December 4th Edition

Good Morning All,

Markets in Canada continued to drift yesterday in front of the Harper address and a couple of bank earnings reports. New York on the other hand rose on some late day buying as December money was put to work. Heed must be paid to both the former and latter points made here because although the Canadian market might lag its U.S. counterpart by a few days due to our ongoing political crisis, the need to put money to work before year-end is a shared condition. Investment managers are not being paid fees to hold zero interest treasuries in the face of 20% weekly run-ups. Sometime soon they will have to stick more than one toe in the soup.

Rate cuts in Europe have so far done little to ease markets as the immediate reaction to these dramatic moves has been one of fear rather than relief as talk of the recession/deflation cycle getting out of control has held the greater weight this morning. As often stated in this rant, we must watch for a market that goes up in the face of bad news, and particularly for signs of one that fares well in the last hour of trading. Not silly folks, just history.

The Harper speech last night and the general tone adopted by the Conservatives over the past few days has been enlightening. It is almost as if Karl Rove had moved his operations to Canada where a new fear mongering campaign can drive a wedge between Canadians. Once more....agree or disagree with the coalition's actions, there is nothing illegal or immoral or even banana republic like about them. Furthermore, the Bloc Quebecois is a joke and it is not being made powerful by the Liberals and NDP but by the desperate attacks of the Conservatives. Read the agreement.