This morning's call will include remarks from the following speakers: Mr. Mark Fetting, Chairman and CEO; and Mr. Pete Nachtwey, Legg Mason's CFO, who will discuss our financial results. In addition, following review of the company's quarter, we will then open the call to Q&A.

Now I would like to turn this call over to Mr. Mark Fetting. Mark?

Mark Raymond Fetting

Thank you, Alan. And I would like to thank everyone for joining the Legg Mason earnings call.

Legg Mason made significant progress, positioning the firm for long-term growth, even amid valuation retrenchment across global investment markets, which led to a drop in our quarterly revenues. In particular, we believe these kinds of conditions played at the strength of our diversified asset base and to the depth and breadth of our managers' specialized expertise.

In a recent note to clients, Chuck Royce noted that as Europe meets its challenges, and as the U.S. begins to get its own fiscal house in order, which is not likely to happen until after the elections, we should move out of the range-bound equity market to the upside.

Isaac Suede is in China meeting with clients and financial leaders and has restated his belief that they will engineer to a soft landing. He points out that they have already cut rates twice, changed the reserve requirements 3 times, and while the Shanghai index is still lagging, he reminds us, changes are never instantaneous in China, and these equity markets should do much better and could be the harbinger for a wider September improvement.

And in a Barron's profile, ClearBridge's Hersh Cowen continued to emphasize the unprecedented risk premium that high-quality, dividend-paying stocks have relative to bonds and sees growing opportunities in these stocks.

Meanwhile, in fixed income credit markets, where both institutional and retail investors continued to add flows, Western's Steve Walsh took a more cautious tone at the Morningstar Investment Conference recently. He stated that it is nearly impossible to come to a conclusive opinion on how Europe will play out. With the market price for negative outcomes, Western has concluded that staying modestly long spread risks and staying attuned to the changing landscape seems to be the right approach.

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