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

Junior oil/gas: - Expect they will really feel the affect of this. Typically, when they start to get near the 10,000 BOE’s a day, exit and sell to an oil/gas trust and then went back into a junior. An effective allocation of capital. This will create less demand for the juniors.

Oil - Thinks that oil has bottomed and that inventories are going to come down. Doesn’t think stocks come anywhere near to reflecting $60 oil price.Gold - Is still fond of gold. US currency issues will continue to hit the US market and as a result feels that gold prices arte poised to go higher.Base metals – Zinc is his favourite right now. Inventories are very low and no new production coming on in the next couple of yearsUranium – Has been granted a freebie with the flooding of the Cigar Lake mine. This took about 2.5% of global capacity out of the equation.

His 2 Top Picks include Ford Credit maturing March/08 and Government of Canada 5.75% Bond 2029.

(Government of Canada 5.75% Bond 2029 was his Top Pick July 7/06. Up 6%)

No stocks discussed. Only bonds, so nothing to report.

Banks: -Money from income trusts has been flowing into bank stocks so they are all high. If you own, hold. It you don't own, wait for weakness.

Optimistic about gold and base metals over the next 3-4 months. Will do very well into the 1st quarter of 2007 and a good chance it may last into the 1st half. In the 2nd half of 07 there are going to be some bumps in the road in the form of mortgage pressure on lenders in the US, which will have a big impact on the behaviour of markets. There will be some economic pressures into 08 because of global slowing. Still thinks gold will hit $800 by 08.

Banks: - Feels that earnings are going to disappoint due to disappointing trading revenues out of the US in the last quarter. Money coming out of the Income Trust sector is moving in making them look better now. Sector is a little bit overbought.

Gut reaction is that copper is being held back by the weakness in the US housing sector. There is still a global demand for base metals that isn’t going to end any time soon, but they are taking on the forms of trading ranges and copper is going in this direction.

Taxes: - Eventually, distributions will be taxed at the dividend rate, which is currently 31%. The more profound issue for some income trusts, like Yellow Pages (YLO.UN-T), which not only pays out income but some of their capital, the haircut maybe even worse than that.

Taxes: - Distributions will take a hit up 31% which is the taxable dividend rate.

REIT’s: - Have the lowest of the income streams in income trust sector. He expects a recession and, if this happens, real estate holdings will generally drop 75%. Very expensive and low yields.

REIT’s: - His main criterion for getting into non-energy trusts was a yield on a 5-year Canada plus 300 basis points. REITs didn't qualify. On some high-quality preferreds, you can get 5.05% to 5.15%, which is better than REITs at 5%.

Foreign Investors: - They are not going to like this one bit. If they can’t get in to rape our corporations, they'll be reluctant to invest in Canada.

Move to Financials? – Not a good idea because financials are extremely highly valued by all historic measures. They pay the highest yield of stocks on the TSX, but that doesn’t mean they are defensive.