Breakfast With Dave: How is this not a Depression?

8/14/2019 Breakfast With Dave: How is this not a Depression?

1/11

David A. Rosenberg December 1, 2009Chief Economist & Strategist Economic [email protected]+ 1 416 681 8919

MARKET MUSINGS & DATA DECIPHERING

Breakfast with DaveWHILE YOU WERE SLEEPING

IN THIS ISSUE

While you were sleeping global equity markets areback on track; positiveeconomic data overseas

How can the recession beover? Out of the 4economic indicators that

the NBER uses, only 1

looks to have remotely putin a discernible bottom

Chicago! The Chicago PMIdid improve in November,but this diffusion index isspotty at best in terms ofpredicting the ISM

Some major non-confirmations; railwaycarloadings, electricityproduction, tax revenue,and bank lending, just toname a few are downyear-over-year

U.S. retail sales update chain-store sales inNovember did not look

that great and auto salesappear to be down on themonth

Goldberg, not Rosenberg;we remain long-term goldbulls, but we could get ameaning correction at any

time

Not a bad time to bethinking income

Strong demand in Canada

Producer deflation inCanada continues

Global equity markets are back on track as the constructive Dubai debt

restructuring plan gets underway. The MSCI Asia-Pac index closed with a 1.4%

gain and is now back at a five-week high.

Commodities are rallying too with oil up for the second day in a row and copper

strengthening on the back of some solid manufacturing PMI data overseas:

Chinas PMI is hot, at 55.7 from 55.4 in October, the best PMI reading in 18

months; Europes PMI is inching up, now at 51.2 from 50.7 and raising hopes of

a similar lift today in the USA.

On the economic data front, India just posted a ripping 13.9% annualized real

GDP growth rate for Q3. Car sales in France soared 48% YoY in November on

the back of the countrys own version of argent-pour-voiture. Germanys jobless

rate fell in November, to 8.1% from 8.2% in October and this came as a surprise

too; and retail sales rebounded 0.5% in October (in line with consensus). U.K.

home prices rose 0.5% in November (Nationwide survey) the seventh gain in

as many months. Korean exports rose last month for the first time in over year.

Its a boom (not really)!

Needless to say, the U.S. dollar is being sold off and the carry-trade is back on

with the resource-based currencies, each with massive net speculative long

positions, rallying hard today (the New Zealand Kiwi is up 1.7%; the Aussie dollarfirming by 1.3% as the Reserve Bank of Australia hiked rates again, to 3.75% from

3.50%). The mighty Yen is also being trounced along with the resumption of global

risk trades, though the announcement from the Bank of Japan that it is going to

provide $15 billion of basically free cash to the commercial banks as a response

to the latest bout with deflation has also played a role (the Yen was looking very

toppy going into todays action).

Outside of JGBs (6bp rally today, to 1.18%), bonds are giving up a lot of ground this

morning. The DXY index is down some 27bps and at 74.527 is closing back in on

the nearby low; a break below 70 means there is no support for the U.S. dollar

(one reason why gold has tacked on nearly $18/oz today as it pierced the

$1,200/oz threshold). The latest tick down, however, in the Baltic Dry Index

provides one key source of non-confirmation to this latest upsurge in thecommodity complex. We are bulls on the resource sector, but for the time being,

we are nervous bulls.

Please see important disclosures at the end of this document.

Gluskin Sheff + Associates Inc. is one of Canadas pre-eminent wealth management firms. Founded in 1984 and focused primarily on high networth private clients, we are dedicated to meeting the needs of our clients by delivering strong, risk-adjusted returns together with the highest

level of personalized client service. For more information or to subscribe to Gluskin Sheff economic reports,

visitwww.gluskinsheff.com


2/11

December 1, 2009 BREAKFAST WITH DAVE

Meanwhile, the markets seem oblivious to the growing crisis in U.S. commercial

real estate, where the default rate just doubled in Q3, to 3.4% (and up 52bps from

Q2) with vacancies on the rise and rents on the decline. This shoe is already

dropping for the banking system.

The markets seem oblivious

to the growing crisis in U.S.commercial real estate

As for residential real estate, the White House is now moving more aggressively to

force lenders to modify mortgage loans, which can only mean that principal

reductions are coming hard and fast and this in turn means more write-downs

are on there way. Caveat emptorwhen it comes to the U.S. financials, a sector

that already looks very toppy see page B3 of the NYT Treasury Presses

Mortgage Lenders for Payment Relief.

