ended April 25. However, continuing claims for jobless benefits *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index remained on the rise climbing 133,000 to 6.27 million, further demonstrating the difficulty employment-seekers are having finding new Apr. 28th S&P/Case-Shiller Composite 20 Index, February 143.2 work. In a separate report, the Labor Department claimed that a broad Apr. 28th Consumer Confidence Index, April 39.2 measure of worker compensation rose 0.3% in the first quarter from the Apr. 29th MBA Purchase Applications 251.6 fourth quarter, the smallest gain since 1982. Wages and salaries Apr. 29th Real GDP, Q1 Quarterly Change SAAR* -6.1% increased 0.3%, while benefits rose 0.5% for the quarter. Apr. 29th GDP Price Index, Q1 Quarterly Change SAAR* 2.9% Apr. 29th EIA Petroleum Status Report, Wkly. Chg. 4.1M Barrels th After a regular policy meeting this week, the Federal Reserve and the Apr. 30 Personal Income, March Monthly Chg. -0.3% th Federal Open Market Committee (FOMC) revealed that there is no Apr. 30 Consumer Spending, March Monthly Chg. -0.2% th intention of pulling back from aggressive efforts to revive the economy. Apr. 30 Core PCE, March Monthly Chg. 0.2% th 0.3% The Fed explained in a statement released following the meeting that it Apr. 30 Employment Cost Index, Q1 Quarterly Change th Initial Jobless Claims ( Week ending 4/25) 631,000 would continue with plans to substantially increase its holdings of Apr. 30 Apr. 30th Chicago PMI Business Barometer Index, April 40.1 mortgage-backed and treasury securities in the months ahead. The Apr. 30th EIA Natural Gas Report, Wkly. Chg. 82 bcf FOMC kept its target federal funds rate near zero and vowed to keep it May 1st Domestic Motor Vehicle Sales, April 6.9M there for an extended period of time. st May 1 Consumer Sentiment Index, April 65.1 May 1st ISM Mfg. Index - Level, April 40.1 Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. st Department of Labor, The Wall Street Journal, The International Monetary Fund, The Conference Board, The May 1 Factory Orders, March Monthly Chg. -0.9% National Associtaion of Realtors. MainStreet Advisors May 1, 2009 Financial Market Update [page 2]

Bond Market Update

Once again, U.S. Treasuries finished the week lower, with the benchmark 10-year note climbing to a new record high for 2009. Amid Yield Curves

growing speculation that the worst of the recession may be over, U.S. 5.0% government debt fell for the sixth straight week, which represents the longest losing streak in almost two years. A spell of selling on Friday, following an industry report that showed manufacturing in the U.S. shrank 4.0% in April at the slowest pace in seven months, pushed prices lower. The Treasury’s announcement to sell $71 billion in new debt next week also 3.0% pressured government bonds. Supply and the brightening economic environment helped Treasuries ignore some of the week’s biggest news. 2.0% Thursday’s official Chapter 11 filing by Chrysler left little impression on the government bond market. In a sign that investors may be focusing on riskier assets, Treasuries have lost 4.6% since March 18, while during 1.0% the same time period junk bonds have returned 15.4%, according to Merrill Lynch Indexes. Meanwhile, the rise in yields this week has not 0.0% pushed up mortgage rates. The average rate on a 30-year mortgage has 2 yr 3 yr 5 yr 10 yr

fallen to 4.92% from 5.16% on March 17, the day before the central bank U.S. Treasury Muni (Tax Equiv.)* announced the mortgage buyback program, according to Bankrate.com Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 4.24.09 5.1.09 Change 3 month T-Bill 0.10% 0.16% 0.06% 2-Year Treasury 0.99% 0.92% -0.07% 5-Year Treasury 1.96% 2.03% 0.07% 10-Year Treasury 3.03% 3.21% 0.18% 30-Year Treasury 3.89% 4.09% 0.20%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/23/2007 8/22/2007 4/24/2008 8/22/2008 4/22/2009 4/24/2008 8/22/2008 4/22/2009 4/23/2007 8/22/2007 12/20/2007 12/19/2008 12/20/2007 12/19/2008

Source: Merrill Lynch; April 9, 2009 Source: Merrill Lynch; April 9, 2009 MainStreet Advisors May 1, 2009 Financial Market Update [page 3]

Stock Market Update

Despite the second quarter in a row of negative GDP growth, the growing flu pandemic, and the announcement of Chrysler’s bankruptcy, most Weekly Change

major markets were up for the week. Stocks have significantly increased 5.0% since the lows of February. U.S. stocks now have back to back monthly gains, with the Dow rising 7.7% in March and 7.4% in April. This rally 4.5% was the best two month gain in nearly seven years. Strong gains were 4.0% observed in overseas markets as well. Emerging markets like Brazil and 3.5% China were up 15.5% and 4.4%, respectively. Developed markets fared 3.0% well too, with Europe up 13.5% and Japan rising 8.9%. 2.5% After weeks of negotiating, Chrysler filed for Chapter 11 bankruptcy 2.0% protection, the 6th largest in U.S. history. Initial terms of the workout 1.5% include a new ownership structure with the UAW holding 55%, Italian 1.0% automaker Fiat 35%, US government 8% and the Canadian government 2%. Other debt holders, like mutual funds, large banks and institutional 0.5% investors are left out of the combined company and are expected to 0.0% make themselves heard through the bankruptcy process. Large Cap Mid Cap Small Cap Int'l

Once again financial stocks made headlines this week. At Bank of Source: Standard & Poor's, Russell Investment Company, MSCI America’s annual shareholder meeting, Ken Lewis was stripped of his Chairman title, but retained his CEO status. Banks that received bailout funds are worried about talented executives from highly profitable trading and fee revenue business segments may depart for firms without pay caps. Citigroup asked for exceptions to government imposed pay caps in an attempt to retain these employees. Year to Date Change

6.0%

4.0%

2.0%

Issue 4.24.09 5.1.09 Change 0.0% Dow Jones 8,076.29 8,212.41 1.69% S&P 500 866.23 877.52 1.30% -2.0% NASDAQ 1,694.29 1,719.20 1.47% Russell 1000 Growth 383.87 389.83 1.55% -4.0% S&P MidCap 400 550.32 558.87 1.55% Russell 2000 478.74 486.98 1.72% -6.0% MSCI EAFE 1,137.08 1,185.84 4.29% MSCI EM 639.75 662.73 3.59% Large Cap Mid Cap Small Cap Int'l

MSCI Small Cap 99.52 102.63 3.13% Source: Standard & Poor's, Russell Investment Company, MSCI

Alternative Investments Market Update

Wheat prices jumped 6.2% on Friday, the largest move in five months, due to speculation involving crop damaging dry weather in Russia and Weekly Change

Ukraine only a month before harvest. Bloomberg reported that wheat 4.5% futures contracts remain down 6.7% for the year due to declining US grain demand. Crude oil rose to a five week high after reports of 4.0% improving US consumer confidence and less discouraging manufacturing 3.5% numbers. Crude prices finished the day at $53.20/barrel, up 2.3% for the 3.0% week, and 19% for the year. 2.5%

The Wall Street Journal reported that Chicago hedge fund, Citadel 2.0% Investment Group Inc., is preparing to enter the investment banking market. The expansion decision follows last year’s massive losses in its 1.5% biggest hedge funds, the Kensington and Wellington, which declined 1.0% approximately 55%. In 2009, they are estimated to be up about 11%. An 0.5% announcement is expected in the near future regarding the hiring of five investment bankers. 0.0%

DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

2.0%

Current1 Issue Previous Week Change 0.0% Gold 914.10 888.20 -2.83%

Crude Oil Futures 48.85 52.74 7.96% -2.0% Copper 2.05 2.10 2.44% Sugar 21.50 21.72 1.02% -4.0% HFRX Equal Wtd. Strat. Index 1,015.71 1,018.12 0.24% HFRX Equity Hedge Index 1,022.71 1,026.73 0.39% -6.0% HFRX Equity Market Neutral 1,009.76 1,003.06 -0.66% HFRX Event Driven 1,195.44 1,203.77 0.70% -8.0% HFRX Merger Arbitrage 1,349.88 1,353.67 0.28% Dow Jones AIG Commodity Index 111.03 114.13 2.79% -10.0% FTSE/NAREIT All REIT 77.75 80.79 3.91% DJ AIG Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors May 15, 2009 Financial Market Update [page 1]

Economic Update

A survey of 52 economists by the Wall Street Journal this week reflected sentiment that the economy would begin to strengthen this fall but that a Economic Indicators, Quarterly Change full recovery could take years. The survey indicated expectations for the economy to contract 1.4% in the current quarter, with slow growth 7.0% returning later in the year. According to Bloomberg, Nobel Prize-winning economist Paul Krugman discussed his outlook for the world economy at 5.0% a forum in Japan this week. Krugman compared the world to Japan 3.0% during its lost decade, noting similarities including a distressed financial system, softened demand, and “helpful but limited fiscal support.” 1.0%

-1.0% Mixed economic data released this week indicate continued challenges including weary consumers and high unemployment claims, yet deflation -3.0% risks show signs of easing. The U.S. Department of Commerce reported -5.0% that retail sales slipped 0.4% in April, as consumers continued to save amid ongoing softening in the jobs market. The slowdown in retail sales -7.0% follows a 1.3% decline in March, suggesting that the slump in consumer Q1 08 Q2 08 Q3 08 Q4 08 spending is still in a bottoming process. With the personal savings rate up each of the last three months, thriftiness among consumers may Real GDP Core CPI* Unemployment Rate

linger even as the economy begins to recover. Source: Bureau of Economic Analysis, Bureau of Labor Statistics *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index Annual inflation in the U.S. declined to a 55-year low in April, as shown by the U.S. Department of Labor. The annual 0.7% decline in the May 12th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.3% Consumer Price Index (CPI) largely reflected the 25.2% annual decline in May 12th International Trade Balance Level, March -27.6B energy prices. The annual rate is well below the 2% often viewed by the May 12th Treasury Budget, April -20.9B Federal Reserve as supportive of price stability and strong employment. May 13th MBA Purchase Applications 256.7 Meanwhile, core CPI, which excludes food and energy prices, advanced May 13th Retail Sales, April Monthly Chg. -0.4% 0.3% for the month, the greatest advance since June 2008. The Labor May 13th Import Prices, April Monthly Chg. 1.6% th Department also reported that producer prices trended higher in April as May 13 Export Prices, April Monthly Chg. 0.5% th a result of climbing food prices. Core producer prices increased 0.1% for May 13 Business Inventories, March Monthly Chg. -1.0% th the month, helping lower the risk of deflation. May 13 EIA Petroleum Status Report, Wkly. Chg. -4.7M Barrels May 14th Producer Price Index, April Monthly Chg. 0.3% th Initial Jobless Claims ( Week ending 5/9) 637,000 Gross domestic product in the euro-zone declined 2.5% in the first May 14 May 14th EIA Natural Gas Report, Wkly. Chg. 95 bcf quarter, an approximate 10% decline on an annual basis. Despite this May 15th Consumer Price Index, April Monthly Chg. 0.0% record rate of contraction, economists continue to anticipate a turn in the May 15th Empire State Mfg Survey, May -4.6 fourth quarter, as reported by the Wall Street Journal. th May 15 Frgn Dmnd for LT US Securities, March 55.8B May 15th Industrial Production, April Monthly Chg. -0.5% Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. th Department of Labor, The Wall Street Journal, Bloomberg. May 15 Consumer Sentiment Index, May 67.9 MainStreet Advisors May 15, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries rallied for the week, amid the Federal Reserve’s bond purchases, a two week pause in government bond and note auctions and Yield Curves

as some weaker than expected economic reports dented investor 5.0% optimism for a speedy economic recovery. Government debt slid on Friday amid a bout of profit taking and news that the contraction in U.S. manufacturing is slowing. In the course of three volatile weeks, the yield 4.0% on the 10-year note retreated this week following a strong rally last Friday. According to a Bloomberg survey of banks and securities 3.0% companies, this figure is expected to finish the year at 3.32% and increase to 3.53% by March 31, 2009. Tthe TED spread fell to 67 basis 2.0% points, the narrowest level in a year. The TED spread, which is the difference in yield between 90-day LIBOR and 90-day T-Bills, is a key indicator of the ease with which banks are lending each other short-term 1.0% funds. Meanwhile, the extra yield, or spread, investors demand to own investment-grade debt rather than similar maturity Treasuries narrowed 0.0% to 4.43%, from a record 6.56% in December. Mark Kiesel, managing 2 yr 3 yr 5 yr 10 yr

director and global head of corporate bond portfolio management at U.S. Treasury Muni (Tax Equiv.)* PIMCO is encouraged that banks have been "able to raise equity and come to the unsecured bond market." Kiesal also discussed avoiding Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin regional banks and focusing on national names. Although he expects the rally to slow, he notes that spreads continue to be attractive. Issue 5.8.09 5.15.09 Change 3 month T-Bill 0.18% 0.17% -0.01% 2-Year Treasury 1.00% 0.88% -0.12% 5-Year Treasury 2.15% 2.01% -0.14% 10-Year Treasury 3.29% 3.14% -0.15% 30-Year Treasury 4.25% 4.09% -0.16%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 5/14/2007 9/12/2007 1/14/2008 5/15/2008 9/11/2008 1/13/2009 5/13/2009 5/14/2007 9/12/2007 1/14/2008 5/15/2008 9/11/2008 1/13/2009 5/13/2009

Source: Merrill Lynch; April 9, 2009 Source: Merrill Lynch; April 9, 2009 MainStreet Advisors May 15, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks sold off this week as investors became concerned that the nine- week long rally has risen too far. The Dow Jones Industrial Average lost Weekly Change

306.01 points, or 3.57% to end the week at 8,268.64. The broader S&P 0.0% 500 closed Friday at 882.88, 46.36 points, or 4.99% lower for the week. The technology-heavy NASDAQ Composite lost 3.38% to end the week -1.0% at 1,680.14. -2.0%

The U.S. Treasury Department announced on Friday that it had approved -3.0% six life insurance companies to receive up to $22 billion of federal TARP bailout money, according to the Wall Street Journal. In return for the aid -4.0% the U.S. government would receive warrants and preferred shares that -5.0% pay a 5% dividend. -6.0%

Chrysler announced the closure of almost one-quarter of its dealerships -7.0% as part of its reorganization, threatening thousands of jobs. The Wall Street Journal Reported that General Motors (GM) was nearing a deal -8.0% with the United Auto Workers (UAW) that would halve the company’s cash outlays for retiree medical care to $10 billion. The proposed deal Large Cap Mid Cap Small Cap Int'l

would save GM approximately $1 billion a year in hourly labor costs and Source: Standard & Poor's, Russell Investment Company, MSCI is a key part of the company’s restructuring plan.

Financial stocks led to the downside this week, losing over 11%, but the group remains 30% higher over the past three months. Consumer staples, technology and healthcare companies lost the least this week, shedding less than 2% each. Year to Date Change

In international news, Sony (SNE) announced its first quarterly loss of the 2.0% past 14 years and predicted that losses would continue in 2009 as sales of televisions, cameras and other electronics continued to decline in the economic slowdown. The Wall Street Journal reported that U.K. banking 0.0% giant, Barclays PLC (BCS), just weeks after entering a deal to sell its iShares ETF business, was in talks to sell its asset management arm, Barclays Global Investors. The unit is rumored to be worth more that $12 -2.0% billion.

Issue 5.8.09 5.15.09 Change -4.0% Dow Jones 8,574.65 8,268.64 -3.57% S&P 500 929.23 882.88 -4.99% NASDAQ 1,739.00 1,680.14 -3.38% -6.0% Russell 1000 Growth 402.34 387.37 -3.72% S&P MidCap 400 586.91 545.72 -7.02% Large Cap Mid Cap Small Cap Int'l

Russell 2000 511.82 475.84 -7.03% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EAFE 1,245.78 1,231.43 -1.15% MSCI EM 714.91 699.39 -2.17% MSCI Small Cap 108.96 107.93 -0.94% Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital International, The Wall Street Journal, MarketWatch. MainStreet Advisors May 15, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Corn prices fell to their lowest levels in two months due to speculation that favorable weather would boost crop yields. Bloomberg reported that, Weekly Change

according to the president of Global Weather Monitoring in Mohawk, 1.0% Michigan, Midwestern soil will get 10 days of mostly warm, dry weather in the upcoming days. According to government data, approximately 48% 0.5% of the U.S. crop was planted by May 10th of this year, compared to the 0.0% five-year average of 71%, primarily due to uncooperative weather conditions that would not allow for planting. Corn prices settled at -0.5% $4.1725 at the end of trading on Friday, which was a decline of 2.6%. Gold futures advanced after the report of an unexpected jump in the -1.0% consumer-price index, ending the week up 1.8%, and 5.3% for 2009. -1.5% Silver prices have also appreciated with a gain of 24% this year. -2.0%

Private equity funds, according to BusinessWeek, have raised an -2.5% estimated $49 billion in funds so far this year, which would place them on track to match 2004’s total of $206 billion, which is currently the sixth- -3.0% highest year ever. Last year, private equity firms raised a total of $554 billion. According to Greenwich Associates, U.S. corporate pensions are DJ AIG Index NAREIT HFRX Equal Wtd Index

anticipating a 10.1% return, on average, over the next five years, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research compared with their forecasted return of 7.8%, on average, for hedge funds over the same period. Some institutions, however, are predicting a mass consolidation of private equity firms, including research by Boston Consulting Group, which estimates that 20-40% of private equity firms will disappear over the next few years.

Year to Date Change

4.0%

1 Issue Previous Week Current Change 2.0%

Gold 914.90 931.30 1.79% 0.0% Crude Oil Futures 58.60 56.51 -3.57% Copper 2.15 2.02 -6.05% -2.0% Sugar 21.68 22.25 2.63% -4.0% HFRX Equal Wtd. Strat. Index 1,022.44 1,028.48 0.59% -6.0% HFRX Equity Hedge Index 1,050.75 1,052.75 0.19% HFRX Equity Market Neutral 1,006.84 1,007.58 0.07% -8.0% HFRX Event Driven 1,211.46 1,213.46 0.17% -10.0% HFRX Merger Arbitrage 1,353.90 1,355.77 0.14% Dow Jones UBS Commodity Index 120.83 117.70 -2.60% -12.0% FTSE/NAREIT All REIT 78.78 78.03 -0.95% DJ UBS Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors May 22, 2009 Financial Market Update [page 1]

Economic Update

Minutes from the April Federal Open Market Committee (FOMC) released this week, reflected growing sentiment that the pace of Economic Indicators, Quarterly Change

contraction in some of the components of final demand has started to 9.0% slow. Despite further softening in the labor market, the Committee noted that the rate of declines in the housing market appear to be moderating. 7.0%

Projections for 2009 real gross domestic product (GDP) were revised 5.0% downward from January to a range of -2.0% to -1.3% as a result of weaker-than-expected declines in employment and output in the first 3.0% quarter. The FOMC projected that GDP would range from 2.0% to 3.0% 1.0% in 2010 and from 3.5% to 4.8% in 2011. Most of the Committee members believed that continued economic slack will hamper inflationary -1.0% pressures. However, the Federal Reserve Bank of Philadelphia -3.0% cautioned against complacency of inflation and warned of the growing -5.0% inflation risks despite continued challenges in the economy. -7.0% Initial claims for unemployment benefits fell again last week, yet workers Q2 08 Q3 08 Q4 08 Q1 09 continuing to collect benefits swelled to a record high of 6,662,000 amid continued challenges in the jobs market. The U.S. Department of Labor Real GDP Core CPI* Unemployment Rate

announced on Friday that state unemployment rates remain elevated. Source: Bureau of Economic Analysis, Bureau of Labor Statistics However, the number of mass layoffs decreased from March to April, *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index suggesting that the rate of job losses may begin to moderate. May 18th Housing Market Index, May 16.0 The Conference Board Leading Economic Index advanced 1.0% in April, May 19th ICSC-Goldman Same Store Sales, Wkly. Chg. -1.2% marking the first increase in seven months. More importantly, the May 19th Housing Starts, April 458,000 Conference Board noted that “strength among its components exceeded May 19th MBA Purchase Applications 254 the weaknesses for the first time in one and a half years” as stock prices, May 19th EIA Petroleum Status Report, Wkly. Chg. -2.1M Barrels the interest rate spread, consumer expectations, initial unemployment May 21th Initial Jobless Claims ( Week ending 5/16) 631,000 th claims, the average workweek, and supplier deliveries all showed May 21 Leading Indicators, April Mthly. Chg. 1.0% th improvement. May 21 Philidelphia Fed Survey, May -22.6 May 21th EIA Natural Gas Report, Wkly. Chg. -103 bcf Builders’ spirits improved for the second consecutive month according to the National Association of Home Builders/ Wells Fargo Housing Market Index (HMI). Lower mortgage rates, extensive inventories, attractive prices, and first-time buyers’ incentives are all contributing to an improvement in the housing market.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, National Association of Home Builders. MainStreet Advisors May 22, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries fell for the week, pushing 10-year notes to their biggest weekly loss since June 2008, with yields jumping to a fresh high for the Yield Curves

year at 3.45%. Treasuries fell amid lingering fears about sovereign debt 5.0% after Standard & Poor’s lowered its outlook on the U.K. and as market participants prepared for the U.S. government to resume debt sales after a two week pause. The 30-year hit a new high as well, closing at 4.38%. 4.0% Ten-year yields have increased by 92 basis points since March 18, when the Fed announced it would buy up to $300 billion in U.S. debt over six 3.0% months in an effort to lower consumer borrowing costs. Longer-maturity securities lead the decline for the week, resulting in a steeper yield curve 2.0% as the spread, or difference in yield, between two-year and 10-year notes. To help support fixed income markets, the Fed may have to announce a change in quantitative easing policy. Thomas Tucci, head of 1.0% U.S. government bond trading at RBC Capital Markets notes “The Fed will have to have an alternative or expansion to the current quantitative 0.0% easing policy to help support the market.” Quantitative easing refers to a 2 yr 3 yr 5 yr 10 yr

government monetary policy occasionally used to increase the money U.S. Treasury Muni (Tax Equiv.)* supply by buying government securities or other securities from the market. Meanwhile, the U.K. became the first large economy to be Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin warned by Standard & Poor’s of losing it’s AAA credit rating, a move that raised fears of possible downgrades for other large developed markets. Issue 5.15.09 5.22.09 Change 3 month T-Bill 0.17% 0.18% 0.01% 2-Year Treasury 0.88% 0.92% 0.04% 5-Year Treasury 2.01% 2.23% 0.22% 10-Year Treasury 3.14% 3.45% 0.31% 30-Year Treasury 4.09% 4.38% 0.29%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 5/21/2007 9/19/2007 1/21/2008 5/22/2008 9/18/2008 1/20/2009 5/20/2009 5/21/2007 9/19/2007 1/21/2008 5/22/2008 9/18/2008 1/20/2009 5/20/2009

Source: Merrill Lynch; April 9, 2009 Source: Merrill Lynch; April 9, 2009 MainStreet Advisors May 22, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks held on to gains this week as mixed economic data weighed on investor optimism. The Dow Jones Industrial Average gained 8.68 Weekly Change

points, or 0.10% to finish the week at 8,277.32. The broader S&P 500 5.0% closed Friday at 887.00, gaining 0.47%, or 4.12 points for the week. The technology-heavy NASDAQ Composite gained 11.87 points to finish the week at 1,692.01. 4.0%

Stocks surged Monday on news that Lowe’s (LOW) announced earnings 3.0% and second quarter guidance that exceeded analysts’ expectations. The surprising news added evidence to support those who feel the housing market has finally reached a bottom. On Tuesday, Home Depot (HD), 2.0% Lowe’s larger rival, reported earnings that exceeded analyst expectations; however, the stock dropped when management warned 1.0% that increased foreclosures would likely have a negative impact on the company’s revenues. 0.0% The U.S. Treasury Department announced on Friday that it would inject $7.5 billion into GMAC, the auto loan arm of General Motors (GM). Large Cap Mid Cap Small Cap Int'l

GMAC, according to Bloomberg, $4 billion would be used to expand its Source: Standard & Poor's, Russell Investment Company, MSCI lending at Chrysler and the remaining $3.5 billion would be used to meet the capital needs uncovered by the government stress tests.

In the year’s largest bank failure, the Wall Street Journal reported that regulators seized BankUnited of Florida. The failure is reported to cost the FDIC as much as $4.9 billion. Federal regulators arranged the sale Year to Date Change of BankUnited to a private equity group that agreed to pump $900 million dollars of new capital into the bank. 4.0%

2.5%

1.0%

-0.5%

-2.0% Issue 5.15.09 5.22.09 Change Dow Jones 8,268.64 8,277.40 0.11% -3.5% S&P 500 882.88 887.04 0.47% NASDAQ 1,680.14 1,692.01 0.71% -5.0% Russell 1000 Growth 387.37 390.66 0.85% S&P MidCap 400 545.72 551.28 1.02% Large Cap Mid Cap Small Cap Int'l

Russell 2000 475.84 477.58 0.37% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EAFE 1,231.43 1,280.63 4.00% MSCI EM 699.39 740.96 5.94% MSCI Small Cap 107.93 113.96 5.59% Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital International, The Wall Street Journal, MarketWatch. MainStreet Advisors May 22, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Dow Jones’ Private Equity Analyst department released their annual Sources of Capital survey in May which breaks private equity investors Weekly Change

down into type and geographic location during 2008. The results were 3.0% fairly intuitive, with banks and other financial institutions decreasing their portion of private equity investing from 19.3% of the overall pie in 2007 to 2.5% 16% in 2008. Family and wealthy individual investors also decreased their share, from 9% to 8.4%. These investors are typically seen as the 2.0% most sensitive to severe downturns in valuations and are often the first to withdraw funds. One surprising change was that foundations and endowment investing into the asset class actually increased their 1.5% contribution from 9.4% to 10.3%. Public pension funds remain the largest investor with a change from 27.3% to 26.6% a year ago. 1.0%

Earlier this year, bank regulators declared that BankUnited was critically 0.5% undercapitalized and ordered it to find a buyer or raise new capital. The recently approved deal involving a consortium of private equity firms 0.0% could signal a shift in the government’s attitude toward private equity bank involvement. Due to the past government reluctance, private equity DJ AIG Index NAREIT HFRX Equal Wtd Index

firms were excluded from bidding on Bear Stearns Cos. and Lehman Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Brothers Holdings Inc. last year.

Year to Date Change

4.0%

1 Issue Previous Week Current Change 2.0%

Gold 931.30 958.90 2.96% 0.0% Crude Oil Futures 56.51 61.67 9.13% Copper 2.02 2.10 3.96% -2.0% Sugar 22.25 22.28 0.13% -4.0% HFRX Equal Wtd. Strat. Index 1,028.48 1,034.84 0.62% -6.0% HFRX Equity Hedge Index 1,052.75 1,063.68 1.04% HFRX Equity Market Neutral 1,007.58 1,019.69 1.20% -8.0% HFRX Event Driven 1,213.46 1,224.93 0.95% -10.0% HFRX Merger Arbitrage 1,355.77 1,360.45 0.35% Dow Jones UBS Commodity Index 117.70 120.65 2.51% -12.0% FTSE/NAREIT All REIT 78.03 78.89 1.10% DJ UBS Index NAREIT HFRX Equal Wtd Index 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors May 22, 2009 Financial Market Update [page 1]

Economic Update

Minutes from the April Federal Open Market Committee (FOMC) released this week, reflected growing sentiment that the pace of Economic Indicators, Quarterly Change

Bond Market Update

U.S. Treasuries fell for the week, pushing 10-year notes to their biggest weekly loss since June 2008, with yields jumping to a fresh high for the Yield Curves

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 5/21/2007 9/19/2007 1/21/2008 5/22/2008 9/18/2008 1/20/2009 5/20/2009 5/21/2007 9/19/2007 1/21/2008 5/22/2008 9/18/2008 1/20/2009 5/20/2009

Source: Merrill Lynch; April 9, 2009 Source: Merrill Lynch; April 9, 2009 MainStreet Advisors May 22, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks held on to gains this week as mixed economic data weighed on investor optimism. The Dow Jones Industrial Average gained 8.68 Weekly Change

2.5%

1.0%

-0.5%

Alternative Investments Market Update

Dow Jones’ Private Equity Analyst department released their annual Sources of Capital survey in May which breaks private equity investors Weekly Change

firms were excluded from bidding on Bear Stearns Cos. and Lehman Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Brothers Holdings Inc. last year.

Year to Date Change

4.0%

1 Issue Previous Week Current Change 2.0%

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors June 12, 2009 Financial Market Update [page 1]

Economic Update

Consumer confidence continued to improve in early June as the Reuters/University of Michigan Surveys of Consumers reached a nine- Economic Indicators, Quarterly Change

month high regardless of ongoing uncertainty about the labor market and 9.0% income prospects. The surveys also showed that inflation expectations are rising as well. The RBC CASH Index, which measures consumer 7.0%

attitudes and spending by household, found that consumer sentiment has 5.0% stalled amid a surge in the unemployment rate and rising gas prices, halting a three-month rally. Despite this, RBC Capital Markets noted that 3.0% the report found a higher number of Americans that “are starting to 1.0% believe the worst is behind them.” -1.0%

The U.S. trade gap widened for the second consecutive month in April, -3.0% according to the U.S. Department of Commerce. The $29.2 billion deficit -5.0% resulted as exports declined at a faster pace than imports. The decelerating rate of decline in imports reflected climbing prices for crude -7.0% oil during the month. Rising crude oil prices also contributed to higher Q2 08 Q3 08 Q4 08 Q1 09 retail sales in May, as shown by the Commerce Department. The 0.5% increase marked the third advance in the last five months. The Wall Real GDP Core CPI* Unemployment Rate

Street Journal questioned whether the pick-up in activity was partially Source: Bureau of Economic Analysis, Bureau of Labor Statistics attributed to the government stimulus plan, noting that the stimulus *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index added 0.5% to personal incomes in April. June 9th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.2% The U.S. Census Bureau reported that business inventories decreased June 9th Wholesale Inventories, April Monthly Chg. -1.4% 1.1% in April from the previous month, down 6.6% from April 2008. This June 10th MBA Purchase Applications 270.7 follows Federal Reserve Chairman Ben Bernanke’s remarks last week in June 10th International Trade Balance Level, April -29.2B which acknowledged the importance of slowing inventory liquidation in an June 10th EIA Petroleum Status Report, Wkly. Chg. -4.4M Barrels improved economic outlook. June 10th Treasury Budget Level, May -189.7B June 11th Retail Sales, May Monthly Chg. 0.5% June 11th Initial Jobless Claims ( Week ending 6/6) 601,000 June 11th RBC Cash Index, June 34.3 June 11th Business Inventories, April Monthly Chg. -1.1% June 11th EIA Natural Gas Report, Wkly. Chg. 106 June 12th Import Prices, May Monthly Chg. 1.3% June 12th Export Prices, May Monthly Chg. 0.6% June 12th Consumer Sentiment Index, June 69

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, RBC Capital Markets. MainStreet Advisors June 12, 2009 Financial Market Update [page 2]

Bond Market Update

Despite a sharp mid-week sell-off in Treasuries this week, bonds yields finished the week with little change in yields. Bond prices have been on Yield Curves

a slide for several weeks now and yields on longer dated Treasuries are 5.0% now approaching levels not seen since October 2008, just prior to the bankruptcy of Lehman Brothers. Early this week, bond vigilantes were still active, selling bonds over renewed inflation fears. This week the 4.0% U.S. Treasury auctioned off $19 billion in 10-year notes and $30 billion in 30 year bonds. Technically, the auction was a re-offering of the same 3.0% bonds as last month, and to get them sold they were offered to dealers at yields modestly above those prevailing in the market. Late Wednesday 2.0% amid the tough auction, the 10-year briefly traded above the key 4% yield level, an important psychological level, but by end week had settled down to 3.81%. The yield curve has remained very steep and may be 1.0% viewed as either a sign that is optimistic for growth, or pessimistic for inflation fears. The spread between two- and 10-year bonds remained at 0.0% a high 252 basis points (bps), down modestly from last week’s all time 2 yr 3 yr 5 yr 10 yr

high of 280 bps. Mortgage backed bonds continue to remain under U.S. Treasury Muni (Tax Equiv.)* pressure, and the average rate on a new 30-year fixed mortgage is 5.77%, according to the Wall Street Journal. Just a few weeks ago the Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin national average hovered at 5%.

Issue 6.5.09 6.12.09 Change 3 month T-Bill 0.20% 0.19% -0.01% 2-Year Treasury 1.32% 1.30% -0.02% 5-Year Treasury 2.85% 2.81% -0.04% 10-Year Treasury 3.84% 3.81% -0.03% 30-Year Treasury 4.63% 4.65% 0.02%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 2/8/2008 2/6/2009 6/8/2009 2/8/2008 2/6/2009 6/8/2009 6/11/2007 10/8/2007 6/10/2008 10/8/2008 6/11/2007 10/8/2007 6/10/2008 10/8/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors June 12, 2009 Financial Market Update [page 3]

Stock Market Update

The Dow Jones Industrial Average (DJIA) closed Friday at 8,799.26, a gain of 28.34 points, to leave the index in positive territory for the year for Weekly Change

the first time since January. The DJIA is now up 0.26% in 2009. The 2.0% broader S&P 500, which first posted a 2009 gain in early May, now stands at 946.21, a gain of 4.76% for the year. For the week, the DJIA 1.5% and S&P 500 both gained, adding 0.41% and 0.65%, respectively.

1.0% While stocks ended the week with a slight gain, markets were choppy as investors, according to CNNMoney, worried that rising Treasury yields and higher commodity prices might stall an economic recovery. 0.5%

Procter & Gamble (PG) announced that, effective July 1, its current CFO, 0.0% Robert McDonald, would become the company’s CEO. The current CEO, A.G. Lafley will retain his position as Chairman. In the ongoing -0.5% U.S. carmaker saga, the U.S. Supreme Court rejected objections from Chrysler LLC’s creditors, clearing the way for Italian automaker Fiat to -1.0% complete the purchase of most of Chrysler’s assets, according to Bloomberg. The purchase created the world’s sixth largest car Large Cap Mid Cap Small Cap Int'l

manufacturer. However, a group of dealers whose dealership Source: Standard & Poor's, Russell Investment Company, MSCI agreements were rejected under the terms of the Fiat purchase have since appealed deal to protect their rights to make claims against the combined company.

