Avery Shenfield

TSX will be at 12,000 points by the end of 2009. Typically it takes about 3 years after a bear market fall of the kind we have had, to get back what you have lost.

Bonds: Bond yields are getting quite low, particularly on government ones. He is less enthusiastic about rolling money back into 5 or 10 year Canada government bond. If you were going to buy bonds, he would look at something like a provincial bond that at least gives you a spread or perhaps a very high-grade corporate bond. Even the Canadian mortgage bond that is backed by the Canadian government gives you better yield.

US Currency: US was a source of a lot of the global mess. It was their housing market that collapsed. They are going to run a huge deficit. Why is their currency rallying? It's not that people want to buy US$’s but that they own US$’s. So global investors borrowed US$’s and Japanese yen to buy securities, which have now dropped. They still owe these currencies.

Canadian Dollar will be at $.90 by mid-2009.

Spreads will narrow on provincial and high-grade corporate bonds in 2009. We are currently in a real fear factor. Investors just want the out right safety of government bonds. Eventually, they will have to start dipping their toe in the water and tried to get higher yields. Rational investors will look at some of these better credits and say it's worth taking that tiny bit of higher risk.

US is in a recession that will last through Q1 with a better than expected recovery in the 2nd half of the year. This has been an extreme economic shock but governments around the world are battling the problem. Have had the fastest interest rate cuts in the US, unprecedented amount of intervention to the banking system and thinks there will be another huge stimulus package in the US.

Oil: In the near term, oil is not going anywhere in a hurry. It would be hard for it to go a lot lower. This is the normal cyclical movement of oil that is in every recession where there is a retreat in demand and a retreat in prices. In an economic recovery, oil prices should move higher.

Canadian$: Our economy had a huge trade surplus despite having a high currency. The question is, longer-term, are commodities still going to be enough of a support for our trade balance to counterbalance to losing a lot of our previous surplus and going into deficit on auto trade. When the economy recovers again will have a trade surplus in commodities that will push the Cdn$ back to $.90-$.95. That will be a perilous range for some of our manufacturers.

Provinces: We went through a period where provinces were having difficulty raising money. Expect that that is starting to ease off now.