November 3 edition

Good Morning All,

World markets have been mixed overnight as they appear to be underplaying the tensions of the coming two days. LIBOR has begun this week with the same positive tone it has exhibited over the last ten settings while the U.S. dollar has continued to lose ground against the Euro and Loonie, a not so surprising occurence considering the incredible gains it had made since summer. The first and most important tenet of financial markets is to provide a stable environment for trade, commerce and the settlement of transactions. In recent months as we are now all aware, the sense of potential failure of the system as described by the daily volatility in commodity, currency, stock and bond markets was palatable. This feeling has eased somewhat in recent days and confidence is once again returning to the economic arena.

The next few months should prove to be less testing and appreciably more enjoyable than the last quarter unless something untoward happens on election night. Imagine for a moment that Obama wins the popular vote by 10 million but loses in the Electoral College.....come to think of it...don't. Believe instead that Barack wins by more than 10 million votes and seals the deal with an Electoral College vote that exceeds the 270 required majority by more than 100, say 379. The Democrats also appear to be on target for Senate and House gains that will give them total control. This will be quite different than the post 1994 situation that Clinton found himself in when the GOP was in charge and harassment topped the agenda. We could go on here about Rawanda ,the Balkans and Monica but space thankfully prohibits us from expanding such rhetoric.

The Stem Cell sector have had a good runup since Thursday (40 plus per cent), the next few days will see them run much higher, but this a trade, not a buy and hold.