Utility stocks led to the upside this week, gaining 3.91%, followed by energy (2.69%), materials (1.74%) and financials (1.38%). Consumer Year to Date Change stocks, health care and industrials were all down between 0.42% and 0.62% for the week. 12.0%

10.5%

9.0%

Issue 6.5.09 6.12.09 Change 7.5% Dow Jones 8,763.13 8,799.26 0.41% 6.0% S&P 500 940.09 946.21 0.65% 4.5% NASDAQ 1,849.42 1,858.80 0.51% Russell 1000 Growth 418.70 983.06 134.79% 3.0% S&P MidCap 400 596.1 597.02 0.15% 1.5% Russell 2000 530.36 526.84 -0.66% MSCI EAFE 1,328.86 1,352.63 1.79% 0.0% MSCI EM 781.76 791.03 1.19% MSCI Small Cap 119.26 121.52 1.89% Large Cap Mid Cap Small Cap Int'l

Prices reflect most recent data available at the time of publication Source: Standard & Poor's, Russell Investment Company, MSCI Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital International, The Wall Street Journal, MarketWatch. MainStreet Advisors June 12, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Expectations on expanding wheat inventories resulted in the largest weekly decline in two months. Rainy weather has caused drastic delays Weekly Change

in fieldwork which has affected states like Oklahoma and Kansas, 2.0% America’s two biggest growers. Approximately 9% of Oklahoma crops have been collected, versus 30% a year earlier. Harvest in Kansas is 1.0% expected to begin as soon as next week. The most actively traded 0.0% wheat contract is currently down 8.2% for the month. The U.S. is the -1.0% world’s largest wheat exporter. It is the fourth-biggest U.S. crop with an approximate value of $16.6 billion in 2008, according to Bloomberg, -2.0%

behind corn, soybeans, and hay. -3.0%

Talbots Inc. announced its intention to sell nearly the entire J. Jill brand -4.0% to private equity firm Golden Gate Capital for about $75 million. The -5.0% clothing retailer has barely owned the brand for three years before -6.0% initiating the sale, and paid an original acquisition price of $517 million. Golden Gate also purchased software company Soft Brands Inc. for -7.0% about $80 million, or $0.92 per share, which is approximately double its price at the time of the announcement, but down from its 52 week high of DJ AIG Index NAREIT HFRX Equal Wtd Index

$2.01 per share. Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

12.0% 10.0%

1 8.0% Issue Previous Week Current Change 6.0% Gold 962.60 940.70 -2.28% 4.0% Crude Oil Futures 68.44 72.04 5.26% 2.0% Copper 2.28 2.37 3.95% Sugar 22.00 22.70 3.18% 0.0% HFRX Equal Wtd. Strat. Index 1,042.69 1,042.28 -0.04% -2.0% HFRX Equity Hedge Index 1,068.58 1,075.62 0.66% -4.0% HFRX Equity Market Neutral 1,015.24 1,013.72 -0.15% -6.0% HFRX Event Driven 1,236.41 1,244.86 0.68% -8.0% HFRX Merger Arbitrage 1,376.58 1,378.46 0.14% -10.0% Dow Jones UBS Commodity Index 127.06 128.89 1.44% FTSE/NAREIT All REIT 86.71 81.55 -5.95% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors June 19, 2009 Financial Market Update [page 1]

Economic Update

Significant regulatory changes proposed by the Obama administration Thursday would impact nearly every aspect of the banking and financial Economic Indicators, Quarterly Change

markets. President Obama and Treasury Secretary Timothy Geithner 9.0% both referenced the economic consequences of inadequate government oversight in discussing the proposed overhaul of the financial system. 7.0%

The proposal includes, according to the Wall Street Journal, the creation 5.0% of an agency with regulatory powers over mortgages, credit cards, savings accounts and annuities, increased shareholder voice in setting 3.0% executive pay, federal regulation of hedge funds, changes to mortgage 1.0% securitization rules for banks, and exchange-based trading of complex derivative securities. In addition, it would substantially increase funding -1.0% for the International Monetary Fund (IMF). The IMF noted that this -3.0% increase in international funding will help in boosting the global economy -5.0% and strengthened the commitment of the U.S. to “a multilateral approach to resolving global economic and financial challenges.” Separately, the -7.0% IMF announced its revised forecast for economic growth, expecting the Q2 08 Q3 08 Q4 08 Q1 09 U.S. to contract by 2.5% in 2009 and to grow 0.75% next year. The IMF attributed its improved outlook to monetary and fiscal stimulus as well as Real GDP Core CPI* Unemployment Rate

stabilizing in the financial markets. Source: Bureau of Economic Analysis, Bureau of Labor Statistics *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index The U.S. Department of Labor announced that the Consumer Price Index (CPI) advanced 0.1% in May, yet annual inflation to continue a downward June 15th Empire State Mfg Survey, June -9.4 trend. The 1.3% annual decline marked the largest decline since April June 15th Frgn Dmnd for LT US Securities, April $11.2B 1950. Excluding food and energy, CPI increased 0.1% for the month. June 15th Housing Market Index 15 The modest increases suggest that the risk of deflation is beginning to June 16th ICSC-Goldman Same Store Sales, Wkly. Chg. -0.6% ease. The Labor Department also reported that the Producer Price Index June 16th Housing Starts, May 0.532M (PPI) increased 0.2% in May. Prices for intermediate goods advanced June 16th Producer Price Index for May 0.2% th 0.3% for the month while prices for crude goods soared 3.6%. June 16 Industrial Production, May Monthly Chg. -1.1% June 17th MBA Purchase Applications, Index Level 261.2 th The housing market showed further signs of stabilizing, according to the June 17 Consumer Price Index, May Monthly Chg. 0.1% th -3.9M U.S. Department of Commerce. Housing starts surged 17.1% in May, up June 17 EIA Petroleum Status Report, Wkly. Chg. th Initial Jobless Claims ( Week ending 6/13) 608,000 for the third consecutive month. The National Association of Home June 18 June 18th Leading Indicators, May Mthly. Chg. 1.2% Builders (NAHB)/Wells Fargo Housing Market Index (HMI) declined June 18th EIA Natural Gas Report, Wkly. Chg. 114 bcf slightly in June, however, the NAHB noted that the outlook for home sales has improved in the last few months.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, International Monetary Fund, National Association of Home Builders. MainStreet Advisors June 19, 2009 Financial Market Update [page 2]

Bond Market Update

Another round of mid week volatility ends with bond yields little changed. Early in the week the Obama administration provided new details for their Yield Curves

overhaul of the financial regulatory system in the United States. Initially, 6.0% Wall Street cheered these reforms and sent bond prices higher. Details

are still being decided, but some of the proposed reforms in the 5.0% regulatory overhaul include increased powers by the Federal Reserve

and Treasury Department, as well as a new, and expected to be 4.0% powerful, Consumer Financial Protection Agency. Better than expected results for weekly jobless claims and both the PPI and CPI also firmed 3.0% Treasury pricing. Mid-week, ten of the largest companies that received TARP money paid back $68 billion in federal bailout funds. The next 2.0% step for these firms is to negotiate a price for which they may purchase Warrants also granted to the government. At the end of the week, it 1.0% appeared that 10-year yield was rapidly approaching the psychologically important 4.0% level, but buyers stepped in strongly. Despite continued 0.0% street protests over the Iranian elections, this escalation in global political 2 yr 3 yr 5 yr 10 yr

risk failed to push Treasuries prices higher in a flight to quality. Even U.S. Treasury Muni (Tax Equiv.)* continued moves by North Korea to pursue nuclear weapons failed to impact Treasuries. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 6.12.09 6.19.09 Change 3 month T-Bill 0.19% 0.19% 0.00% 2-Year Treasury 1.30% 1.25% -0.05% 5-Year Treasury 2.81% 2.82% 0.01% 10-Year Treasury 3.81% 3.79% -0.02% 30-Year Treasury 4.65% 4.52% -0.13%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 2/8/2008 2/6/2009 6/8/2009 2/8/2008 2/6/2009 6/8/2009 6/11/2007 10/8/2007 6/10/2008 10/8/2008 6/11/2007 10/8/2007 6/10/2008 10/8/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors June 19, 2009 Financial Market Update [page 3]

Stock Market Update

Just one week after the Dow Jones Industrial Average closed in positive territory for the first time since early January, the index dropped back into Weekly Change

negative territory this week. The DJIA lost 259.53 points, or 2.95%, to 1.0% close the week at 8,539.73. The broader S&P 500 lost as well, ending the week at 921.23, 24.98 points or 2.64% lower than last week. 0.0%

Energy and materials stocks led the downside this week on weak -1.0% commodity prices. Energy shares lost 8.04% while materials shares shed 6.96% this week. The sole positive sector for the week was healthcare, which gained 1.76%. Financial shares were volatile as -2.0% investors reacted to the President Obama’s sweeping vision for a new regulatory environment. The White House argued that expanded federal -3.0% regulatory power is vital to protect the financial system and is likely to impact bank profitability as well as consumers’ access to credit. -4.0%

CarMax Inc. (KMX) reported first-quarter results of $0.11 a share, triple -5.0% analysts’ expectations. The used car dealer gained 17% on the news Friday, according to Bloomberg. Apple Inc. (AAPL) gained 2.6% on Large Cap Mid Cap Small Cap Int'l

strong expected demand for its latest version of the popular iPhone, Source: Standard & Poor's, Russell Investment Company, MSCI which was released Friday.

Stocks in Japan and Europe sold off this week with Japan’s NIKKEI 225 Index losing 3.45%, the FTSE 100 losing 2.16% in the U.K. and the DAX shedding 4.59% in Germany.

Year to Date Change

8.0%

6.0%

Issue 6.12.09 6.19.09 Change Dow Jones 8,799.26 8,539.73 -2.95% 4.0% S&P 500 946.21 921.23 -2.64% NASDAQ 1,858.80 1,827.47 -1.69% Russell 1000 Growth 420.01 410.47 -2.27% 2.0% S&P MidCap 400 597.02 577.98 -3.19% Russell 2000 526.84 512.72 -2.68% MSCI EAFE 1,352.63 1,293.36 -4.38% 0.0% MSCI EM 791.03 743.72 -5.98% MSCI Small Cap 121.52 116.34 -4.26% Large Cap Mid Cap Small Cap Int'l

Alternative Investments Market Update

New York City based private equity firm Kohlberg Kravis & Roberts Co., is planning to merge its business with its Amsterdam-listed affiliate, KKR Weekly Change

Private Equity Investors, which invests in KKR funds and portfolio 1.0% companies. The Wall Street Journal reported that the intention is to ultimately finalize an initial public offering on the New York Stock Exchange. KKR most recently reported an earnings loss of $1.2 billion in 0.0% 2008. Despite the economic slowdown, deal activity for the private equity firm has picked up in recent weeks, when it purchased Oriental -1.0% Brewery Co. for $1.8 billion from Anheuser-Busch InBev NV. KKR also announced a deal last week to invest approximately $350 million into East Resources, a natural gas exploration firm. -2.0%

-3.0%

-4.0%

DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

8.0%

6.0%

1 4.0% Issue Previous Week Current Change Gold 940.70 936.20 -0.48% 2.0% Crude Oil Futures 72.04 69.55 -3.46% 0.0% Copper 2.37 2.26 -4.64% -2.0% Sugar 22.70 22.45 -1.10% -4.0% HFRX Equal Wtd. Strat. Index 1,042.28 1,044.06 0.17% -6.0% HFRX Equity Hedge Index 1,075.62 1,062.95 -1.18% HFRX Equity Market Neutral 1,013.72 1,003.98 -0.96% -8.0% HFRX Event Driven 1,244.86 1,253.87 0.72% -10.0% HFRX Merger Arbitrage 1,378.46 1,376.36 -0.15% -12.0% Dow Jones UBS Commodity Index 128.89 124.73 -3.23% FTSE/NAREIT All REIT 81.55 78.40 -3.86% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors June 26, 2009 Financial Market Update [page 1]

Economic Update

This week, differing houses of congress took up debate over bills covering the environment, "cap and trade," and labor relations, "card Economic Indicators, Quarterly Change

check." Though not yet headed to the president's desk, many feel that 9.0% either of these has the potential to hamper the countries ability to compete globally. The Federal Reserve completed another regular 7.0%

meeting this week and left interest rates unchanged. Its statement 5.0% indicated that the federal funds rate would remain near zero "for an extended period" and noted that the pace of economic contraction 3.0% appears to be slowing. The Fed also reiterated their plan to purchase up 1.0% to $300 billion in Treasuries and $1.25 trillion of mortgage backed securities by year end, but failed to increase this amount as some traders -1.0% may have expected. After the Fed meeting adjourned, congress put -3.0% Chairman Ben Bernanke in the spotlight and questioned him very -5.0% critically about the circumstances regarding the government's takeover of Bank of America (BAC). Critics of the chairman alleged that the Fed -7.0% strongly coerced BAC to go ahead with its acquisition of Merrill Lynch, Q2 08 Q3 08 Q4 08 Q1 09 despite Bank of America's concern about potential additional unrealized losses from the brokerage firm's trading operations. Real GDP Core CPI* Unemployment Rate

Source: Bureau of Economic Analysis, Bureau of Labor Statistics The U.S. saw the first positive signs from the economic stimulus as *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index personal incomes were reported to rise by 1.4% in May. Gross domestic product for the first quarter was revised to -5.5%, up from -5.7%. The June 23rd ICSC-Goldman Same Store Sales, Wkly. Chg. 0.0% savings rate in the U.S. rose 6.3% last month, the highest level since June 23rd Existing Home Sales, May SAAR* 4.77M December 1993, up from 5.6% in April and 4.3% in March. Job losses June 24th MBA Purchase Applications 280.3 for the week came in at 627,000, an increase of 15,000 compared to the June 24th Durable Goods New Orders, May Monthly Chg. -2.6% previous week. June 24th New Home Sales, May 342,000 June 24th EIA Petroleum Status Report, Wkly. Chg. -3.9M Barrels th Overseas, struggling banks received help from the European Central June 24 Real GDP, Q1 Quarterly Change SAAR* -5.5% th Bank (ECB), which injected nearly $622 billion (€422 billion) into the June 24 GDP Price Index, Q1 Quarterly Change SAAR* 2.8% th system at the low rate of only 1%. This represents the ECB's biggest June 25 Initial Jobless Claims ( Week ending 6/20) 627,000 th -21.8% lifeline to Eurozone banks to date and has a one year term. June 25 After-tax Corporate Profits, Q1 Annual Change June 25th EIA Natural Gas Report, Wkly. Chg. 94 bcf June 26th Personal Income, May Monthly Chg. 1.4% June 26th Consumer Spending, May Monthly Chg. 0.3% June 26th Core PCE Price Index, May Monthly Chg. 0.1% June 26th Consumer Sentiment Index, June 70.8

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg. MainStreet Advisors June 26, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries rallied considerably for the week, with 10-year yields decreasing by approximately 29 basis points. Government bond prices Yield Curves

rose the most in three months on optimism there is sufficient demand to 6.0% absorb the Treasury’s record bond sales as it raises funds to support the

economy. The sale of two-, five-, and seven–year notes this week drew 5.0% higher demand than forecast supported by what is known as “indirect

bidders”, a class of investors that include foreign central banks. Now 4.0% poised for their worst quarter since the first three months of 1980, Treasuries have lost 3.2% since March 31, according to Merrill Lynch’s 3.0% U.S. Treasury Master Index. The difference in yield, or spread, between two- and ten-year yields widened to 2.43% for the week, up from 1.45% 2.0% on January 1, and still near the all-time high of 2.76% reached on May 27. A widening of the yield curve often results from reduced demand for 1.0% longer-dated notes, which are more sensitive to the outlook for inflation. This typically indicates that traders expect the economy to strengthen in 0.0% the next three to six months. Meanwhile, President Obama’s “Build 2 yr 3 yr 5 yr 10 yr

America Bonds” have reduced supply of tax-exempt bonds, driving muni U.S. Treasury Muni (Tax Equiv.)* yields lower. Build America Bonds are long-term taxable municipal securities in which the government subsidizes 35% of the borrower’s Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin interest cost. Because municipalities have an incentive to issue taxable securities, sales of tax-exempt munis fell 17% so far this year. Issue 6.19.09 6.26.09 Change 3 month T-Bill 0.19% 0.20% 0.01% 2-Year Treasury 1.25% 1.10% -0.15% 5-Year Treasury 2.82% 2.53% -0.29% 10-Year Treasury 3.79% 3.52% -0.27% 30-Year Treasury 4.52% 4.30% -0.22%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 6/25/2007 2/22/2008 6/24/2008 2/20/2009 6/22/2009 2/22/2008 6/24/2008 2/20/2009 6/22/2009 6/25/2007 10/22/2007 10/22/2008 10/22/2007 10/22/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors June 26, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks extended their losses for a second straight week as a Thursday rally failed to regain early-week losses. The Dow Jones Industrial Weekly Change

Average ended the week at 8,438.39, a weekly loss of 101.34, or 1.19%. 0.2% The S&P 500 ended the week 2.33 points or 0.25% lower at 918.90; however, the technology-heavy Nasdaq Composite Index bucked the 0.1% trend and gained 10.75 points, or 0.59% on the week to close at 1,838.22. 0.0%

Markets were weak as doubts grew among investors about the prospects -0.1% for global growth. On Monday stocks tumbled sending the DJIA down -0.2% 2.3%, the index’s largest loss since June 12. Energy stocks led the S&P

500 to the downside this week, losing 2.68%, on lower oil, gas and -0.3% commodity prices. Health care and utilities led the upside, each gaining about 1% for the week. -0.4%

Chicago-based Boeing Co. (BA) again delayed delivery of its 787 -0.5% Dreamliner as the company had to delay the plane’s initial test flight when structural problems were found, according to the Wall Street Large Cap Mid Cap Small Cap Int'l

Journal. The Washington Post subsequently reported that Qantas Source: Standard & Poor's, Russell Investment Company, MSCI Airways of Australia cancelled 15 of its 30-plane order for the 787. The cancellation is estimated to be worth as much as $3.1 billion.

General Motors (GM) announced that it had chosen a Michigan plant to produce the first of the company’s smallest cars, according to Bloomberg. The state of Michigan offered GM breaks on taxes and Year to Date Change union staffing if the company chose to retool the factory, based in Orion Township, Michigan. The plant will restore approximately 1,200 jobs and 8.0% is expected to produce 160,000 cars annually by 2011.

6.0%

Issue 6.19.09 6.26.09 Change Dow Jones 8,539.73 8,438.39 -1.19% 4.0% S&P 500 921.23 918.90 -0.25% NASDAQ 1,827.47 1,838.22 0.59% Russell 1000 Growth 410.47 410.30 -0.04% 2.0% S&P MidCap 400 577.98 576.73 -0.22% Russell 2000 512.72 513.22 0.10% MSCI EAFE 1,293.36 1,288.25 -0.39% 0.0% MSCI EM 743.72 750.23 0.87% MSCI Small Cap 116.34 116.47 0.11% Large Cap Mid Cap Small Cap Int'l

Alternative Investments Market Update

Bloomberg reported that both crude oil and gasoline futures contracts fell after government savings data came in at 6.9%. Traders took this as an Weekly Change

indication that there will be heavy pressure on the prospects of a speedy 0.0% economic recovery. Crude oil for August declined -0.56% for the week, including a 1.6% drop on Friday. Crude prices remain up 55% in 2009. -0.1% According to a Bloomberg News survey, 21 of 38 analysts surveyed thought that crude prices will fall through July 2nd. Nine of the remaining -0.2% forecasted little change and eight said prices will rise. -0.3% Private equity activity fell in the first half of 2009 to a 17-year low -0.4% according to Thomson Reuters data. Year-to-date, deal activity totaled

approximately $22.4 billion, down 82% from the year ago period, and -0.5% only accounted for 2.6% of all M&A activity, the lowest level since the first half of 1998. The top five deals so far have been Oriental Brewery, -0.6% purchased by KKR for $1.8 billion; IndyMac Bancorp, purchased by JCFlowers for $1.55 billion; Votorantim Celulose e Papel, purchased by -0.7% BNDES Participacoes for $1.35 billion; New City Residence, purchased by Lone Star for $1.1 billion; and Wood Mackenzie, purchased by DJ AIG Index NAREIT HFRX Equal Wtd Index

Charterhouse Capital for $903.2 million. Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Harvard’s endowment, according to Reuters, declined from $37 billion on June 30 2008, to what is expected to be $25 billion at month end. The endowment accounted for approximately a third of Harvard’s operating budget in 2008. Citing the decline in value, Harvard announced 275 job cuts and salary freezes of more than 9,000 faculty and staff. Year to Date Change

8.0%

6.0%

1 4.0% Issue Previous Week Current Change Gold 936.20 941.00 0.51% 2.0% Crude Oil Futures 69.55 69.16 -0.56% 0.0% Copper 2.26 2.31 2.21% -2.0% Sugar 22.45 22.80 1.56% -4.0% HFRX Equal Wtd. Strat. Index 1,044.06 1,043.21 -0.08% -6.0% HFRX Equity Hedge Index 1,062.95 1,061.68 -0.12% HFRX Equity Market Neutral 1,003.98 1,002.15 -0.18% -8.0% HFRX Event Driven 1,253.87 1,254.35 0.04% -10.0% HFRX Merger Arbitrage 1,376.36 1,378.96 0.19% -12.0% Dow Jones UBS Commodity Index 124.73 123.92 -0.65% FTSE/NAREIT All REIT 78.40 78.29 -0.14% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors July 2, 2009 Financial Market Update [page 1]

Economic Update

U.S. job losses unexpectedly accelerated in June, according to the U.S. Department of Labor. Payrolls shed 467,000 for the month amid broad- Economic Indicators, Quarterly Change

based weakness across major industries. The unemployment rate 9.0% continued its uptrend, reaching 9.5%. The report served as a reminder that despite recent signs of slowing contraction, the economic 7.0%

environment remains challenging. Recent advances in consumer 5.0% confidence were largely a reflection of an improved outlook for the jobs market and income prospects. However, The Conference Board 3.0% Consumer Confidence Index edged lower in June as consumers again 1.0% began to question the employment outlook. The Conference Board of Consumer Research Center Director Lynn Franco noted that the survey -1.0% of 5,000 U.S. households suggested “less negative conditions in the -3.0% months ahead, as opposed to strong growth.” -5.0%

Declines in manufacturing activity decelerated for the sixth consecutive -7.0% month in June, as shown by the 44.8% reading in the Purchasing Q2 08 Q3 08 Q4 08 Q1 09 Managers Index (PMI). The Institute for Supply Management (ISM) reported that production started to rebound and inventories began to Real GDP Core CPI* Unemployment Rate

contract at a faster pace. Survey respondents from various industries Source: Bureau of Economic Analysis, Bureau of Labor Statistics seemed cautiously optimistic and commented on a return in demand, *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index increased orders for the coming months, and sentiment that the market has bottomed. June 30th ICSC-Goldman Same Store Sales, Wkly. Chg. 1.6% June 30th S&P/Case-Shiller Composite 20 Index, April 139.2 The S&P/Case-Shiller Home Price Indices showed the rate of decline in June 30th Consumer Confidence Index, June 49.3 U.S. home prices moderated in April. While still negative, annual June 30th State Street Investor Confidence Index, June 115.5 declines of 18.0% and 18.1% posted by the 10- and 20-City Composite July 1st Domestic Motor Vehicle Sales, June 7.1.M Indices, respectively, were significantly less than the 18.7% declines July 1st MBA Purchase Applications 267.7 st each experienced in March. July 1 Announced Layoffs, June 74,393 st July 1 ISM Mfg. Index - Level, June 44.8 st The European Central Bank (ECB) held its key interest rates unchanged July 1 Construction Spending, May Monthly Chg. -0.9% st 0.1% at its monetary policy meeting Thursday. The ECB reiterated its July 1 Pending Home Sales, May Monthly Chg. st EIA Petroleum Status Report, Wkly. Chg. -3.7M Barrels expectation for economic activity to continue softening for the rest of July 1 July 2nd Non-farm Payrolls, June Monthly Chg. -467,000 2009 albeit at a slower rate. Furthermore, the ECB announced that July 2nd Unemployment Rate, June 9.5% economic conditions in the euro zone should recover by mid-2010 given July 2nd Initial Jobless Claims ( Week ending 6/27) 589,000 considerable policy stimulus in all facets of the economy. nd July 2 Factory Orders, May Monthly Chg. 1.2% July 2nd EIA Natural Gas Report, Wkly. Chg. 70 bcf Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, The Conference Board, Institute for Supply Management, S&P/Case-Shiller, European Central Bank. MainStreet Advisors July 2, 2009 Financial Market Update [page 2]

Bond Market Update

Bond yields were marginally lower on modest price gains during this holiday shortened week. Mid-week, bond traders focused on the better Yield Curves

than expected readings in construction spending and pending home 6.0% sales and sold bonds off over concerns that those two readings indicated

stronger growth was around the corner. However, by week's end 5.0% important non-farm payroll report indicated 100,000 more jobs lost than

anticipated. Bond traders viewed this news as non-inflationary and bond 4.0% prices rallied strongly. The state of California's budget is still not resolved, with a $26 billion deficit for $92 billion in planned expenditures. 3.0% California Controller John Chiang announced the state will issue $3.4 billion worth of "I O U's" to cover various bills for the coming weeks. 2.0% Officially called "individual registered warrants," the state previously issued these for a short time in 1992 and some banks in the state would 1.0% accept them. Mr. Chiang has said without the IOUs, the state would be depleted of cash by the end of July. In Europe, where bank loans 0.0% finance the majority of lending needs by businesses, Dealogic reported 2 yr 3 yr 5 yr 10 yr

the amount of bond issuance in Europe in year to date totals $311 billion, U.S. Treasury Muni (Tax Equiv.)* up 50% from last year. Lastly, Moody's has downgraded Ireland's debt rating to Aa1, stripping yet another government of the coveted AAA Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin status.

Issue 6.25.09 7.2.09 Change 3 month T-Bill 0.20% 0.17% -0.03% 2-Year Treasury 1.10% 1.05% -0.05% 5-Year Treasury 2.53% 2.51% -0.02% 10-Year Treasury 3.52% 3.55% 0.03% 30-Year Treasury 4.30% 4.34% 0.04%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 7/2/2007 3/3/2008 7/2/2008 7/2/2007 3/3/2008 7/2/2008 2/28/2009 6/30/2009 2/28/2009 6/30/2009 10/30/2007 10/30/2008 10/30/2007 10/30/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors July 2, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks plummeted on Thursday to end the holiday-shortened week in negative territory as investors grappled with weak employment numbers. Weekly Change

Friday’s 219.62 point, or 2.58%, slide wiped out gains made earlier in the 4.0% week to leave the Dow Jones Industrial Average at 8,284.44, down 1.82% for the week. The broader S&P 500 finished at 896.45, off 2.45% 3.0% for the week. The technology-heavy NASDAQ composite lost 37.32 2.0% points, or 2.27%, for the week. 1.0% Friday’s sell-off was broad-based with 2,404 NYSE issues declining, 562 issues advancing and 111 unchanged. Financial shares led the weekly 0.0% decline, shedding 3.78%. High-volume declines were made on Thursday -1.0% by Bank of America (BAC), which lost -3.07%; Citigroup (C) down - 2.35%; and Wells Fargo (WFC), off -3.85%. Weak crude prices sent -2.0%

energy shares down 3.61% for the week. Consumer staples stocks held -3.0% their ground this week, losing just 0.61%. -4.0% European stocks also fell on Thursday with the DJ Euro Stoxx 50 losing 3.27%. The FTSE 100 Index lost 2.45% in the U.K., in Germany the Large Cap Mid Cap Small Cap Int'l

DAX Index lost 3.81% and the French CAC 40 Index lost 3.13%. In Source: Standard & Poor's, Russell Investment Company, MSCI Japan, the NIKKEI 225 lost just 0.64%, but due to the time differences, most Asian stock markets are closed when U.S. economic data is released and therefore do not suffer similar declines.

Year to Date Change

8.0%

7.0%

6.0%

5.0% Issue 6.25.09 7.2.09 Change 4.0% Dow Jones 8,438.39 8,284.52 -1.82% 3.0% S&P 500 918.90 896.42 -2.45% 2.0% NASDAQ 1,838.22 1,796.52 -2.27% 1.0% Russell 1000 Growth 410.30 402.04 -2.01% S&P MidCap 400 576.73 565.04 -2.03% 0.0% Russell 2000 513.22 498.29 -2.91% -1.0% MSCI EAFE 1,288.25 1,325.58 2.90% -2.0% MSCI EM 750.23 773.07 3.05% MSCI Small Cap 116.47 120.08 3.10% Large Cap Mid Cap Small Cap Int'l

Alternative Investments Market Update

The Federal Deposit Insurance Corp.’s board of directors voted to seek comment on a proposal that would require private equity firms to Weekly Change

maintain a 15% tier 1 leverage ratio for at least three years at the 3.0% acquired bank. The Wall Street Journal reported that the vote came as a result of regulators becoming increasingly concerned that private equity 2.0% investors may not be committed to the long-term ownership of a healthy bank. 1.0% Och-Ziff Capital Management, a publically listed hedge-fund manager, experienced gains on all main funds in June, however, investor 0.0% withdrawals brought the total assets under management down $800 million compared to May. Their total assets are down to $20.7 billion. -1.0% Their flagship fund, OZ Master Fund, is up 12.41% year to date, which includes a 2.16% appreciation in June. -2.0%

-3.0%

DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

6.0%

4.0% 1 Issue Previous Week Current Change 2.0% Gold 941.00 931.00 -1.06% Crude Oil Futures 69.16 66.73 -3.51% 0.0% Copper 2.31 2.31 0.00% -2.0% Sugar 22.80 22.75 -0.22% -4.0% HFRX Equal Wtd. Strat. Index 1,043.21 1,043.41 0.02% HFRX Equity Hedge Index 1,061.68 1,063.10 0.13% -6.0% HFRX Equity Market Neutral 1,002.15 1,006.69 0.45% -8.0% HFRX Event Driven 1,254.35 1,260.84 0.52% HFRX Merger Arbitrage 1,378.96 1,385.92 0.50% -10.0% Dow Jones UBS Commodity Index 123.92 121.02 -2.34% FTSE/NAREIT All REIT 78.29 80.40 2.70% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors July 10, 2009 Financial Market Update [page 1]

Economic Update

U.S. consumer sentiment slipped in early July, as shown by the Reuters/University of Michigan Surveys of Consumers. The preliminary Economic Indicators, Quarterly Change

index of confidence retreated to March lows as consumers returned to 9.0% concerns about length of the economic downturn, job market, and erosion of wealth. Lower consumer confidence levels are a reminder of 7.0%

ongoing headwinds the economy faces and suggests a gradual 5.0% economic recovery. Retailers reported soft sales last month, in comparison to June 2008 when consumers were spending their 3.0% economic stimulus checks. Sales at stores open for more than one year, 1.0% decreased by an average of 5.1%, according to the International Council for Shopping Centers (ICSC). ICSC acknowledged signs of -1.0% improvement, particularly in teen and value retailers which ahieved -3.0% unexpectedly solid gains in June. -5.0%

The U.S. Department of Commerce announced Friday that the trade gap -7.0% narrowed in May as the goods and services deficit shrank to $26.0 Q2 08 Q3 08 Q4 08 Q1 09 billion. Export activity for the month increased by $1.9 billion, while imports fell by $900 million. Lower global trade activity has become an Real GDP Core CPI* Unemployment Rate

increasing concern in recent months and was discussed when the Group Source: Bureau of Economic Analysis, Bureau of Labor Statistics of Eight (G-8) met this week. The G-8 set aggressive goals to make *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index progress in trade negotiations for the September meeting. The Wall Street Journal reported that both developed and developing countries July 6th ISM Non-Mfg. Index, June 47 have agreed to a series of bilateral meetings in order to help speed the July 7th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.1% process of global trade negotiations. July 8th MBA Purchase Applications 285.6 July 8th EIA Petroleum Status Report, Wkly. Chg. -2.9M Barrels The International Monetary Fund released its World Economic Outlook July 8th Consumer Credit, May Monthly Change -3.2B this week, upgrading its 2010 economic growth forecast to 2.5%. The July 9th Initial Jobless Claims ( Week ending 7/4) 565,000 th improved outlook was a result of decelerating downward pressures and July 9 Wholesale Inventories, May Monthly Chg. -0.8% th expectations for higher growth in the United States and in Japan. IMF July 9 EIA Natural Gas Report, Wkly. Chg. 75 bcf th Chief Economist Olivier Blanchard noted that “while the world economy is July 10 International Trade Balance Level, May -26.0B th 3.2% still in recession, the recovery is coming.” July 10 Import Prices, June Monthly Chg. July 10th Export Prices, June Monthly Chg. 1.1% July 10th Consumer Sentiment Index, July 64.6

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, Reuters, International Council for Shopping Centers, International Monetary Fund. MainStreet Advisors July 10, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries rallied considerably for the week, with 10-year yields decreasing by 23 basis points. Government bond prices rose as a recent Yield Curves

pause in global equity increased demand for the relative safety of 6.0% government debt, and rising doubt about the strength of the economic

recovery caused investors to seek comfort in Treasuries. The 10-year 5.0% note’s yield has fallen significantly over the past month after briefly rising

above 4% in early June. The decline gained momentum after a 4.0% government report released last week showed non-farm job losses were greater than economist’s forecasts. Concern also rose about the funding 3.0% problems of CIT Group, a major U.S. lender to small businesses. The Federal Deposit Insurance Corp (FDIC) reported they are unwilling to 2.0% guarantee CIT’s bond sales through the Temporary Liquidity Guarantee Program, according to a Bloomberg report. Market participants are 1.0% worried that if the company cannot access liquidity, it could struggle to meet its debt maturities in 2010 without taking actions that could hurt its 0.0% bond holders. Small businesses may be directly affected by CIT’s lack of 2 yr 3 yr 5 yr 10 yr

lending, putting additional pressure on a speedy economic recovery. U.S. Treasury Muni (Tax Equiv.)* Meanwhile, Mark Kiesel, global head of the corporate bond group at PIMCO, cautioned investors about high-yield, high-risk bonds and Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin announced expectations for investment grade corporates to outperform junk-bonds throughout the second half of the year. Issue 7.3.09 7.10.09 Change 3 month T-Bill 0.17% 0.18% 0.01% 2-Year Treasury 1.05% 0.91% -0.14% 5-Year Treasury 2.51% 2.22% -0.29% 10-Year Treasury 3.55% 3.32% -0.23% 30-Year Treasury 4.34% 4.20% -0.14%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 7/9/2007 7/9/2008 3/6/2009 7/7/2009 7/9/2008 3/6/2009 7/7/2009 7/9/2007 11/6/2007 3/10/2008 11/6/2008 11/6/2007 3/10/2008 11/6/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors July 10, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks retreated for a fourth straight week, sending the Dow Jones Industrial Average (DJIA) lower by shedding 134.22 points or 1.67% to Weekly Change

close at 8,146.52. The broader S&P 500 closed at 879.13, down 17.29 0.0% points, or 1.93% and the technology-heavy NASDAQ Composite shed 2.25%. A larger-than-expected slide consumer confidence added to -1.0% concerns that the economic recovery would take longer than previously expected. -2.0% Google, Inc. (GOOG) announced that it was developing a new PC operating system in the company's latest battle in its war against -3.0% software giant Microsoft (MSFT). Google has also attempted to chip- away at Microsoft’s dominance of the internet browser and the office -4.0% productivity software businesses. -5.0% Chevron (CVX), the second largest U.S. energy producer, slid 2.6% on Friday when the company announced that the falling dollar reduced -6.0% overseas profit from oil and gas wells during April and May, according to Bloomberg. Large Cap Mid Cap Small Cap Int'l

Source: Standard & Poor's, Russell Investment Company, MSCI General Motors (GM) emerged from bankruptcy after just 39 days, well ahead of the 60 to 90 days predicted by the Obama administration. The reorganized company will have just four domestic brands instead of eight, will have less debt, fewer employees and a slimmer dealership network. In addition, the company will have a smaller team of executives to run the company. Year to Date Change

Losses this week were concentrated in four sectors: materials, 3.0% industrials, energy and financial, each of which lost over 3%. The 2.0% consumer staples led the pack with no change on the week and health

care lost a modest 0.43%. 1.0%

Issue 7.3.09 7.10.09 Change 0.0% Dow Jones 8,284.52 8,146.52 -1.67% S&P 500 896.42 879.13 -1.93% -1.0% NASDAQ 1,796.52 1,756.03 -2.25% Russell 1000 Growth 402.04 396.06 -1.49% -2.0% S&P MidCap 400 565.04 547.08 -3.18% -3.0% Russell 2000 498.29 480.98 -3.47% MSCI EAFE 1,325.58 1,261.18 -4.86% -4.0% MSCI EM 773.07 741.75 -4.05% MSCI Small Cap 120.08 115.12 -4.13% Large Cap Mid Cap Small Cap Int'l

Alternative Investments Market Update

Crude oil futures fell for the fourth consecutive week, losing over 10% in the biggest weekly decline since the beginning of the year. The slide Weekly Change

was attributed to concerns that the demand for energy will be slow to 2.0% rebound from the global recession that has crippled consumer spending. Contrary to this opinion, the International Energy Agency has projected 0.0% that worldwide crude oil consumption will increase by 1.7% (or 1.4 million barrels per day) next year. Oil has plunged 59% from its high of $147.27 -2.0% reached nearly one year ago.

Copper prices fell 4.3%, marking its second weekly drop. The decline -4.0% was fueled by speculation that China, the world’s biggest purchaser of copper, will experience decreased demand after building a surplus from -6.0% its currently high volume of imports. Analysts suspect that copper prices could fall further in the second half of the year on the heels of a probable -8.0% decline in imports. -10.0% Gold lost nearly 2% this week, falling to $912.50 per ounce. Gold prices have recently experienced a downward trend due to the dollar gaining DJ AIG Index NAREIT HFRX Equal Wtd Index

strength and crude oil losing ground. Analysts predict that this trend will Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research continue, estimating that the price of gold next week will fall below the $900 mark.

