A Comment -- General Comments From an Expert (A Commentary)

Market anticipated good news from G7 today. US is now buying equities so are now turning into a hedge fund.

SHORT SELLING: Current problems are not the fault of short sellers. Still viable and still fair. Has a lot of cash on sidelines. Portfolio hit hard. Short selling is a margin type of transaction. Short sellers can make up rumors but so can long buyers. GOLD: Likes gold. There’s a lot of money being printed. Gold could do well, but gold stocks are tricky. Their profit picture has not been good; costs are high, labour shortages. A recession might help them.

Be careful in Bond market because there is not a lot going on. There are some attractive yields. Canadian Banks are the best of breed compared to US banks. There was a mass exitis out of money market funds when a US fund broke the buck. DEFLATION: It is bullish for the bond market initially.

BEAR ETF: Will rise if Bonds fall. Inflation is not such a concern now, but rather deflation.

HIGH YIELD BONDS: Is it time to Buy? No. We are 6-12 months away from having the dust settle.

VANILA Bonds: Bond with no options, not convertible, callable, etc.

SCOTIA BANK CAPITAL TRUST BOND, due 2013, Single ‘A’.

ROYAL BANK 5.45% Due 2013

PROVINCE OF ONTARIO 4.3% 2017

Ishares CANADIAN CORPORATE BOND INDEX.

If we are going to be buyers, don’t jump in right away. 9100-9200 could be a support level. Copper: It’s a base mettle with a PHD in economics. It is really close to a 5 year level of support. The world is going to grow and we still need copper. Preferred Shares: Excellent way to participate in the recovery. Buffet is buying them. Should he expect a rebound in the financials? Where will the bottom form? Once the markets start to turnaround, financials will be one of the first sectors to react but it will be a short-term thing. Lighten up going into the next quarter.

This is life until we get confidence in the markets. The interest rate cut was expected. We have a concerted effort world wide and that didn’t happen in the 30’s. 90% of .25 rate cut at end month

US ETFs: Caution that this is not to be part of fixed income portfolio, as the money in fixed income should be relatively safe.

On Harper’s Speech: When we responded to the credit crisis, we weren’t dealing with the same crisis in Canada. Consumer debt started going out of control in 2002, not Aug 2007. Likes what Harper had to say. Wants him to keep his promise to reduce capital gains tax. Not sure about Dion’s idea of assembling a panel to discuss the economy. That had to happen a while ago and Harper has been consulting experts all along.

Following Bernanke speech: Thinks we are getting an interest rate cut and it should work. He likes what they are doing. Have drops in global PE ratios dropped to historical averages? Yes, we are at 15-year lows. So right now we have some very good buying opportunities. Europe is cheaper than North America.