Overseas, the next worry spots range from sovereign credit risks in Greece, to

fiscal stress in the U.K. and Ireland, to signs of a property bubble in China, to a

severe debt refinancing calendar in Russia and many the Baltic states. In the U.S.,

try the burgeoning losses at Fannie and Freddie, not to mention the FHAs razor-

thin reserve cushion and the inevitable need for a taxpayer bailout. Dubai was

very likely NOT the last in the series of post-credit-bubble aftershocks.

HOW CAN THE RECESSION BE OVER?

There are four items that go into the NBER recession call:

3 of the 4 economic

indicators that the NBER

uses to access business

cycles are still in decline

1. Employment2. Real personal income excluding government transfers3. Industrial production4. Real salesThree of these four indicators are still in decline only industrial production looks

to have even remotely put in a discernible bottom. Employment was down 0.1%MoM in October after dropping 0.2% in September; real organic income dipped

0.03% to a new cycle low in October after a more visible 0.2% decline in

September; and we just now got the real manufacturing/retail/wholesale trade

sales data for September and they showed a 0.2% drop in September after a

similar falloff in August.

So how can a recovery start

with just one limb hanging

on the body?

So, it begs the question as to how a recovery has started with just one limb

hanging on the body. Just because the equity market is up more than 60% from

the lows by no means suggests that this is some official arbiter of how the real

economy is shaping up. Remember, it was the same equity market hitting new

highs through the first ten months of 2007, seemingly oblivious to the fact that the

worst economic downturn in seven decades was merely a few weeks away.

HOW CAN THIS NOT BE A DEPRESSION?

One in every eight Americans

With a mortgage are either in arrears or in the foreclosure process Are unemployed or underemployed Are on a food stamp program

Page 2 of 11


3/11


Wall Street and Main Street are on opposite sides of the planet right now. Have a

read of the op-ed article today on page A15 of the WSJ (Working Two Jobs and Still

Underemployed).

CHICAGO!

The Chicago PMI did improve to 56.1 from 54.2 in October (as did New York,

Dallas, Kansas City, Cincinnati and Milwaukee!). But this diffusion index is spotty

at best in terms of predicting ISM, and ISM itself is currently not reliable given that

it is biased towards large companies and it is small business that is cutting back

on spending activity and is having trouble accessing capital.

CHART 1: SMALL BUSINESSES HAVING TROUBLE ACCESSING CAPITAL

United States: National Federation of Independent Business Survey:

Percent Reporting That Credit Was Harder to Get

(percent)

0987654321098

16

12

8

4

0

-4

Source: Haver Analytics, Gluskin Sheff

Going back to 1974 (the history for the National Federation of Independent

Business (NFIB) optimism index), on average, when the NFIB is around the current

level of 89.1 (as of October) ISM is usually at 44.0 (currently at 55.7 in October).

So in essence, the NFIB index is currently trading as if ISM is 44.0, not 56.0.

Not only that, but during expansions, the NFIB index averages 100.2; during

recessions, the NFIB, on average, is at 92.2. The NFIB is currently at 89.1, so this

notion that we are out of recession seems to be at odds with a lot of other

information out there outside of a 65% rally in the equity market.

SOME MAJOR NON-CONFIRMATIONS

Railway carloadings and electricity output down 5.0-7.0% YoY Mortgage applications for home purchases down 15% YoY Tax revenues down more than 10% YoY Bank lending down 6% YoY Financials peaking out nearly two months ago and rolling over Divergences in both the small-cap stocks and emerging markets

Page 3 of 11


4/11


Major topping formation in the transports despite Warren Buffetts foray andlower energy prices (triple-top in the transports-to-utilities ratio?)

The U.S. consumer still looks

to be on pretty shaky terrain Bond yields below their 200-day moving average. Real rates (10-year TIPS yield) all the way down to 1.10% (from 1.5% barely

over a month ago).

Baa spreads widening 15bps from nearby lows and by 25bps in the high-yieldmarket.

RETAIL SALES UPDATE

U.S. chain-store sales in November did not look that great but we will find out more

on Thursday. As for auto sales for the month, Edmunds.com is calling for 10.34

million at an annual rate, which would translate into a 10% decline from Octobers

tally. The U.S. consumer still looks to be on pretty shaky terrain. The official U.S.

retail sales data will be released on December 11.

