Houston, Texas, October 1, 2008 - Liquidity was the only gainer while bonds were down and equities were devastated as the investment grade U. S. capital markets had their largest one month loss since March, 2001. The combined markets were down 5.01% to $30.56 trillion at the end of September.

Equities were down $1.44 trillion in September which reduced the size of the equity market by 9.66%. This was the largest loss both in terms of dollars and percent since February, 2001. All sectors were down with the biggest drag coming from the Manufacturing & Wholesale Trade sector which was off by more than 14%. The Mining & Construction; Transportation, Communications, & Utilities; and Business Services sectors all also had losses greater than 10%. October starts with the market for equities valued at $13.51 trillion, accounting for 44.20% of the traditional investment grade U.S. capital markets.

Liquidity securities, composed of short term bonds and money market instruments, were the only ones to gain in September, due almost entirely to an unprecedented increase in the size of the market for Treasury bills. The $312 billion increase in the market for Treasury bills was growth of 26% and nearly double the previous largest single month increase in February of this year. The market for Treasury bills is now valued at over $1.5 trillion and alone accounts for nearly 5% of the investment grade U.S. capital markets. Aside from the market for Treasury bills, nearly all of the other markets for liquidity securities were down. Despite that, the market for liquidity securities now accounts for 24.01% of the traditional investment grade U.S. capital markets with a total value of $7.34 trillion.

The markets for bonds with maturities greater than a year decreased in size largely due to a $339 billion decrease in the market for long-term investment grade corporate bonds. This combined with nearly $50 billion decrease in the market for mortgage-backed securities to overcome increases in the markets for long-term Treasury bonds and agency bonds. These all combined to bring the bond markets down 2.39% to $9.71 trillion, a 31.79% share of the traditional investment grade U.S. capital markets. One year ago the same markets were valued at $32.79 trillion with the equity, liquidity, and bond market proportions of 54.69%, 18.28%, and 27.03% 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: CPMKTSE^sm The Capital Markets Equity Index, CPMKTSB^sm The Capital Markets Bond Index and CPMKTSL^sm The Capital Markets Liquidity Index.

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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