Year to Date Change

10.0%

5.0% 1 Issue Previous Week Current Change

Gold 931.00 912.50 -1.99% 0.0% Crude Oil Futures 66.73 59.89 -10.25% Copper 2.31 2.21 -4.33% -5.0% Sugar 22.75 22.55 -0.88% HFRX Equal Wtd. Strat. Index 1,043.41 1,044.17 0.07% -10.0% HFRX Equity Hedge Index 1,063.10 1,053.36 -0.92% HFRX Equity Market Neutral 1,006.69 1,005.67 -0.10% -15.0% HFRX Event Driven 1,260.84 1,257.79 -0.24% HFRX Merger Arbitrage 1,385.92 1,384.65 -0.09% -20.0% Dow Jones UBS Commodity Index 121.02 113.99 -5.81% FTSE/NAREIT All REIT 80.40 73.51 -8.57% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors July 17, 2009 Financial Market Update [page 1]

Economic Update

The minutes released from the June 23-24 FOMC meeting reflected the Fed’s satisfaction with the progression of its monetary policy. Economic Indicators, Quarterly Change

Improvement in the financial markets pushed the focus of the meeting 9.0% toward planning the development of tools that will allow for a timely withdrawal of policy accommodation when appropriate. This is in 7.0%

response to the Fed’s vastly expanded balance sheet, which staff project 5.0% will peak late this year and decline gradually thereafter. Economic growth projections were revised up for the remainder of 2009 and 2010, 3.0% offering confirmation that the Fed views the economy as on the path to a 1.0% fragile recovery later this year. -1.0%

Despite the relatively positive forecast for the economy as a whole, the -3.0% Fed also increased its projections for unemployment and core inflation, -5.0% suggesting a continued dreary outlook for the labor market. Former Federal Reserve Governor Laurence Meyer said that he doesn’t predict -7.0% the U.S. returning to full employment – or a jobless rate around 5% – for Q2 08 Q3 08 Q4 08 Q1 09 another 6 years. In an interview with Bloomberg.com, Meyer stated that since we are starting “in a hole” at a near 10% unemployment rate, relief Real GDP Core CPI* Unemployment Rate

is going to come very slowly. The U.S. has lost 7.2 million jobs since the Source: Bureau of Economic Analysis, Bureau of Labor Statistics beginning of the recession in December 2007. *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index

Housing starts in the U.S. for June rose to a seven-month high, jumping July 14th ICSC-Goldman Same Store Sales, Wkly. Chg. -0.9% 3.6% to 582,000. This number exceeded forecasts by over 50,000, July 14th Producer Price Index, June Monthly Chg. 1.8% suggesting that the housing market meltdown could be reaching an end. July 14th Retail Sales, June Monthly Chg. 0.6% Some economists are not as optimistic, fearing that rising mortgage rates July 14th Business Inventories, May Monthly Chg. -1.0% and high foreclosure rates could potentially send the housing market into July 15th MBA Purchase Applications Index Level 258.8 a renewed decline. July 15th Consumer Price Index, June Monthly Chg. 0.7% July 15th Empire State Mfg Survey, July -0.55 th Newly released data showed that the China’s GDP grew 7.9% this year July 15 Industrial Production, June Monthly Chg. -0.4% th through the second quarter, indicating that the country’s economic July 15 EIA Petroleum Status Report, Wkly. Chg. -2.8M Barrels th 522,000 stimulus package has been very effective. Goldman Sachs estimates July 16 Initial Jobless Claims ( Week ending 7/11) th Frgn Dmnd for LT US Securities, May -19.8B that annualized second quarter growth was 16.5% as compared with the July 16 July 16th RBC Cash Index, July 22.4 previous 3 months. July 16th Philidelphia Fed Survey, July -7.5 July 16th EIA Natural Gas Report, Wkly. Chg. 90 bcf July 16th Housing Market Index, July 17.0 July 17th Housing Starts, June 582,000 Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, Reuters, International Council for Shopping Centers, International Monetary Fund. MainStreet Advisors July 17, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries fell, marking the first weekly decline in six weeks, as housing starts in the U.S. unexpectedly rose in June, suggesting the Yield Curves

housing market may be stabilizing. Selling pressure from major 6.0% European government bond markets also weighed on Treasury prices.

Brian Edmonds, head of interest rates at Cantor Fitzgerald, noted a 5.0% “large” stop-loss sell order in German government bonds. Market

participants also sold government debt to hedge against possible new 4.0% issuance from the financial sector after several major banks reported better than expected earnings this week. All else equal, new issuance 3.0% tends to raise interest rates as supply increases and demand remains unchanged. Meanwhile CIT Group, a commercial finance company, 2.0% announced that is in talks with potential lenders to avoid bankruptcy after failing to receive federal guarantees for its bonds. CIT may need as 1.0% much as $6 billion to avoid filing for bankruptcy protection, according to Bloomberg. JPMorgan and Morgan Stanley are in talks with other banks 0.0% about a debtor-in-possession loan, used to fund a company’s operations 2 yr 3 yr 5 yr 10 yr

after it seeks court protection from creditors, said people familiar with the U.S. Treasury Muni (Tax Equiv.)* matter, who declined to be identified because the negotiations are private. CIT and its advisers, including Morgan Stanley and Evercore Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin Partners Inc., are also trying to arrange rescue financing to avert bankruptcy. Issue 7.13.09 7.20.09 Change 3 month T-Bill 0.18% 0.19% 0.01% 2-Year Treasury 0.91% 1.00% 0.09% 5-Year Treasury 2.22% 2.46% 0.24% 10-Year Treasury 3.32% 3.59% 0.27% 30-Year Treasury 4.20% 4.45% 0.25%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 7/16/2007 3/17/2008 7/16/2008 3/13/2009 7/14/2009 3/17/2008 7/16/2008 3/13/2009 7/14/2009 7/16/2007 11/13/2007 11/13/2008 11/13/2007 11/13/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors July 17, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks broke the recent down trend with strong gains in four out of five days. The Dow Jones Industrial Average closed at 8,743.94, up 597.42 Weekly Change

points, or 7.33% for the week. The broader S&P 500 gained 6.97% on 9.0% the week to close Friday at 940.38. The NASDAQ Composite gained the most of the major indices, adding 7.44% this week. 8.0% 7.0% The rally was sparked by positive economic reports and better than 6.0% expected earnings from Goldman Sachs (GS) and JP Morgan Chase (JPM). Goldman reported record quarterly revenues in equity 5.0%

underwriting, trading and principal investments. Goldman, according to 4.0% the Wall Street Journal, was able to successfully take business from its weakened rivals. The company reported net income in the second 3.0% quarter of $3.44 billion. JP Morgan also reported better than expected 2.0% earnings, and announced that it had repaid the $25 billion capital 1.0% injection it had received under the Troubled Asset Relief Program (TARP). 0.0%

While good news was posted by Goldman Sachs and JP Morgan, other Large Cap Mid Cap Small Cap Int'l

companies continued to struggle. Citigroup (C) posted a profit for the Source: Standard & Poor's, Russell Investment Company, MSCI second quarter, but when the one time gain on the sale of its Smith Barney brokerage unit is removed, earnings missed analyst expectations. General Electric (GE) fell the most in three months on Friday, according to Bloomberg, when the company reported that revenue fell by 17% in the second quarter, a larger drop than analysts expected. Year to Date Change

Financial and material stocks led the broad-based rally this week, each 10.0% posting gains in excess of 9%. The laggards were health care, utilities, 9.0% and consumer staples, posting gains of 3.47%, 4.12% and 4.54%, 8.0% respectively. 7.0%

International stocks rallied this week as well, driven by the positive news 6.0% in the U.S. The NIKKEI 225 gained 1.16% in Japan and the FTSE 100 5.0% gained 5.69% in the U.K. 4.0%

3.0% Issue 7.13.09 7.20.09 Change Dow Jones 8,146.52 8,743.94 7.33% 2.0% S&P 500 879.13 940.38 6.97% 1.0% NASDAQ 1,756.03 1,886.61 7.44% 0.0% Russell 1000 Growth 396.06 422.18 6.59% S&P MidCap 400 547.08 589 7.66% Large Cap Mid Cap Small Cap Int'l

Russell 2000 480.98 519.22 7.95% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EAFE 1,261.18 1,320.25 4.68% MSCI EM 741.75 773.41 4.27% MSCI Small Cap 115.12 118.94 3.31% Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital International, The Wall Street Journal, MarketWatch. MainStreet Advisors July 17, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Industrial metals fared the best for the week with a gain of 9.36%. Nickel (11.25%), Copper (9.57%), Aluminum (8.60%), and Zinc (8.44%) all Weekly Change

experienced significant price appreciations likely as a result of increased 12.0% stability in U.S. manufacturing and strong Chinese imports. Natural gas prices, up 9.22%, rose over 11.00% on Thursday after a government 10.0% report was released which showed a narrowing surplus of the factory and power-plant fuel, according to Bloomberg. Also contributing was the 8.0% Commerce Department which reported the highest level of single family home starts since November 2008. 6.0%

4.0%

2.0%

0.0%

DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

6.0%

4.0% 1 Issue Previous Week Current Change 2.0% Gold 912.50 937.50 2.74% 0.0% Crude Oil Futures 59.89 63.56 6.13%

Copper 2.21 2.42 9.50% -2.0% Sugar 22.55 23.15 2.66% -4.0% HFRX Equal Wtd. Strat. Index 1,044.17 1,046.09 0.18% HFRX Equity Hedge Index 1,053.36 1,061.20 0.74% -6.0% HFRX Equity Market Neutral 1,005.67 1,002.58 -0.31% -8.0% HFRX Event Driven 1,257.79 1,259.52 0.14% HFRX Merger Arbitrage 1,384.65 1,384.55 -0.01% -10.0% Dow Jones UBS Commodity Index 113.99 120.29 5.53% FTSE/NAREIT All REIT 73.51 80.60 9.64% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors July 24, 2009 Financial Market Update [page 1]

Economic Update

In testimony to the U.S. House of Representatives earlier this week, Federal Reserve Chairman Ben Bernanke stressed the role aggressive Economic Indicators, Quarterly Change

policy action has played in the stabilization of the global financial system 9.0% and economy. He reiterated the Fed’s expectations that the target federal funds rate will need to remain at historically low levels for “an 7.0%

extended period.” Later in the week, Bernanke returned to Congress to 5.0% comment on the restructuring of regulatory powers over the U.S. financial system. Bernanke argued that effective regulation will require the 3.0% cooperation and adjustments from all regulatory agencies. Further, he 1.0% explained that promoting effective systematic risk controls will require consolidating regulatory oversight, an outlook that encompasses the -1.0% financial system as a whole, and improved mechanisms to identify and -3.0% monitor systematic risk. U.S. Treasury Secretary Timothy Geithner also -5.0% addressed Congress on Friday, asking for a total overhaul of the financial regulatory system by the end of this year. Geithner emphasized the -7.0% importance of revamping an outdated system as quickly as possible and Q2 08 Q3 08 Q4 08 Q1 09 pointed to examples of regulatory ineffectiveness that surfaced during the financial crisis. Real GDP Core CPI* Unemployment Rate

Source: Bureau of Economic Analysis, Bureau of Labor Statistics Meanwhile, consumer sentiment has dropped in recent weeks, as shown *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index by the Reuters/ University of Michigan Surveys of Consumers. The final July reading was the weakest since April as consumers are now more July 20th Leading Indicators, June Monthly Chg. 0.7% concerned about the long-term economic outlook. The survey indicated July 21th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.5% that while consumers acknowledge the pace of economic contraction July 22nd MBA Purchase Applications 262.1 appears to have stabilized, many doubt that stimulus policies will be able July 22nd EIA Petroleum Status Report, Wkly. Chg. -1.8M Barrels to effectively improve their personal financial conditions in the near-term. July 23rd Initial Jobless Claims ( Week ending 7/18) 554,000 July 23rd Existing Home Sales, June SAAR* 4.89M rd The Conference Board Leading Economic Index advanced 0.7% in June, July 23 EIA Natural Gas Report, Wkly. Chg. 66 bcf rd marking the third consecutive increase. Seven of the ten indicators were July 23 Consumer Sentiment Index, January 66.0 positive for the month, led by the interest rate spread, building permits, and stock prices. The National Association of Realtors (NAR) reported that sales of existing homes rose for the third straight month as well, with signs of improvement in all major regions. The NAR noted expectations for a gradual recovery to continue and expressed optimism for price stabilization in much of the country by the end of the year.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, Reuters, The Conference Board, National Association of Realtors. MainStreet Advisors July 24, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries were little changed this week, dropping modestly and marking the second straight weekly decline as market participants await Yield Curves

a record amount of new debt sales next week. The Treasury plans to sell 6.0% a record $115 billion of coupon debt, including $109 billion in notes and

$6 billion in 20-year TIPS. The government will also sell $90 billion in 5.0% three-, six- and 52-week Treasury Bills. Fortunately, central banks of

emerging nations are increasing their purchases of Treasuries as they 4.0% sell their currencies to stem appreciation. A rising currency can cause prices of exported goods to rise, curtailing demand for a country’s 3.0% products. While the rise in yields so far this year has been tempered by the increase in emerging market central bank purchases and the U.S. 2.0% economic downturn, investors remain concerned that yields may begin to rise given the government’s massive monetary stimulus policies. Foreign 1.0% investors, including central banks, are becoming concerned that the U.S. needs to return to more responsible fiscal policies to prevent a 0.0% devaluation of the dollar, which would cut the value of their large U.S. 2 yr 3 yr 5 yr 10 yr

Treasury debt holdings. Meanwhile, CIT Group reworked its tender offer U.S. Treasury Muni (Tax Equiv.)* for $1 billion of notes maturing next month to encourage investors to deliver the debt to the company sooner, according to Bloomberg. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin Investors tendering their notes by July 31 will receive $775 plus a $50 early delivery payment for every $1,000 of securities they own. Issue 7.17.09 7.24.09 Change 3 month T-Bill 0.19% 0.18% -0.01% 2-Year Treasury 1.00% 1.05% 0.05% 5-Year Treasury 2.46% 2.57% 0.11% 10-Year Treasury 3.59% 3.70% 0.11% 30-Year Treasury 4.45% 4.55% 0.10%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 7/23/2007 3/25/2008 7/23/2008 3/20/2009 7/21/2009 3/25/2008 7/23/2008 3/20/2009 7/21/2009 7/23/2007 11/20/2007 11/20/2008 11/20/2007 11/20/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors July 24, 2009 Financial Market Update [page 3]

Stock Market Update

Domestic equity markets had a strong week, with the S&P 500, NASDAQ, and Dow Jones Industrial Average indices each posting nearly Weekly Change

4% in gains. Encouraging corporate reports and a jump in housing sales 6.0% fueled the rally, leaving the NASDAQ at a nine-month high and the S&P 500 and Dow indices at eight-month highs. Bloomberg.com reported that 5.0% investors are pouring money into shares on speculation that the fastest rally since the Great Depression will reverse losses from last year. 4.0% The largest gains occurred Thursday, though some late-released disappointing profit reports weighed on investors leading into trading on 3.0% Friday. Mircrosoft (MSFT) announced a 29% decrease in earnings for its fiscal fourth period, a figure well below analyst estimates. The stock lost 2.0% as much as 11% during trading on Friday before making a faint recovery. American Express (AXP) reported a 48% drop in profit. Despite 1.0% technology and finance companies leading the broader market lower, most indices managed slight gains on Friday, surprising many investors 0.0% expecting a substantial drop. The NASDAQ did fall however, ending a streak of 13 session gains. Large Cap Mid Cap Small Cap Int'l

Source: Standard & Poor's, Russell Investment Company, MSCI Oil and natural gas prices propelled energy stocks this week, boosting Exxon Mobil Corp. (XOM) and ConocoPhillips (COP) 11.0% and 6.1%, respectively. Financials produced mixed results this week. Fifth Third Bank (FITB) posted a gain of 15.2% after an impressive earnings report, while Citigroup (C) and Bank of America (BAC) experienced losses of 9.9% and 5.0% for the week. Year to Date Change

Emerging market equity funds continued to entice investors this week, 18.0% drawing in $2.6 billion on the optimism that the demand for exports in the 16.0% U.S. will recover. The inflows add to a near $32 billion sum invested in 14.0% emerging markets this year, giving developing nations 10 of the world’s best performing stock markets this year. 12.0%

10.0%

8.0%

Issue 7.17.09 7.24.09 Change 6.0% Dow Jones 8,743.94 9,093.24 3.99% 4.0% S&P 500 940.38 979.26 4.13% NASDAQ 1,886.61 1,965.96 4.21% 2.0% Russell 1000 Growth 422.18 437.46 3.62% 0.0% S&P MidCap 400 589 621.7 5.55% Russell 2000 519.22 548.46 5.63% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,320.25 1,385.79 4.96% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 773.41 822.11 6.30% MSCI Small Cap 118.94 124.39 4.58%

Alternative Investments Market Update

After record purchases, China’s copper imports have reportedly slowed, according to Bloomberg. The recent flurry of buying has resulted in a Weekly Change

75% rally this year, as reflected by data from Dow Jones. Chinese 6.0% copper demand is expected by some analysts to grow by 7-8%, or 400,000 tons this year. In related news, China is on course to overtake India to become the world’s top consumer of gold in 2009. Total gold demand in the first quarter was six times that of India, according to the 4.0% World Gold Council.

As reported by Dow Jones, the first half of 2009 resulted in 173 private equity funds raise $54.9 billion, amounting to a 64% decline from the levels seen over the first half of 2008. The majority of the money is 2.0% moving towards leverage buyout and corporate finance funds. Since January, 73 buyout funds raised $28.7 billion, or 72% less than the amount raised by 98 funds in the year ago period. 0.0% Online retail giant Amazon intends to purchase online shoe store Zappos in exchange for approximately 10 million shares of Amazon common DJ AIG Index NAREIT HFRX Equal Wtd Index

stock, which roughly equates to $807 million based on a trailing 45 day Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research estimate. Additionally, Amazon will provide Zappos employees with $40 million in cash and restricted stock units. Private equity firm Sequoia Capital, an early financial backer, reportedly owns 10% of the company, which would likely amount to a highly profitable exit opportunity.

Year to Date Change

6.0%

4.0% 1 Issue Previous Week Current Change

Gold 937.50 953.10 1.66% 2.0% Crude Oil Futures 63.56 68.05 7.06% Copper 2.42 2.52 4.13% 0.0% Sugar 23.15 23.25 0.43% HFRX Equal Wtd. Strat. Index 1,046.09 1,050.15 0.39% -2.0% HFRX Equity Hedge Index 1,061.20 1,069.02 0.74% HFRX Equity Market Neutral 1,002.58 1,001.03 -0.15% -4.0% HFRX Event Driven 1,259.52 1,267.79 0.66% HFRX Merger Arbitrage 1,384.55 1,385.23 0.05% -6.0% Dow Jones UBS Commodity Index 120.29 123.32 2.52% FTSE/NAREIT All REIT 80.60 84.21 4.48% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors July 31, 2009 Financial Market Update [page 1]

Economic Update

Recession in the U.S. economy has started to ease, as suggested by gross domestic product (GDP) estimates for the second quarter. The Economic Indicators, Quarterly Change

Commerce Department reported that the economy contracted at a 9.0% seasonally adjusted annual rate of 1.0% in the quarter, following a 6.4% decline in the first quarter and a 5.4% in the fourth quarter. This marks 7.0%

the fourth consecutive quarter of negative GDP, the longest period since 5.0% records began in 1947 according to the Wall Street Journal. Smaller declines in business spending, exports, and inventory investment as well 3.0% as government stimulus contributed to the better-than-expected figures. 1.0% The Federal Reserve’s latest survey of regional economic regions indicated that the majority of Districts have experienced moderating -1.0% economic decline or stabilizing low levels of activity. Although economic -3.0% activity has remained weak this summer, a decelerating rate of decline -5.0% suggests that conditions will improve during the second half of the year. -7.0% Higher sales of new residential homes and stabilizing prices released this Q3 08 Q4 08 Q1 09 Q2 09 week suggest that the housing market has bottomed. The U.S. Department of Commerce announced that June sales surged 11% from Real GDP Core CPI* Unemployment Rate

the previous month to a seasonally adjusted annual rate of 384,000. Source: Bureau of Economic Analysis, Bureau of Labor Statistics Meanwhile, national prices continued to improve in May, as shown by the *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index S&P/Case-Shiller Home Price Indices. Annual price declines in both the 10-City and 20-City Composites, which represent the largest metropolitan July 27th New Home Sales, June 384,000 cities, slowed for the fourth straight month, with 13 of the 20 metropolitan July 28th ICSC-Goldman Same Store Sales, Wkly. Chg. 1.0% cities reporting positive monthly returns. July 28th S&P/Case-Shiller Composite 20 Index, May 139.84 July 28th Consumer Confidence Index, July 46.6 The Conference Board Consumer Confidence Index retreated further in July 29th MBA Purchase Applications 262 July, as consumers struggle with deteriorating conditions in the labor July 29th Durable Goods New Orders, June Monthly Chg. -2.5% th market. The survey of 5,000 U.S. households reflected significant July 29 EIA Petroleum Status Report, Wkly. Chg. 5.2M Barrels th pessimism about the short-term economic outlook, with more consumers July 30 Initial Jobless Claims ( Week ending 7/25) 584,000 th concerned about their income prospects. July 30 EIA Natural Gas Report, Wkly. Chg. 71 bcf July 31st Real GDP, Q2 Quarterly Change SAAR* -1.0% st GDP Price Index, Q2 Quarterly Change SAAR* 0.2% The Commerce Department reported this week that new orders for July 31 July 31st Employment Cost Index, Q2 Quarterly Change 0.4% durable goods declined 2.5% in June, following two consecutive months July 31st Chicago PMI Business Barometer Index, July 43.4 of increases. Orders excluding transportation increased 1.1% for the month, the strongest since February.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, The Conference Board, Standard & Poor's. MainStreet Advisors July 31, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries ended the week mixed, with the long end of the curve advancing and the short end dropping modestly. Longer dated maturities Yield Curves

ended the week much stronger than where they began, as prices 6.0% bounced back from the losses suffered amid a string of weaker-than-

expected auctions. Treasuries rallied sharply on Friday after the release 5.0% of second quarter GDP, which showed that consumers and businesses

continue to struggle. Friday’s rally was yet another reminder of the 4.0% enduring appeal of risk-free investments in an uncertain economic environment. Long bonds also benefited from month-end buying, as 3.0% managers adjusted their portfolios to changes in the composition of benchmark indexes. 2.0%

Weak auctions this week reignited concerns about whether the 1.0% government can continue to attract buyers from China and other foreign central banks, according to the Wall Street Journal. Traders noted 0.0% China’s absence from direct participation in two Treasury bond auctions. 2 yr 3 yr 5 yr 10 yr

While China may have bought Treasuries just before the auction, market U.S. Treasury Muni (Tax Equiv.)* participants read the country’s actions as a worrying sign than foreign investors may be decreasing purchases at a time when the U.S. is Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin seeking to fund a $1.8 trillion budget deficit.

Issue 7.24.09 7.31.09 Change 3 month T-Bill 0.18% 0.18% 0.00% 2-Year Treasury 1.05% 1.19% 0.14% 5-Year Treasury 2.57% 2.66% 0.09% 10-Year Treasury 3.70% 3.67% -0.03% 30-Year Treasury 4.55% 4.44% -0.11%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/1/2008 4/1/2008 7/30/2007 7/30/2008 3/27/2009 7/28/2009 7/30/2008 3/27/2009 7/28/2009 7/30/2007 11/27/2007 11/27/2008 11/27/2007 11/27/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors July 31, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks ended mixed on Friday but gained for the week. The Dow Jones Industrial Average closed at 9,171.61, 78.37 points, or 0.86% higher on Weekly Change

the week. The broader S&P 500 added 8.22 points or 0.84% but the 2.0% technology-heavy NASDAQ Composite lost 0.29% on the week. The DJIA and S&P closed Friday at levels last seen in early November, 2008. 1.8% The NASDAQ Composite, despite the small loss on Friday, is at level 1.6% last seen in early October. 1.4%

1.2% Stocks surged over 1% on Thursday, ahead of Friday’s second quarter GDP release on optimism that the worst of the economic downturn might 1.0% be over, according to the Wall Street Journal. General Electric (GE) 0.8% gained 7% on Thursday when the Wall Street Journal reported that a 0.6%

Goldman Sachs analyst upgraded the stock, saying that GE may not 0.4% have to spin off its GE Capital finance arm after all. 0.2% Microsoft (MSFT) and Yahoo! (YHOO) announced that they had entered 0.0% into an agreement that would fight Google’s (GOOG) dominance of the Internet search business. Under the proposed deal, according to the Large Cap Mid Cap Small Cap Int'l

Wall Street Journal, Microsoft’s Bing search engine would become the Source: Standard & Poor's, Russell Investment Company, MSCI Internet search engine on Yahoo!, who would sell advertisements to accompany the searches. The 10-year deal is expected to face stiff regulatory scrutiny.

International stocks rallied this week as well, sending Japan’s NIKKEI 225 up 4.15% to its highest level since early October. Stocks gained in Year to Date Change Europe as well, with the DJ Euro Stoxx 50 Index adding 2.14% and trading at its highest level since November. 18.0% 16.0%

14.0%

12.0%

10.0%

8.0%

Issue 7.24.09 7.31.09 Change 6.0% Dow Jones 9,093.24 9,170.93 0.85% 4.0% S&P 500 979.26 987.48 0.84% NASDAQ 1,965.96 1,978.50 0.64% 2.0% Russell 1000 Growth 437.46 438.81 0.31% 0.0% S&P MidCap 400 621.7 628.05 1.02% Russell 2000 548.46 556.71 1.50% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,385.79 1,410.91 1.81% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 822.11 833.54 1.39% MSCI Small Cap 124.39 125.61 0.98%

Alternative Investments Market Update

The smaller-than-expected contraction in the U.S. economy and a weaker dollar raised the appeal of gold which closed above $950 an Weekly Change

ounce by the end of the week. Gold rose 2.8% over the month of July. 4.0% Copper rose 2.3% this week to $2.62 a pound for September contracts, while silver increased 3.4% to $13.94 an ounce. 3.5%

3.0% Crude-oil futures rose 2.06% this week to $68.05, the highest level in a month. Oil prices remain volatile, falling 0.6% in July. Exxon Mobil, the 2.5% world’s largest publicly traded oil company, cited volatile prices and a weak economy as reasons for their 66% decrease in profits in the second 2.0% quarter. 1.5%

China Investment Corp. (CIC) has begun to invest in hedge funds, 1.0%

allocating hundreds of millions of dollars to Blackstone Group LP and 0.5% Morgan Stanley to be invested in new private-fund investments, according to the Wall Street Journal. CIC has recently taken a strong 0.0% interest in alternative investments, buying a 40% stake in Citic Capital Holdings Ltd., an alternative asset-management firm. In the coming DJ AIG Index NAREIT HFRX Equal Wtd Index

months, CIC is expected to allocate billions more to hedge funds. Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

9.0% 8.0%

1 7.0% Issue Previous Week Current Change 6.0% Gold 953.10 955.80 0.28% 5.0% Crude Oil Futures 68.05 69.45 2.06% 4.0% Copper 2.52 2.63 4.37% Sugar 23.25 23.20 -0.22% 3.0% HFRX Equal Wtd. Strat. Index 1,050.15 1,051.25 0.10% 2.0% HFRX Equity Hedge Index 1,069.02 1,068.60 -0.04% 1.0% HFRX Equity Market Neutral 1,001.03 996.29 -0.47% 0.0% HFRX Event Driven 1,267.79 1,265.53 -0.18% -1.0% HFRX Merger Arbitrage 1,385.23 1,384.40 -0.06% -2.0% Dow Jones UBS Commodity Index 123.32 126.48 2.56% FTSE/NAREIT All REIT 84.21 87.39 3.78% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors August 7, 2009 Financial Market Update [page 1]

Economic Update

The unemployment rate remained almost unchanged at 9.4% in July, as reported by the Labor Department. However, there is some indication Economic Indicators, Quarterly Change

that the labor market will start to improve. Both temporary employment 10.0% and employment in the service sector showed slower declines. Temporary employment, one of the leading indicators, decreased by less 8.0% than 10,000, while the service sector, the main source of U.S. jobs, 6.0% experienced a decline of 119,000, much less than in the previous month. 4.0% According to the Wall Street Journal, in the week ending August 1, the 2.0% number of initial claims for state jobless benefits fell to 550,000. The four- week average fell to 555,250, its lowest level since January 24. 0.0% -2.0% The Bureau of Economic Analysis reported that personal income -4.0% decreased 1.3% in June offsetting its 1.3% growth in May, which was primarily driven by government transfer payments. Personal consumption -6.0% expenditures increased 0.4% in June following a 0.1% increase in May. -8.0% However, according to the Wall Street Journal, this increase was mostly Q3 08 Q4 08 Q1 09 Q2 09 fueled by rising gasoline prices, as retail gas hit a 2009 high in June. The weak consumer spending resulted in another tough month for retailers in Real GDP Core CPI* Unemployment Rate

July. They are expected to continue to be hit hard in the coming months Source: Bureau of Economic Analysis, Bureau of Labor Statistics by weak back-to-school sales as teen retailers were hit the hardest. The *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index Commerce Department also reported that personal saving as a percentage of disposable personal income was 4.6% in June, down from Aug. 3rd Domestic Motor Vehicle Sales, July 8.3M a 14-year high last month of 6.2%. Aug. 3rd ISM Mfg. Index - Level, July 48.9 Aug. 3rd Construction Spending, June Monthly Chg. 0.3% Although the overall economy expanded for the third month in a row, the Aug. 4th ICSC-Goldman Same Store Sales, Wkly. Chg. -0.2% Institute for Supply Management (ISM) reported that the manufacturing Aug. 4th Pending Home Sales, June Monthly Chg. 3.6% sector showed no growth for the eighteenth consecutive month. In July, Aug. 4th Personal Income, June Monthly Chg. -1.3% only six of the eighteen manufacturing industries showed growth, while Aug. 4th Consumer Spending, June Monthly Chg. 0.4% ten reported contraction. Service industries, which make up 90% of the Aug. 4th Core PCE Price Index, June Monthly Chg. 0.2% U.S. economy, contracted at a slower pace than in May. The ISM non- Aug. 5th Announced Layoffs, July 97,373 manufacturing index increased from 43.7 to 44, its highest level in seven Aug. 5th Factory Orders, June Monthly Chg. 0.4% months. Aug. 5th ISM Non-Mfg. Index, July 46.4 Aug. 5th EIA Petroleum Status Report, Wkly. Chg. 1.7M Barrels Aug. 6th Initial Jobless Claims ( Week ending 8/1) 550,000 Aug. 6th EIA Natural Gas Report, Wkly. Chg. 66 bcf th -247,000 Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Aug. 6 Non-farm Payrolls, July Monthly Chg. th Department of Labor, The Wall Street Journal, Bloomberg, The Institute for Supply Management. Aug. 7 Unemployment Rate, July 9.4% Aug. 7th Consumer Credit, June Monthly Chg. -10.3B MainStreet Advisors August 7, 2009 Financial Market Update [page 2]

Bond Market Update

After a strong rally earlier, U.S. Treasuries finished only modestly higher for the week as better-than-expected jobs data drove bonds sharply Yield Curves

lower on Friday. The jobs report bolstered investor sentiment yet again 6.0% amid a string of improvements in recently released economic data. As

the outlook for the economy recovers, Treasuries lose their appeal as a 5.0% safe haven security. Strengthening the case for an economic rebound,

the spread between 10-year TIPS and similar maturity Treasury notes 4.0% increased to 2.02% from near zero earlier in the year. This yield difference has averaged 2.20% for the past five years, according to 3.0% Bloomberg. A widening of this spread often results from increased expectations for higher consumer prices. The threat of inflation typically 2.0% increases when traders anticipate the economy will strengthen sometime in the next three to six months. Meanwhile, demand for European bonds 1.0% far exceeded supply this week, even as non-financial investment grade new issuance reached record levels. Record-high spreads relative to 0.0% government securities have attracted investors to this asset class. 2 yr 3 yr 5 yr 10 yr

Investment grade notes in euros returned 10.2% this year, the highest U.S. Treasury Muni (Tax Equiv.)* level since at least 1998, according to Merrill Lynch. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 7.31.09 8.7.09 Change 3 month T-Bill 0.18% 0.19% 0.01% 2-Year Treasury 1.19% 1.32% 0.13% 5-Year Treasury 2.66% 2.84% 0.18% 10-Year Treasury 3.67% 3.89% 0.22% 30-Year Treasury 4.44% 4.61% 0.17%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 8/6/2007 4/8/2008 8/6/2008 4/3/2009 8/4/2009 4/8/2008 8/6/2008 4/3/2009 8/4/2009 8/6/2007 12/4/2007 12/3/2008 12/4/2007 12/3/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors August 7, 2009 Financial Market Update [page 3]

Stock Market Update

As the second quarter's corporate earnings reporting season comes to a close, the Wall Street Journal reported earlier this week that 75% of the Weekly Change

companies that had reported beat the consensus estimate. This latest 5.0% reading was the highest ever recorded in results going back to 1994. With the bulk of earnings now out, and not much in the way of economic releases except for the monthly jobless number on Friday, many 4.0% investors initially expected the week to be fairly quiet. But the summer

rally continued. On Monday stocks hit two psychologically important 3.0% levels, with the S&P 500 trading over 1000 and the NASDAQ over 2000. The S&P 500 last closed over 1000 on November 4—the DJIA had broken through 9000 11 days earlier. 2.0%

Hope that the worst of the recession is now behind us and a surge in 1.0% auto sales from the Cash for Clunkers program were thought to spur the averages higher early in the week. During the middle of the week stocks moved mostly sideways, accompanied by Procter & Gamble (PG) and 0.0% Cisco (CSC) both earning near their consensus estimates, which had been significantly guided down by management. It was also reported this Large Cap Mid Cap Small Cap Int'l

week that the advisory fees to Investment Banks for breaking up AIG Source: Standard & Poor's, Russell Investment Company, MSCI would be near $1 billion. However, some of those same firms could be dealt a blow as the SEC announced they were considering a ban on so called "flash trading," a form of high frequency stock trading that may be create an unfair advantage for firms that use it. Morgan Stanley repurchased the government’s long-term warrants for $950 million. On Friday, the monthly jobs number was a positive surprise, with the Year to Date Change nationwide unemployment rate declining to 9.4%. On this good news, stocks on Friday leapt at the opening and closed nearly 1.5% higher for 25.0% the day. 20.0%

15.0%

10.0% Issue 7.31.09 8.7.09 Change Dow Jones 9,170.93 9,370.07 2.17% S&P 500 987.48 1,010.48 2.33% 5.0% NASDAQ 1,978.50 200.25 -89.88% Russell 1000 Growth 438.81 443.53 1.08% 0.0% S&P MidCap 400 628.05 655.1 4.31% Russell 2000 556.71 572.4 2.82% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,410.91 1,452.56 2.95% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 833.54 855.52 2.64% MSCI Small Cap 125.61 131.47 4.66%

Alternative Investments Market Update

Blackstone Group LP, the world’s largest buyout company, posted solid earnings on Thursday, citing improvement among its private equity Weekly Change

funds. Alternative investments firm Fortress Investment Group LLC also 10.0% posted a moderate earnings report on Wednesday. Although most private equity firms are, in fact, private unlisted companies, the apparent earnings stabilization of these two public companies could signal a new 8.0% trend from the significant downward pressure seen in the industry over

the past two years. These reports come as private equity firms Kohlberg 6.0% Kravis & Roberts and Silver Lake Partners announced that they raised $650 million from an IPO of Avago Technologies Ltd., which marks the first significant buyout-backed IPO of the year. In related news, it was 4.0% reported that U.S. alternative asset management firm Och-Ziff Capital

Management has acquired a 7.61% stake in Australia’s oldest property 2.0% trust, GPT Group, representing approximately $356 million.