Note that one giant wild card in this Fridays U.S. nonfarm payroll report (which

everyone has upgraded post last weeks claims data) is retail employment. This is

the sectors largest hiring month of the year and if there is anything we know with

certainty, it is that merchants went into this season deliberately mean and lean.

This may end up being a large swing factor that could cause the data to line up on

the soft side, irrespective of the seasonal adjustment factor.

Note that while this is still early days in the holiday season, Cyber Monday was

very mixed more eyeballs than a year ago (+16%), but less $$$ per buyer (

-12% per sales ticket). This was much like Black Friday at the malls total

traffic was up but the average purchase was down 8% to below 2007 levels

(average of $340 per shopper). Also note that the giving spirit is being

negatively affected by the ongoing frugality too only 21% of business owners

are planning to give year-end bonuses this year versus 44% last year, as oneexample (see Rethinking Holiday Perks on page B7 of the WSJ).

GOLDBERG, NOT ROSENBERG

Gold just capped off its best month in a year up 14% in November and 34% so

far in 2009. Not even the S&P 500 can compete with that. Helping drive the

latest gains was the news out of the China Gold Association that the countrys gold

demand is on pace this year to exceed 450 metric tonnes, a 14% increase over

the 395.6 tonnes in 2008. (In contrast to India, jewelry sales are up double-digits

in China so far this year.) By way of comparison, China, which recently surpassed

South Africa as the worlds largest producer, is on its way to 310 tons of newly

mined output this year, or more than 30% below its level of demand.

Gold just capped off its best

month in a year +14% in

November and 34% year-to-

date

Its not just the middle-class in China that is starting to buy gold, but the centralbank, which has very deep pockets, is going to do likewise. We just came across a

Bloomberg News article quoting an official from the state-owned Assets

Supervision and Administration Commission (Ji Xiaonan, the Chief) as sayingwe

recommend China increase its gold reserves to 6,000 metric tons within three-to-

five years and possibly to 10,000 tons in eight to 10 years. Chinas reserves,

after a 76% buildup since 2003, currently stand at 1,054 tons, so we are talking

here about the prospect of some pretty heaving buying in coming years.

Page 4 of 11


5/11


If China were to lift their gold reserves to 5,000 tonnes, which is equivalent to

about two years of global production, that shift in demand would boost the gold

price by $800/oz to around $2,000 ($1,978) based on our models. If China

moves towards 10,000 tonnes, well, that would end up taking the gold price to

$2,623/ounce if our calculations are in the ball-park.

Make no mistake, we are

gold bulls; central bankshave deep pockets and

production of gold is

stagnant so the demand-

supply backdrop for bullion

is bullishMake no mistake, we are gold bulls. Central banks have deep pockets and

production of gold is stagnant so the demand-supply backdrop for bullion is bullish.

At the same time, we have to pay respect for market positioning over the near-

term. The market for precious metals is overextended right now after the

parabolic move of the past two months. The net speculative long position has

swelled to a record 273,552 contracts (100 ounces each) on the COMEX. Open

interest has never been higher, at 693,661 contracts. So this is one crowded

trade as is the short-trade on the USD against all the major currencies,

especially the commodity-based units.

So, we could get a meaningful gold correction at any time, and we are talking

about a correction in what is still a secular bull market the 200-day moving

average is $970/oz, which means we could get as much as a 20% pullback and

no fundamental trendline would be violated. We remain long-term gold bulls,

and our commentary remains fundamentally bullish, but anything that could

spark a countertrend rally in the U.S. dollar, which is our principal near-term

concern, would put gold at a much better price point for investors than the peak

we are at today.

CHART 2: GOLD UP ALMOST 70% FROM THE NEARBY LOW

London Gold Bullion, PM Fix

(US$ per Troy oz)

NOVCTEPUGULUN09AYPRAREBANECOV

1200

1100

1000

900

800

700


Page 5 of 11


6/11


CHART 3: RECORD NET SPECULATIVE LONG POSITION IN GOLD

Gold: Reportable Noncommercial Long minus Short Position

(number of contracts)

-100,000

-50,000

0

50,000

100,000

150,000

200,000

250,000

300,000

95 98 01 04 07


NOT A BAD TIME TO BE THINKING INCOME

Steady as she goes whether it be in the bond market or bond proxies in the

equity market (ie, large-cap dividend payers). Treasuries have delivered near 8%

returns since the summer (annualized). From the worst levels late last year,

corporate bonds have delivered 35% returns. Within the equity universe, total

returns in utilities from the March low are close to 40% and in the telecom

services sphere, closer to 50%. In both cases, dividend yields are at least

double the rest of the market.

