| OUTLOOK |
| "Bearish on US Treasuries" |
| 3/6/2007 |
| We believe the yield on the 10-Year Treasury Note will rise to 4.65% or more within the next 8 weeks. |
| Our bond system is indicating extremes in bullish sentiment and overbought conditions in the 10-Year Treasury Note as a result of flight to safety buying. We believe these conditions will unwind and cause bond prices to fall and yields to rise. As of 3/6/07, we have entered a short position in TLT at 90.06. |
| Mark Yuan, CFA |