Blackstone Group LP’s president Tony James was also in the news on 0.0% Friday where he was reportedly quoted by Bloomberg as claiming that the latest FDIC proposition for new buyout rules would “kill it for private DJ AIG Index NAREIT HFRX Equal Wtd Index

equity.” The new rule, if implemented, would require banks bought by Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research private equity firms to maintain a Tier 1 capital ratio of 15%, which is nearly double the amount currently required for startup. Tier 1 capital, often used as a measure of a bank’s financial strength, is comprised of highly liquid assets that are regularly priced on the open market, and can include common stock, retained earnings, and non-redeemable non- cumulative preferred stock. Year to Date Change

12.0%

10.0% 1 Issue Previous Week Current Change

Gold 955.80 959.50 0.39% 8.0% Crude Oil Futures 69.45 70.93 2.13% Copper 2.63 2.79 6.08% 6.0% Sugar 23.20 24.73 6.59% HFRX Equal Wtd. Strat. Index 1,051.25 1,061.69 0.99% 4.0% HFRX Equity Hedge Index 1,068.60 1,092.73 2.26% HFRX Equity Market Neutral 996.29 990.20 -0.61% 2.0% HFRX Event Driven 1,265.53 1,283.59 1.43% HFRX Merger Arbitrage 1,384.40 1,389.65 0.38% 0.0% Dow Jones UBS Commodity Index 126.48 130.24 2.98% FTSE/NAREIT All REIT 87.39 95.65 9.45% DJ UBS Index NAREIT HFRX Equal Wtd Index

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors August 14, 2009 Financial Market Update [page 1]

Economic Update

The Reuters/University of Michigan’s Consumer sentiment index dropped for the second month in a row, falling from 66.0 to 63.2. This drop was Economic Indicators, Quarterly Change

mainly due to weakness in the current conditions component, which fell 10.0% from 70.5 to 64.9, and a drop in the main component, consumer expectations, which fell from 63.2 to 62.1. In a related report, the 8.0% Commerce Department announced that U.S. retail sales fell 0.1% in July. 6.0% Excluding automobiles, retail sales dropped 0.6%, with decreased 4.0% purchases of furniture, electronics, building materials, groceries, and 2.0% sporting goods. Both of these reports suggest that the consumer is still constraining spending, despite other positive economic signals. 0.0% -2.0% The Department of Commerce reported this week that total exports for -4.0% June were $125.8 billion and imports were $152.8 billion, resulting in a goods and services deficit of $27.0 billion. This increase from the $26.0 -6.0% billion deficit in May was caused mainly by the high cost of oil imports, -8.0% which outweighed gains in industrial supplies and capital goods exports. Q3 08 Q4 08 Q1 09 Q2 09

Although the Federal Open Market Committee judged the economy to be Real GDP Core CPI* Unemployment Rate

leveling out, they decided to hold interest rates at record lows and Source: Bureau of Economic Analysis, Bureau of Labor Statistics pledged to keep them there for an extended period to aid in economic *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index recovery. Fed officials also decided to extend the $300 billion stimulus plan to buy U.S. Treasuries to October in an effort to promote a smooth Aug. 11th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.0% transition out of this program. Aug. 11th Wholesale Inventories, June Monthly Chg. -1.7% Aug. 12th MBA Purchase Applications 267.2 In July, industrial production rose for the first time in 9 months, with a Aug. 12th International Trade Balance Level, June -27.0B 0.5% increase, according to a report issued by the Federal Reserve. This Aug. 12th EIA Petroleum Status Report, Wkly. Chg. 2.5M Barrels increase was driven primarily by a 20.1% increase in the production of Aug. 13th Retail Sales, July Monthly Chg. -0.1% motor vehicles and parts. Aug. 13th Initial Jobless Claims ( Week ending 8/8) 558,000 Aug. 13th Export Prices, July Monthly Chg. -0.3% According to the Labor Department, the Consumer Price Index remained Aug. 13th Import Prices, July Monthly Chg. -0.7% unchanged in July after a 0.7% increase in June, while the core CPI rose Aug. 13th Business Inventories, June Monthly Chg. -1.1% 0.1%. This is considered a positive sign for the economy, signifying that Aug. 13th EIA Natural Gas Report, Wkly. Chg. 63 bcf the Federal Reserve’s injections into the banking system have not given Aug. 14th Consumer Price Index, July Monthly Chg. 0.0% rise to faster inflation. Aug. 14th Industrial Production, July Monthly Chg. 0.5%

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, The Institute for Supply Management. MainStreet Advisors August 14, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries rallied for the week as weaker than expected economic data fueled demand for low risk government debt and spurred higher Yield Curves

than forecasted demand for the record $15 billion auction of 30-year 6.0% bonds. Ten-year notes rose Friday after the Reuters/University of

Michigan preliminary index of consumer sentiment fell well below 5.0% economist’s forecasts. This decrease in consumer confidence along with

a weak inflation report drove the ten-year to its largest weekly gain in 4.0% almost ten months. Because of this week’s soft economic data, some market strategists now feel the economic recovery may be slower than 3.0% anticipated. This will likely curb the inflation outlook, creating a more bullish environment for bonds. The spread, or difference in yield, 2.0% between 10-year notes and Treasury Inflation Protected Securities fell to 1.80% from 2.00% last week reflecting a muted outlook for rising 1.0% consumer prices among traders. Meanwhile, Europe’s corporate bond rally fizzled this week amid lower yields offered on new debt issues. 0.0% Investors had been enticed by high spreads in this sector, with 2 yr 3 yr 5 yr 10 yr

investment grade securities trading in euros increasing by 10.2% for the U.S. Treasury Muni (Tax Equiv.)* year, according to Merrill Lynch. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 8.7.09 8.14.09 Change 3 month T-Bill 0.19% 0.18% -0.01% 2-Year Treasury 1.32% 1.07% -0.25% 5-Year Treasury 2.84% 2.51% -0.33% 10-Year Treasury 3.89% 3.55% -0.34% 30-Year Treasury 4.61% 4.41% -0.20%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 8/13/2007 4/15/2008 8/13/2008 4/13/2009 8/11/2009 4/15/2008 8/13/2008 4/13/2009 8/11/2009 8/13/2007 12/11/2007 12/10/2008 12/11/2007 12/10/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors August 14, 2009 Financial Market Update [page 3]

Stock Market Update

Investors sent stocks on a roller coaster this week as early losses were offset by mid-week gains, only to be dragged back down by weak the Weekly Change

consumer sentiment numbers released on Friday. The Dow Jones 1.0% Industrial Average shed 48.67 points, or 0.52%, to end the week at 9,321.40. The broader S&P 500 closed at 1,004.09, 6.39 points, or 0.5% 0.63%, lower than last week.

0.0% Consumer discretionary stocks led the downside, losing 2.34% this week followed by industrial and materials stocks, which lost 1.55% and 1.39%, respectively. The defensive healthcare and consumer staples sectors -0.5% contributed positively to the performance of the S&P 500, gaining 1.09% and 0.49%, respectively. -1.0%

Boeing Corp (BA) lost 3.75% on Friday, the largest percentage loss of -1.5% the 30 DJIA companies, when the company announced further problems with its 787 Dreamliner jet. Boeing announced that over a month ago it -2.0% had stopped work on two sections of the 787 when the company found defects in parts built by an Italian vendor; the defects were found on 23 of Large Cap Mid Cap Small Cap Int'l

the company’s airplanes. Source: Standard & Poor's, Russell Investment Company, MSCI

On Friday, rumors swirled about the potential takeover of Colonial BancGroup Inc (CNB) by BB&T (BBT), according to Bloomberg. Colonial, the second largest lender in Alabama, has been saddled with more than $1.7 billion in sour Florida real estate loans. The deal, the largest in 2009, is said to be brokered by the FDIC and would make Year to Date Change BB&T the ninth largest bank by assets and will give them a solid footprint in Alabama. 25.0%

Stocks in Europe sold off as well with the DJ Euro Stoxx 50 losing 1.36% 20.0% on the week. Stocks in Japan, which end trading before many economic reports are released in the U.S., rose this week with the NIKKEI 225 gaining 1.78%. 15.0%

10.0% Issue 8.7.09 8.14.09 Change Dow Jones 9,370.07 9,321.40 -0.52% S&P 500 1,010.48 1,004.09 -0.63% 5.0% NASDAQ 200.25 1,985.52 891.52% Russell 1000 Growth 443.53 441.27 -0.51% 0.0% S&P MidCap 400 655.1 645.99 -1.39% Russell 2000 572.4 563.9 -1.48% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,452.56 1,464.94 0.85% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 855.52 855.64 0.01% MSCI Small Cap 131.47 133.33 1.42%

Alternative Investments Market Update

Crude Oil tumbled on Friday after reports that U.S. consumer confidence unexpectedly declined in August, marking the second consecutive month Weekly Change

of decreasing confidence and increasing skepticism that fuel demand will 1.0% recover by the end of this year. Currency movements also contributed to the fall in oil; investors found less appeal in commodities for an inflation 0.5% hedge as the dollar gained against the Euro. For the week oil futures fell 4.82%, with most of the losses felt on Friday. 0.0%

Copper inventories moved up for the third straight week, jumping 20% to -0.5% the highest levels in over a year. Prices also boomed, gaining 2.15% on -1.0% the week. Gold prices declined this week, dropping 1.13% overall. This

can be attributed to the increasing strength of the dollar and the dismal -1.5% CPI report that reflected the sharpest year-over-year decline in nearly 60 years, both of which reduce gold’s appeal as a hedge against inflation. -2.0%

Many of the largest American food companies have called for an easing -2.5% of import restrictions on sugar, citing that the severe global shortage could force them to raise the prices of cereals, candy bars, cookies, DJ AIG Index NAREIT HFRX Equal Wtd Index

chewing gum, and countless other products that use the resource. Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Prices of sugar futures contracts have exploded this year, gaining 95% year-to-date and recently hitting a 28-year high on speculation that the supply shortage could inflate prices to as high as 40 cents a pound. Brazil, the largest sugar producer in the world, has had a surplus of wet weather that has cut into production. The country is also diverting large amounts of its cane crop to making ethanol fuel. These events could Year to Date Change factor into a prolonged shortage. Friday marked the first time in seven sessions that sugar prices declined, reflecting the reluctance of some 10.0% investors to hold out for the forecasted gains. 8.0%

6.0% 1 Issue Previous Week Current Change

Gold 959.50 948.70 -1.13% 4.0% Crude Oil Futures 70.93 67.51 -4.82% Copper 2.79 2.85 2.15% Sugar 20.95 21.89 4.49% 2.0% HFRX Equal Wtd. Strat. Index 1,061.69 1,065.24 0.33% HFRX Equity Hedge Index 1,092.73 1,090.43 -0.21% 0.0% HFRX Equity Market Neutral 990.20 994.37 0.42% HFRX Event Driven 1,283.59 1,290.47 0.54% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,389.65 1,401.56 0.86% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 130.24 127.51 -2.10% FTSE/NAREIT All REIT 95.65 96.07 0.44% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors August 21, 2009 Financial Market Update [page 1]

Economic Update

Federal Reserve Chairman Ben Bernanke recognized recent improvements in the global economy, but reiterated ongoing challenges Economic Indicators, Quarterly Change

during a speech at the economic symposium in Jackson Hole on Friday. 10.0% He attributed stabilization in key financial markets to recent policy actions and noted the Fed’s belief that “prospects for a return to growth in the 8.0% near term appear good.” Bernanke discussed expectations for a slow 6.0% economic recovery due to lingering strains in the financial market, 4.0% potential additional losses for financial institutions, and still difficult credit 2.0% availability. 0.0%

Economic data released this week indicated further recovery in the -2.0% housing market. The National Association of Realtors (NAR) reported -4.0% that sales of existing homes surged 7.2% to a seasonally adjusted rate of 5.24 million in July, marking the fourth consecutive month of increased -6.0% activity. The NAR reported that the last time sales posted four back-to- -8.0% back gains was in June 2004. The current sales rate is 5.0% higher than Q3 08 Q4 08 Q1 09 Q2 09 one year ago, which the NAR has concluded is a reflection of success in first-time buyer initiatives and greater affordability. Building permits for Real GDP Core CPI* Unemployment Rate

privately-owned houses retreated 1.8% in July, according to a report Source: Bureau of Economic Analysis, Bureau of Labor Statistics released by the U.S. Department of Commerce Tuesday. However, *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index housing starts for single family homes rose 1.7% last month. Separately, the National Association of Home Builders/Wells Fargo Housing Market Aug. 17th Empire State Mfg Survey, August 12.08 Index, which serves as a gauge of builder confidence, reached the th Aug. 17 Housing Market Index, August 18 highest level in more than a year again, largely as a result of the first-time Aug. 18th ICSC-Goldman Same Store Sales, Wkly. Chg. -0.9% home buyer tax credit. Aug. 18th Housing Starts, July 581,000 Aug. 18th Producer Price Index, July Monthly Chg. -0.9% The Conference Board Leading Economic Index advanced climbed 0.6% th MBA Purchase Applications Index, Wkly. Chg. 3.9% in July, up for the fourth consecutive month. The Conference Board Aug. 19 th -8.4M Barrels concluded that the component indexes suggest economic conditions are Aug. 19 EIA Petroleum Status Report, Wkly. Chg. th improving and that “activity will begin to recover soon.” Aug. 20 Initial Jobless Claims ( Week ending 8/15) 576,000 Aug. 20th Leading Indicators, July Monthly Chg. 0.6% th The Eurozone has started to display signs of recovery, according to the Aug. 20 Philidelphia Fed Survey, August 4.2 Markit Flash Eurozone Composite Index which reached a 15-month high Aug. 20th EIA Natural Gas Report, Wkly. Chg. 52 bcf this month. The improvement stemmed from gains in manufacturing Aug. 21st Existing Home Sales, July SAAR* 5.24M activity and a notable deceleration in contraction within the service sector.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, Bloomberg, National Association of Realtors, National Association of Home Builders, The Conference Board, Markit Economics. Markit Economics.

MainStreet Advisors August 21, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week mostly unchanged, as mixed data mirrored the uncertainty about the strength of the economic recovery. Yield Curves

Overall, Treasuries have rebounded from earlier this month, mostly due 6.0% to weakness in the global equity markets. Mixed signals from recent

economic reports have tempered investor’s appetite for riskier assets, 5.0% pressuring market participants to sell stocks to lock in profits and return

to the safety of Treasuries. Treasuries returned 2.1% for the past two 4.0% weeks relative to a 1.4% return for corporate bonds, according to Merrill Lynch. Meanwhile, corporate new bond issuance slowed to the lowest 3.0% level in more than four months, suggesting that the credit market rally may have run ahead of a U.S. economic recovery. A recent report from 2.0% Standard & Poor’s said the number of issuers that had their credit ratings cut to “junk” climbed to 62 with a combined face value of $222 billion. 1.0% The amount of debt in the “fallen angel” class almost matches the $226.4 billion level reached in all of 2008. Evidence suggesting continued 0.0% weakness in the economy grew, as the number of issuers with potential 2 yr 3 yr 5 yr 10 yr

for a rating upgrade by S&P fell to 10 companies, the lowest monthly U.S. Treasury Muni (Tax Equiv.)* level since the rating firm began tracking data in 2002. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 8.14.09 8.21.09 Change 3 month T-Bill 0.18% 0.17% -0.01% 2-Year Treasury 1.07% 1.13% 0.06% 5-Year Treasury 2.51% 2.58% 0.07% 10-Year Treasury 3.55% 3.56% 0.01% 30-Year Treasury 4.41% 4.36% -0.05%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 8/20/2007 4/22/2008 8/20/2008 4/20/2009 8/18/2009 4/22/2008 8/20/2008 4/20/2009 8/18/2009 8/20/2007 12/18/2007 12/17/2008 12/18/2007 12/17/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors August 21, 2009 Financial Market Update [page 3]

Stock Market Update

U.S. stocks gained this week as positive economic news outweighed a selloff on Monday that was sparked by declines in overseas markets. Weekly Change

The Dow Jones Industrial Average gained 184.56 points or 1.98% this 4.0% week to head into the weekend at 9,505.96, its highest close this year. The DJIA is now up 8.31% in 2009. The broader S&P 500 rose 2.20% this week to close Friday at 1,026.13, up 13.60% this year. The 3.0% technology-heavy NASDAQ Composite rose 1.59% this week.

2.0% Energy stocks paced the gains this week, up 3.23%, followed by healthcare and utility stocks, up 2.69% and 2.34%, respectively. Consumer staples stocks trailed this week, gaining just 1.39%. 1.0%

Sear Holdings Corp. (SHLD) returned to a net loss in the second quarter 0.0% after reporting positive results in the first quarter. Investors, expecting a small profit, sent Sears share plummeting 12%. Sears announced that revenues declined 10% from a year earlier as the company struggled to -1.0% compete with Wal-Mart Stores Inc.(WMT) and Target Corp. (TGT). Large Cap Mid Cap Small Cap Int'l

Stocks in China continued to decline this week with the Shanghai Source: Standard & Poor's, Russell Investment Company, MSCI Composite down 2.83%; the index is now 14.71% off its high made in early August. Despite the recent selloff, Chinese stocks have gained over 62% this year, one of the best performing asset classes. According to the Wall Street Journal, the Chinese stock market is dominated by retail investors who are prone to swings in sentiment, rather than fundamentals of corporate earnings. Year to Date Change

25.0%

20.0%

15.0%

10.0% Issue 8.14.09 8.21.09 Change Dow Jones 9,321.40 9,505.96 1.98% S&P 500 1,004.09 1,026.13 2.20% 5.0% NASDAQ 1,985.52 2,020.90 1.78% Russell 1000 Growth 441.27 449.69 1.91% 0.0% S&P MidCap 400 645.99 659.6 2.11% Russell 2000 563.9 581.513 3.12% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,464.94 1,453.66 -0.77% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 855.64 837.12 -2.16% MSCI Small Cap 133.33 133.43 0.08%

Alternative Investments Market Update

More than half of the commodities that make up the Dow Jones UBS Commodity Index declined during the week. The average return was - Weekly Change

0.60%, which was led by a significant return in lean hog futures of 7.17%. 0.5% Crude oil rose to a 10-month high on Friday after the positive news emerged in the U.S. housing market. October delivery for light sweet crude settled at $73.89 per barrel, with the September contract valued at 0.0% $72.54 per barrel. Natural gas prices, which declined 7.12% for the

week, plummeted to a seven year low by Thursday after a report was -0.5% released which showed a record high level of inventory. The Wall Street Journal reported that the reason for the dramatic drop in prices from $13 per thousand cubic feet seen last summer to $3 today is a decrease in -1.0% demand and a large expansion of domestic production.

-1.5% Bloomberg reported that private equity giant, Blackstone Group LP, is embarking on a joint venture with Shanghai’s government, which would mark the first step in China’s effort to expand on its own private equity -2.0% exposure. According to the article, Blackstone will be the first global private equity firm to secure investment from a tier-one city government DJ AIG Index NAREIT HFRX Equal Wtd Index

in China. The arrangement is to set up a 5 billion yuan ($732 million) Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research fund, likely intending to help develop Chinese capital markets and help provide China with industry experience.

Year to Date Change

10.0%

8.0%

6.0% 1 Issue Previous Week Current Change Gold 948.70 954.70 0.63% 4.0% Crude Oil Futures 67.51 73.89 9.45% Copper 2.85 2.89 1.40% Sugar 21.89 21.70 -0.87% 2.0% HFRX Equal Wtd. Strat. Index 1,065.24 1,068.21 0.28% HFRX Equity Hedge Index 1,090.43 1,085.03 -0.50% 0.0% HFRX Equity Market Neutral 994.37 995.78 0.14% HFRX Event Driven 1,290.47 1,291.98 0.12% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,401.56 1,404.19 0.19% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 127.51 127.59 0.06% FTSE/NAREIT All REIT 96.07 94.47 -1.67% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors August 28, 2009 Financial Market Update [page 1]

Economic Update

Federal Reserve Chairman Ben Bernanke reiterated his commitment to promoting the foundation for economic growth and price stability when Economic Indicators, Quarterly Change

accepting President Barack Obama’s nomination for another term as the 10.0% Fed Chief. While still defending aggressive actions the Fed has taken in the last year to stabilize financial and credit markets, Bernanke faces 8.0% lingering economic challenges. 6.0% 4.0% The Bureau of Economic Analysis (BEA) confirmed that gross domestic 2.0% product (GDP) contracted by 1% in the second quarter. The BEA also reported that corporate profits rebounded for the second consecutive 0.0% quarter to an annualized $1.050 trillion, up 33.8% from the first quarter. -2.0%

-4.0% According to the S&P/Case-Shiller Home Price Indices, prices in 18 of the 20 largest U.S. metropolitan areas rose for the second straight -6.0% month. Chairman of the Index Committee at Standard & Poor’s noted -8.0% that for the first time since 2006, prices have increased on a quarterly Q3 08 Q4 08 Q1 09 Q2 09 basis. Sales for new homes rose to a seasonally adjusted annual rate of 433,000 in July, as reported by the Commerce Department. This Real GDP Core CPI* Unemployment Rate

represents a 9.6% increase from the previous month. Source: Bureau of Economic Analysis, Bureau of Labor Statistics *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index The Commerce Department reported that new orders for durable goods soared 4.9% to $168.4 billion in July, marking the strongest monthly Aug. 25th S&P/Case-Shiller Composite 20 Index, June 141.86 increase in two years, as demand for both defense and non-defense th Aug. 25 Consumer Confidence Index, August 54.1 capital goods increased. Aug. 25th State Street Investor Confidence Index, August 122.9 Aug. 26th MBA Purchase Applications Index, Wkly. Chg. 1.0% The Conference Board Consumer Confidence Index advanced 6.7 points Aug. 26th Durable Goods New Orders, Dec. Monthly Chg. 4.9% in August to a reading of 54.1. The Conference Board attributed the th New Home Sales, July 331,000 rebound to the improvements in consumers’ appraisal of the labor market Aug. 26 th 0.2M Barrels and the short-term economic outlook. However, the Reuters/University Aug. 26 EIA Petroleum Status Report, Wkly. Chg. th of Michigan Surveys of Consumers indicated that sentiment is at a four- Aug. 27 GDP Price Index, Q2 Quarterly Change SAAR* -1.0% th month low due to ongoing concerns about job market and personal Aug. 27 Real GDP, Q2 Quarterly Change SAAR* 0.0% th financial situations, but has improved from earlier this month. Aug. 27 Initial Jobless Claims ( Week ending 8/22) 570,000 Separately, the Commerce Department announced that personal Aug. 27th After-tax Corporate Profits, Q2 Annual Change -17.7% spending increased 0.2% in July, while personal incomes remained Aug. 27th EIA Natural Gas Report, Wkly. Chg. 54 bcf unchanged. The personal savings rate, as a percentage of disposable Aug. 28th Personal Income, July Monthly Chg. 0.0% personal income, fell for the second month to 4.2%. Aug. 28th Consumer Spending, July Monthly Chg. 0.2% th Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Aug. 28 Core PCE Price Index, July Monthly Chg. 0.0% Labor, Standard & Poor's, The Conference Board, Rueters. Aug. 28th Consumer Sentiment Index, August 65.7 MainStreet Advisors August 28, 2009 Financial Market Update [page 2]

Bond Market Update

Despite mixed economic reports, and a seasonal lull in corporate and municipal bond issuance, the bond market finished a little stronger for the Yield Curves

week. The benchmark 10-year Treasury rallied nearly 10 basis points on 6.0% the week, to yield 3.44% by week's end. Bonds even managed to rally in

the face of an ever growing U.S. federal budget deficit, which was 5.0% revised downward for fiscal '09, from $1.8 trillion to $1.58 trillion, the long-

term total accumulated debt was predicted to be over $9 trillion by 2019. 4.0% Signs of improvement in the credit markets continue as Bank of America/Merrill Lynch managed to issue another large asset backed 3.0% security, a $2 billion note backed by auto loans and eligible purchase by the Treasury under the TALF guidelines. Also, the TED spread 2.0% continues to remain close to historical norms. In a surprising reversal, it became cheaper to borrow short term in dollars compared to the yen. 1.0% Earlier this week, it was observed that 3-month U.S. dollar LIBOR was quoted at 0.372% and 3 month Yen LIBOR was 0.388%. The last time it 0.0% was cheaper to borrow in dollars was in May of 1993. Lastly, in a sign 2 yr 3 yr 5 yr 10 yr

that inflation concerns may soon return, Israel became the first country to U.S. Treasury Muni (Tax Equiv.)* raise interest rates, hiking its key short term rate from 0.50% to 0.75%. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 8.21.09 8.28.09 Change 3 month T-Bill 0.17% 0.15% -0.02% 2-Year Treasury 1.13% 1.01% -0.12% 5-Year Treasury 2.58% 2.46% -0.12% 10-Year Treasury 3.56% 3.46% -0.10% 30-Year Treasury 4.36% 4.21% -0.15%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 8/27/2007 4/29/2008 8/27/2008 4/27/2009 8/25/2009 4/29/2008 8/27/2008 4/27/2009 8/25/2009 8/27/2007 12/26/2007 12/24/2008 12/26/2007 12/24/2008

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors August 28, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks ended the week slightly higher as mixed economic news released throughout the week sent stocks on a rollercoaster ride. The Dow Jones Weekly Change

Industrial Average closed Friday at 9,544.20, 38.24 points, or 0.40%, 2.5% higher than last week. The broader S&P 500 gained 2.8 points, or 0.27% to end the week at 1,028.93. 2.0%

General Electric Corp. (GE) announced it would put its security business 1.5% up for auction. The unit is expected, according to Reuters, to fetch about $2 billion; Bloomberg News reported that Tyco International Ltd. (TYC) and United Technologies Corp. (UTX) were expected to place bids. 1.0%

Apple Inc. (AAPL) announced that it had entered a three-year deal with 0.5% China’s number two wireless carrier, Unicom to sell Apple’s iPhone in China. The deal is Apple’s first in China, the world largest mobile phone 0.0% market, according to Reuters. -0.5% Dell Inc. (DELL) reported quarterly results that exceeded analyst expectations on Friday, rallying 1.76% and helping to send technology Large Cap Mid Cap Small Cap Int'l

stocks higher by 0.35% as a group. Dell reported that it expects Source: Standard & Poor's, Russell Investment Company, MSCI revenues to on an annual basis beginning in 2010, on increased demand from China and India.

The Federal Deposit Insurance Corp. (FDIC) announced that it was adding 111 banks to the list of endangered banks, bringing the total to 416, or about 5% of U.S. banks, according to the Wall Street Journal. Year to Date Change The problem bank list is a list of banks that the FDIC deems as highly likely to fail, according to the Wall Street Journal; the FDIC has already 25.0% shuttered 81 banks this year. 20.0% Financial stocks led the upside this week adding 1.44%, followed by consumer discretionary and technology stocks, which gained 1.03% and 0.80%, respectively. Utility stocks trailed, losing 1.01% this week. 15.0%

10.0% Issue 8.21.09 8.28.09 Change Dow Jones 9,505.96 9,544.20 0.40% S&P 500 1,026.13 1,028.93 0.27% 5.0% NASDAQ 2,020.90 2,028.77 0.39% Russell 1000 Growth 449.69 450.19 0.11% 0.0% S&P MidCap 400 659.6 663.15 0.54% Russell 2000 581.513 579.86 -0.28% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,453.66 1,483.19 2.03% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 837.12 843.99 0.82% MSCI Small Cap 133.43 136.25 2.11%

Alternative Investments Market Update

The Dow Jones UBS Commodity Index finished the week just above flat as price declines in the energy sector held back gains seen in precious Weekly Change

metals, agriculture, grains, and softs. Natural gas prices, down 3.43% for 5.0% the week, continue to decline as global supply and demand diverge. Sugar prices appreciated 7.70%, reaching their highest price level since 4.5% 1981. According to BBC News, India, the world’s largest consumer of 4.0% sugar and the second largest producer, will be unable to match domestic 3.5%

demand for the upcoming year due to monsoon rains significantly 3.0% reducing output. BBC also reported that India’s sugar supply may have declined to 4.5 million tons, which is the equivalent of two months of 2.5% domestic supply. Pakistan has faced similar troubles, where the 2.0% government doubled sugar prices, resulting in public outrage in the 1.5%

months leading up to Ramadan. They announced that they will be 1.0% importing 175,000 tons of sugar on an emergency basis. Also contributing to the shortage is Brazil’s growing demand to turn sugar into 0.5% ethanol for fuel. 0.0%

USA Today reported that more than two dozen large well-known private DJ AIG Index NAREIT HFRX Equal Wtd Index

equity companies, including Blackstone Group and Carlyle Group, have Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research contributed over $1.97 million to the campaigns of many officials including governors and treasurers. These officials are thought to be influential to the public pension fund money manager selection process. None of these firms, however, were charged in connection with pay-to- play investigations by the Securities and Exchange Commission thus far.

Year to Date Change

14.0%

12.0%

10.0%

8.0% 1 Issue Previous Week Current Change Gold 954.70 958.80 0.43% 6.0% Crude Oil Futures 73.89 72.74 -1.56% 4.0% Copper 2.89 2.95 2.08% Sugar 21.70 23.52 8.39% 2.0% HFRX Equal Wtd. Strat. Index 1,068.21 1,068.56 0.03% HFRX Equity Hedge Index 1,085.03 1,099.09 1.30% 0.0% HFRX Equity Market Neutral 995.78 991.96 -0.38% HFRX Event Driven 1,291.98 1,294.86 0.22% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,404.19 1,404.14 0.00% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 127.59 127.84 0.20% FTSE/NAREIT All REIT 94.47 98.57 4.34% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors September 4, 2009 Financial Market Update [page 1]

Economic Update

The Labor Department reported that the unemployment rate increased 0.3% to 9.7% in August, its highest level since June 1983. However, the Economic Indicators, Quarterly Change

pace of job loss slowed with non-farm payroll employment decreasing 10.0% only 216,000, as compared to a 276,000 decrease in July. According to the Wall Street Journal, this data indicates that a recovery in the labor 8.0% market may sluggish. The Labor Department also announced that non- 6.0% farm business sector labor productivity rose 6.6% in the second quarter 4.0% of 2009, the largest increase since the third quarter of 2003, while labor 2.0% costs fell 5.9%, the largest decrease in nine years. Higher productivity and lower expenses may help in easing the employment slump, while 0.0% limiting inflation. -2.0%

-4.0% As reported by the Institute for Supply Management (ISM), eleven of eighteen manufacturing industries are reporting growth in August as -6.0% compared with the previous month. The Purchasing Managers’ Index -8.0% increased 4 percentage points to 52.9%, its highest level since June of Q3 08 Q4 08 Q1 09 Q2 09 last year. This increase was driven by strength in the New Orders Index which rose 9.6 points to 64.9%. The ISM also announced continued Real GDP Core CPI* Unemployment Rate

contraction in the non-manufacturing sector in August. The Non- Source: Bureau of Economic Analysis, Bureau of Labor Statistics Manufacturing Index rose from 46.4% to 48.4%, indicating the sector is *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index contracting at a slower rate. Aug. 31st Chicago PMI Business Barometer Index, August 50.0 Minutes from the August Federal Open Market Committee indicated that st Sep. 1 Domestic Motor Vehicle Sales, August 10.1M the staff’s outlook for the economy remained positive. They expect real Sep. 1st ICSC-Goldman Same Store Sales, Wkly. Chg. -0.5% gross domestic product to begin increasing in the second half of 2009 Sep. 1st ISM Mfg. Index - Level, August 52.9 with financial conditions continuing to improve in 2010. Sep. 1st Construction Spending, July Monthly Chg. -0.2% st Pending Home Sales, July Monthly Chg. 3.2% After a large sales drop in July, retailers recovered in August with a boost Sep. 1 nd -1.0% from early back-to-school purchases. However, sales at stores open Sep. 2 MBA Purchase Applications Index, Wkly. Chg. nd more than a year, a key indicator of retail strength, decreased 2.9%. Sep. 2 Announced Layoffs, August 76,456 nd According to the Wall Street Journal, sales, though weak, were the Sep. 2 Factory Orders, July Monthly Chg. 1.3% nd strongest since September 2008. Sep. 2 EIA Petroleum Status Report, Wkly. Chg. -0.4M Barrels Sep. 2nd Initial Jobless Claims ( Week ending 8/29) 570,000 Sep. 3rd ISM Non-Mfg. Index, August 48.4 Sep. 3rd EIA Natural Gas Report, Wkly. Chg. 65 bcf Sep. 4th Non-farm Payrolls, August Monthly Chg. -216,000 th Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Sep. 4 Unemployment Rate, August 9.7% Labor, Institute of Supply Management. MainStreet Advisors September 4, 2009 Financial Market Update [page 2]

Bond Market Update

The U.S. Treasury yield curve steepened for the week, with the long-end dropping modestly as the upcoming $70 billion government debt auction Yield Curves

overshadowed a still weak employment report. Market makers tend to 6.0% push up long-term bond yields as a way to underwrite bond auctions at

more attractive levels. Despite this weakness on the long-end, short- 5.0% term notes have rallied amid increased purchases by banks with funds

from investors saving more. Given the rise in unemployment and slowing 4.0% wage gains, market participants now anticipate a muted inflation outlook, as the difference in yield between 10-year Treasury notes and 10-year 3.0% TIPS narrowed to 1.69% from last month’s high of 2.05%. Meanwhile, municipal bond yield spreads between high and low rated investment- 2.0% grade bonds narrowed to the lowest level since October 2008, according to Bloomberg. Demand from mutual funds that invest in lower rated 1.0% securities has driven much of this recent shift in yields. Flows into high yield municipal bond funds also rose to the highest level in more than 18 0.0% months, as investors anticipate a below average supply of new tax- 2 yr 3 yr 5 yr 10 yr

exempt bonds going forward. The Build America Bonds program, which U.S. Treasury Muni (Tax Equiv.)* gives state and local governments interest rebates on taxable municipal debt, has stimulated almost $30 billion in sales since mid-April, Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin representing approximately 30% of all municipal market new issuance.

Issue 8.28.09 9.4.09 Change 3 month T-Bill 0.15% 0.14% -0.01% 2-Year Treasury 1.01% 0.94% -0.07% 5-Year Treasury 2.46% 2.36% -0.10% 10-Year Treasury 3.46% 3.45% -0.01% 30-Year Treasury 4.21% 4.27% 0.06%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 9/3/2007 1/3/2008 5/6/2008 9/2/2008 1/2/2009 5/4/2009 9/1/2009 9/3/2007 1/3/2008 5/6/2008 9/2/2008 1/2/2009 5/4/2009 9/1/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors September 4, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks rebounded on Thursday and Friday after four straight days of losses. Concerns about demand from China weighed on stocks but the Weekly Change

dour mood was snapped on some positive economic news late in the 0.0% week. The Dow Jones Industrial Average (DJIA) entered the long Labor Day weekend at 9,441.34, down 103.46 points, or 1.08%. The broader -0.2% S&P 500 lost 12.53 points, or 1.22%, to end at 1,016.40. -0.4% -0.6%

Disney Company (DIS) announced on Monday it had agreed to purchase -0.8% Marvel Entertainment (MVL) for $4 billion. The cash and stock deal values Marvel at approximately $50 a share, a 29% premium over its -1.0% close last Friday, according to the Wall Street Journal. The deal adds -1.2% the Spider-Man, Iron Man, X-Men and Indredible Hulk franchises to -1.4%

Disney’s entertainment empire. -1.6%

EBay Inc. (EBAY) announced its plans to sell a 65% stake of Skype to a -1.8% group of private investors for $2.75 billion. The deal values the Skype, -2.0% the Internet-phone company, just higher than the $2.6 billion eBay paid for the company in 2005, according to the Wall Street Journal. Large Cap Mid Cap Small Cap Int'l

Source: Standard & Poor's, Russell Investment Company, MSCI Bank of America Corp. (BAC) offered to pay back part of the bailout money it received from the U.S. government as part of the banks purchase of Merrill Lynch. The arrangement had the U.S. government and Bank of America sharing in any losses that resulted from the Merrill acquisition. The repayment would mean, according to the Wall Street Journal, that Bank of America’s pay packages would not be subject to Year to Date Change federal review. 25.0% The early week declines were led by weakness in the financial sector, which also led the declines for the full week. The financial sector as a 20.0% group lost 3.86% this week with the next-worse sector, energy, losing 2.18%. Consumer staples eked out a small gain on the week, adding 0.28%. 15.0%

10.0% Issue 8.28.09 9.4.09 Change Dow Jones 9,544.20 9,434.24 -1.15% S&P 500 1,028.93 1,016.25 -1.23% 5.0% NASDAQ 2,028.77 2,016.34 -0.61% Russell 1000 Growth 450.19 448.08 -0.47% 0.0% S&P MidCap 400 663.15 653.35 -1.48% Russell 2000 579.86 569.84 -1.73% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,483.19 1,461.47 -1.46% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 843.99 840.99 -0.36% MSCI Small Cap 136.25 134.93 -0.97%

Alternative Investments Market Update

Gold prices soared 3.95% this week, marking the best week of performance in nearly four months. Futures hit a six-month high on Weekly Change

Thursday and approached $1,000 an ounce before edging lower Friday 1.0% following a dismal employment report. This particular price movement has garnered investor’s attention because it has not been accompanied 0.0% by large market movements. Gold’s rise can be seen as a sign of -1.0% increasing nervousness that markets may take another downturn; the commodity is often used as a hedge against inflation or as a safe-haven -2.0% investment. -3.0%

It was a down week for crude oil, with futures prices dropping 6.49%, the -4.0% biggest weekly loss in nearly two months. Oil was pushed lower by high levels of inventory, Friday’s jobs report, and the U.S. dollar strengthening -5.0%

against most of its rivals. Bloomberg reported that oil is on a “slippery -6.0% slope” after failing to break through its resistance, making crude vulnerable to a “significant decline.” Prices have traded in a range -7.0% between about $67 and $69.40 a barrel for three days, and some analysts believe that crude oil is poised to test the $60 mark in the near DJ AIG Index NAREIT HFRX Equal Wtd Index

future. Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Pork commodities received a boost this week as the Agriculture Department said on Thursday that it would buy another $30 million of pork to help foster price increases. This is in addition to the $121 million that the USDA has already pledged to purchase from the pork industry this year for government food-assistance programs. Despite the efforts, Year to Date Change producers have continued to struggle. 8.0%

6.0%

1 Issue Previous Week Current Change 4.0% Gold 958.80 996.70 3.95% Crude Oil Futures 72.74 68.02 -6.49% Copper 2.95 2.87 -2.71% 2.0% Sugar 23.52 21.65 -7.95% HFRX Equal Wtd. Strat. Index 1,068.56 1,071.25 0.25% HFRX Equity Hedge Index 1,099.09 1,087.28 -1.07% 0.0% HFRX Equity Market Neutral 991.96 990.17 -0.18% HFRX Event Driven 1,294.86 1,292.45 -0.19% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,404.14 1,401.49 -0.19% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 127.84 122.93 -3.84% FTSE/NAREIT All REIT 98.57 92.90 -5.75% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors September 11, 2009 Financial Market Update [page 1]

Economic Update

In the Federal Reserve’s Beige Book released this week, data from the 12 Federal Reserve Districts reflected greater stabilization in economic Economic Indicators, Quarterly Change

conditions over the past two months. According to the report, the 10.0% economic outlook has improved as business leaders “remained cautiously positive.” Although consumer spending remains muted and 8.0% the labor market continues to shed jobs, the manufacturing sector and 6.0% real estate market have shown signs of recovering. These improvements 4.0% have bolstered consumer confidence. The Reuters/University of 2.0% Michigan Surveys of Consumers indicated that consumer sentiment is at the highest level since June as the economic outlook becomes more 0.0% favorable. However, Reuters reported that consumers still have -2.0% concerns regarding their personal financial situations, which they do not -4.0% expect to improve in the near-term. -6.0%

The U.S. Department of Commerce announced that the international -8.0% trade deficit expanded to $32.0 billion in July—a 16.3% increase from the Q3 08 Q4 08 Q1 09 Q2 09 previous month. This marked the greatest monthly advance in more than a decade. Exports increased by $2.7 billion and imports advanced by Real GDP Core CPI* Unemployment Rate

$7.2 billion. The considerable jump in imports was largely reflective of Source: Bureau of Economic Analysis, Bureau of Labor Statistics increased energy-related petroleum products and higher crude oil prices. *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index Separately, the Labor Department reported that the U.S. Import Price Index increased 0.2% in August as a result of a 9.8% surge in fuel prices. Sep. 9th MBA Purchase Applications Index, Wkly. Chg. 9.5% All import prices have advanced 18.1% since August 2008 whereas th Sep. 9 ICSC-Goldman Same Store Sales, Wkly. Chg. 0.6% export prices have increased a modest 8.3% in the last year. The U.S. Sep. 10th International Trade Balance Level, July -32.0B Export Price Index climbed 0.7% in August as prices for agricultural Sep. 10th Initial Jobless Claims ( Week ending 9/5) 550,000 exports increased by 0.2% and non-agricultural export prices rose 0.8%. Sep. 10th EIA Natural Gas Report, Wkly. Chg. 69 bcf th EIA Petroleum Status Report, Wkly. Chg. -5.9M Barrels The Wall Street Journal released results Friday from its latest economic Sep. 10 th 2.0% forecasting survey in which economists indicated their expectations for Sep. 11 Import Prices, August Monthly Chg. th the labor market to add jobs over the next year and the unemployment Sep. 11 Export Prices, August Monthly Chg. 0.7% th rate to continue on an upward trend into next year. According to the Sep. 11 Consumer Sentiment Index, September 70.2 th survey, forty of the 51 economists that responded believe the economy Sep. 11 Wholesale Inventories, July Monthly Chg. -1.4% has come out of the recession that began in December 2007.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal. MainStreet Advisors September 11, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries rallied with the 10-year note gaining for the fifth straight week. Strong demand for government debt drove yields lower this week Yield Curves

amid the Treasury Department’s auction of $70 billion in notes and 6.0% bonds. Even at historically low interest rates, this week’s $12 billion sale

of 30-year bonds drew robust interest as investors bid 2.92 times the 5.0% amount of securities offered. This was the highest “bid-to-cover” ratio for

the 30-year bond since November 2007, according to Bloomberg. The 4.0% success of the auctions suggest that market participants feel inflation will remain tame given the tepid economic recovery, which, in turn, will likely 3.0% encourage central bankers to leave short-term rates unchanged. Although the Treasury Department has sold over $442 billion of notes 2.0% and bonds this quarter, Treasuries have returned 1.79% since June, according to Merrill Lynch. The U.S. government is relying specifically 1.0% on China to sustain their level of Treasury note and bond purchases to help fund a $787 billion stimulus spending package. Recently, Chinese 0.0% investors have doubled their holdings of U.S. government bonds to $776 2 yr 3 yr 5 yr 10 yr

billion as of June, according to Treasury Department data. However, U.S. Treasury Muni (Tax Equiv.)* looking forward, some strategists feel these purchases may slow as China begins to diversify their currency reserves due to their large scale Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin holdings.

