The Copp Comment - October 14 Edition

Good Morning All,

When it became evident over the weekend that the U.S. free marketers led by Hank Paulson were going to be dragged kicking and screaming into a quasi socialist solution to the banking crisis, stock markets in America joined their European counterparts in celebration of the revised plan. As discussed in yesterday's blog this Swedish inspired, U.K. generated solution is considered to be one that addresses the core of the problem rather than its excesses, the base of the inverted pyramid instead of its incomprehensible overhang. Gordon Brown, the British P.M. has been reborn.

We also predicted yesterday that a 1000 point up Dow day would evolve this week and that it would be accompanied by a 2000 point surge on the TSX. We got part one early and catch up in Toronto, after yesterday's Canadian holiday, may make this idea a morning "fait accompli". Japan also made history overnight as it too came off a market closure with a 14% rise. European indexes are up strongly for the second day in a row and New york futures are very powerful in the pre market. The natural rule here would be to sell into strength as the euphoria of the early going presumably turns back into malaise. We will have to watch how this plays out but I believe that a true bottom has been made and that our previous forecast of a 50% retracement of the one year losses is a minimum target by mid January. It could be somewhat greater as the ride back up will be led by banks and techs, sectors which have lately taken losses of huge magnitude. In Canada, the once overowned but now vastly oversold oil, gas and mining sectors should enjoy a major and immediate resurgence from recent lows but they will not be the lasting leaders of the "new" market, at least not until much later in 2009.

The choice for the Canadian electorate today is between tweedledum and tweedledee. It is our hope that the vote leaves us much the same as we were before this ridiculous election was called.In America the choice is of a far different nature and holds the promise for a renewed and better country.