Dear Friends and Family,

Our physical landscape is changing with the season, and so has our financial landscape. It looks vastly different than it did at the time of our last cover letter. These are extraordinary times. The dictionary defines “extraordinary” as beyond what is usual, ordinary, regular, or established. Venerable, long-standing, independent institutions are either no longer independent, have been bought out, or the Federal Government has taken control of them. The speed at which the news is coming makes it difficult to discuss all the aspects of what is occurring. Currently, there is an unprecedented rescue proposed by the Bush Administration that would give the government broad power to buy up devalued assets from troubled financial firms. The bailout is aimed at helping unlock credit and stabilize badly shaken markets in the U.S. and globally.

The FDIC, which insures bank deposits, said it would not have to dip into the insurance fund as a result of the seizure due to the sale of WaMu assets to JP Morgan Chase. This leads us to discuss how SIPC (Securities Investor Protection Corporation) protects investors in member firms, of which Fidelity Investments is one. SIPC gets involved when a brokerage firm fails owing customers cash and securities that are missing from the customer accounts. SIPC is the investor’s first line of defense in the event a brokerage firm fails. Fidelity money market funds in clients’ accounts are considered “securities” and covered up to $500,000, and FCash is covered up to $100,000 per account. Also, Fidelity has excess SIPC insurance — CAPCO — which will cover everything in excess of SIPC coverage.

We welcome your calls regarding everything that is happening. These are truly trying times, but we are here to lend perspective, advice, and information. We continue to believe that these markets will create great buying opportunities going forward.

Some websites we find helpful regarding SIPC and CAPCO insurance are: www.sipc.org, www.capcoexcess.com. We also have a number of articles that we can email or send to you that further discuss the topics above. Please let us know if you would like any of them. Also, continue to check our website — we are frequently updating and adding articles.

We will be offering College Planning and Women, Wisdom, and Wealth seminars in our Issaquah office on Wednesday, October 29th, and Thursday, October 30th at lunch and in the evening. Please call Sue or Vicki for additional information and to reserve a spot.

Sincerely,

Katz Family Financial