Issue 9.4.09 9.11.09 Change 3 month T-Bill 0.14% 0.14% 0.00% 2-Year Treasury 0.94% 0.90% -0.04% 5-Year Treasury 2.36% 2.29% -0.07% 10-Year Treasury 3.45% 3.34% -0.11% 30-Year Treasury 4.27% 4.18% -0.09%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 9/9/2008 1/9/2009 9/8/2009 9/9/2008 1/9/2009 9/8/2009 9/10/2007 1/10/2008 5/13/2008 5/11/2009 9/10/2007 1/10/2008 5/13/2008 5/11/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors September 11, 2009 Financial Market Update [page 3]

Stock Market Update

U.S. stocks gained during the holiday-shortened week despite a slight decline on Friday. The Dow Jones Industrial Average (DJIA) added Weekly Change

164.14 points since last Friday, or 1.74%, to close at 9,605.41, its highest 6.0% point since last October. The broader S&P 500 also gained on the week, adding 26.33 points, or 2.59%, to close at 1042.73. 5.0%

Investors sent FedEx Corp. (FDX) higher by 6.41% on Friday when the 4.0% company raised its first quarter 2010 earnings outlook and issued a better than expected second quarter 2010 outlook. FedEx and UPS Inc. (UPS) are often viewed as proxies for the U.S. economy as they handle 3.0% almost 80% of the nation’s package shipments, according to Bloomberg. 2.0% General Motors Co. announced that it reached an agreement to sell its European operations, Opel and Vauxhall, to a group of investors led by 1.0% Magna International Inc. (MGA), the Canadian auto parts manufacturer, according to the Wall Street Journal. 0.0%

Apple Corp. (AAPL) CEO Steve Jobs appeared in public for the first time Large Cap Mid Cap Small Cap Int'l

since his liver transplant to announce the company’s latest offerings. Source: Standard & Poor's, Russell Investment Company, MSCI Major announcements include adding a video camera to iPod nano and price reductions across all iPods in an effort to bolster sales.

Energy and industrial stocks led the gains this week, adding 5.18% and 4.11% respectively. While no S&P 500 sectors declined, utility stocks posted a gain of just 0.07% this week. Year to Date Change

Stocks rose 4.48% in China on a government report that output at 30.0% Chinese factories gained 12.3% from a year earlier. 25.0%

20.0%

15.0%

Issue 9.4.09 9.11.09 Change 10.0% Dow Jones 9,434.24 9,605.41 1.81% S&P 500 1,016.25 1,042.73 2.61% 5.0% NASDAQ 2,016.34 2,080.90 3.20% Russell 1000 Growth 448.08 458.99 2.43% 0.0% S&P MidCap 400 653.35 679.41 3.99% Russell 2000 569.84 593.59 4.17% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,461.47 1,541.09 5.45% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 840.99 887.05 5.48% MSCI Small Cap 134.93 143.23 6.15%

Alternative Investments Market Update

The Dow Jones UBS Commodity Index finished the week just above flat as price declines in the industrial metals sector held back gains seen in Weekly Change

precious metals and energy. Natural gas futures posted their biggest 8.0% weekly gain since May as prospects for a global economic recovery increased. According to Bloomberg, the commodity soared 15% on 7.0% Thursday, which was the biggest one day gain in nearly five years due to 6.0% Department of Energy data showing a smaller than forecast increase in domestic stockpiles. Additionally, it is speculated that consumer 5.0% confidence increased in September due to a slower pace of job losses and negative economic news. Natural gas futures led the week, gaining 4.0% 7.33%, followed by corn, up 4.42%. Gold prices, $1,006.40 per ounce, 3.0% finished the week above $1,000 for the first time since February. 2.0%

The Wall Street Journal reported that both Harvard and Yale’s 1.0% endowments declined 30% in the year ended June 30th. Collectively, the endowments shrank by $17.8 billion over the time period. Harvard 0.0% announced that their total endowment is now worth $26 billion, down from $36.9 billion a year earlier. Harvard reduced its risk profile by DJ AIG Index NAREIT HFRX Equal Wtd Index

reducing exposure to private equity by $3 billion, and reducing its real Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research estate exposure by 3%, down to a total of 23%. It also plans to hold 2% of assets in cash, as compared to its previous strategy of -5%, which was achieved through leverage. Yale’s endowment fell to $16 billion, down from $22.9 billion a year before. Yale had only forecast a drop of 25% and may call for additional budget cuts.

Year to Date Change

16.0%

14.0%

12.0%

10.0%

1 Issue Previous Week Current Change 8.0% Gold 996.70 1,006.40 0.97% 6.0% Crude Oil Futures 68.02 69.29 1.87% Copper 2.87 2.85 -0.70% 4.0% Sugar 21.65 21.21 -2.03% 2.0% HFRX Equal Wtd. Strat. Index 1,071.25 1,075.85 0.43% HFRX Equity Hedge Index 1,087.28 1,111.69 2.25% 0.0% HFRX Equity Market Neutral 990.17 995.13 0.50% HFRX Event Driven 1,292.45 1,297.66 0.40% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,401.49 1,405.80 0.31% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 122.93 123.79 0.70% FTSE/NAREIT All REIT 92.90 99.88 7.51% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors September 18, 2009 Financial Market Update [page 1]

Economic Update

Economic data released this week supported speculation of improving conditions despite lingering challenges. On Tuesday, Federal Reserve Economic Indicators, Quarterly Change

Chairman Ben Bernanke acknowledged that the recession was likely 10.0% over in a technical sense, with tentative signs of growth in the third quarter, as reported by the Wall Street Journal. The Commerce 8.0% Department reported that July retail sales advanced 3.0% from the 6.0% previous month, but remained 5.3% lower than August 2008. Although 4.0% much of this stemmed from the Cash for Clunkers program, sales 2.0% excluding motor vehicles and parts still increased 1.1% from July. 0.0%

Industrial production continued to rise in August, up 0.8% according to -2.0% the Federal Reserve. Higher production for both durable and non- -4.0% durable goods caused output for consumer goods to climb 1.3% for the month. Capacity utilization increased as well, reaching 69.9% for the -6.0% month. -8.0% Q3 08 Q4 08 Q1 09 Q2 09 Builder confidence strengthened for the third month in September, as shown by the National Association of Home Builders/Wells Fargo Real GDP Core CPI* Unemployment Rate

Housing Market Index. The 19-point reading reflected improvements Source: Bureau of Economic Analysis, Bureau of Labor Statistics from the first-time buyer tax credit, attractive mortgage rates, and greater *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index housing affordability. The U.S. Department of Commerce announced Thursday that privately-owned housing starts rose 1.5% in August to a Sep. 15th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.0% seasonally adjusted annual rate of 598,000. Building permits for th Sep. 15 Producer Price Index, August Monthly Chg. 1.7% privately-owned homes increased 2.7% for the month, showing further Sep. 15th Retail Sales, August Monthly Chg. -2.7% signs of recovery in the housing industry. Sep. 15th Empire State Mfg Survey, September 18.9 Sep. 15th Business Inventories, July Monthly Chg. -1.0% The Consumer Price Index (CPI) and Producer Price Index (PPI) reports th MBA Purchase Applications Index, Wkly. Chg. -10.3% indicated that inflationary pressures remained soft in August. The Labor Sep. 16 th 0.4% Department reported that CPI increased 0.4% for the month, up 0.2% Sep. 16 Consumer Price Index, August Monthly Chg. th less food and energy. Meanwhile, PPI for finished goods climbed 1.7% Sep. 16 Frgn Dmnd for LT US Securities, November 15.3B th in August, up 0.2% for the month excluding food and energy. Sep. 16 Industrial Production, August Monthly Chg. 0.8% Sep. 16th EIA Petroleum Status Report, Wkly. Chg. -4.7M Barrels The Federal Reserve announced Thursday that household net worth Sep. 16th Housing Market Index, September 19.0 increased in the second quarter—the first in nearly two years. Sep. 17th Housing Starts, August 598,000 Household debt decreased at an annual rate of 1.75% in the quarter, Sep. 17th Initial Jobless Claims ( Week ending 9/12) 545,000 resulting from lower home mortgage debt and consumer credit. Sep. 17th Philidelphia Fed Survey, September 14.1 th Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Sep. 17 EIA Natural Gas Report, Wkly. Chg. 66 bcf Labor, The Wall Street Journal, National Association of Home Builders. MainStreet Advisors September 18, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries closed the week lower across the yield curve marking their first weekly loss since early August. A bout of profit taking before Yield Curves

next week’s record Treasury auctions drove much of selling. The 6.0% government will sell $112 billion of Treasury notes, including $43 billion

in two-year notes, $40 billion in five-year notes and $29 billion in seven 5.0% year notes, according to the Wall Street Journal. Analysts note that the

buying that took place in August and early September has pushed these 4.0% securities to the richer end of their historical trading range. Equally important, what is known as “rate-locked hedging” also nudged prices 3.0% lower. New U.S. corporate bond sales surged to the highest level in four months as companies locked in the narrowest yield spreads relative to 2.0% similar maturity Treasuries in more than a year. Because these bonds will not be priced until next week, companies tend to sell Treasuries to 1.0% lock in relatively low interest rates. Investment-grade spreads tightened nine basis points this week to 2.35%, the narrowest level since February 0.0% 2008, according to Merrill Lynch. High-yield spreads also narrowed to 2 yr 3 yr 5 yr 10 yr

their lowest level in 18 months, falling by 69 basis points to 8.09%. U.S. Treasury Muni (Tax Equiv.)*

Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 9.11.09 9.18.09 Change 3 month T-Bill 0.14% 0.08% -0.06% 2-Year Treasury 0.90% 1.03% 0.13% 5-Year Treasury 2.29% 2.49% 0.20% 10-Year Treasury 3.34% 3.49% 0.15% 30-Year Treasury 4.18% 4.24% 0.06%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 9/17/2007 1/17/2008 5/20/2008 9/16/2008 1/16/2009 5/18/2009 9/15/2009 9/17/2007 1/17/2008 5/20/2008 9/16/2008 1/16/2009 5/18/2009 9/15/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors September 18, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks continued their march higher this week as the Dow Jones Industrial Average (DJIA) closed Friday at 9,820.20, up 2.24% or 214.79 Weekly Change

points higher for the week. The index is now within striking distance of 5.0% the psychologically important 10,000 point level. The broader S&P 500 also gained on the week, adding 25.57 points, or 2.45% to close Friday at 1,068.30. The tech-heavy NASDAQ Composite added 2.50%, ending 4.0% the week at 2,132.86.

3.0% Financial shares again provided sector leadership, gaining 4.20% this week. Material companies also made large gains this week, adding 3.96% as commodity prices rose. The health care sector posted the only 2.0% loss this week, shedding 0.55% on continued uncertainty regarding

health care reform. 1.0%

AMR Corp (AMR), the parent company of American Airlines, obtained $2.9 Billion in liquidity and new aircraft-lease financing; the company also 0.0% announced that it would cut daily departures from St. Louis and Raleigh /Durham in North Carolina. Investors cheered the news, sending AMR Large Cap Mid Cap Small Cap Int'l

stock up 19% on Thursday. Source: Standard & Poor's, Russell Investment Company, MSCI

FedEx Corp. (FDX) announced fiscal first quarter earnings that were 53% lower than a year earlier. Despite the earnings decline, FedEx announced that its U.S. volume rose slightly and CFO Alan B. Graf, Jr. “sees signs of improvement in the overall economy.” The year-over-year decline in earnings was widely expected and was in-line with analyst Year to Date Change expectations; however, revenues for the quarter fell short by a small margin. 35.0%

30.0% Stocks in Europe and Japan gained this week, with the DJ Euro Stoxx 50

adding 1.97% and the NIKKEI 225 Index adding 1.65%. However, 25.0% stocks in China saw continued volatility, losing 2.13% this week as measured by the Shanghai Stock Exchange A Shares Index. 20.0%

15.0% Issue 9.11.09 9.18.09 Change 10.0% Dow Jones 9,605.41 9,820.20 2.24% S&P 500 1,042.73 1,068.30 2.45% 5.0% NASDAQ 2,080.90 2,132.86 2.50% Russell 1000 Growth 458.99 467.90 1.94% 0.0% S&P MidCap 400 679.41 701.53 3.26% Russell 2000 593.59 617.88 4.09% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,541.09 1,580.58 2.56% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 887.05 919.89 3.70% MSCI Small Cap 143.23 146.45 2.25%

Alternative Investments Market Update

The Dow Jones UBS Commodity Index rose 3% for the week and real estate investment trusts (REITs) rose over 7%. Notable intraday swings Weekly Change

in copper, sugar, natural gas, and gold were all observed Friday. 8.0%

In a potential blow to trading desks at hedge funds, the Securities Exchange Commission proposed eliminating "flash trading" this week. 6.0% Critics say this flash trading gives its users an unfair advantage over traders without super fast computing power.

Private equity firm Kohlberg Kravis & Roberts (KKR) invested $400 4.0% million in newly issued 8-year bonds issued by cash strapped Kodak. As part of the deal, KKR also purchased warrants from Kodak allowing it to control 20% of the company upon exercise. 2.0%

Natural gas reversed the near historic declines of last week and rallied nearly 30% on the week. The rise in natural gas prices is surprising 0.0% considering recent gas field discoveries and record amounts stored in the United States. According to the Energy Institute of America (EIA), DJ AIG Index NAREIT HFRX Equal Wtd Index

inventory levels are at 3.458 trillion cubic feet, 16% higher than the 5- Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research year average. The EIA estimates that storage levels will rise to 3.840 trillion cubic feet by year-end, just short of peak capacity estimates of 3.889 trillion feet.

Gold reached an 18-month high on Thursday, climbing to $1,025.80 an ounce on its way to its fifth weekly gain. Trading took gold marginally Year to Date Change lower on Friday, ending the week with a modest increase of 0.39%. Many investors remain bearish on gold due to the concern of possible 24.0% inflation. 20.0%

16.0%

1 Issue Previous Week Current Change 12.0% Gold 1,006.40 1,010.30 0.39% Crude Oil Futures 69.29 72.04 3.97% 8.0% Copper 2.85 2.79 -2.11% Sugar 21.21 21.95 3.49% 4.0% HFRX Equal Wtd. Strat. Index 1,075.85 1,080.54 0.44% HFRX Equity Hedge Index 1,111.69 1,130.23 1.67% 0.0% HFRX Equity Market Neutral 995.13 984.62 -1.06% HFRX Event Driven 1,297.66 1,313.65 1.23% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,405.80 1,408.05 0.16% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 123.79 127.51 3.00% FTSE/NAREIT All REIT 99.88 107.24 7.37% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors September 25, 2009 Financial Market Update [page 1]

Economic Update

The leaders of the world’s industrial powers gathered this week in Pittsburgh, Pennsylvania for the G-20 Summit. Meetings focused on Economic Indicators, Quarterly Change

assessing progress since the global economic downturn, as well as 10.0% formulating exit strategies for resource-heavy government policies that were set in place to prop up free-falling markets during the worst of the 8.0% recession. The unpredictability of the recovery makes unwinding 6.0% stimulus efforts a difficult task, as pulling support prematurely could 4.0% possibly derail a recovery. On Friday the Group of 20 nations 2.0% implemented a detailed plan to change global economic policy and boost growth. Critics feel that the lack of sanctions in the agreement could 0.0% render it ineffective. -2.0%

-4.0% The Federal Open Market Committee (FOMC) announcement released on Wednesday suggested that economic activity has improved further, -6.0% with healthier conditions in financial markets, bolstered activity in the -8.0% housing sector, and stabilizing household spending. However, the Q3 08 Q4 08 Q1 09 Q2 09 improving economic conditions remain constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Real GDP Core CPI* Unemployment Rate

Businesses continue to cut back on staffing and fixed investment, but at Source: Bureau of Economic Analysis, Bureau of Labor Statistics a slower rate. The Committee predicts that the economy will continue to *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index slowly recover and stabilize as time goes on. Sep. 21st Leading Indicators, August Monthly Chg. 0.6% Consumer sentiment data released this week marked the highest level nd Sep. 22 ICSC-Goldman Same Store Sales, Wkly. Chg. -2.0% since January 2008, in line with what appears to be continued Sep. 23rd MBA Purchase Applications Index, Wkly. Chg. 5.6% improvement in the labor market. Momentum in the housing market Sep. 23rd EIA Petroleum Status Report, Wkly. Chg. 2.8M Barrels slowed this week as new reports reflected weaker-than-expected existing Sep. 24th Initial Jobless Claims ( Week ending 9/19) 530,000 and new home sales. Levels still remain above year-ago levels, th Existing Home Sales, August SAAR* 5.1M according to the National Association of Realtors. Leading indicators Sep. 24 th 67 bcf posted positive growth for the fifth consecutive month, suggesting that Sep. 24 EIA Natural Gas Report, Wkly. Chg. th the economy is continuing to ease toward recovery. Sep. 25 Durable Goods New Orders, August Monthly Chg. -2.4% Sep. 25th Consumer Sentiment Index, September 73.5 Sep. 25th New Home Sales, August 429,000

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, National Association of Realtors, The Conference Board. MainStreet Advisors September 25, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries rallied for the week amid strong demand from investors once again seeking a flight to safety trade and a surprisingly strong $29 Yield Curves

billion auction of seven-year notes. Mixed economic reports continue to 6.0% cloud the economic outlook, compelling market participants to focus on

less risky securities. Although many economic reports have recently 5.0% improved, Secretary Treasurer Timothy Geithner said this week that the

U.S. has “a ways to go” before the economy recovers from the recession. 4.0% Equally important, the Federal Reserve signaled that the economic outlook remains uncertain by pledging to complete their $1.25 trillion 3.0% stimulus program to purchase mortgage securities and extended the end date to March from December. On a positive note, the Fed also detailed 2.0% plans to reduce the size of its Term Auction Facility (TAF) and Term Securities Lending Facility (TSLF) programs. These plans were created 1.0% in response to problems associated with the subprime mortgage crisis with the goal to promote liquidity in the short-term financing markets. As 0.0% risk taking by banks and the credit markets has recovered, the use of 2 yr 3 yr 5 yr 10 yr

these facilities declined significantly, indicating a more normal short-term U.S. Treasury Muni (Tax Equiv.)* lending environment. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 9.18.09 9.25.09 Change 3 month T-Bill 0.08% 0.10% 0.02% 2-Year Treasury 1.03% 0.93% -0.10% 5-Year Treasury 2.49% 2.37% -0.12% 10-Year Treasury 3.49% 3.40% -0.09% 30-Year Treasury 4.24% 4.17% -0.07%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 9/24/2007 1/24/2008 5/27/2008 9/23/2008 1/23/2009 5/25/2009 9/22/2009 9/24/2007 1/24/2008 5/27/2008 9/23/2008 1/23/2009 5/25/2009 9/22/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors September 25, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks dropped this week as investors re-assessed their outlook for U.S. companies. The Dow Jones Industrial Average (DJIA) shed 155.01 Weekly Change

points, or 1.58%, this week to close at 9,665.19. The broader S&P 500 0.0% lost 0.61% to close at 1,044.38 while the tech-heavy NASDAQ Composite closed at 2,090.92, off 0.79% this week.

-1.0% Dell Inc. (DELL) announced a deal to purchase Perot Systems Corp. (PER) for $3.9 billion, according to the Wall Street Journal. The $30 per class A share of Perot is a 68% premium over Perot’s close last Friday. The purchase, Dell’s largest ever, is a move to better compete with IBM -2.0% Corp (IBM) and Hewlett-Packard Co. (HPQ) in selling IT services such as email services and back-office computers. -3.0% In more news that markets are moving past the largest financial crisis since the Great Depression, the Wall Street Journal reported that through Thursday, five companies raised $2.97 billion in initial public offerings -4.0% (IPOs)—marking the largest week for IPOs since April 20, 2008. Further evidence of strong demand for IPOs is that many are being priced above Large Cap Mid Cap Small Cap Int'l

their expected ranges and to maintain that higher price in post-IPO Source: Standard & Poor's, Russell Investment Company, MSCI trading,

The materials sector lost 4.59% this week to lead the broad-based decline followed by financials and industrials, which lost 3.63% and 3.26%, respectively. The traditionally defensive sectors, consumer discretionary and healthcare, posted the smallest declines, losing just Year to Date Change 0.63% and 0.80%, respectively. 30.0%

25.0%

Issue 9.18.09 9.25.09 Change 20.0% Dow Jones 9,820.20 9,665.35 -1.58% S&P 500 1,068.30 1,044.38 -2.24% 15.0% NASDAQ 2,132.86 2,090.92 -1.97% Russell 1000 Growth 467.90 459.09 -1.88% 10.0% S&P MidCap 400 701.53 678.31 -3.31% Russell 2000 617.88 598.86 -3.08% 5.0% MSCI EAFE 1,580.58 1,554.09 -1.68% MSCI EM 919.89 908.13 -1.28% 0.0% MSCI Small Cap 146.45 144.13 -1.58% Large Cap Mid Cap Small Cap Int'l

Alternative Investments Market Update

Bloomberg reported that futures prices for wheat contracts fell to the lowest levels since 2007 after India, the world’s second largest grower, Weekly Change

announced a production boost of 2.5%. The U.S. Department of 6.0% Agriculture estimated that global wheat supplies may increase by 10%, totaling 186.6 million tons, in the year that ends May 31, 2010. Currently, 4.0% prices are down 39% over the past 12 months. In addition to the supply glut impacting wheat prices, domestic wheat demand has also seen a 2.0% slump throughout the current economic crisis, which has further reduced its market value. 0.0% Crude oil futures contracts finished the week down nearly 9%, marking the largest weekly drop since July. Traders appear concerned that, -2.0% despite optimism in an economic recovery, domestic oil stockpiles remain abundant. Goldman Sachs announced an increase in its global -4.0% crude oil demand forecast by 1.9%, estimating that crude oil use worldwide will average 86.405 million barrels per day in 2010. Contango, -6.0% a situation where longer term contacts are more expensive than shorter term ones, has been an issue as of late, which typically provides an DJ AIG Index NAREIT HFRX Equal Wtd Index

incentive to hold oil in storage and wait for it to appreciate. The gap Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research between the contracts has narrowed in recent days from $1.41 per barrel in the third week of August to only $0.47 today. This will likely result in an increased supply on the market, resulting in some further depreciation of prices.

Year to Date Change

20.0%

16.0%

12.0% 1 Issue Previous Week Current Change Gold 1,010.30 991.60 -1.85% 8.0% Crude Oil Futures 72.04 66.02 -8.36% Copper 2.79 2.74 -1.79% Sugar 21.95 21.70 -1.14% 4.0% HFRX Equal Wtd. Strat. Index 1,080.54 1,128.00 4.39% HFRX Equity Hedge Index 1,130.23 1,125.01 -0.46% 0.0% HFRX Equity Market Neutral 984.62 985.34 0.07% HFRX Event Driven 1,313.65 1,316.61 0.23% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,408.05 1,402.02 -0.43% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 127.51 123.37 -3.25% FTSE/NAREIT All REIT 107.24 102.02 -4.87% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors October 2, 2009 Financial Market Update [page 1]

Economic Update

The U.S. Department of Labor announced Friday that non-farm payrolls shed 263,000 jobs in September. The unemployment rate increased to Economic Indicators, Quarterly Change

9.8%, twice as high as when the recession began in December 2007. 10.0% The highly anticipated report reflected further declines in construction, manufacturing, retail trade, and government. Personal income however 8.0% has continued to increase modestly, according to the Department of 6.0% Commerce. The 0.2% monthly gain in August was offset with a 1.3% 4.0% increase in personal spending. The report also indicated that personal 2.0% savings, as a percentage of disposable personal income, was 3.0% in August compared with 4.0% the preceding month. A higher savings rate 0.0% suggests that an economic recovery will be very gradual, because -2.0% consumer spending comprises approximately 70% of gross domestic -4.0% product (GDP). The Department of Commerce reported that the third and final estimates of second quarter GDP indicated the economy -6.0% declined at an annual rate of 0.7% in the quarter. Earlier estimates -8.0% reflected a decline of 1.0%. Corporate profits for the second quarter Q3 08 Q4 08 Q1 09 Q2 09 were revised downward, falling 19.2% from the previous year verses the 17.7% decline originally estimated. Real GDP Core CPI* Unemployment Rate

Source: Bureau of Economic Analysis, Bureau of Labor Statistics Data released this week indicated continued improvements in the *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index housing market. The Standard & Poor’s/Case Shiller Home Price Indices, with data through July 2009, showed that prices in the largest 10- Sep. 29th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.1% City and 20-City U.S. metropolitan areas are recovering. Chairman of the th Sep. 29 Consumer Confidence Index, September 53.1 Index Committee at Standard & Poor’s noted “we now seem to be Sep. 30th MBA Purchase Applications Index, Wkly. Chg. -6.2% witnessing some sustained monthly increases across many of the Sep. 30th EIA Petroleum Status Report, Wkly. Chg. 2.8M Barrels markets.” Separately, the National Association of Realtors reported the Sep. 30th Domestic Motor Vehicle Sales, September 6.7M seventh consecutive increase in its October Pending Home Sales Index, th Announced Layoffs, September 66,404 a leading indicator of housing activity. Sep. 30 st 0.2% Oct. 1 Personal Income, August Monthly Chg. st Manufacturing activity accelerated in September, according to the Oct. 1 Consumer Spending, August Monthly Chg. 1.3% st Institute for Supply Management (ISM). The sector expanded for the Oct. 1 Initial Jobless Claims ( Week ending 9/26) 551,000 st second consecutive month, with 13 of the 18 industries surveyed Oct. 1 ISM Mfg. Index - Level, September 52.6 reporting growth. ISM asked whether these industries expected to Oct. 1st Construction Spending, August Monthly Chg. 0.8% experience some benefit from the American Recovery and Reinvestment Oct. 1st Pending Home Sales, August Monthly Chg. 6.4% Act—12 responded yes. Oct. 1st EIA Natural Gas Report, Wkly. Chg. 64 bcf Oct. 2nd Non-farm Payrolls, September Monthly Chg. -263,000 nd Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Oct. 2 Unemployment Rate, September 9.8% Labor, The Wall Street Journal, National Association of Realtors, The Conference Board. Oct. 2nd Factory Orders, August Monthly Chg. -0.8% MainStreet Advisors October 2, 2009 Financial Market Update [page 2]

Bond Market Update

Although U.S. Treasuries rallied earlier in the week, investors sold bonds on Friday as they shifted their focus to next week’s auction. Overall, Yield Curves

government debt ended the week slightly higher. Next week, the 6.0% Treasury will auction $39 billion of three-year notes, $20 billion in 10-year

securities, $12 billion in 30-year bonds and $7 billion of 10-year TIPS. 5.0% This marks the second straight week where the Treasury auctioned more

than $70 billion in new securities. Ten-year note yields had dropped 4.0% earlier in the week to the lowest level since May after a government report showed the U.S. economy lost more jobs than forecast in 3.0% September, reinforcing expectations for a slower recovery. For the quarter, Treasuries rose 2.1%, marking the strongest three-month 2.0% performance since the last quarter of 2008, according to Merrill Lynch. Meanwhile, market participants question whether substantial Treasury 1.0% sales and the decline of the dollar will stop foreign governments such as China and Saudi Arabia from investing large portions of their trade 0.0% earned dollars into U.S. government securities. However, year-to-date 2 yr 3 yr 5 yr 10 yr

quite the contrary has occurred. So far in 2008, foreign investors bought U.S. Treasury Muni (Tax Equiv.)* 43% of all notes and bonds issued by the Treasury versus 27% for the same period in 2008, according to Bloomberg. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 9.25.09 10.2.09 Change 3 month T-Bill 0.10% 0.10% 0.00% 2-Year Treasury 0.93% 0.87% -0.06% 5-Year Treasury 2.37% 2.20% -0.17% 10-Year Treasury 3.40% 3.21% -0.19% 30-Year Treasury 4.17% 3.97% -0.20%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 2/1/2008 6/3/2008 6/1/2009 2/1/2008 6/3/2008 6/1/2009 10/1/2007 10/1/2008 1/31/2009 9/30/2009 10/1/2007 10/1/2008 1/31/2009 9/30/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors October 2, 2009 Financial Market Update [page 3]

Stock Market Update

U.S. stocks dropped for a second straight week as weak economic reports weighed on investor optimism about the strength of the economic Weekly Change

recovery. The Dow Jones Industrial Average lost 177.52 points, or 0.0% 1.84%, to close at 9,483.97. The broader S&P 500 also lost 1.84%, or 19.17, to end the week at 1,025.17. The technology-heavy NASDAQ Composite finished at 2,048.11, down 42.81 points, or 2.05%. -1.0%

Bank of America Corp. (BAC) made news this week when President and CEO Ken Lewis announced he would retire at the end of the year. Lewis had helped build the company from a mid-sized North Carolina Bank to -2.0% the largest bank by assets, but had recently come under pressure for the company’s harried purchase of Merrill Lynch and billions of dollars of losses during the financial crisis. Separately, Bank of America -3.0% announced that it would sell the long-term asset management business of Columbia Management to Ameriprise Financial, Inc. (AMP). Ameriprise investors cheered the news, sending the stock up 12.34% on -4.0% Wednesday. Large Cap Mid Cap Small Cap Int'l

Energy, industrial, and material stocks led the downside this week, losing Source: Standard & Poor's, Russell Investment Company, MSCI 2.97%, 2.99% and 3.05%, respectively, as commodity prices dropped. Consumer staple stocks added 0.28%, the only S&P 500 sector to post a gain on the week.

International stocks sold off this week as well, with the DJ Euro Stoxx 50 dropping 2.52%, Japan’s NIKKEI 225 shedding 5.20% and China’s Year to Date Change Shanghai A Shares dropping 2.09%. 25.0%

20.0%

Issue 9.25.09 10.2.09 Change Dow Jones 9,665.35 9,487.67 -1.84% 15.0% S&P 500 1,044.38 1,025.21 -1.84% NASDAQ 2,090.92 2,048.11 -2.05% 10.0% Russell 1000 Growth 459.09 452.91 -1.35% S&P MidCap 400 678.31 663.43 -2.19% Russell 2000 598.86 580.2 -3.12% 5.0% MSCI EAFE 1,554.09 1,524.76 -1.89% MSCI EM 908.13 911.26 0.34% 0.0% MSCI Small Cap 144.13 142.21 -1.33% Large Cap Mid Cap Small Cap Int'l

Alternative Investments Market Update

The Dow Jones UBS Commodity Index rose 0.66% for the week, with the petroleum sector appreciating nearly 6%. Copper prices fell to the Weekly Change

lowest levels in two months in response to the recently announced U.S. 1.0% employment data. Natural gas fell by 4.65%, followed by soybeans, down 4.43%, and copper, down 2.15%. Unleaded gas and crude oil led the group, up 6.41% and 5.95%, respectively. 0.0%

Private equity firm KKR & Co. began trading publically in Europe today, -1.0% which has been two years in the making after withdrawing plans for an initial public offering in 2008. It was also reported by research firm Prequin that private equity commitments in the third quarter of 2009 -2.0% amounted to $38 billion, the lowest level of fundraising since the fourth

quarter of 2003. -3.0%

-4.0%

DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research

Year to Date Change

16.0%

12.0%

1 Issue Previous Week Current Change 8.0% Gold 991.60 1,004.30 1.28% Crude Oil Futures 66.02 69.95 5.95% Copper 2.74 2.68 -2.19% 4.0% Sugar 23.17 23.78 2.63% HFRX Equal Wtd. Strat. Index 1,128.00 1,087.77 -3.57% HFRX Equity Hedge Index 1,125.01 1,119.42 -0.50% 0.0% HFRX Equity Market Neutral 985.34 977.19 -0.83% HFRX Event Driven 1,316.61 1,323.01 0.49% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,402.02 1,413.52 0.82% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 123.37 124.17 0.65% FTSE/NAREIT All REIT 102.02 98.84 -3.12% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors October 9, 2009 Financial Market Update [page 1]

Economic Update

U.S. retailers reported their first monthly sales gain in more than a year in September as shown by a survey of stores open for at least one year, Economic Indicators, Quarterly Change

prepared by Thomson Reuters. The 0.6% gain is the first encouraging 10.0% sign of consumer spending ahead of the holiday shopping season. Of the 30 retailers surveyed, Reuters reported that 18 beat expectations. 8.0% 6.0% Consumer confidence has strengthened in the first week of October as 4.0% concerns about personal financial situations and employment began to 2.0% ease, according to the RBC CASH Index. The index, which reflects U.S. consumer attitudes about personal finances, local economies, savings, 0.0% and the confidence to make large decisions, showed broad-based -2.0% improvements in consumer sentiment. -4.0%

The Institute of Supply Management (ISM) announced that its Non- -6.0% Manufacturing Index reached 50.9% in September, marking expansion in -8.0% the sector for the first time in a year. Component indexes showed that Q3 08 Q4 08 Q1 09 Q2 09 non-manufacturing business activity also improved last month in addition new orders and employment. ISM asked survey participants about Real GDP Core CPI* Unemployment Rate

expected benefits from the American Recovery and Reivestment Act and Source: Bureau of Economic Analysis, Bureau of Labor Statistics learned that 14 of the 18 industries surveyed expect to benefit. *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index

The U.S. Department of Labor announced that initial claims for Sep. 29th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.1% unemployment benefits declined by 33,000 for the week ending October th Sep. 29 Consumer Confidence Index, September 53.1 3 to 521,000. Although employment is a lagging economic indicator, Sep. 30th MBA Purchase Applications Index, Wkly. Chg. -6.2% decelerating initial unemployment claims suggests some stabilization in Sep. 30th EIA Petroleum Status Report, Wkly. Chg. 2.8M Barrels the jobs market. Sep. 30th Domestic Motor Vehicle Sales, September 6.7M Sep. 30th Announced Layoffs, September 66,404 Oct. 1st Personal Income, August Monthly Chg. 0.2% Oct. 1st Consumer Spending, August Monthly Chg. 1.3% Oct. 1st Initial Jobless Claims ( Week ending 9/26) 551,000 Oct. 1st ISM Mfg. Index - Level, September 52.6 Oct. 1st Construction Spending, August Monthly Chg. 0.8% Oct. 1st Pending Home Sales, August Monthly Chg. 6.4% Oct. 1st EIA Natural Gas Report, Wkly. Chg. 64 bcf Oct. 2nd Non-farm Payrolls, September Monthly Chg. -263,000 nd Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Oct. 2 Unemployment Rate, September 9.8% Labor, The Wall Street Journal, National Association of Realtors, The Conference Board. Oct. 2nd Factory Orders, August Monthly Chg. -0.8% MainStreet Advisors October 9, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries fell dramatically for the week, with much of the decline taking place on Friday as Federal Reserve Chairman Ben Bernanke Yield Curves

indicated the central bank is ready to tighten monetary policy 6.0% aggressively once the economic outlook improves. Futures on the

Chicago Board of Trade indicate a 43% chance the Fed will raise interest 5.0% rates by April, relative to 35% odds a month earlier. Thirty-year bonds

also fell after Thursday’s $12 billion auction drew below average 4.0% demand. The bid-to-cover ratio, which gauges demand by comparing total bids with the amount of securities offered, was 2.37, compared with 3.0% 2.92 at the September auction, according to Bloomberg. Foreign investors bought 34.5% of the bonds versus 46.5% at the last auction 2.0% and an average of 45.36% at the last five public sales. Meanwhile, investment grade corporate bonds rated BBB and below rallied as many 1.0% investors feel higher rated debt may have run too far too fast. The spread, or difference in yields, between lower rated investment grade 0.0% bonds and similar maturity Treasuries narrowed to 305 basis points, only 2 yr 3 yr 5 yr 10 yr

60 basis points higher than the average in 2007, according to Merrill U.S. Treasury Muni (Tax Equiv.)* Lynch. An environment in which the economy continues to improve tends to benefit lower rated corporate bonds as demand for these higher Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin risk securities improves.