Over the past six months, U.S. investors have put a net $26 billion into equity

funds while plowing $254 billion into bond/hybrid funds, in what appears to be a

secular change in behavior allocating more cash into the fixed-income market.

This divergence could persist for some time because at last count, less than 7%

of household assets were in bonds and 25% were in equities (and 30% still in

real estate!).

Institutional demand for bonds has been solid too. The Treasury managed to

sell $44 billion of 2-year Treasury notes last week at a record low yield of 80bps.

The average bid-to-cover ratio at the Treasury auctions so far this year has been

2.59 versus 2.19 in 2008 despite a record $1.4 trillion budget deficit. Through

the first nine months of 2009, foreign investors, public and private, have added

more than $400 billion to their holdings of Treasury securities matching all of

the activity posted in 2008. So much for an international buyers strike as far as

U.S. government bonds are concerned.

STRONG DEMAND IN CANADA

The Canadian economy eked out a 0.4% annualized advance in Q3 but that

masked a huge improvement in final demand, which accelerated at a 4.7% annual

rate the best spending performance since the fourth quarter of 2007. As with

the U.S.A., the post-downturn rebound in real GDP was extremely tepid by the

standards of post-WWII cycles (then again, this was hardly a normal recession).

Page 6 of 11


7/11


To put +0.4% in Q3 into perspective, a typical quarter that follows a recession

posts a 4.3% annualized growth rate. Dare we say that the last time we had such

a soft post-recession quarter was in 1980, a double-dip was only a year away?

In any case, the only reason why the GDP headline was not an absolute blow-out

was because imports surged at a 36% annual rate. But outside of commercial

construction, which sagged at a 13.8% annual rate (fourth quarter in a row of

contraction) the Canadian economy is humming along:

Consumer spending +3.1% at an annual rate in Q3 Capex +25.6% Exports +15.3% Residential construction +8.1% Renovation activity +11.5% Government +7.9%So while much of Canadian demand was filled with foreign production with

imports soaring, the strength in spending is consistent with improved confidence

levels in Canada across the household and business sectors. The improvement

in the auto sector from depressed levels no doubt helped underpin exports but

this will likely be temporary and import substitution given the strong Canadian

dollar is probably going to be an enduring theme and is already triggering

some deflation pressure as the final domestic demand price deflator actually

dipped at a 0.4% annual rate after being flat in the second quarter. That was

the first decline in two years and is constructive for the Canadian bond market

as it gives the BoC that much more leeway to stay on the sidelines for longer.

CHART 4: DOMESTIC DEMAND DEFLATOR IS HEADING DOWN

Canada: Final Domestic Demand Implicit Price Deflator

(year-over-year percent change)

0505050505

15.0

12.5

10.0

7.5

5.0

2.5

0.0


Page 7 of 11


8/11


PRODUCER DEFLATION IN CANADA CONTINUES

The trend in producer pricesin Canada is down

Industrial prices in Canada, as measured by the industrial product price index

(IPPI), which is similar to the U.S.'s PPI index, unexpected fell again in October,

deflating 0.3% versus consensus expectations of a +0.2% MoM gain and on

top of September's -0.4% reading. It seems that the strong Canadian dollar

played a major role in pulling IPPI lower this month as it appreciated 2.6%

versus the U.S. dollar in October. Without the effects of the strong Loonie, IPPI

would have been +0.4% instead of -0.3% MoM. But this has no bearing on the

Bank of Canada's thinking as it already stated that the persistent strength in

the Canadian dollar is going to subdue inflation pressures.

Nonetheless, the trend in producer prices in Canada is down. On a year-over-

year basis, IPPI is deflating at a 6.3% rate, which is not that far off from the

record -7.1% rate seen three months ago. And, excluding energy (petroleum

and coal products), which rose 1.6% in October, partially reversing the 2.6%

decline in September, IPPI fell 0.5% MoM in October and is now flat or

deflating seven months in a row. On a year-over-year basis, IPPI excluding

energy is deflating at a record 4.5% rate in October. Of the 21 major groups,

over 70% are either down or flat on the month.

