From: US GIO

From: US GIO To: Undisclosed recipients:; Subject: Eye on the Market: Thanksgiving edition, November 18, 2010 Date: Thu, 18 Nov 2010 20:20:13 +0000 Eye on the Market, November 18, 2010 A Don Quixote Thanksgiving At this time each year, I write on a topic linking politics and investments to give our clients something to talk about over the Thanksgiving holiday (lest the conversation become stale). Following on last year's comparison of the Obama Cabinet's business experience with all administrations since Theodore Roosevelt, we focus on Europe's ongoing strains in the periphery. This follows on our Aspen Insights session on Europe we held with Martin Feldstein and Paul Marshall earlier this year. The diverging economic conditions between Europe's core and periphery are severe, but not insurmountable. However, a flaw in Europe's creation myth may lay at the heart of the inability of the European Monetary Union to survive over the long run. As Europe deals with its latest weak link (Ireland), i am reminded of Don Quixote, who among other things, went on a difficult journey for all the wrong reasons. For Europe, the EMU may turn out to be the same. At the end, some brief comments on investments in European equity and sovereign debt markets. Michael Cembalest Chief Investment Officer The material contained herein is intended as a general market commentary. Opinions expressed herein are thaw of Michael Cembalest and may differ from those of other J.P. Morgan employees and affiliates. This information in no way constitutes JP Morgan research and should not be treated as such. Furdren the views expressed herein may differ from that contained in J.P. Morgan research reports. The above summary/prices/quotes/statistics have been obtained from. ources deemed to be reliable, but we do not guarantee their accuracy or completeness, any yield referenced ts indicative and. ubject to change. Past performance is not a guarantee of future results. References to the performance or character of our portfolios generally refer to our Balanced Model Portfolios constructed by JR Morgan. It is a proxy for client performance and may not represent actual transactions or investments in client accounts. The model portfolio can be implemented across brokerage or managed accounts depending on the unique objectives of each client and is serviced through distinct legal entities licensed for specific activities. Bank. trust and investment management services are provided by J.P. Morgan Chase Bank. NA. and its affiliates% Securities are offered through J.P. Morgan Securities LW (JAMS), Member NYSE. F/NRA and SIPC. Securities products purchased or sold through JAMS are not insured by the Federal Deposit insurance Corporation ("FDIC"): are not deposits or other obligations of its bank or thrift affiliates and are not guaranteed by its bank or thrift affiliates: and are subject to investment risks% including passible loss of the principal invested. Not all investment ideas referenced are suitable for all investors. These recommendations may not be suitable for all investors. Speak with your J.R Morgan Representative concerning your personal situation. This materials not intended as an offer or solicitation for the parka or sale ofany financial instrument. Private Investments may engage in leveraging and other speculative practices that may increase the Ask of investment loss, can be highly illiquid. are not required to provide periodic pricing or valuations to investors and may involve complex tax. tructures and delays in distributing important tax information. Typically such investment ideas can only be offered to suitable investors through a confidential offering memorandum which fully describes all terms, conditions, and risks. IRS Circular 230 Disclosure: JAI/organ Chase & Co. and its affiliates do not provide tax advice. Accordingly any discussion of LIS tax matters contained herein (including any attachments) is not intended or written to be used. and cannot be used, in connection with the promotion. marketing or recommendation by anyone unaffiliated with JRAforgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding 1J.S. taceelated penalties. Note that JP. Morgan is not a licensed insurance provider. •t, 2010 JAMorgan Chase A Co EFTA00751944 EFTA00751945