Issue 10.2.09 10.9.09 Change 3 month T-Bill 0.10% 0.06% -0.04% 2-Year Treasury 0.87% 0.97% 0.10% 5-Year Treasury 2.20% 2.35% 0.15% 10-Year Treasury 3.21% 3.38% 0.17% 30-Year Treasury 3.97% 4.22% 0.25%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 2/1/2008 6/3/2008 6/1/2009 2/1/2008 6/3/2008 6/1/2009 10/1/2007 10/1/2008 1/31/2009 9/30/2009 10/1/2007 10/1/2008 1/31/2009 9/30/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors October 9, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks broke four sessions of declines from last week and began strongly on Monday, with major indices rising almost 2%. Most of the Weekly Change

activity was attributed to traders setting up for positive surprises to the 7.0% beginning of 3rd quarter earnings announcements scheduled to begin later in the week. 6.0%

On Tuesday, the Reserve Bank of Australia surprised markets with a 5.0% 0.25% rate hike. The equity markets interpreted this move as an optimistic sign that the world wide global growth is imminent. On the 4.0% news, the DJIA rallied 1.4% for the day. Producers of commodities and 3.0% energy stocks also rallied on the news, with Alcoa (AA), the largest U.S.

aluminum producer, rising 3.5%, and the S&P 500 energy sector rose 2.0% 2.1% as oil prices also rose. On Wednessday, Alcoa Inc. led off the third quarter earnings season with a positive tone. The company cut costs 1.0% faster than predicted and announced a profit for the third quarter when most analysts predicted a small loss. Alcoa Chief Executive Officer, 0.0% Klaus Kleinfeld sees end market demand beginning to improve, yet another sign that the economy is has stabilized. Large Cap Mid Cap Small Cap Int'l

Source: Standard & Poor's, Russell Investment Company, MSCI Retailers announced the first rise in same store sales since August 2008 sending Hope Depot (HD) and Lowe's (LOW) up 2.87% and the S&P Retail Index up 1.70% on Thursday.

By the end of the week, the DJIA had reached a new high for 2009, closing at 9,864. The DJIA is down nearly 30% from its of 14,164 last Year to Date Change seen in October of 2007. 35.0%

30.0%

25.0% Issue 10.2.09 10.9.09 Change

Dow Jones 9,487.67 9,864.94 3.98% 20.0% S&P 500 1,025.21 1,071.49 4.51% NASDAQ 2,048.11 2,139.28 4.45% 15.0% Russell 1000 Growth 561.82 588.02 4.66% S&P MidCap 400 663.43 702.19 5.84% 10.0% Russell 2000 580.2 614.92 5.98% 5.0% MSCI EAFE 1,524.76 1,563.81 2.56% MSCI EM 911.26 939.91 3.14% 0.0% MSCI Small Cap 142.21 146.07 2.72% Large Cap Mid Cap Small Cap Int'l

Alternative Investments Market Update

The attention in alternative investments focused on gold and other commodities this week. Following the Bank of Australia's rate hike on Weekly Change

Tuesday, gold prices began a strong rally. The rise continued on 5.0% Wednesday and gold hit an intrady high of $1,060, clsoing at a record high of $1,048, and on Thursday gold closed at another record high of $1,055. Modest profit taking occured on Friday, with gold closing at 4.0% $1,048. Copper rose 7%, but sugar declined 15%.

3.0% Hedge fund Renaissance Technology, one of the largest and most profitable quantitative trading funds, announced that it's founder Jim Simons will retire. Renaissance's Medallion Fund has logged one of the 2.0% most impressive track records in the industry, returning more than 30%

annually since inception in 1988, according to a recent Wall Street 1.0% Journal article.

In another continued sign of gradual thawing in the credit markets, two 0.0% leveraged buyout delas by private equity firms occured. Blackstone Group acquired that it is buying the theme park business of Anheuser DJ AIG Index NAREIT HFRX Equal Wtd Index

Busch InBev for $2.3 billion. Clayton Dubilier & Rice announced an Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research investment of $477 million in cleaning products company JohsonDiversey. The notable aspect of each of these deals is that the financing provided was handled by several banks and required both less leverage and a higher equity contribution, compared to just a few years ago when deals like this were funded by just two or three banks.

Year to Date Change

20.0%

16.0%

12.0% 1 Issue Previous Week Current Change Gold 1,004.30 1,048.60 4.41% 8.0% Crude Oil Futures 69.95 71.77 2.60% Copper 2.68 2.84 5.97% Sugar 23.78 21.24 -10.68% 4.0% HFRX Equal Wtd. Strat. Index 1,087.77 1,089.65 0.17% HFRX Equity Hedge Index 1,119.42 1,125.85 0.57% 0.0% HFRX Equity Market Neutral 977.19 976.90 -0.03% HFRX Event Driven 1,323.01 1,327.90 0.37% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,413.52 1,411.04 -0.18% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 124.17 129.18 4.03% FTSE/NAREIT All REIT 98.84 102.00 3.20% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors October 16, 2009 Financial Market Update [page 1]

Economic Update

Consumer sentiment declined in early October amid continued concerns about personal financial situations, as show by the Reuters/University of Economic Indicators, Quarterly Change

Michigan Survey of Consumers. Reuters reported that personal financial 10.0% situations have experienced the “longest and deepest decline in the 60- year history of the surveys.” This suggests that consumer spending will 8.0% continue to be muted in the coming months. The U.S. Department of 6.0% Commerce reported this week that September retail sales declined 1.5% 4.0% from August, down 5.7% from last September. According to Bloomberg, 2.0% this was largely reflective of lower auto sales following the Cash for Clunkers program. 0.0% -2.0% Businesses successfully continued to reduce inventories in August. The -4.0% Commerce Department reported that manufacturers’ and trade inventories adjusted for seasonal variance, declined 1.5% from the -6.0% previous month and are 13.3% lower than August 2008. Federal -8.0% Reserve Chairman Ben Bernanke noted the importance of getting Q3 08 Q4 08 Q1 09 Q2 09 inventories to more normal levels several times in recent months. The Philadelphia Federal Reserve’s Business Outlook Survey, released this Real GDP Core CPI* Unemployment Rate

week, reported that the manufacturing sector has continued to Source: Bureau of Economic Analysis, Bureau of Labor Statistics strengthen. While the survey reflects a recovery in the sector, the *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index composite indexes indicate very modest growth. On Friday, the Federal Reserve announced that industrial production increased 0.7% in Oct. 13th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.6% September. This caused overall output to increase at a seasonally th Oct. 14 MBA Purchase Applications Index, Wkly. Chg. -5.0% adjusted annual rate of 5.2% for the third quarter—the strongest quarterly Oct. 14th Retail Sales, September Monthly Chg. -1.5% activity since 2005. Oct. 14th Export Prices, September Monthly Chg. -0.3% Oct. 14th Import Prices, September Monthly Chg. 0.1% The Consumer Price Index (CPI) advanced 0.2% in September, th Business Inventories, August Monthly Chg. -1.5% according to the U.S. Department of Labor. In the last year, CPI has Oct. 14 th 0.2% declined 1.3% on a seasonally adjusted basis. Prices excluding food Oct. 15 Consumer Price Index, September Monthly Chg. th and energy, or core CPI, increased 0.2%. The report showed that food Oct. 15 Empire State Mfg Survey, October 34.57 th and energy prices have both trended lower over the past year. Oct. 15 Initial Jobless Claims ( Week ending 10/10) 514,000 th Separately, the Labor Department reported that the U.S. Import Price Oct. 15 Philidelphia Fed Survey, October 11.5 Index increased 0.1% last month, following a 1.6% gain in August. A Oct. 15th EIA Natural Gas Report, Wkly. Chg. 58 bcf 1.8% decrease in fuel prices helped offset increases in non-fuel imports. Oct. 15th EIA Petroleum Status Report, Wkly. Chg. 0.4M Barrels Prices for U.S. exports decreased 0.3% in September, down from a 0.7% Oct. 16th Frgn Dmnd for LT US Securities, August 28.6B increase the previous month. Oct. 16th Industrial Production, September Monthly Chg. 0.7% th Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Oct. 16 Consumer Sentiment Index, October 69.4 Labor, The Wall Street Journal, Reuters. MainStreet Advisors October 16, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week mostly unchanged, although the 30- year bond posted a strong return on Friday benefiting from weakness in Yield Curves

the U.S. stock markets. Some market participants, including Pimco’s Bill 6.0% Gross, feel Treasuries are relatively cheap given a sluggish U.S.

recovery and tepid short-term inflation expectations. Pimco’s Total 5.0% Return Fund recently increased U.S government debt from 44% to 48%

of the portfolio and cut mortgage bond holdings to the lowest level since 4.0% 2005. Should inflation remain subdued, the Treasury markets may be on the cusp of what’s known as a “bull flattening” in which yields on long 3.0% dated bonds fall more than rates on short-term paper. Meanwhile, a recent report from the Treasury Department showed international 2.0% demand for long-term U.S. Treasuries rose in August as Japan and Russia increased their positions. China remained the largest foreign 1.0% holder of U.S. debt at $797.1 billion, followed by Japan with $731 billion, and Russia holding $121.6 billion. Highlighting imbalances in trade and 0.0% investment, China’s reserves grew to a record $2.3 trillion in the third 2 yr 3 yr 5 yr 10 yr

quarter. In an effort to promote more balanced economic worldwide U.S. Treasury Muni (Tax Equiv.)* growth, Group of Seven (U.S., U.K., Canada, France, Italy, Germany and Japan) finance officials recently recommended a stronger Chinese Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin currency, at odds with Treasury Secretary Geithner’s strong dollar position. Issue 10.9.09 10.16.09 Change 3 month T-Bill 0.06% 0.07% 0.01% 2-Year Treasury 0.97% 0.97% 0.00% 5-Year Treasury 2.35% 2.41% 0.06% 10-Year Treasury 3.38% 3.49% 0.11% 30-Year Treasury 4.22% 4.31% 0.09%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 2/15/2008 6/17/2008 2/13/2009 6/15/2009 2/15/2008 6/17/2008 2/13/2009 6/15/2009 10/15/2007 10/15/2008 10/14/2009 10/15/2007 10/15/2008 10/14/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors October 16, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks gave back some early week gains on Friday but went into the weekend higher than last Friday. The bulk of the gains came on Weekly Change

Wednesday when positive earnings news from JP Morgan (JPM) and 3.0% Intel (INTC) sent the DJIA through the psychologically important 10,000 level; this has happened before—April 1999 and December 2003. The 2.5% DJIA ended the week at 9,995.91, up 130.97 points or 1.33% from last week. The broader S&P 500 gained 16.91 points, or 1.51%, to finish the 2.0% week at 1,087.68.

A number of bellwether companies reported a mixed bag of third quarter 1.5% earnings results this week. Stocks drifted lower after a report from Johnson & Johnson (JNJ), which fell short of analyst expectations. 1.0% Wednesday’s rally was sparked by JP Morgan’s third-quarter results, which beat analyst expectations on better than expected trading gains. 0.5% Also, Intel reported positive results and raised its outlook, commenting that it sees the PC market recovering, according to Reuters. Adding to 0.0% Wednesday’s enthusiasm was a report from the Department of Commerce that retail sales had declined less than expected. On Large Cap Mid Cap Small Cap Int'l

Thursday, Citicorp (C) and Goldman Sachs (GS) both beat analyst Source: Standard & Poor's, Russell Investment Company, MSCI expectations, but Wall Street sent the stocks more than 2% lower due to uncertainty in the outlook for the two financial companies. On Friday, Google (GOOG) reported a blow-out third quarter which lead to a large number of analyst upgrades. Meanwhile, Bank of America (BAC) reported results that missed analyst expectations on larger-than- expected loan losses, sending the stock 4.64% lower. Year to Date Change

35.0%

30.0%

25.0% Issue 10.9.09 10.16.09 Change

Dow Jones 9,864.94 9,995.91 1.33% 20.0% S&P 500 1,071.49 1,087.68 1.51% NASDAQ 2,139.28 2,156.80 0.82% 15.0% Russell 1000 Growth 588.02 478.32 -18.66% S&P MidCap 400 702.19 707.87 0.81% 10.0% Russell 2000 614.92 616.18 0.20% 5.0% MSCI EAFE 1,563.81 1,602.32 2.46% MSCI EM 939.91 975.79 3.82% 0.0% MSCI Small Cap 146.07 149.37 2.26% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors October 16, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Volatility in commodities continued to be high this week, but the gains in crude oil outpaced last week's rally gold. The benign CPI report and a Weekly Change

positive surprise rise in the industrial production may have been 5.0% responsible for this week's modest change in gold.

Oil, however, began trading at new 52-week levels earlier this week. 4.0% After hitting the psychologically important level of $75 per barrel on

Wednesday, Thursday's Department of Energy report that gasoline 3.0% stockpiles declined by 5.2 million barrels instead of rising by 700,000 and distillate oil stocks fell by 1.1 million barrels instead of 100,000 were behind the $2.40 rise—nearly 3.2%, to close at $77.58. Oil closed the 2.0% week at $78.53 per barrel, a rise of 9.4%.

1.0% Congress has continued to wrangle over measures to regulate the over- the-counter derivatives market. An amendment late in the week loosened the requirement for all derivates to be cleared by a central 0.0% exchange. This bill is part of the Obama administration's efforts to overhaul financial regulation. DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Fitch Ratings issued its quarterly report on the real estate investment trusts (REITs) industry this week, noting that credit concerns for REITs have improved this year. The report also indicated that of the 11 REITs they offer ratings on, they have issued unsecured debt of $7.9 billion, executed bond tender offers worth $3.4 billion and issued common stock worth $9.6 billion since March. REITs are expected to have reduced Year to Date Change leverage and increased liquidity as a result of these moves. 20.0%

16.0%

12.0% 1 Issue Previous Week Current Change Gold 1,048.60 1,051.50 0.28% 8.0% Crude Oil Futures 71.77 78.53 9.42% Copper 2.84 2.85 0.35% Sugar 21.24 23.91 12.57% 4.0% HFRX Equal Wtd. Strat. Index 1,089.65 1,093.67 0.37% HFRX Equity Hedge Index 1,125.85 1,136.95 0.99% 0.0% HFRX Equity Market Neutral 976.90 976.46 -0.05% HFRX Event Driven 1,327.90 1,331.80 0.29% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,411.04 1,418.11 0.50% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 129.18 134.32 3.98% FTSE/NAREIT All REIT 102.00 103.90 1.86% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors October 23, 2009 Financial Market Update [page 1]

Economic Update

Mixed housing data released this week indicated that while activity has improved, challenges to maintain momentum after the first-time home Economic Indicators, Quarterly Change

buyer tax credit ends remain. The National Association of Realtors 10.0% (NAR) reported that sales of existing homes climbed significantly in September, up 9.4% to a seasonally adjusted annual rate of 5.57 million 8.0% units. This marked a 9.2% increase from September 2008 and 6.0% represented the strongest level of activity in more than two years, 4.0% according to the report. NAR Chief Economist Lawrence Yun hopes that 2.0% the tax credit will be extended into next year, noting the higher sales activity “needs to continue for a few additional quarters until we reach a 0.0% point of a self-sustaining recovery.” Earlier this week, the National -2.0% Association of Home Builders/Wells Fargo Housing Market Index showed -4.0% that builder confidence retreated slightly in October. The end of the buyer tax credit is approaching next month, which the report suggested -6.0% may be hurting sales activity. All of the three index components declined -8.0% for the first time since September 2008. The Commerce Department Q3 08 Q4 08 Q1 09 Q2 09 reported that housing starts increased a modest 0.5% in September, after declining 1.0% the previous month. The seasonally adjusted annual rate Real GDP Core CPI* Unemployment Rate

of 590,000 units is 28.2% lower than September 2008. Source: Bureau of Economic Analysis, Bureau of Labor Statistics *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index The Federal Reserve released its Beige Book on Wednesday, which indicated improvements or further stabilization in many sectors Oct. 19th Housing Market Index, October 18.0 throughout the 12 Federal Reserve Districts. The residential real estate th Oct. 20 ICSC-Goldman Same Store Sales, Wkly. Chg. 0.2% and manufacturing sectors were considerably stronger while other Oct. 20th Housing Starts, September 590,000 sectors, including consumer spending were mixed. However, the noted Oct. 20th Producer Price Index, September Monthly Chg. -0.6% improvements were classified as “either small or scattered.” The Oct. 21st MBA Purchase Applications Index, Wkly. Chg. -7.6% commercial real estate sector deteriorated further. Oct. 21st EIA Petroleum Status Report, Wkly. Chg. 1.3M Barrels st 589,000 The Conference Board announced its U.S. Index of Leading Economic Oct. 21 Initial Jobless Claims ( Week ending 10/17) nd Indicators, which takes into account things such as manufacturing hours Oct. 22 House Price Index, August Monthly Chg. 166.1 nd worked, stock prices and consumer expectations, rose by 1.0% in Oct. 22 Leading Indicators, September Monthly Chg. 1.0% nd September. The sixth consecutive monthly increase has helped provide Oct. 22 EIA Natural Gas Report, Wkly. Chg. 18 bcf investors some reassurance that an economic recovery is in progress. Oct. 23rd Existing Home Sales, December SAAR* 5.57M

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, National Assocation of Realtors, National Association of Home Builders, The Conference Board. Conference Board.

MainStreet Advisors October 23, 2009 Financial Market Update [page 2]

Bond Market Update

After rising earlier, U.S. Treasuries ended the week mostly unchanged as concerns over next week’s $123 billion in government debt auctions and Yield Curves

the outlook for interest rates dampened the markets on Friday. 6.0% Weakness before auctions has become an enduring theme for the bond

market as investors sell securities with the expectation that increased 5.0% supply will drag down prices, all else equal. Comments from Federal

Reserve Bank of Philadelphia President Charles Plosser also weighed 4.0% on the markets. Mr. Plosser stated his instinct is that the time to raise rates will be well before many of his colleagues think. Futures on the 3.0% Chicago Board of Trade suggest a 58% chance the Fed will increase its target interest rate by April. At their most recent meeting, on September 2.0% 23, members of the Fed’s Open Market Committee held the benchmark rate in the range of 0.00% to 0.25%, and reported that economic 1.0% conditions will warrant keeping the rate low for an extended period of time. Meanwhile, the yield curve steepened to 2.48%, widening for the 0.0% fourth straight week. A steepening yield curve has historically preceded 2 yr 3 yr 5 yr 10 yr

improvement in the economic environment given the increase in liquidity U.S. Treasury Muni (Tax Equiv.)* to the financial system. Typically, this liquidity has helped support short- term borrowing and business activity. However, given the current Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin deleveraging crisis, the trickle-down effect to consumers and businesses may be longer than in the past. Issue 10.16.09 10.23.09 Change 3 month T-Bill 0.07% 0.06% -0.01% 2-Year Treasury 0.97% 0.97% 0.00% 5-Year Treasury 2.41% 2.39% -0.02% 10-Year Treasury 3.49% 3.44% -0.05% 30-Year Treasury 4.31% 4.24% -0.07%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 2/22/2008 6/24/2008 2/20/2009 6/22/2009 2/22/2008 6/24/2008 2/20/2009 6/22/2009 10/22/2007 10/22/2008 10/21/2009 10/22/2007 10/22/2008 10/21/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors October 23, 2009 Financial Market Update [page 3]

Stock Market Update

Despite a number upbeat of earnings announcements, stocks retreated two out of three days this week on mixed economic results. The Dow Weekly Change

Jones Industrial Average (DJIA) lost 23.73 points, or 0.24%, this week 0.0% while the broader S&P 500 lost 8.08 points, or 0.74%.

-0.5% Third quarter earnings announcements came out with generally better- than-expected results. On Monday, Apple Inc. (APPL) lifted stocks when -1.0% it reported a 47% increase in profits for the quarter, exceeding analysts’ forecast of a 25% increase; Apple gained 4.67% on the news. Among other companies that reported significantly better than expected results -1.5% were 3M Company (MMM), McDonalds Corp. (MCD), The Travelers Companies Inc. (TRV), and AT&T, Inc. (T). -2.0%

Technology stocks posted a weekly gain of 0.99%, the only S&P 500 -2.5% sector to post gains this week, on better than expected earnings from Microsoft (MSFT) and Amazon (AMZN). Microsoft gained 5.42% on -3.0% Friday when the company announced an 18% year over year decrease in profits. Separately, Microsoft officially launched Windows 7, the latest Large Cap Mid Cap Small Cap Int'l

version of its Windows operating system. Third quarter sales at Amazon Source: Standard & Poor's, Russell Investment Company, MSCI increased 28% year over year and the company announced that it expects fourth quarter sales to grow between 21% and 36% as compared to the fourth quarter 2008.

Health care stock posted the largest loss this week with a decline of 1.81%. Health care is now the second worst performing sector - behind Year to Date Change utilities – with a gain of 8.14% year-to-date. 35.0%

30.0%

25.0% Issue 10.16.09 10.23.09 Change

Dow Jones 9,995.91 9,972.18 -0.24% 20.0% S&P 500 1,087.68 1,079.60 -0.74% NASDAQ 2,156.80 2,154.47 -0.11% 15.0% Russell 1000 Growth 478.32 476.71 -0.34% S&P MidCap 400 707.87 701.33 -0.92% 10.0% Russell 2000 616.18 600.86 -2.49% 5.0% MSCI EAFE 1,602.32 1,600.60 -0.11% MSCI EM 975.79 961.45 -1.47% 0.0% MSCI Small Cap 149.37 148.25 -0.75% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors October 23, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

On Monday, crude oil snapped an eight session winning streak that culminated in a rise of 10%, and even traded over $80 per barrel. After a Weekly Change

modest pull back on Tuesday, oil futures rallied 3.5% on Wednesday to 3.0% close at $81.37. Crude oil managed a close over $80 per barrel on Friday, now up almost 16% month-to-date. Reports indicating that cooler temperatures may come early this year helped push natural gas prices to 2.0% a 6.7% rally on Tuesday. Natural gas now trades well over $5.00 Btu

compared to almost breaking below $3.50 in July. Gold continued to 1.0% remain near both 52-week and all-time highs, flirting with psychological resistance around the $1,060 at times during the week. 0.0% Forecasts for continued wet weather are pushing back the harvest of

corn and soybeans, which has helped drive up prices this week. The -1.0% U.S. Department of Agriculture has estimated the corn and soybean harvests are 17% and 30% complete, respectively, compared to five-year averages of 46% and 72% for this time of the year. -2.0%

At the close of last week, hedge fund Galleon was raided by federal DJ AIG Index NAREIT HFRX Equal Wtd Index

agents under allegations of insider trading that included not only the Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research founder of the firm, but also expanded to include arrests of executives at IBM, Intel and McKinzie & Co. All defendants have been released on bail, but a wave of investor redemptions is now forcing Galleon to close down, liquidate all holdings and return money to investors.

Year to Date Change

20.0%

16.0%

12.0% 1 Issue Previous Week Current Change Gold 1,051.50 1,056.40 0.47% 8.0% Crude Oil Futures 78.53 80.50 2.51% Copper 2.85 3.03 6.32% Sugar 23.91 22.95 -4.02% 4.0% HFRX Equal Wtd. Strat. Index 1,093.67 1,098.61 0.45% HFRX Equity Hedge Index 1,136.95 1,141.48 0.40% 0.0% HFRX Equity Market Neutral 976.46 984.97 0.87% HFRX Event Driven 1,331.80 1,333.31 0.11% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,418.11 1,417.51 -0.04% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 134.32 137.32 2.23% FTSE/NAREIT All REIT 103.90 102.91 -0.95% 1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors October 30, 2009 Financial Market Update [page 1]

Economic Update

The U.S. economy expanded at an annual rate of 3.5% from the second quarter to the third quarter, according to advance gross domestic product Economic Indicators, Quarterly Change

(GDP) estimates released Thursday by the Commerce Department. This 10.0% marked the first quarterly increase in GDP following four consecutive quarters of declines, suggesting the recession has technically ended. 8.0% Stimulus programs such as “Cash for Clunkers” and the first-time home 6.0% buyer’s tax credit helped encourage spending. Economic growth was 4.0% largely driven by increased personal consumption expenditures in 2.0% addition to private inventory investment, exports, and residential fixed investment, with a decelerating decline in nonresidential fixed 0.0% investment. -2.0%

-4.0% The Conference Board Consumer Confidence Index retreated further in October, down 5.7 points from September. The survey of 5,000 U.S. -6.0% households showed that perceptions of present economic conditions -8.0% have deteriorated amid ongoing softening in the jobs market. The survey Q3 08 Q4 08 Q1 09 Q2 09 also indicated that consumers’ expectations for the short-term economic outlook have weakened as well, with just 20.8% of respondents Real GDP Core CPI* Unemployment Rate

anticipating business conditions to strengthen in the next six months. Source: Bureau of Economic Analysis, Bureau of Labor Statistics Meanwhile, the Reuters/University of Michigan Surveys of Consumers *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index also showed that consumers remain concerned about their personal financial situations and have focused on paying down debts, suggesting Oct. 27th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.1% consumer spending will still be muted in the comings months. The th Oct. 27 S&P/Case-Shiller Composite 20 Index, August 146 Commerce Department reported Friday that consumer spending slipped Oct. 27th Consumer Confidence Index, October 47.7 0.5% in September while personal income remained unchanged. Oct. 27th State Street Investor Confidence Index, January 108.4 Personal savings, as a percentage of disposable personal income, ticked Oct. 28th MBA Purchase Applications Index, Wkly. Chg. -5.2% up slightly to 3.3% in September from 2.8% the previous month. Oct. 28th Durable Goods New Orders, Sept. Monthly Chg. -2.6% th 402,000 Home prices continued to improve for the seventh consecutive month in Oct. 28 New Home Sales, September th August, according to the S&P/Case-Shiller Home Price Indices. Both the Oct. 28 EIA Petroleum Status Report, Wkly. Chg. 0.8M Barrels th 10-City and 20-City Composite Indices comprised of the largest 10 and Oct. 29 GDP Price Index, Q3 Quarterly Change SAAR* 0.8% th 20 U.S. metropolitan areas posted monthly gains, while annual rates of Oct. 29 Real GDP, Q3 Quarterly Change SAAR* 3.5% decline eased. Separately, the U.S. Department of Commerce reported Oct. 29th Initial Jobless Claims ( Week ending 10/24) 530,000 this week that sales of new residential homes increased 3.6% to a Oct. 29th EIA Natural Gas Report, Wkly. Chg. 25 bcf seasonally adjusted annual rate of 402,000 in September—an inventory Oct. 30th Personal Income, September Monthly Chg. 0.0% of 7.5 months at the current sales rate. Oct. 30th Consumer Spending, September Monthly Chg. -0.5% th Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Oct. 30 Core PCE Price Index, September Monthly Chg. 0.1% Labor, The Wall Street Journal, The Conference Board, Reuters, Standard & Poor's. Oct. 30th Consumer Sentiment Index, October 70.6 MainStreet Advisors October 30, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week modestly positive after weakness earlier, as the 30-year bond posted a very strong return on Friday Yield Curves

benefiting from significant weakness in the U.S. stock markets. The yield 6.0% on the 10-year note dropped nearly 20 basis points from the week’s peak

of 3.58% on Monday, the highest level since late August. Monthly 5.0% rebalancing of bond indexes also added to gains on Friday, as many

portfolio managers buy bonds near the time of rebalancing. For the year, 4.0% Treasuries have dropped 3.1%, while corporate bonds have gained 18%, according to Merrill Lynch indexes. Meanwhile, CIT Group bond and 3.0% credit-default swap prices indicate that investors are betting the commercial lender will file for bankruptcy after the deadline for a debt 2.0% exchange expired overnight, according to Bloomberg. The company, which lost $5 billion over the past two years and failed to get a second 1.0% round of government funding in July, sought to avert bankruptcy by asking bondholders to agree to a debt exchange or vote for a pre- 0.0% packaged bankruptcy. If the debt swap fails, CIT plans to file for 2 yr 3 yr 5 yr 10 yr

bankruptcy before $800 million of bonds mature next week according to U.S. Treasury Muni (Tax Equiv.)* people familiar with the situation. A pre-packaged bankruptcy could have the company emerge from insolvency in as little as 60 days. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 10.23.09 10.30.09 Change 3 month T-Bill 0.06% 0.05% -0.01% 2-Year Treasury 0.97% 0.90% -0.07% 5-Year Treasury 2.39% 2.31% -0.08% 10-Year Treasury 3.44% 3.41% -0.03% 30-Year Treasury 4.24% 4.19% -0.05%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 7/1/2008 7/1/2008 2/29/2008 2/27/2009 6/29/2009 2/29/2008 2/27/2009 6/29/2009 10/29/2008 10/29/2007 10/28/2009 10/29/2008 10/29/2007 10/28/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors October 30, 2009 Financial Market Update [page 3]

Stock Market Update

Equities slid on Friday to end lower for the second week in a row as investors questioned the strength of the economic recovery. The Dow Weekly Change

Jones Industrial Average drop 259.45 points or 2.60% to end the week at 0.0% 9,712.73. The broader S&P 500 fell to 1,036.18, losing 43.43 points, or 4.02% on the week. The DJIA finished October just above even, adding -1.0% 0.45 points, while the S&P 500 ended the month down 20.89 points, a loss of 1.98%. -2.0%

The CBOE Volatility Index (also known as the VIX), jumped on Friday to -3.0% 30.06 its highest point since early July. The VIX is based on S&P 500 -4.0% options contracts that on the Chicago Board Options Exchange it is

viewed an in indicator of the “fear” inherent in equity markets. -5.0%

Apollo Group Inc (APOL), the largest U.S. for-profit education company, -6.0% announced earnings that exceeded analyst expectations on Wednesday; however, the company also announced that the Securities and Exchange -7.0% Commission (SEC) was looking into the company’s revenue recognition policies. The stock lost 17.61% on the news. Large Cap Mid Cap Small Cap Int'l

Source: Standard & Poor's, Russell Investment Company, MSCI On Thursday ExxonMobil (XOM), the largest U.S. oil producer, reported a 65% decline in third-quarter profit from a year ago. The decline was blamed on lower fuel demand due to the slumping economy. The decline was widely expected and the stock ended the day little changed, but underperformed Thursday’s broad market rally.

Year to Date Change

30.0%

25.0%

Issue 10.23.09 10.30.09 Change 20.0% Dow Jones 9,972.18 9,712.73 -2.60% S&P 500 1,079.60 1,036.18 -4.02% 15.0% NASDAQ 2,154.47 1,037.39 -51.85% Russell 1000 Growth 476.71 458.73 -3.77% 10.0% S&P MidCap 400 701.33 659.15 -6.01% Russell 2000 600.86 562.77 -6.34% 5.0% MSCI EAFE 1,600.60 1,548.82 -3.23% MSCI EM 961.45 921.35 -4.17% 0.0% MSCI Small Cap 148.25 141.83 -4.33% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors October 30, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

The third quarter U.S. GDP report had a significant impact on crude oil and gold this week, while wet weather across America's heartland Weekly Change

continued to delay the fall harvest. After strong gains since early 0.0% September, gold futures began to pull back from record highs and appear to be heading lower. In advance of the GDP report, investors had been selling gold which drove the price lower, but gold rallied 1.6%, or $16, on -1.0% Wednesday following the better-than-expected report. By Friday most of

the larger than normal intraday swings resulted in little change for the -2.0% week, but the metal is up 3.8% for the month.

Crude oil continued a decline from last week, with volatility up -3.0% substantially throughout the week. Historically, daily price changes in oil

have been about $1 per day, but this week saw intraday swings -4.0% approaching $4 per barrel—nearly a 5% swing. Crude oil climbed 9% in the month of October. -5.0% Wet Midwestern weather continues to delay the fall harvest, and grain prices reflect the potential of a much smaller crop. Since the beginning DJ AIG Index NAREIT HFRX Equal Wtd Index

of October, prices of soybeans and corn have risen 11% and 13% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research respectively. Grain brokers are expecting prices to come down once the harvest begins, as is the usual fall pattern. Separately, news that China is expected to lift its ban on imported pork from the U.S. caused lean hogs rallied to a three-month high this week.

Chicago-based hedge fund Citadel, which posted declines of around Year to Date Change 50% in 2008, halted all redemptions at the end of '08 in the face of more than $1 billion in investor redemption requests. Earlier in October, 16.0% Citadel allowed investors to withdraw up to $250 million on a pro-rata basis, and have just this week overturned the moratorium on investor redemptions. According to a recent Citadel newsletter, its two biggest 12.0% funds have appreciated nearly 57% year-to-date.