As for the raw materials price index (RMPI), it rose 2.5% MoM in October

reversing the 1.0% decline in September. The increase in this index was

mainly due to mineral fuels, in particular crude oil. The year-over-year rate for

RMPI is becoming less negative, at -7.6% in October compared to -21.4% in

September and -34.5% just three-ago; however, there seems to be no flow-

through to the later stages of production: the price index for intermediate

goods is 0% and finished goods is deflating at a 0.7% rate.

Overall, all this attests to our deflationary theme for finished goods and hence

the income-heavy tilt to our investment strategy; and the inflation that is

centered in primary production due to Asias secular growth dynamics also

leaves us with an overall constructive stance on the resource sector.

Page 8 of 11


9/11


Page 9 of 11

PRICES OF CAPITAL EQUIPMENT IN CANADA DEFLATING GREAT NEWS ON

A PRODUCTIVITY STANDPOINT

Within the IPPI report produced by Statistics Canada, we saw that prices for

capital equipment continues to fall, down 1.0% in October, which makes it the

seven months of consecutive declines a streak we last saw in mid-2004.

This bodes well for companies to investment in capital equipment, which in

turn could potentially increase productivity.

CHART 5: PRICES OF CAPITAL EQUIPMENT DEFLATING

GOOD NEWS FROM A PRODUCTIVITY STANDPOINT

Canada

(quarter-over-quarter percent change at an annual rate)

-50

-40

-30

-20

-10

0

10

20

30

40

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Business Investment in

Machinery & Equipment

Industrial Price Index for

Capital Equipment



10/11


Gluskin Sheffat a Glance

Gluskin Sheff+ Associates Inc. is one of Canadas pre-eminent wealth management firms.Founded in 1984 and focused primarily on high net worth private clients, we are dedicated to theprudent stewardship of our clients wealth through the delivery of strong, risk-adjustedinvestment returns together with the highest level of personalized client service.OVERVIEW

As of September30, 2009, the Firmmanaged assets of$5.0 billion.

Gluskin Sheff became a publicly tradedcorporation on the Toronto StockExchange (symbol: GS) in May2006 andremains 65% owned by its senior

management and employees. We havepublic company accountability andgovernance with a private companycommitment to innovation and service.

Our investment interests are directlyaligned with those of our clients, asGluskin Sheffs management andemployees are collectively the largestclient of the Firms investment portfolios.

We offer a diverse platform of investmentstrategies (Canadian and U.S. equities,Alternative and Fixed Income) andinvestment styles (Value, Growth and

Income).1

The minimum investment required toestablish a client relationship with theFirm is $3 million for Canadian investorsand $5 million for U.S. & Internationalinvestors.

PERFORMANCE

$1 million invested in our Canadian ValuePortfolio in 1991 (its inception date)

would have grown to $15.5 million2

onSeptember 30, 2009 versus $9.7millionfor the S&P/TSX Total Return Index

over the same period.$1 million usd invested in our U.S.Equity Portfolio in 1986 (its inceptiondate) would have grown to $11.2 millionusd

2on September 30, 2009 versus $8.7

million usd for the S&P500TotalReturn Index over the same period.

INVESTMENT STRATEGY & TEAM

We have strong and stable portfoliomanagement, research and client serviceteams. Aside from recent additions, ourPortfolio Managers have been with theFirm for a minimum of ten years and wehave attracted best in class talent at all

levels. Our performance results are thoseof the team in place.

Our investmentinterests are directlyaligned with those ofour clients, as Gluskin

Sheffs management andemployees arecollectively the largestclient of the Firmsinvestment portfolios.

$1 million invested in our

Canadian Value Portfolio

in 1991 (its inception

date) would have grown to

$15.5 million2 on

September 30, 2009

versus $9.7 million for the

S&P/TSX Total Return

Index over the same

period.

We have a strong history of insightfulbottom-up security selection based onfundamental analysis. For long equities, welook for companies with a history of long-term growth and stability, a proven trackrecord, shareholder-minded managementand a share price below our estimate ofintrinsic value. We look for the opposite inequities that we sell short. For corporatebonds, we look for issuers with a margin ofsafety for the payment of interest andprincipal, and yields which are attractive

relative to the assessed credit risks involved.

We assemble concentrated portfolios our top ten holdings typicallyrepresent between 25% to 45% of aportfolio. In this way, clients benefitfrom the ideas in which we have thehighest conviction.

