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

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.

People are obviously very scared. There are financial institutions in trouble so health companies could not borrow. It’s been very dangerous to call a bottom in financials. Now European banks are getting into trouble. All the government actions are helping the credit market. Lots of areas where he things opportunities are being created. Companies where there is more than a 10% cash flow yield.

We are overdue for a relief rally. It’s going to be tough to pick the bottom. Are funds at risk if ETF operator goes under? Investments are separate and segregated from the corporate funds. Thereis no cause for concern. How to survive a high inflationary period: Exposure to gold, real estate and bonds. In the case of real estate, look for investments that are lower than replacement cost. Windom tree has some currency ETFs. Shorting the banks. You have to pay the dividends along the way and that can be risky. It’s too late to short the banks.

The action in the market was bizarre. Down a thousand points in an hour. There were no bids. People were trying to sell but institutional investors were sitting on the sidelines. Doesn’t know who was buying those stocks. If you are sitting on good quality stocks and you don’t need to sell them for margin call or rent, you don’t need to sell them, especially if they are dividend-paying stocks. Canadian banks are not at risk as in Europe or States. We are all fully liable for the full amount of our mortgage. In Canada we never got into the teasers in mortgages. Doesn’t see banks cutting dividends.

The S&P should trade at 14x earnings with the bailout package. The financials may do surprisingly well. Economically sensitive stocks could be problematic. There is a chance of a bit of a bounce in the short term, but bear market longer term. S&P could go below 1100.

The bail out gives some confidence and some relief. The credit markets will be dysfunctional for some time. You should buy companies that are solvent. It’s going to be expensive to issue debt. It’s slam-dunk that we see a recession.

Silver: There is a commodity side to Silver. There is increasing demand for Silver in China for Jewelry. But this demand is overwhelmed in this market by the financial demand as an investment. The problem with Silver and Gold is that there is no reason for them to rebound. Only buy it to give as a gift.

Anticipation is sometimes better than reality. The market anticipated the passing of the bailout bill, but then started to realize how the recession would hit Canada. The market had some reality therapy towards the close today. The commodity peak has clearly come and gone, but does not agree that the commodity boom is over.

Slver: There is a commodity side to Silver. There is increasing demand for Silver in China for Jewelry. But this demand is overwhelmed in this market by the financial demand as an investment. The problem with Silver and Gold is that there is no reason for them to rebound. Only buy it to give as a gift.

Thinks there would have been more confidence with the senate passing this bill. Thinks it will be a global recession, now that credit problem is moving to phase 2 – following the crisis

Credit problem is priced into market but recession is not.

He’s bullish on gold stocks. Market is looking beyond inflationary implications of package to fears of severe recession and commodity weakness.