1 Issue Previous Week Current Change 8.0% Gold 1,055.00 1,045.80 -0.87% Crude Oil Futures 79.61 76.93 -3.37% Copper 302.10 295.60 -2.15% 4.0% Sugar 23.12 22.81 -1.34% HFRX Equal Wtd. Strat. Index 1,098.61 1,092.58 -0.55% HFRX Equity Hedge Index 1,141.48 1,100.97 -3.55% 0.0% HFRX Equity Market Neutral 984.97 987.21 0.23% HFRX Event Driven 1,333.31 1,320.35 -0.97% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,417.51 1,419.98 0.17% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 137.32 131.86 -3.97% FTSE/NAREIT All REIT 102.91 100.11 -2.72%

1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors November 6, 2009 Financial Market Update [page 1]

Economic Update

Employment data released early Friday showed a larger-than-expected increase in the unemployment rate. The forecast for the rate, as Economic Indicators, Quarterly Change

predicted by economists, was an increase to 9.9% for the month of 10.0% October. However, it jumped by 0.4 percentage points from 9.8% in September to a 26-year high of 10.2%. Payrolls likewise posted worse 8.0% than predicted results for month of October. The actual drop of 190,000 6.0% jobs exceeded the 175,000 decline anticipated by economists. Though 4.0% this loss in payroll employment is significant, it is a large improvement 2.0% from the monthly job cuts in January 2009, when it peaked at 741,000. The one bright spot in the payroll survey was a 34,000 gain in temporary 0.0% help services, which is often seen as a leading indicator for hiring -2.0% intentions by businesses. This is the third month in a row that this -4.0% component has risen. -6.0%

Cuts in labor costs due to the recession are allowing businesses to see -8.0% substantial gains in productivity. The third quarter productivity leap of an Q3 08 Q4 08 Q1 09 Q2 09 annual 9.5% rate resulted from both greater output and fewer hours worked. Output increased at an annual 4.0% rate in the quarter and Real GDP Core CPI* Unemployment Rate

hours worked decreased at an annual 5.0% rate. Large gains in Source: Bureau of Economic Analysis, Bureau of Labor Statistics productivity often occur at the end of recessions and the beginning of *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index recoveries. According to the Wall Street Journal, typically productivity grows first, then employment rises, and finally wages increase. Nov. 2nd ISM Mfg. Index - Level, October 55.7 Nov. 2nd Construction Spending, September Monthly Chg. 0.8% On Wednesday the Federal Open Market Committee (FOMC) reported Nov. 2nd Pending Home Sales, September Monthly Chg. 6.1% that economic activity has picked up according to new information they Nov. 3rd Domestic Motor Vehicle Sales, October 7.9M received since they last met in September. Although the FOMC’s report Nov. 3rd ICSC-Goldman Same Store Sales, Wkly. Chg. 0.1% seemed a bit more positive about the market than their September rd Factory Orders, September Monthly Chg. 0.9% announcement, they also reported that economic activity is likely to Nov. 3 th -1.8% remain weak for a time, which suggests that the recovery will be very Nov. 4 MBA Purchase Applications Index, Wkly. Chg. th gradual. Nov. 4 Announced Layoffs, October 55,679 Nov. 4th EIA Petroleum Status Report, Wkly. Chg. -4.0M Barrels th The Institute for Supply Management (ISM) Purchasing manager Index Nov. 4 ISM Non-Mfg. Index, October 50.6 (PMI) continued to accelerate in October, as it increased more than 3 Nov. 5th Initial Jobless Claims ( Week ending 10/31) 512,000 percentage points to 55.7%. Readings above 50% indicate expansion in Nov. 5th EIA Natural Gas Report, Wkly. Chg. 29 bcf the factory sector and the index has been over 50% for the past three Nov. 6th Non-farm Payrolls, October Monthly Chg. -190,000 months. Nov. 6th Unemployment Rate, October 10.2% th Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Nov. 6 Wholesale Inventories, September Monthly Chg. -0.9% Labor, The Wall Street Journal, The Conference Board, Reuters, Standard & Poor's. Nov. 6th Consumer Credit, September Monthly Change -14.8B MainStreet Advisors November 6, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week lower, with a rally in the fixed income markets wilting on Friday as investors began to focus on next week’s $81 Yield Curves

billion in government bond auctions. The government is scheduled to 6.0% sell $40 billion of three-year notes, $25 billion of 10-year debt and $16

billion of 30-year bonds next week—all record amounts, according to 5.0% Bloomberg. Bond prices rallied earlier after a weaker-than-expected jobs

report showed the unemployment rate rose above 10% for the first time 4.0% in 26 years triggering investors to seek the safety of low-risk government debt. The spread, or difference in yields, between 2- and ten-year notes 3.0% steepened to 263 basis points, the most since July. Many analysts feel the yield curve may widen even further in what’s known as a “bear 2.0% steepener” wherein long-term yields increase at a faster rate than short- term government debt. A steepening yield curve often indicates that 1.0% market participants expect positive economic growth and accelerating inflation expectations. Meanwhile, the Fed signaled that a return to 0.0% economic growth alone will not warrant higher interest rates, and will 2 yr 3 yr 5 yr 10 yr

focus more on the labor market and expected inflation conditions. The U.S. Treasury Muni (Tax Equiv.)* comments prompted traders to reduce odds for an increase in borrowing costs with futures on the Chicago Board of Trade indicating a small Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin chance that policy makers will increase the target lending rate by their January meeting. Issue 10.30.09 11.6.09 Change 3 month T-Bill 0.05% 0.04% -0.01% 2-Year Treasury 0.90% 0.90% 0.00% 5-Year Treasury 2.31% 2.35% 0.04% 10-Year Treasury 3.41% 3.57% 0.16% 30-Year Treasury 4.19% 4.41% 0.22%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 3/7/2008 7/8/2008 3/5/2009 7/6/2009 3/7/2008 7/8/2008 3/5/2009 7/6/2009 11/5/2007 11/5/2008 11/3/2009 11/5/2007 11/5/2008 11/3/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors November 6, 2009 Financial Market Update [page 3]

Stock Market Update

The Dow Jones Industrial Average (DJIA) jumped back above the 10,000 mark on Thursday when it rallied 203.8 points or 2.1% and finished the Weekly Change

day at 10,006. This was the largest rise in daily points since July 15. 4.0% Cisco Systems, Inc. (CSCO) was a large contributor to the point jump when it reported stronger-than-forecasted fiscal first-quarter profit late Wednesday. The DJIA remained above the 10,000 point threshold for 3.0% the remainder of the week closing at 10,023. It gained 310.69 points or 3.2% on the week. 2.0%

The S&P 500 was also in the green this week posting gains on 4 of the 5 days. Opening the week at 1,036 and closing at 1,069, it gained 33.2 1.0% points or 3.2% on the week. All sectors of the S&P 500 were positive for the week led by industrials with a 6.29% increase, followed by the 0.0% consumer discretionary sector with a 4.77% increase and the materials sector with a 4.6% increase. -1.0% The stock market, although hurt by economic data in the employment field, still posted slight increases on Friday. It was helped along largely Large Cap Mid Cap Small Cap Int'l

by General Electric Co. (GE) which increased 6.24% on Friday after Source: Standard & Poor's, Russell Investment Company, MSCI being upgraded by analysts at both Sanford C. Bernstein and Oppenheimer to an "outperform" rating.

In Warren Buffett’s largest acquisition, Berkshire Hathaway said early Tuesday that it would spend $44 billion to purchase the stock of railroad operator Burlington Northern Santa Fe (BNI) that it did not already own. Year to Date Change This purchase is a sign that Chairman Warren Buffet believes the U.S. economy is on the road to recovery. 30.0%

25.0%

Issue 10.30.09 11.6.09 Change 20.0% Dow Jones 9,712.73 10,023.19 3.20% S&P 500 1,036.18 1,069.30 3.20% 15.0% NASDAQ 1,037.39 2,112.44 103.63% Russell 1000 Growth 458.73 474.96 3.54% 10.0% S&P MidCap 400 659.15 681.35 3.37% Russell 2000 562.77 580.33 3.12% 5.0% MSCI EAFE 1,548.82 1,545.48 -0.22% MSCI EM 921.35 930.09 0.95% 0.0% MSCI Small Cap 141.83 142.79 0.68% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors November 6, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Gold remains the focus for commodities this week, while oil is little changed. Early in the week, gold, as represented by the most active Weekly Change

front month futures contract, December, had several sharp intraday 0.3% moves of $15-$25. Early in the week, gold rallied to the highest level since early October on concern that the dollar might hit new lows against 0.2% other currencies. The announcement that the US Federal Reserve would be keeping short term rates historically low, and potentially risking higher 0.1% inflation down the road is an apparent reason for gold's rise. Contradicting these announcements was Friday's US unemployment at a 0.0% higher than expected 10.2%, with more people out of work the threat for -0.1% near term inflation is not considered likely. On Friday, both the

November and December gold futures contracts traded over $1,100 for a -0.2% time, and the December contract closed at $1,095.70. -0.3% The big news in oil this week was the announcement by the International Energy Association's World Energy Outlook, to be released next week, is -0.4% expected to indicate a significant world wide demand for oil. Exact details will be available next week, but according to a report in the Wall DJ AIG Index NAREIT HFRX Equal Wtd Index

St. Journal, a source at the IEA has indicate the upcoming report will Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research include the second yearly downward revision to world oil demand in a row.

In a sign of improvement in credit conditions for the real estate market, it was announced that the REIT mall operator Developers Diversified Realty (DDR) had obtained a loan for $400 million from Goldman Sachs Year to Date Change and was intending to securitize this loan into a Commercial Backed Mortgage Security, CMBS, and sell much of it to the Federal Reserve 16.0% under the Term Asset Lending Facility. Though the Fed has not officially approved the transaction, news of such a large single issuer CMBS offering was cheered by commercial real estate investors. 12.0%

1 Issue Previous Week Current Change 8.0% Gold 1,045.80 1,096.30 4.83% Crude Oil Futures 76.93 77.62 0.90% Copper 295.60 295.30 -0.10% 4.0% Sugar 22.81 22.43 -1.67% HFRX Equal Wtd. Strat. Index 1,092.58 1,094.48 0.17% HFRX Equity Hedge Index 1,100.97 1,118.67 1.61% 0.0% HFRX Equity Market Neutral 987.21 984.55 -0.27% HFRX Event Driven 1,320.35 1,322.61 0.17% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,419.98 1,420.76 0.05% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 131.86 131.42 -0.34% FTSE/NAREIT All REIT 100.11 99.74 -0.37%

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors November 13, 2009 Financial Market Update [page 1]

Economic Update

President Barack Obama spoke in Tokyo on Friday, stressing the importance for the global economy to become less dependent on the Economic Indicators, Quarterly Change

U.S. consumer for growth. The message that the world economy needs 10.0% to rebalance echoed conclusions presented by Federal Reserve Chairman Ben Bernanke in mid-October. This concept is a likely topic at 8.0% the upcoming Asia-Pacific Economic Cooperation forum and the 6.0% Association of Southeast Asian Nations meeting this weekend. 4.0%

2.0% The U.S. international trade gap widened in September as exports increased by $3.7 billion and imports grew by $9.3 billion, according to 0.0% data released by the U.S. Department of Commerce on Friday. The -2.0% $36.47 billion deficit marked an 18% increase from August—the greatest -4.0% monthly gain in more than ten years and the highest level in ten months. The higher levels of both export and import activity suggest that global -6.0% trade may be recovering. The Labor Department reported that the U.S. -8.0% Import Price Index advanced 0.7% in October amid a 1.8% rise in fuel Q3 08 Q4 08 Q1 09 Q2 09 prices. Overall import prices have risen seven of the past eight months. Meanwhile, export prices increased 0.3% for the month after declining Real GDP Core CPI* Unemployment Rate

0.2% in September. Source: Bureau of Economic Analysis, Bureau of Labor Statistics *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index Data released by Eurostat this week indicated that the Euro-zone economy advanced for the first time since the first quarter in 2008. Nov. 10th ICSC-Goldman Same Store Sales, Wkly. Chg. -0.1% Although gross domestic product grew 0.4% in the third quarter, it missed th Nov. 12 MBA Purchase Applications Index, Wkly. Chg. -11.7% consensus estimates due to an unexpectedly weak quarter in France. Nov. 12th Initial Jobless Claims ( Week ending 11/7) 502,000 Nov. 12th EIA Petroleum Status Report, Wkly. Chg. 1.8M Barrels U.S. consumer sentiment retreated further in early November, as shown Nov. 13th International Trade Balance Level, September -36.5B by the Reuters/University of Michigan Surveys of Consumers. The th Import Prices, October Monthly Chg. 0.7% survey indicated continued concerns surrounding softening in the labor Nov. 13 th 0.3% market and a perceived dismal outlook for job prospects. The 66.0- Nov. 13 Export Prices, October Monthly Chg. th reading represented the weakest level of consumer sentiment since Nov. 13 Consumer Sentiment Index, November 66.0 th August, a signal that consumer spending is likely to remain muted in the Nov. 13 EIA Natural Gas Report, Wkly. Chg. 25 bcf coming months. Reuters noted that the survey occurred prior to the announcement of the latest employment report which suggests a possibility that sentiment will continue to slide further. In addition, the survey showed that the one-year outlook reached the lowest level since April.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Wall Street Journal, Bloomberg, Reuters, Eurostat. MainStreet Advisors November 13, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week modestly higher, supported by comments from Chicago Federal Reserve Bank President Charles Evans Yield Curves

that suggested interest rates will remain low for the foreseeable future. 6.0% “Unless there are unusual developments, I think the policy is going to be

highly accommodative, as it is now, for quite some period of time,” Evans 5.0% told reporters after a recent speech in Paris. The comments prompted

traders to again reduce odds for an increase in borrowing costs with 4.0% futures on the Chicago Board of Trade indicating a small chance that policy makers will increase the target lending rate by their January 3.0% meeting. Last week the central bank reiterated its intentions to keep interest rates near zero for an extended period. Meanwhile, the 2.0% sustainability of the U.S. economic recovery by the private sector after government stimulus programs ends remains in question, according to 1.0% Bill Gross of Pimco. Mortgage and high yield bonds are “overvalued,” making investment grade and emerging market debt attractive, Gross 0.0% said in a recent interview. Below average economic growth may prompt 2 yr 3 yr 5 yr 10 yr

yield spreads on high yield debt to increase. High yield bonds have U.S. Treasury Muni (Tax Equiv.)* returned a record 52% this year, compared with 19% for investment grade debt and a loss of 2.5% for Treasuries, according to Merrill Lynch. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 11.6.09 11.13.09 Change 3 month T-Bill 0.04% 0.06% 0.02% 2-Year Treasury 0.90% 0.82% -0.08% 5-Year Treasury 2.35% 2.28% -0.07% 10-Year Treasury 3.57% 3.43% -0.14% 30-Year Treasury 4.41% 4.36% -0.05%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 3/14/2008 7/15/2008 3/12/2009 7/13/2009 3/14/2008 7/15/2008 3/12/2009 7/13/2009 11/12/2007 11/12/2008 11/10/2009 11/12/2007 11/12/2008 11/10/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors November 13, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks rose for a second straight week with the Dow Jones Industrial Average (DJIA) closing at 10,270.47 on Friday for a gain of 247.05 points Weekly Change

or 2.46%. The broader S&P 500 gained 2.26% to close the week at 3.0% 1,093.48.

2.5% Disney (DIS) reported third quarter profit 18 percent higher-than- expected by analysts on higher fees for its ESPN channels, according to 2.0% Bloomberg. Disney gained 4.5% on the news. In positive retail news, Abercrombie & Fitch (ANF) and JC Penny (JCP) reported better-than- expected results and raised their 2010 outlooks; the stocks gained 1.5% 10.66% and 6.19%, respectively, on the news. 1.0% With earnings season winding down, Bloomberg reports that over 80% of S&P 500 companies reporting third quarter results have exceeded 0.5% analysts’ expectations, the largest percentage since Bloomberg began tracking quarterly results in 1993. 0.0%

Small cap stocks, as measured by the S&P 600, have gained 69% since Large Cap Mid Cap Small Cap Int'l

the market’s bottom and are now trading at 34 times trailing twelve month Source: Standard & Poor's, Russell Investment Company, MSCI earnings, the highest level in 13 years, according to Bloomberg. The large cap S&P 500 index has gained 61% and trades at approximately 22 times trailing twelve month earnings.

Amid renewed confidence that the Federal Reserve would keep interest rates low for a prolonged period of time, Bloomberg reported that EPFR Year to Date Change Global’s fund flow report found investors poured the most money into equity mutual funds in 11 months. According to the report, a total of $10 35.0% billion was added to global equity funds in the week ended November 11. 30.0%

25.0% Issue 11.6.09 11.13.09 Change

Dow Jones 10,023.19 10,270.47 2.47% 20.0% S&P 500 1,069.30 1,093.48 2.26% NASDAQ 2,112.44 2,167.88 2.62% 15.0% Russell 1000 Growth 474.96 486.63 2.46% 10.0% S&P MidCap 400 681.35 698.26 2.48% Russell 2000 580.33 586.28 1.03% 5.0% MSCI EAFE 1,545.48 1,581.11 2.31% MSCI EM 930.09 958.88 3.10% 0.0% MSCI Small Cap 142.79 144.77 1.38% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors November 13, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Despite a story in the Wall Street Journal depicting the amount of U.S. dollar buying by Russia, Thailand, South Korea, and the Philippines, the Weekly Change

impact on the dollar was slight, but gold declined 1% on the news. A 3.0% surprising jump in the monthly trade deficit continued to support the year long rally in gold and commodities. Comments by U.S. Treasury Timothy 2.5% Geithner about the country's commitment to a "strong dollar" had little impact on gold, and it remained over $1,100 per ounce for most of the 2.0% week. On Thursday, gold futures prices hit a contract record high of $1,123.40 per ounce for the most actively traded contract. 1.5% For several consecutive weeks, oil futures have been mired in the upper $70s and have not been able to make it over $80 bbl. Despite news that 1.0% Europe posted GDP growth for the first time since last year, oil prices failed to advance over this key level on the perception of higher demand. 0.5% A report by the U.S. Energy Information Agency released Thursday showed that stockpiles of crude oil rose by 1.76 million barrels, 0.0% compared to a consensus forecast of 200,000. In addition, the report indicated that the amount petroleum distillates like diesel fuel and heating DJ AIG Index NAREIT HFRX Equal Wtd Index

oil actually built up by 349,000 barrels when normally this time of year Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research stockpiles begin to draw down.

Another legendary hedge fund manager has retired. John Horseman has announced that he will retire from managing the $3.6 billion Horseman Fund, which has declined about 23% through October, significantly behind its benchmark. Year to Date Change

20.0%

16.0%

12.0% 1 Issue Previous Week Current Change Gold 1,096.30 1,119.40 2.11% 8.0% Crude Oil Futures 77.62 76.40 -1.57% Copper 295.30 299.65 1.47% Sugar 22.43 22.72 1.29% 4.0% HFRX Equal Wtd. Strat. Index 1,094.48 1,097.20 0.25% HFRX Equity Hedge Index 1,118.67 1,133.66 1.34% 0.0% HFRX Equity Market Neutral 984.55 988.05 0.36% HFRX Event Driven 1,322.61 1,330.89 0.63% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,420.76 1,423.68 0.21% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 131.42 131.68 0.19% FTSE/NAREIT All REIT 99.74 102.38 2.65%

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MainStreet Advisors November 20, 2009 Financial Market Update [page 1]

Economic Update

The Conference Board Leading Economic Index advanced 0.3% in October, marking the sixth consecutive month of gains. The Conference Economic Indicators, Quarterly Change

Board noted that the gains are “broad-based” and suggest that economic 10.0% activity will continue to improve. Six of the ten composite indicators were positive for the month, led by the interest rate spread and average 8.0% weekly initial unemployment claims. The U.S. Department of Labor 6.0% announced Thursday that initial claims for unemployment insurance for 4.0% the week ending November 14 remained unchanged at 505,000. 2.0% Separately, the Labor Department reported that 29 states and Washington D.C. reported increases in the unemployment rate over the 0.0% month. However, the net change for regional and state unemployment -2.0% rates remained essentially unchanged last month. -4.0%

Builder confidence remained flat at a low level in November, as shown by -6.0% the National Association of Home Builders (NAHB)/Wells Fargo Housing -8.0% Market Index (HMI). The index also indicated that expectations for sales Q4 08 Q1 09 Q2 09 Q3 09 activity to strengthen in the coming months increased slightly. NAHB Chief Economist David Crowe noted that this report reflects the Real GDP Core CPI* Unemployment Rate

anticipation of the home-buyer tax credit expiring. Additionally, NAHB Source: Bureau of Economic Analysis, Bureau of Labor Statistics reported that the survey showed that one-third of respondents have lost *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index sales following low appraisal values. The NAHB also announced that housing affordability remained near the highest level in the third quarter. Nov. 16th Retail Sales, October Monthly Chg. 1.4% The NAHB/Wells Fargo Housing Opportunity Index indicated that 70.1% th Nov. 16 Empire State Mfg Survey, November 23.5 of homes sold in the quarter were affordable to families that earned the Nov. 16th Business Inventories, September Monthly Chg. -0.4% national median income of $64,000. Nov. 17th ICSC-Goldman Same Store Sales, Wkly. Chg. -0.1% Nov. 17th Producer Price Index, October Monthly Chg. 0.3% The Department of Labor reported that the Consumer Price Index (CPI) th Frgn Dmnd for LT US Securities, September 40.7B increased 0.3% in October—down 0.2% in the last year, seasonally Nov. 17 th 0.1% adjusted. CPI excluding food and energy prices rose 0.2% for the month Nov. 17 Industrial Production, October Monthly Chg. th and prices are 1.7% higher than one year ago. The Producer Price Index Nov. 18 MBA Purchase Applications Index, Wkly. Chg. -4.7% th for finished goods also climbed 0.3% in October on a seasonally Nov. 18 Consumer Price Index, October Monthly Chg. 0.3% th adjusted basis. Finished goods excluding food and energy declined Nov. 18 Housing Starts, October 529,000 0.6% last month, while prices rose 0.3% for intermediate goods and 5.4% Nov. 18th EIA Petroleum Status Report, Wkly. Chg. -0.9M Barrels for crude goods. Nov. 19th Initial Jobless Claims ( Week ending 11/14) 505,000 Nov. 19th Leading Indicators, October Monthly Chg. 0.3% Nov. 19th EIA Natural Gas Report, Wkly. Chg. 20 bcf th Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Nov. 19 Philidelphia Fed Survey, November 16.7 Labor, The Conference Board, National Association of Home Builders. MainStreet Advisors November 20, 2009 Financial Market Update [page 2]

Bond Market Update

Among a plethora of important economic releases, U.S. Treasury bonds were mixed for the week. Releases of the Consumer Price Index (CPI) Yield Curves

and Producer Price Index (PPI) often cause excess volatility in the bond 6.0% markets, but as these two releases were fairly close to consensus

estimates, and continue to show benign inflation, bonds were little 5.0% changed on these results. For the most part, the short-end of the yield

curve rallied and the long-end stayed about the same. Most of the 4.0% interest happened in the shortest part of the yield curve on Thursday. Shortly following Treasury Secretary Geithner's appearance at 3.0% congressional hearings, it was observed that yields on some T-bills actually went negative for part of the trading session. The last time T- 2.0% bills had negative yields was back in the fall of 2008, at the time of the Lehman Brothers collapse and bankruptcy. This time, the negative 1.0% yields are thought to be more the result of a lack of supply of the shortest maturity Treasuries. General Electric (GE) made history as the first U.S. 0.0% company to issue an Islamic bond, called a sukuk, for $500 million. 2 yr 3 yr 5 yr 10 yr

Given how successful this offer was, GE is expected to use this market U.S. Treasury Muni (Tax Equiv.)* as a growing source of capital. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 11.13.09 11.20.09 Change 3 month T-Bill 0.06% 0.02% -0.04% 2-Year Treasury 0.82% 0.75% -0.07% 5-Year Treasury 2.28% 2.20% -0.08% 10-Year Treasury 3.43% 3.36% -0.07% 30-Year Treasury 4.36% 4.30% -0.06%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 3/14/2008 7/15/2008 3/12/2009 7/13/2009 3/14/2008 7/15/2008 3/12/2009 7/13/2009 11/12/2007 11/12/2008 11/10/2009 11/12/2007 11/12/2008 11/10/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors November 20, 2009 Financial Market Update [page 3]

Stock Market Update

After closing at a 13-month high on Tuesday, stocks sold off to end the week mixed relative to last week. The Dow Jones Industrial Average Weekly Change

(DJIA) gained 47.69 points or 0.46% to end the week at 10,318.16. 0.0% However, the broader S&P 500 lost 2.1 points, or 0.19% to close at 1,091.38. Stocks saw weakness from technology companies and -0.2% general concern about the state of the economic recovery loomed over -0.4% stocks when the weekly change in jobless claims was unchanged since -0.6% last week and housing starts were weaker than expected. -0.8%

Stocks were in positive territory until Thursday when the DJIA traded -1.0% down by as much as 167 points. The weakest Dow component was Intel (INTC), which lost 4.08% on Thursday when a Bank of America Merrill -1.2% Lynch analyst downgraded eight chip makers, including Intel, according -1.4% to the Wall Street Journal. In more technology company weakness, PC -1.6% maker Dell (DELL) dropped nearly 10% on Friday after announcing that its revenue was down 15% year over year, falling short of analyst -1.8% expectations. The tech-heavy NASDAQ Composite Index lost 1.01% this week, closing at 2,146.04. Large Cap Mid Cap Small Cap Int'l

Source: Standard & Poor's, Russell Investment Company, MSCI S&P 500 sectors ended the week mixed with health care and materials posting gains of 2.05% and 1.34%, respectively. The sector laggards were consumer discretionary and energy stocks, losing 1.14% and 1.17%, respectively.

International equities sold off this week amid concerns that the European Year to Date Change Central Bank would phase out its economic stimulus measures, thus threatening the global economic recovery, according to Bloomberg. In 30.0% Europe, the DJ Euro Stoxx 50 Index lost 1.73% while heavier losses were seen in Japan as the NIKKEI 225 lost 2.79% on the week. 25.0%

Issue 11.13.09 11.20.09 Change 20.0% Dow Jones 10,270.47 10,318.16 0.46% S&P 500 1,093.48 1,091.38 -0.19% 15.0% NASDAQ 2,167.88 2,146.04 -1.01% Russell 1000 Growth 486.63 484.97 -0.34% 10.0% S&P MidCap 400 698.26 687.54 -1.54% Russell 2000 586.28 584.68 -0.27% 5.0% MSCI EAFE 1,581.11 1,568.37 -0.81% MSCI EM 958.88 968.46 1.00% 0.0% MSCI Small Cap 144.77 143.37 -0.97% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors November 20, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Alternative investors who focus on commodities like oil and precious metals have seen a strong inverse relationship between these and the Weekly Change

U.S. dollar began to weaken. When a commodity is priced in dollars and 3.0% the value of the dollar falls in foreign currency markets, the price of that commodity rises in dollar terms. This week, despite a reversal in dollar 2.5% weakness, in fact it has failed to breach below the critical level of 75 on the JPMorgan U.S. Dollar Index, gold continues to make new highs. By 2.0% week's end gold, as measured by the December futures contract, had closed at $1,146.80 per ounce and early in the week spot gold traded briefly over $1,150 per ounce. For the dollar to rise, and the price of gold 1.5% to also rise, the volume of gold purchased must be large enough to offset the currency effect. However, crude oil seemed to trade more in line with 1.0% the foreign exchange market, declining modestly by week's end despite making a run for $81per barrel in conjunction with an announcement by 0.5% the U.S. Energy Information Administration that gasoline stock piles fell by 1.8 million barrels when the consensus expectation was for a build of 0.0% 100,000 barrels. DJ AIG Index NAREIT HFRX Equal Wtd Index

As the investigation into Galleon insider trading case continues, it was Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research reported that one defendant in the case received an envelope filled with cash, reminiscent of the Boesky scandal in the 1980s. In another sign that private equity is slowly coming back, it was announced that Blackstone Group acquired 60% of Birds Eye Foods for $1.3 billion.

Year to Date Change

20.0%

16.0%

12.0% 1 Issue Previous Week Current Change Gold 1,119.40 1,150.70 2.80% 8.0% Crude Oil Futures 76.40 76.72 0.42% Copper 299.65 314.95 5.11% Sugar 22.72 22.47 -1.10% 4.0% HFRX Equal Wtd. Strat. Index 1,097.20 1,102.65 0.50% HFRX Equity Hedge Index 1,133.66 1,144.12 0.92% 0.0% HFRX Equity Market Neutral 988.05 996.50 0.86% HFRX Event Driven 1,330.89 1,337.49 0.50% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,423.68 1,429.00 0.37% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 131.68 134.90 2.45% FTSE/NAREIT All REIT 102.38 103.94 1.52%

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MainStreet Advisors November 25, 2009 Financial Market Update [page 1]

Economic Update

Economic data released this week continued to suggest that the economy is recovering. The U.S. Department of Commerce reported that Economic Indicators, Quarterly Change

personal consumption expenditures (PCE) climbed 0.7% in October 10.0% while personal income increased 0.2%. The report indicated that the personal savings rate, as a percentage of disposable personal income, 8.0% declined to 4.4% from 4.6% in September. While consumer spending is 6.0% widely expected to remain mild in the coming months, gauges of 4.0% consumer confidence have indicated slight improvements in November. 2.0% The Conference Board Consumer Confidence Index increased 0.8 points to a reading of 49.5 this month. Separately, the Reuters/University of 0.0% Michigan Surveys of Consumers showed that consumer sentiment -2.0% increased modestly late-November, largely as a result of ongoing -4.0% concerns about personal financial situations. -6.0%

Initial claims for unemployment benefits dropped to 466,000 for the week -8.0% ending November 21—35,000 less than the previous two weeks. This Q4 08 Q1 09 Q2 09 Q3 09 signals that payroll losses, reported by the U.S. Department of Labor next week, may have continued to taper. Real GDP Core CPI* Unemployment Rate

Source: Bureau of Economic Analysis, Bureau of Labor Statistics The Commerce Department reported revised estimates of third quarter *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index gross domestic product this week. The revision indicated that the economy expanded at a 2.8% in the quarter, matching consensus Nov. 23rd Existing Home Sales, October SAAR* 6.10M estimates. Several factors contributed to the downward revisions, led by th Nov. 24 ICSC-Goldman Same Store Sales, Wkly. Chg. 0.0% lower estimates for PCE. Nov. 24th Real GDP, Q3 Quarterly Change SAAR* 2.8% Nov. 24th GDP Price Index, Q3 Quarterly Change SAAR* 0.5% Activity in the housing market improved further in October, as shown by Nov. 24th After-tax Corporate Profits, Q3 Annual Change -7.2% new and existing home sales. The National Association of Realtors th S&P/Case-Shiller Composite 20 Index, December 146.5 (NAR) reported that sales of existing single-family homes soared to a Nov. 24 th 49.5 seasonally adjusted annual rate of 6.10 million units, 10.1% above Nov. 24 Consumer Confidence Index, November th September. Sales are now at the highest level since February 2007. Nov. 24 State Street Investor Confidence Index, November 100.8 th The Commerce Department announced that new home sales surged Nov. 24 MBA Purchase Applications Index, Wkly. Chg. 9.6% th 6.1% in October to a seasonally adjusted annual rate of 430,000—a Nov. 24 Durable Goods New Orders, Oct. Monthly Chg. -0.6% 5.1% increase from October 2008. Meanwhile, home prices have Nov. 25th Personal Income, October Monthly Chg. 0.2% continued to improve. The Standard & Poor’s/Case-Shiller Home Price Nov. 25th Consumer Spending, October Monthly Chg. 0.7% Indices indicated that the U.S. National Home Price Index posted its Nov. 25th Initial Jobless Claims ( Week ending 11/21) 466,000 second consecutive quarterly increase in the third quarter. Nov. 25th Consumer Sentiment Index, November 67.4 th Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Nov. 25 New Home Sales, October 430,000 Labor, The Conference Board, National Association of Realtors, Reuters. Nov. 25th EIA Petroleum Status Report, Wkly. Chg. 1.0M Barrels MainStreet Advisors November 25, 2009 Financial Market Update [page 2]

Bond Market Update

Economic news releases and record supply of Treasury bonds at auction dominated the fixed income market's attention this week. The Treasury Yield Curves

market continued to be well bid for the record setting $44 billion in two- 6.0% year notes, priced to yield a historically low 0.802%, and $44 billion in 5

year notes, yielding 2.175%. At the time the 5-year auction closed, the 5.0% high bid yield was actually lower than market prices by 2.5 basis points,

and the market immediately moved to that level. On Wednesday, $32 4.0% billion of 7-year notes was auctioned to a yield of 2.835%, again a level modestly below the market at time of announcement. The bid to cover 3.0% ratio, an indication of the number of total auction bids compared to the number of securities offered, remains high by historical standards, but 2.0% slightly less than last month's auctions. 1.0% New York Federal Reserve Bank Chairman Stephen Friedman resigned. Friedman was a director of Goldman Sachs, and when Goldman 0.0% converted to a bank holding company, Friedman was in violation of Fed 2 yr 3 yr 5 yr 10 yr

rules on conflicts of interest. A new Fed policy was unveiled today, U.S. Treasury Muni (Tax Equiv.)* providing further guidelines on these matters. Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin

Issue 11.18.09 11.25.09 Change 3 month T-Bill 0.02% 0.05% 0.03% 2-Year Treasury 0.75% 0.73% -0.02% 5-Year Treasury 2.20% 2.15% -0.05% 10-Year Treasury 3.36% 3.32% -0.04% 30-Year Treasury 4.30% 4.25% -0.05%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 3/14/2008 7/15/2008 3/12/2009 7/13/2009 3/14/2008 7/15/2008 3/12/2009 7/13/2009 11/12/2007 11/12/2008 11/10/2009 11/12/2007 11/12/2008 11/10/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors November 25, 2009 Financial Market Update [page 3]

Stock Market Update

With an early market close on Friday that has historically seen light volume, stocks gained on a healthy dose of positive economic news. Weekly Change

Major indices all posted gains through Wednesday, with the Dow Jones 2.0% Industrial Average (DJIA) up 146.24 points, or 1.42% to close at 10,464.40. The broader S&P 500 gained 19.25, or 1.76%, to close at 1.8% 1,110.63, and the technology-heavy NASDAQ Composite gained 1.40%. 1.5%

Toyota Motor Corp (ADR: TM), the world’s largest auto manufacturer, 1.3% announced this week a recall that would affect nearly four million U.S. vehicles, according to Bloomberg. The recall relates to incidents of the 1.0% accelerator pedal becoming trapped beneath the floor mat. This recall, 0.8% the firms largest ever, comes just one day after it recalled 110,000 Tundra pickups for frame corrosion that damaged brake lines, according 0.5%

to Bloomberg. 0.3%

Battered by competition, price wars and the general slump in the overall 0.0% economy, booksellers Barnes & Noble (BKS) and Borders (BGP) posted dismal third quarter results. Sales at stores open at least one-year Large Cap Mid Cap Small Cap Int'l

declined 3.2% and 12.0%, respectively. Despite the disappointing Source: Standard & Poor's, Russell Investment Company, MSCI quarter, Barnes & Noble remains excited about its Nook electronic book reader, which has sold-out for the holiday season, forcing the company to increase its production schedule.

Stocks in Europe and Australia rose through Wednesday on higher metals prices. The DJ Euro Stoxx 50 gained 2.25% and the S&P/ASX Year to Date Change 200 index gained 0.78% in Australia. However, Asian stocks posted modest declines with the NIKKEI 225 shedding 0.59% in Japan and the 35.0% Shaghai SE A Shares Index dropping 0.54% in China. 30.0%

25.0% Issue 11.18.09 11.25.09 Change

Dow Jones 10,318.16 10,460.92 1.38% 20.0% S&P 500 1,091.38 1,110.63 1.76% NASDAQ 2,146.04 2,175.49 1.37% 15.0% Russell 1000 Growth 484.97 492.94 1.64% 10.0% S&P MidCap 400 687.54 697.78 1.49% Russell 2000 584.68 592.19 1.28% 5.0% MSCI EAFE 1,568.37 1,576.77 0.54% MSCI EM 968.46 972.19 0.38% 0.0% MSCI Small Cap 143.37 143.54 0.12% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors November 25, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

News in the alternative space continues to be dominated by commodities. The usual lack of volume and trading activity Thanksgiving Weekly Change

week was not observed in precious metals, with gold again hitting new 2.0% highs this week. On Wednesday, dollar weakness was fairly strong with the U.S. dollar index trading below the crucial 75 level, the Euro breaking 1.5% through $1.50 and the dollar trading below 88 yen, two key levels for the greenback. As the dollar weakens, commodities priced in dollars rise, 1.0% and gold made another record high, trading over $1,185 this week. However, oil continues its seesaw between $75-$80 bbl, despite the dollar weakness. 0.5%

A story in the Wall Street Journal pointed out that demand for vault 0.0% storage of bullion by exchange traded funds has gotten so strong that one vault operator, HSBC, is now requiring its non-institutional clients -0.5% relocate their gold to another vault operator or HSBC will deliver to it them. In a sign of life for the beleaguered private equity industry, Leon -1.0% Black's Apollo Global Management LLC has brought back plans to go public and list the shares on the New York Stock Exchange. DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research In venture capital (VC), a trend toward cheaper pricing on partnership terms has taken hold. Previously the VC industry charged annual fees of 3-4% and a "carried interest" fee - the fee the VC company charges when it sells one of its investments for profit - of 30%. Recent deals have quoted those fees at 2% and 20%, respectively. According to VC industry research firm Prequin, 134 VC funds have raised $20.4 billion, Year to Date Change through November, compared to $58.2 billion for all of 2008. 20.0%

16.0%

12.0% 1 Issue Previous Week Current Change

Gold 1,150.70 1,191.90 3.58% 8.0% Crude Oil Futures 76.72 77.95 1.60% Copper 314.95 320.25 1.68% Sugar 22.47 22.32 -0.67% 4.0% HFRX Equal Wtd. Strat. Index 1,102.65 1,103.64 0.09% HFRX Equity Hedge Index 1,144.12 1,145.37 0.11% 0.0% HFRX Equity Market Neutral 996.50 993.18 -0.33% HFRX Event Driven 1,337.49 1,341.11 0.27% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,429.00 1,426.96 -0.14% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 134.90 137.24 1.73% FTSE/NAREIT All REIT 103.94 103.23 -0.68%

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors December 11, 2009 Financial Market Update [page 1]

Economic Update

The Reuters/University of Michigan Surveys of Consumers showed that sentiment has picked up in early December. The survey indicated that Economic Indicators, Quarterly Change

consumers consider current economic conditions to have improved and 10.0% that expectations for the economic outlook have increased as well. The RBC CASH Index, a measure of U.S. consumer attitudes towards 8.0% economic conditions, personal financial situations, savings, and the 6.0% confidence to make large investments, also increased in December. The 4.0% reading of 39.0 is twice as strong as December 2008. RBC Capital 2.0% Markets U.S. Economist Tom Porcelli noted that consumers are typically more optimistic during the holiday season and while overall confidence 0.0% remains weak, consumers are becoming more hopeful. These gauges in -2.0% consumer confidence are encouraging for the holiday shopping season. -4.0% Data showed that retail activity increased heading into the holiday season. The U.S. Department of Commerce announced on Friday that -6.0% retail sales advanced 1.3% in November, beating consensus estimates. -8.0% Excluding auto-related sales, retail sales increased 1.2%. Q4 08 Q1 09 Q2 09 Q3 09

The Department of Commerce reported that business inventories Real GDP Core CPI* Unemployment Rate

increased 0.2% in October, following a 0.4% decline in September. This Source: Bureau of Economic Analysis, Bureau of Labor Statistics suggests that the correction in business inventory since August 2008 *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index may have concluded. Businesses will have to restock diminished inventories at some point, which will likely be the next stage in working Dec. 7th Consumer Credit, October Monthly Change -3.5B towards an economic recovery. th Dec. 8 ICSC-Goldman Same Store Sales, Wkly. Chg. -1.3% Dec. 9th MBA Purchase Applications Index, Wkly. Chg. 4.0% The U.S. international trade gap narrowed to $32.9 billion in October as Dec. 9th Wholesale Inventories, October Monthly Chg. 0.3% exports increased $3.5 billion from September and imports increased Dec. 9th EIA Petroleum Status Report, Wkly. Chg. -3.8M Barrels $0.7 billion. The Commerce Department reported that higher exports th International Trade Balance Level, October -32.9B were led by increases in capital goods and consumer goods. Separately, Dec. 10 th 474,000 the Department of Labor released the U.S. Import and Export Price Dec. 10 Initial Jobless Claims ( Week ending 12/5) th Indexes for November on Friday. Import prices climbed 1.7% for the Dec. 10 EIA Natural Gas Report, Wkly. Chg. -64 bcf th month while export prices advanced 0.8%. Dec. 11 Retail Sales, November Monthly Chg. 1.3% Dec. 11th Import Prices, November Monthly Chg. -4.2% Dec. 11th Export Prices, November Monthly Chg. -2.3% Dec. 11th Consumer Sentiment Index, December 73.4 Dec. 11th Business Inventories, October Monthly Chg. 0.2%

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, Realtors, Reuters, RBC Capital Markets. MainStreet Advisors December 11, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries sold off for the second straight week on some surprisingly positive reports on the consumer, as retail sales and the Yield Curves

Reuters/University of Michigan consumer confidence survey came in 6.0% stronger than expected. The spread, or difference in yield, between 2

two- and 30-year government securities widened to the highest level in 5.0% over 30 years as investors bet the Federal Reserve will keep short-term

rates low while the government continues to sell longer maturity debt, 4.0% keeping these yields elevated. Treasury officials said recently that they will issue more long-term debt and reduce sales of bills and two- and 3.0% three-year notes as the government borrows record amounts to fund spending programs. The Treasury spread has now reached 3.74% after 2.0% averaging 1.32% over the past five years. Many analysts feel the yield curve may widen even further in what’s known as a “bear steepener” 1.0% wherein long-term yields increase at a faster rate than short-term government debt. A steepening yield curve often, but not always, 0.0% indicates that market participants expect positive economic growth and 2 yr 3 yr 5 yr 10 yr

accelerating inflation expectations. Currently, traders have reduced bets U.S. Treasury Muni (Tax Equiv.)* that the Fed will raise short-term rates by June 2010 as fed fund futures fell to 47.8% versus 54.0% a week ago, indicating that these market Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin participants feel the central bank will keep short-term rates low for an extended period. Issue 12.4.09 12.11.09 Change 3 month T-Bill 0.06% 0.03% -0.03% 2-Year Treasury 0.84% 0.83% -0.01% 5-Year Treasury 2.24% 2.26% 0.02% 10-Year Treasury 3.48% 3.55% 0.07% 30-Year Treasury 4.40% 4.49% 0.09%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/9/2009 4/9/2009 4/14/2008 8/12/2008 12/9/2008 8/10/2009 12/8/2009 4/14/2008 8/12/2008 12/9/2008 8/10/2009 12/8/2009 12/10/2007 12/10/2007

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors December 11, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks ended the week slightly higher as weakness in financial stocks weighed on the performance of indices. The Dow Jones Industrial Weekly Change

Average (DJIA) added 65.67 points, or 0.63%, to end the week at 1.0% 10,471.50 while the broader S&P 500 gained 0.37%, closing at 1,106.41.

