Good Morning All,
In Friday morning's letter I promised a positive end to a day that would start out with a depressing tone। A casual observor, or one locked solely into Canadian Markets may have thought that the promise was left undelivered....it was not, as a late day rally in New York took the Dow Jones from minus 500 to plus 300 in less than a Sarah Palin blink। Admittedly it did give up much of its new found trading momentum just a couple of "betchas" later but by then the saving grace nature of the activity had been gratefully established.
Europe, led by a U।K. solution based on a 1990's Swedish model whereby the various governments would guarantee interbank lending as well as deposits in exchange for equity effectively brought an end to 1980's Thatcherism and quite possibly the present crisis. The Swedish experience, although obviously based on a much smaller model, employed four per cent of that country's GDP most of which was recovered within ten years. America is still working out the structure of its recovery package with the appointment of a Neel Kashkari and his team of experts. A tough job indeed for this self styled free market Republican but a good deal more encouraging than the lunatic fringe led by Lou Dobbs who don't want Wall Streeters involved; one would suppose that unemployed grocery clerks and retired autoworkers should take up the baton and solve both the economic and the hyped immigration problems at the same time. Either way it will be very difficult for American "free marketers" to consider serious government equity participation but guess what...they will. Preferred shares and warrants a la Warren Buffett are the recipe.
What a day for credit markets to be closed in the U.S., while open in Europe. Canadian and Japanese stock and bond markets are also closed. This could lead to a major catch up day tomorrow if present price gains in Europe hold and U.S. stock markets keep or expand on the huge gains that futures are indicating. I believe that a 1000 point up day on the Dow is possible this week and a 2000 point one day TSX advance automatic if this should occur. We may not be out of the woods yet but when the leaves fall you can always get a better look at the forest.
Sorry, I cannot get enthused about our Canadian election as too much important stuff is going on elsewhere but I am all for minority government at this stage. In America John McCain is facing an important personal dilemma; he can either lose or win with his honour intact or he can endanger the future of America by allowing if not encouraging his minions to indulge in the politics of division.
In Friday morning's letter I promised a positive end to a day that would start out with a depressing tone। A casual observor, or one locked solely into Canadian Markets may have thought that the promise was left undelivered....it was not, as a late day rally in New York took the Dow Jones from minus 500 to plus 300 in less than a Sarah Palin blink। Admittedly it did give up much of its new found trading momentum just a couple of "betchas" later but by then the saving grace nature of the activity had been gratefully established.
Europe, led by a U।K. solution based on a 1990's Swedish model whereby the various governments would guarantee interbank lending as well as deposits in exchange for equity effectively brought an end to 1980's Thatcherism and quite possibly the present crisis. The Swedish experience, although obviously based on a much smaller model, employed four per cent of that country's GDP most of which was recovered within ten years. America is still working out the structure of its recovery package with the appointment of a Neel Kashkari and his team of experts. A tough job indeed for this self styled free market Republican but a good deal more encouraging than the lunatic fringe led by Lou Dobbs who don't want Wall Streeters involved; one would suppose that unemployed grocery clerks and retired autoworkers should take up the baton and solve both the economic and the hyped immigration problems at the same time. Either way it will be very difficult for American "free marketers" to consider serious government equity participation but guess what...they will. Preferred shares and warrants a la Warren Buffett are the recipe.
What a day for credit markets to be closed in the U.S., while open in Europe. Canadian and Japanese stock and bond markets are also closed. This could lead to a major catch up day tomorrow if present price gains in Europe hold and U.S. stock markets keep or expand on the huge gains that futures are indicating. I believe that a 1000 point up day on the Dow is possible this week and a 2000 point one day TSX advance automatic if this should occur. We may not be out of the woods yet but when the leaves fall you can always get a better look at the forest.
Sorry, I cannot get enthused about our Canadian election as too much important stuff is going on elsewhere but I am all for minority government at this stage. In America John McCain is facing an important personal dilemma; he can either lose or win with his honour intact or he can endanger the future of America by allowing if not encouraging his minions to indulge in the politics of division.
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