Houston, Texas, January 2, 2009 - Robust growth in the bond market led the way as the markets for equity, liquidity and bonds all grew in December. For the first time in nearly 14 years the market for bonds is larger than that for equities. The traditional investment grade U.S. capital markets grew by 2.62% in December by adding $720 billion to end at $28.25 trillion. However these gains could not overcome the awful weight of 2008 which was witness to a $4.78 trillion contraction, a decrease of 14.48%, in the investment grade U.S. capital markets. This is the first negative calendar year for the combined markets since 2002 and the worst calendar year loss both in dollar value and in percentage in the 30 year history of Dorchester’s Capital Market’s Weights.

The barely positive 0.14% gain in the market for equity securities brought the market up by $14.59 billion. This was due to growth in the Consumer Goods, Consumer Services & Retail Trade, and Manufacturing & Wholesale Trade Sectors overcoming losses in the other sectors. The market for equity securities devastated 2008. For the year the market lost $6.81 trillion, which is nearly $1 trillion more than the total combined losses in the calendar years of 2000, 2001, and 2002. The 40.25% contraction in 2008 was the worst tightening for a calendar year in the past 30 years. The market for equity securities closes December 2008 with a value of $10.11 trillion, accounting for 35.79% of the investment grade U.S. capital markets. This is the equities lowest portion of the overall markets since November 1991.

Growth in the markets for short-term federal agency securities including discount notes, along with growth in the market for short-term investment grade corporate bonds, managed to keep the market for liquidity securities growing in December. Though the $63.64 billion increase was only a gain of 0.83%, it was enough to give the market for liquidity securities a second consecutive year with an increase of over $1 trillion. The liquidity markets finish December valued at $7.77 trillion, a 27.50% share of the investment grade U.S. capital markets.

Topping the size of the market for equity securities for the first time since January 1995, the market for long-term investment grade bonds grew a robust 6.60% by increasing in value $642 billion in December. For the year, the size of the long-term investment grade bond market increased nearly $1 trillion to end 2008 at $10.37 trillion, a 36.71% share of the investment grade U.S. capital markets. The market for long-term investment grade bonds has had only one calendar year with a contraction, 1994, in the past 30 years. A year ago the capital markets were valued at $33.03 trillion with equity, liquidity, and bond market proportions of 51.24%, 20.39%, and 28.37% respectively.

Dorchester's flagship index, CPMKTS^sm The Capital Markets Index, is carried on The American Stock Exchange under the symbol CPMKTS, with updates every 15 seconds. The Amex also publishes the component indexes: CPMKTE^sm The Capital Markets Equity Index, CPMKTB^sm The Capital Markets Bond Index, CPMKTL^sm The Capital Markets Liquidity Index, CPMKTC^sm The Capital Markets Corporate Bond Index (with yield published in real-time under ticker: CPCYLD), CPMKTM^sm The Capital Markets Mortgage-backed Index, and CPMKTT^sm The Capital Markets Treasury Bond Index (with yield published in real-time under ticker: CPTYLD).

About Dorchester Capital Management LLC.
Dorchester Capital Management LLC is a Houston-based company principally focused on designing financial products for the professional investment community. Dorchester’s unique approach to processing, organizing and standardizing capital markets data from the broadest variety of sources gives it a superior ability to help clients with the fundamental risk analysis questions of asset allocation and benchmarking. For additional information, please visit the company's Web site at www.cpmkts.com.

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