The financial sector posted a decline of 2.12% this week, despite news 0.0% that Bank of America (BAC) would repay the $45 billion it lent from the federal government under the Troubled Asset Relief Program, according -1.0% to Reuters. Leading the upside were utilities stocks on weak coal and crude oil prices, both of which are inputs to the power generation process. Consumer discretionary stocks gained 1.92% this week, largely -2.0% on big gains made Thursday and sustained Friday on news that retail sales were better than expected in November. -3.0%

Shipper FedEx (FDX), often viewed as a bellwether for the broader economy, announced Monday that its fiscal second quarter was better -4.0% than expected. The company reported that it earned $1.10 a share, 24 cents above the consensus estimate of 86 cents. FedEx cited its cost Large Cap Mid Cap Small Cap Int'l

controls and a pick-up in shipping due to businesses restocking Source: Standard & Poor's, Russell Investment Company, MSCI inventory, according to Bloomberg.

Stocks in Japan lost 0.59% as measured by the NIKKEI 225 Index as Japan unveiled an $81 billion stimulus plan. Stocks in Europe dropped 1.17% as measured by the DJ Euro Stoxx 50 Index, after Spain had its credit outlook reduced and the credit rating of Greece was downgraded. Year to Date Change

35.0%

30.0%

25.0% Issue 12.4.09 12.11.09 Change

Dow Jones 10,388.90 10,471.50 0.80% 20.0% S&P 500 1,105.98 1,106.41 0.04% NASDAQ 2,194.35 2,190.31 -0.18% 15.0% Russell 1000 Growth 492.10 492.62 0.11% S&P MidCap 400 702.14 705.94 0.54% 10.0% Russell 2000 602.79 600.37 -0.40% 5.0% MSCI EAFE 1,612.59 1,563.64 -3.04% MSCI EM 986.07 965.26 -2.11% 0.0% MSCI Small Cap 146.57 141.49 -3.47% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors December 11, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

Commodity prices tend to be more volatile than stocks and bonds, a trend that continued this week. Last Friday's $48 per ounce drop in gold Weekly Change

prices due to positive trends in unemployment continued this week as 0.0% commodity prices fell amid good economic news and a rally in the U.S. dollar. This week's closing prices made a four-week low and erased all -0.2% of the price gains for November. Gold declined and the dollar rose despite news of worsening sovereign credit outlooks for Portugal, Spain, -0.4% Greece, Dubai, Aba Dhabi and the U.K. Often rising risks in sovereign debt ratings stoke a flight to quality trade of heavy dollar buying, but the -0.6% market focused more on the relative health of the U.S. economy. Crude -0.8% oil, having see-sawed from $75-$80 per barrel for the last several weeks,

succumbed to the rising dollar and broke through the psychological -1.0% barrier of $70 to settle at $69.87 per barrel on Friday. -1.2% A climate change conference kicked off this week in Copenhagen, with the world wide attendees focusing efforts on reducing CO2 emissions. -1.4% Vice President Al Gore, an ardent supporter of alternative investments and also a partner and advisor to Kleiner Perkins, a private equity firm DJ AIG Index NAREIT HFRX Equal Wtd Index

with significant investments in alternative energy, cancelled his Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research appearance at the meeting. Critics cite the growing focus on hacked emails demonstrating data manipulation among top scientist, "ClimateGate," as a possible reason for his absence. Also in private equity developments, the U.S. House of Representatives voted to raise the tax on so called "carried interest" from 15% to 35%. Carried interest, represents a gain on activity performed within a limited partnership and Year to Date Change industry experts fear this measure may impact funding of small and mid- sized start-up businesses. 24.0%

20.0%

16.0%

1 Issue Previous Week Current Change 12.0% Gold 1,162.70 1,116.20 -4.00% Crude Oil Futures 75.74 69.81 -7.83% 8.0% Copper 320.05 314.20 -1.83% Sugar 22.52 24.00 6.57% 4.0% HFRX Equal Wtd. Strat. Index 1,105.11 1,104.49 -0.06% HFRX Equity Hedge Index 1,149.43 1,135.48 -1.21% 0.0% HFRX Equity Market Neutral 988.43 989.64 0.12% HFRX Event Driven 1,337.28 1,338.50 0.09% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,426.70 1,435.27 0.60% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 134.79 133.15 -1.21% FTSE/NAREIT All REIT 107.17 105.95 -1.14%

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors December 18, 2009 Financial Market Update [page 1]

Economic Update

Initial claims for unemployment benefits unexpectedly increased for the week ending December 12, according to the Labor Department. Claims Economic Indicators, Quarterly Change

increased by 7,000 to 480,000, signaling ongoing challenges in the labor 10.0% market despite recent reports of improvements. On Friday, the Labor Department reported that unemployment declined in 36 states last 8.0% month. Still, 14 states have unemployment rates above 10%. 6.0% 4.0% The Conference Board Leading Economic Index increased for the eighth 2.0% consecutive month in November. The Conference Board attributed the continued uptrend to better financial conditions, an improved outlook for 0.0% the jobs market, and encouraging increases in housing permits. Despite -2.0% this, the Conference Board acknowledged that the six-month growth rate -4.0% has decelerated in the past few months but noted that “looking ahead, we can expect a slowly improving economy in 2010.” -6.0% -8.0% The U.S. Department of Labor reported that the Consumer Price Index Q4 08 Q1 09 Q2 09 Q3 09 advanced 0.4% in November, up 1.8% in the last year. Notably, this marks the first positive 12-month change since February 2009. Real GDP Core CPI* Unemployment Rate

Excluding food and energy, consumer prices were flat for the month. Source: Bureau of Economic Analysis, Bureau of Labor Statistics Energy prices during November rose 4.1% and have increased 7.4% in *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index the past 12 months. Separately, the Labor Department announced that the Producer Price Index (PPI) climbed 1.8% in November. Core PPI, Dec. 15th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.4% which excludes food and energy, remained unchanged from the previous th Dec. 15 Producer Price Index, November Monthly Chg. 1.8% month. Dec. 15th Empire State Mfg Survey, December 2.6 Dec. 15th Frgn Dmnd for LT US Securities, October 20.7B Dec. 15th Industrial Production, November Monthly Chg. 0.8% Dec. 15th Housing Market Index, December 16.0 Dec. 16th MBA Purchase Applications Index, Wkly. Chg. -0.1% Dec. 16th Consumer Price Index, November Monthly Chg. 0.4% Dec. 16th Housing Starts, November 574,000 Dec. 16th EIA Petroleum Status Report, Wkly. Chg. -3.7M Barrels Dec. 17th Initial Jobless Claims ( Week ending 12/12) 480,000 Dec. 17th Leading Indicators, November Monthly Chg. 0.9% Dec. 17th Philidelphia Fed Survey, December 20.4 Dec. 17th EIA Natural Gas Report, Wkly. Chg. -207 bcf

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Conference Borad. MainStreet Advisors December 18, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries finished the week mostly unchanged after being higher earlier, amid mixed economic data. In terms of factors that moved Yield Curves

Treasuries lower late in the week, unemployment claims were reported 6.0% higher than expected and crude oil futures increased to levels not seen in

several months. Factors that moved bonds higher earlier in the week 5.0% included S&P downgrading Greece’s credit rating and weakness in

global equity markets, which triggered another flight to safety trade. 4.0% Investors hinted that inflation may be poised to head higher as the yield on the ten-year note touched its highest level since August after a report 3.0% showed a 1.8% increase in prices paid to factories, farmers and other producers. This increase in PPI was more than twice as large as 2.0% anticipated. Meanwhile, Fed officials said the U.S. economy has yet to improve enough for them to raise interest rates from a record low and 1.0% that rates would remain exceptionally low for an extended period. In a sign that longer-term Treasury yields may be headed higher, Bill Gross of 0.0% Pimco reduced holdings of government debt and increased cash to the 2 yr 3 yr 5 yr 10 yr

highest level since the Lehman Brothers collapse in September 2008. U.S. Treasury Muni (Tax Equiv.)* The world’s largest bond fund now holds a cash position of 7%, up from a derivatives generated level of -7%, while government related securities Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin fell to 51% from an earlier position of 63% in October.

Issue 12.11.09 12.18.09 Change 3 month T-Bill 0.03% 0.05% 0.02% 2-Year Treasury 0.83% 0.82% -0.01% 5-Year Treasury 2.26% 2.30% 0.04% 10-Year Treasury 3.55% 3.04% -0.51% 30-Year Treasury 4.49% 4.46% -0.03%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/21/2008 8/19/2008 4/17/2009 8/17/2009 4/21/2008 8/19/2008 4/17/2009 8/17/2009 12/17/2007 12/16/2008 12/15/2009 12/17/2007 12/16/2008 12/15/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors December 18, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks dropped this week due primarily to a Thursday sell-off sparked by an unexpected rise in initial unemployment claims. The Dow Jones Weekly Change

Industrial Average (DJIA) lost 142.61 points or 1.36% to end Friday at 2.0% 10,328.89. The broader S&P 500 dropped 3.94 points or 0.36% to end at 1,102.47; however, the technology-heavy NASDAQ Composite Index rallied on Friday to gain 0.98% this week. 1.0%

A Friday rally in technology shares was sparked by positive news from Blackberry maker Research in Motion Ltd. (RIM) and software developer Oracle Corp. (ORCL). In other technology news, the U.S. Federal Trade 0.0% Commission (FTC) announced that it was suing chipmaker Intel Corp. (INTC) for allegedly using its market dominance to stifle competition, according to the Wall Street Journal. On Thursday, the day the news -1.0% was announced, Intel shares sold off 1.41% while competitors Nvidia Corp. (NVDA) and Advanced Micro Devices Inc. (AMD) gained 6.07% and 6.12%, respectively. -2.0%

In its largest deal since the purchase of Mobil in 1999, Exxon Mobil Corp. Large Cap Mid Cap Small Cap Int'l

(XOM) announced Monday that it agreed to purchase the largest publicly- Source: Standard & Poor's, Russell Investment Company, MSCI traded natural gas company XTO Energy Inc. (XTO), according to the Wall Street Journal. Exxon will pay XTO shareholders $31 billion in stock, including the assumption of $10 billion of debt. The price tag represents a 25% premium over XTO’s previous close, prompting speculation that Exxon is paying too much for the company, according to the Wall Street Journal. The move would boost Exxon’s participation in Year to Date Change the natural gas market, whose demand is expected to grow far faster than the demand for oil. 35.0%

30.0% Bank of America (BAC) announced that Brian T. Moynihan would be

promoted to president and chief executive officer to replace its outgoing 25.0% chief executive, Kenneth Lewis. Moynihan, a longtime insider, ran the bank’s retail and small-business operations. 20.0%

15.0% Issue 12.11.09 12.18.09 Change Dow Jones 10,471.50 10,328.89 -1.36% 10.0% S&P 500 1,106.41 1,102.47 -0.36% 5.0% NASDAQ 2,190.31 2,211.69 0.98% Russell 1000 Growth 492.62 492.57 -0.01% 0.0% S&P MidCap 400 705.94 714.89 1.27% Russell 2000 600.37 610.57 1.70% Large Cap Mid Cap Small Cap Int'l

MSCI EAFE 1,563.64 1,548.97 -0.94% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EM 965.26 954.93 -1.07% MSCI Small Cap 141.49 140.27 -0.86%

Alternative Investments Market Update

In a reversal this week, oil broke a nine session losing streak and rallied on political and economic news, while gold fell. Oil staged a rally of Weekly Change

nearly 7% this week after trading below $70 for parts of Tuesday and 2.5% Wednesday. Iran, the holder of the third largest oil reserves, gave energy markets a scare when it announced the test firing of a medium range missile capable of striking Israel and some U.S. military bases in 2.0% South Eastern Europe. It was also announced that U.S. crude oil stockpiles declined by 3.689 million barrels, according to the U.S. Energy 1.5% Institute Administration, twice the consensus forecast. Also, on Friday a late developing story indicated Iran's military had seized an oil rig in the Al-Fakkah oil field, located in an oft disputed area of the Iraqi - Iranian 1.0% border.

0.5% Gold's large drop last week looked set to reverse as prices rose modestly for the first few days of the week. On expectations that the U.S. Federal Reserve would continue with the zero interest rate policy, gold rose. 0.0% Despite rises in both PPI and the CPI, gold prices began to fall on by Wednesday, focusing more on U.S. growth outlook and a credit DJ AIG Index NAREIT HFRX Equal Wtd Index

downgrade of Greece and a modest improvement in jobless claims. The Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research flight to quality in U.S. currency buying pushed gold down $40 on Thursday to lows not seen since early November, and gold even traded below $1,100 for a time. According to a report by Eurekahedge, there have been $164 billion in net redemptions of hedge funds world wide, leaving total assets at about $440 billion, down from May 2008's peak of $823 billion. Year to Date Change

28.0%

24.0%

20.0%

16.0% 1 Issue Previous Week Current Change Gold 1,116.20 1,112.70 -0.31% 12.0% Crude Oil Futures 69.81 73.18 4.83% Copper 314.20 314.40 0.06% 8.0% Sugar 24.00 26.34 9.75% 4.0% HFRX Equal Wtd. Strat. Index 1,104.49 1,106.57 0.19% HFRX Equity Hedge Index 1,135.48 1,138.43 0.26% 0.0% HFRX Equity Market Neutral 989.64 992.41 0.28% HFRX Event Driven 1,338.50 1,335.48 -0.23% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,435.27 1,428.22 -0.49% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 133.15 135.49 1.75% FTSE/NAREIT All REIT 105.95 108.09 2.02%

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors December 23, 2009 Financial Market Update [page 1]

Economic Update

Consumer sentiment rose in December as incomes increased and the perceived outlook for the labor market improved, according to the Economic Indicators, Quarterly Change

Reuters/University of Michigan Surveys of Consumers. The 72.5-point 10.0% reading for the consumer sentiment index marked the greatest level of confidence since September. Reuters reported that, despite the recent 8.0% improvement in personal financial situations, consumers overall assets 6.0% still remain lower than normal. 4.0%

2.0% The U.S. Department of Commerce reported Wednesday that personal income continued an uptrend in November, increasing 0.4% from the 0.0% previous month. Personal consumption expenditures (PCE) climbed -2.0% 0.5%, following a 0.6% increase in October. Meanwhile, the personal -4.0% savings rate, as a percentage of disposable personal income, remained unchanged for the month at 0.7%. -6.0% -8.0% Revised estimates for third quarter gross domestic product (GDP), Q4 08 Q1 09 Q2 09 Q3 09 released Tuesday by the Commerce Department, indicated that the economy expanded at a 2.2% annual rate from the second quarter Real GDP Core CPI* Unemployment Rate

opposed to the 2.8% growth estimated previously. Positive contributions Source: Bureau of Economic Analysis, Bureau of Labor Statistics to GDP were led by higher PCE followed by exports. Separately, the *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index report showed that corporate profits increased $132.4 billion in the third quarter—significantly higher than the $43.8 billion increase that occurred Dec. 22nd ICSC-Goldman Same Store Sales, Wkly. Chg. 0.6% in the second quarter. nd Dec. 22 GDP Price Index, Q3 Quarterly Change SAAR* 0.4% Dec. 22nd Real GDP, Q3 Quarterly Change SAAR* 2.2% Sales of existing homes increased 7.4% to a seasonally adjusted annual Dec. 22nd After-tax Corporate Profits, Q3 Annual Change -7.7% rate of 6.54 million in November, as reported by the National Association Dec. 22nd Existing Home Sales, November SAAR* 6.54M of Realtors (NAR). The current level of sales represents a 44.1% rd MBA Purchase Applications Index, Wkly. Chg. -11.6% increase from November 2008. NAR Chief Economist Lawrence Yun Dec. 23 rd 0.4% concluded that the rise in activity resulted from buyers trying to take Dec. 23 Personal Income, November Monthly Chg. rd advantage of the first-time home buyers’ tax credit. Although Yun Dec. 23 Consumer Spending, November Monthly Chg. 0.5% rd expects temporary sales to pullback shortly, he expects a rebound in Dec. 23 Core PCE Price Index, November Monthly Chg. 0.0% rd activity for the spring market and hopes to see a “self-sustaining market Dec. 23 Consumer Sentiment Index, December 72.5 in the second half of 2010.” The Commerce Department reported on Dec. 23rd New Home Sales, November 355,000 Wednesday that sales of new homes declined 11.0% in November from Dec. 23rd EIA Petroleum Status Report, Wkly. Chg. -4.9M Barrels the October rate of 400,000 homes and is 9.0% below November 2008 levels.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, National Association of Realtors, Reuters. MainStreet Advisors December 23, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries headed for a weekly loss after the Treasury announced plans to sell $118 billion in 2-, 5- and 7-year notes next week. A bout of Yield Curves

profit taking often occurs before auctions as market makers tend to push 6.0% up long-term bond yields as a way to underwrite these auctions at more

attractive levels. The spread, or difference in yield, between 2- and 30- 5.0% year government securities remained wide as investors bet the Federal

Reserve will keep short-term rates low while the government continues to 4.0% sell longer maturity debt, keeping these yields elevated. Treasury officials said recently that they will issue more long-term debt and reduce 3.0% sales of bills and two- and three-year notes as the government borrows record amounts to fund spending programs. The Treasury spread 2.0% remains near record high levels of 3.69% after averaging 1.32% over the past five years. Many analysts feel the yield curve may widen even 1.0% further in what’s known as a “bear steepener” wherein long-term yields increase at a faster rate than short-term government debt. A steepening 0.0% yield curve often indicates that market participants expect positive 2 yr 3 yr 5 yr 10 yr

economic growth and accelerating inflation expectations. Meanwhile, U.S. Treasury Muni (Tax Equiv.)* market participants question whether substantial Treasury sales and the decline of the dollar will stop foreign governments such as China and Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin Saudi Arabia from investing large portions of their trade earned dollars into U.S. government securities. Issue 12.16.09 12.23.09 Change 3 month T-Bill 0.05% 0.07% 0.02% 2-Year Treasury 0.82% 0.96% 0.14% 5-Year Treasury 2.30% 2.51% 0.21% 10-Year Treasury 3.04% 3.77% 0.73% 30-Year Treasury 4.46% 4.61% 0.15%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 4/28/2008 8/26/2008 4/24/2009 8/24/2009 4/28/2008 8/26/2008 4/24/2009 8/24/2009 12/24/2007 12/23/2008 12/22/2009 12/24/2007 12/23/2008 12/22/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors December 23, 2009 Financial Market Update [page 3]

Stock Market Update

With a half-day of trading remaining in the holiday-shortened week U.S. stocks were in positive territory relative to Friday’s close. The Dow Weekly Change

Jones Industrial Average (DJIA) closed at 10,466.44 on Wednesday, a 4.0% gain of 137.55 points or 1.33% for the week. The broader S&P 500 rose 1.64% to close at 1,120.59 while the technology-heavy NASDAQ Composite jumped 2.62%. 3.0%

Stocks rose amid low volume on rosy consumer sentiment and personal income data on Monday and positive home-sales data released on Tuesday. The CBOE Volatility Index, or VIX, dropped below 20 for the 2.0% first time since August of 2008, according to the Wall Street Journal, closing at 19.54 on Tuesday. The VIX is a measure of the implicit volatility of S&P 500 options and is viewed as a measure of “fear” in the 1.0% overall market.

Health insurance stocks breathed a collective sigh of relief as the Senate 0.0% neared passage of historic health care legislation that would bring health coverage to an estimated 30 million Americans. Insurers Cigna (CI), Large Cap Mid Cap Small Cap Int'l

Aetna (AET) and Humana (HUM) jumped 1.93%, 3.83% and 5.09%, Source: Standard & Poor's, Russell Investment Company, MSCI respectively, as the proposed legislation was absent a public option that would compete with private insurers. Expected to pass a Christmas Eve vote, the Senate bill would need to be reconciled with the House of Representative’s version of the bill.

Year to Date Change

40.0%

35.0%

30.0% Issue 12.16.09 12.23.09 Change Dow Jones 10,328.89 10,466.44 1.33% 25.0% S&P 500 1,102.47 1,120.59 1.64% 20.0% NASDAQ 2,211.69 2,269.64 2.62% 15.0% Russell 1000 Growth 492.57 502.19 1.95% S&P MidCap 400 714.89 735.95 2.95% 10.0% Russell 2000 610.57 630.98 3.34% 5.0% MSCI EAFE 1,548.97 1,553.72 0.31% MSCI EM 954.93 953.92 -0.11% 0.0% MSCI Small Cap 140.27 139.66 -0.44% Large Cap Mid Cap Small Cap Int'l Prices reflect most recent data available at the time of publication Source: Bloomberg, Russell Investment Company, Standard & Poor’s, Morgan Stanley Capital Source: Standard & Poor's, Russell Investment Company, MSCI International, The Wall Street Journal, MarketWatch. MainStreet Advisors December 23, 2009 Financial Market Update [page 4]

Alternative Investments Market Update

What appeared to be a U.S. dollar bouncing off its lows may now be turning into a rally causing many commodity prices to start the week with Weekly Change

big declines. Gold futures began the week with another 1.5% drop 3.0% posting a decline of nearly $30 per ounce and closing below the psychologically important $1,100 level. As the week progressed and 2.5% economic news in the U.S. continued to point to a modest recovery gold's lure as a safe haven in uncertain times waned and prices 2.0% continued to fall. 1.5% With only a non-binding resolution on CO2 emission cuts between the 1.0% U.S. and China, the energy market sold off this week. Oil declined at the

beginning of the week, but natural gas firmed. An early Nor'easter that 0.5% socked much of the mid-Atlantic seaboard with 12-24 inches of snow was barely felt in energy prices. OPEC announced that they will keep their 0.0% daily output quotas at 4.2 million barrels per day. However, they expressed concern over the historically high inventory levels and -0.5% encouraged their members to do a better job adhering to the daily quotas. DJ AIG Index NAREIT HFRX Equal Wtd Index

Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research In hedge fund news, Galleon continues to be in the headlines with reports that founder Rajaratnam and long-time associate Danielle Chiesi have both pleaded not guilty to the insider trading charges levied against them. Meanwhile, Dubai World’s investments group last week lost control of the New York Union Square Hotel in a foreclosure auction after investing in the property near the top of the real estate market, according Year to Date Change to Bloomberg. A real estate fund won the auction for mezzanine debt, agreeing to pay $2 million for a portion of the debt. The Dubai 28.0% investment group paid $285 million for the property in 2006. 24.0%

20.0%

16.0% 1 Issue Previous Week Current Change Gold 1,112.70 1,088.40 -2.18% 12.0% Crude Oil Futures 73.18 76.65 4.74% Copper 314.40 320.35 1.89% 8.0% Sugar 26.34 26.50 0.61% 4.0% HFRX Equal Wtd. Strat. Index 1,106.57 1,106.47 -0.01% HFRX Equity Hedge Index 1,138.43 1,130.81 -0.67% 0.0% HFRX Equity Market Neutral 992.41 985.32 -0.71% HFRX Event Driven 1,335.48 1,339.98 0.34% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,428.22 1,434.89 0.47% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 135.49 137.30 1.34% FTSE/NAREIT All REIT 108.09 111.02 2.71%

120 North LaSalle Street Suite 3750 Chicago, Illinois 60602 312.223.0270 direct 312.223.0276 fax www.mainstreetadv.com MainStreet Advisors

MainStreet Advisors December 31, 2009 Financial Market Update [page 1]

Economic Update

Initial claims for unemployment benefits unexpectedly fell in the week ending December 26, according to the U.S. Department of Labor. Claims Economic Indicators, Quarterly Change

declined by 22,000 to a level of 432,000, marking the lowest level since 10.0% June 2008. The continued downtrend in the four-week moving average bodes well for the employment outlook. Consumer expectations for 8.0% conditions in the labor market to improve were apparent in The 6.0% Conference Board Consumer Confidence Index report, released earlier 4.0% this week. Indeed, consumers’ brighter forecast for business and job 2.0% market conditions led the index higher to a 52.9-point reading in December. Director of The Conference Board Consumer Research 0.0% Center Lynn Franco noted that economic expectations for the short-term -2.0% rose to the strongest level since December 2007. However, consumers’ -4.0% appraisal of personal financial conditions remained cautious, which will likely temper spending in the coming months. -6.0% -8.0% The S&P/Case-Shiller Home Price Indices, released Tuesday with data Q4 08 Q1 09 Q2 09 Q3 09 through October 2009, reflected further deceleration in annual rates of decline in national home prices. Annual readings for both the 10-City Real GDP Core CPI* Unemployment Rate

and 20-City Composite Indices, down 6.4% and 7.3% respectively, have Source: Bureau of Economic Analysis, Bureau of Labor Statistics improved for about nine straight months. Only seven of the 20 largest *Core CPI excludes energy and food prices from the calculation of the Consumer Price Index U.S. metropolitan cities posted month-over-month gains in October, partially offsetting news of improved annual rates. Dec. 29th ICSC-Goldman Same Store Sales, Wkly. Chg. 0.4% Dec. 29th S&P/Case-Shiller Composite 20 Index, October 146.58 On Wednesday, the Chicago Purchasing Managers announced that Dec. 29th Consumer Confidence Index, December 52.9 national business activity expanded for the third consecutive month in Dec. 29th State Street Investor Confidence Index, December 103.9 December, as shown by the Chicago Business Barometer. The reading Dec. 30th Chicago PMI Business Barometer Index, December 60.0 of 60.0 is significantly above the recession low of 31.4 experienced in th EIA Petroleum Status Report, Wkly. Chg. -1.5M Barrels March—readings above 50.0 signify an expansion in the economy. The Dec. 30 st 432,000 report, produced by Institute for Supply Management and Kingsbury Dec. 31 Initial Jobless Claims ( Week ending 12/26) st International, Ltd. indicated that production reached the highest level in Dec. 31 EIA Natural Gas Report, Wkly. Chg. -124 bcf more than a year and new orders were the highest since May 2007.

Source: Bureau of Economic Analysis, U.S. Department of Commerce, Federal Reserve Banks, U.S. Department of Labor, The Conference Board, Standard & Poor's. MainStreet Advisors December 31, 2009 Financial Market Update [page 2]

Bond Market Update

U.S. Treasuries fell for the week, particularly on the short-end, as an unexpected drop in jobless claims and a better-than-expected Chicago Yield Curves

Institute for Supply Management report increased the likelihood that the 6.0% Federal Reserve may consider raising rates sooner than anticipated.

Another increase in yield on the 10-year note pushed the security’s price 5.0% back toward “oversold” conditions, according to technical analysts. This

yield rose to 3.91% during the week, the highest level since June 11 4.0% when it reached 4% and marked the high for the year. Significant “yield resistance” remains at the 4% level, according to David Ader and Ian 3.0% Lyngen, well-respected government bond analysts at CRT Capital. Yield resistance refers to an area on price charts where buy orders may be 2.0% clustered, making further price decreases more difficult. Momentum measures, another technical analysis tool, also indicate an oversold 1.0% market. Meanwhile, investor appetite for corporate bonds continued to surge. The spread, or difference in yield, that market participants 0.0% demand to purchase investment grade corporate bonds rather than 2 yr 3 yr 5 yr 10 yr

Treasuries fell to 2.06% from a high of 7.10% in December of 2008, U.S. Treasury Muni (Tax Equiv.)* according to Barclays. The 2.06% level represents the lowest level of 2009 and suggests that investors feel defaults in this segment of the Source: U.S. Department of Treasury, Standard & Poor's, FTN Financial *Taxable Equivalent rate is calculated by using a 35% tax margin market will remain low.

Issue 12.24.09 12.31.09 Change 3 month T-Bill 0.07% 0.06% -0.01% 2-Year Treasury 0.96% 1.14% 0.18% 5-Year Treasury 2.51% 2.69% 0.18% 10-Year Treasury 3.77% 3.85% 0.08% 30-Year Treasury 4.61% 4.63% 0.02%

Source: Bloomberg, FTN Financial, The Wall Street Journal, U.S. Department of Treasury.

U.S. Investment Grade Corporate Bond Spreads (BBB-A), in bps U.S. Investment Grade Corporate Bond Yields (BBB-A)

750 10.0%

650 9.0% 550

8.0% 450

350 7.0%

250 6.0% 150

50 5.0% 5/2/2008 5/2/2008 8/31/2008 4/30/2009 8/28/2009 8/31/2008 4/30/2009 8/28/2009 12/31/2007 12/30/2008 12/29/2009 12/31/2007 12/30/2008 12/29/2009

Source: Merrill Lynch Source: Merrill Lynch MainStreet Advisors December 31, 2009 Financial Market Update [page 3]

Stock Market Update

Stocks finished the year on a down note Thursday, with the Dow Jones Industrial (DJIA) dropping 120.46; most of the losses were made in the Weekly Change

last half-hour of trading. The late day sell-off pushed stocks into negative 2.0% territory for the week, with the DJIA ending at 10,428.05, a loss of 38.39 points or 0.37%. The broader S&P 500 ended at 1,115.10, down 5.49 points or 0.49%. The technology-heavy NASDAQ Composite posted a 1.0% slight loss of 0.02% over last week. In the best year for stocks since 2003, the DJIA, S&P 500 and the NASDAQ Composite gained 18.82%, 23.45% and 50.34%, respectively. 0.0% The S&P Retail Index jumped 2.45% this week when retailers announced that total holiday sales were up 3.6% relative to 2008. The news quashed fears that the Christmas shopping season was disrupted by a -1.0% Nor’easter that hit in the heart of the holiday shopping season.

A terrorist’s failed attempt to blow up a Northwest airliner on Christmas -2.0% day caused the Amex Airline Index to lose 2.54% this week. The incident will likely increase security measures at airports, making air Large Cap Mid Cap Small Cap Int'l

travel more time-consuming, a negative for airline companies. Source: Standard & Poor's, Russell Investment Company, MSCI

In future auctions of failed banks, the FDIC will begin to ask bidders for participation in any rally of the winner’s stock. After watching the stock prices of several auction winners soar, the FDIC tested the provision in its auction of the failed Cleveland bank, AmTrust Bank, which was won by New York Community Bankcorp Inc. (NYB). A similar provision was Year to Date Change first used during the savings and loan crisis in the 1980s. 40.0%

The Wall Street Journal reported Wednesday that GMAC Financial 35.0% Services, after suffering additional mortgage losses, was close to getting $3.5 billion in government aid. The additional sum would bring the total 30.0% aid package for the company to $16 billion. However, in its initial 25.0% estimates made earlier this year, the Treasury department said the company would need as much as $5.6 billion in additional capital, far 20.0% more than the $3.5 billion being discussed. 15.0%

Issue 12.24.09 12.31.09 Change 10.0% Dow Jones 10,466.44 10,426.76 -0.38% 5.0% S&P 500 1,120.59 1,115.10 -0.49% NASDAQ 2,269.64 2,269.15 -0.02% 0.0% Russell 1000 Growth 502.19 500.22 -0.39% S&P MidCap 400 735.95 726.67 -1.26% Large Cap Mid Cap Small Cap Int'l

Russell 2000 630.98 625.38 -0.89% Source: Standard & Poor's, Russell Investment Company, MSCI MSCI EAFE 1,553.72 1,573.17 1.25% MSCI EM 953.92 980.61 2.80% MSCI Small Cap 139.66 141.89 1.60%

Alternative Investments Market Update

Crude oil futures climbed on the final day of 2009 on declines in U.S. oil inventories and falling temperatures across the country. Oil briefly Weekly Change

reached $80 per barrel on Thursday, marking an 80% increase in the last 1.6% year and a level not seen since November 18. The U.S. Energy Information Agency reported that the crude stock declined by 1.5 million 1.4% barrels last week causing crude and oil-product reserves to be at the 1.2% lowest combined level in nine months, according to the Wall Street Journal. Cold weather also drove natural gas prices higher this week to 1.0% greatest levels since January 2009. Separately, gold futures passed $1,100 per ounce on Thursday to close the week at $1,095.70 per ounce 0.8% as the U.S. dollar pared some of its earlier gains. 0.6%

On Wednesday, the International Monetary Fund (IMF) announced its 0.4%

expectations for commodity prices to continue their uptrend in 2010 amid 0.2% strengthening global economic conditions. The IMF noted more significant price fluctuations in commodities than in previous recessions, 0.0% with its commodity price index up more than 40% since global industrial production reached a low in March. The IMF acknowledged that DJ AIG Index NAREIT HFRX Equal Wtd Index

commodity prices will also depend on price development of Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research internationally traded goods and services and that the chance of another surge in commodity prices “would seem remote over the near-term.”

The Wall Street Journal reported that while shopping mall operator Simon Property Group (SPG) and developer AvalonBay Communities (AVB) were making new 52-week highs, options traders were preparing Year to Date Change for a drop in real estate stocks. Nine times more put options were traded than call options on Wednesday, indicating that traders are protecting 32.0%

themselves from a decline in the underlying stock price. The trading 28.0% action may be indicative of an overall trend that real estate investment trusts (REITs) may be overvalued. As reported in the Wall Street 24.0% Journal, Mike Kirby, chief analyst for real-estate research firm Green 20.0% Sf 1 Issue Previous Week Current Change 16.0% Gold 1,088.40 1,095.70 0.67% 12.0% Crude Oil Futures 76.65 79.53 3.76% Copper 320.35 334.70 4.48% 8.0% Sugar 26.50 26.95 1.70% 4.0% HFRX Equal Wtd. Strat. Index 1,106.47 1,111.79 0.48% HFRX Equity Hedge Index 1,130.81 1,135.61 0.42% 0.0% HFRX Equity Market Neutral 985.32 986.89 0.16% HFRX Event Driven 1,339.98 1,347.91 0.59% DJ UBS Index NAREIT HFRX Equal Wtd Index

HFRX Merger Arbitrage 1,434.89 1,447.03 0.85% Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research Dow Jones UBS Commodity Index 137.30 139.19 1.37% FTSE/NAREIT All REIT 111.02 112.34 1.19%

1 Prices reflect most recent data available at the time of publication Source: Dow Jones, National Association of Real Estate Investment Trusts, Hedge Fund Research, Bloomberg, The Wall Street Journal, The International Monetary Fund. MainStreet Advisors performance results reflect time-weighted rates of returns based upon MainStreet Advisors proprietary trading strategies. Performance results reflect the reinvestment of dividends and other earnings as well as the deduction of management and transaction fees. Performance does not reflect additional fees charged by institutions MainStreet Advisors provides investment services. In some cases performance reflects the quarterly rebalancing of assets based upon MainStreet Advisors Tactical Asset Allocation Models.

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