Our success has often been linked to ourlong history of investing in under-followed and under-appreciated smalland mid cap companies both in Canadaand the U.S.

PORTFOLIO CONSTRUCTION

For further information,

please contact

[email protected]

In terms of asset mix and portfolioconstruction, we offer a unique marriagebetween our bottom-up security-specificfundamental analysis and our top-downmacroeconomic view, with the notedaddition of David Rosenberg as ChiefEconomist & Strategist.

Page 10 of 11

Notes:Unless otherwise noted, all values are in Canadian dollars.

1. Not all investment strategies are available to non-Canadian investors. Please contact Gluskin Sheff for information specific to your situation.2. Returns are based on the composite of segregated Value and U.S. Equity portfolios, as applicable, and are presented net of fees and expenses.


11/11


IMPORTANT DISCLOSURES

Copyright 2009 Gluskin Sheff + Associates Inc. (Gluskin Sheff). All rights

reserved. This report is prepared for the use of Gluskin Sheff clients andsubscribers to this report and may not be redistributed, retransmitted ordisclosed, in whole or in part, or in any form or manner, without the expresswritten consent of Gluskin Sheff. Gluskin Sheff reports are distributedsimultaneously to internal and client websites and other portals by GluskinSheff and are not publicly available materials. Any unauthorized use ordisclosure is prohibited.

Gluskin Sheff may own, buy, or sell, on behalf of its clients, securities ofissuers that may be discussed in or impacted by this report. As a result,readers should be aware that Gluskin Sheff may have a conflict of interest

that could affect the objectivity of this report. This report should not beregarded by recipients as a substitute for the exercise of their own judgmentand readers are encouraged to seek independent, third-party research onany companies covered in or impacted by this report.

Individuals identified as economists do not function as research analystsunder U.S. law and reports prepared by them are not research reports underapplicable U.S. rules and regulations. Macroeconomic analysis isconsidered investment research for purposes of distribution in the U.K.

under the rules of the Financial Services Authority.

Neither the information nor any opinion expressed constitutes an offer or aninvitation to make an offer, to buy or sell any securities or other financialinstrument or any derivative related to such securities or instruments (e.g.,options, futures, warrants, and contracts for differences). This report is notintended to provide personal investment advice and it does not take intoaccount the specific investment objectives, financial situation and theparticular needs of any specific person. Investors should seek financialadvice regarding the appropriateness of investing in financial instrumentsand implementing investment strategies discussed or recommended in thisreport and should understand that statements regarding future prospectsmay not be realized. Any decision to purchase or subscribe for securities inany offering must be based solely on existing public information on suchsecurity or the information in the prospectus or other offering documentissued in connection with such offering, and not on this report.

Securities and other financial instruments discussed in this report, orrecommended by Gluskin Sheff, are not insured by the Federal DepositInsurance Corporation and are not deposits or other obligations of anyinsured depository institution. Investments in general and, derivatives, inparticular, involve numerous risks, including, among others, market risk,counterparty default risk and liquidity risk. No security, financial instrumentor derivative is suitable for all investors. In some cases, securities andother financial instruments may be difficult to value or sell and reliableinformation about the value or r isks related to the security or financialinstrument may be difficult to obtain. Investors should note that incomefrom such securities and other financial instruments, if any, may fluctuateand that price or value of such securities and instruments may rise or fall

and, in some cases, investors may lose their entire principal investment.

Past performance is not necessarily a guide to future performance. Levelsand basis for taxation may change.

Foreign currency rates of exchange may adversely affect the value, price orincome of any security or financial instrument mentioned in this report.Investors in such securities and instruments effectively assume currencyrisk.

Materials prepared by Gluskin Sheff research personnel are based on publicinformation. Facts and views presented in this material have not beenreviewed by, and may not reflect information known to, professionals inother business areas of Gluskin Sheff. To the extent this report discussesany legal proceeding or issues, it has not been prepared as nor is itintended to express any legal conclusion, opinion or advice. Investorsshould consult their own legal advisers as to issues of law relating to thesubject matter of this report. Gluskin Sheff research personnels knowledgeof legal proceedings in which any Gluskin Sheff entity and/or its directors,officers and employees may be plaintiffs, defendants, co-defendants or co-plaintiffs with or involving companies mentioned in this report is based onpublic information. Facts and views presented in this material that relate to

any such proceedings have not been reviewed by, discussed with, and maynot reflect information known to, professionals in other business areas ofGluskin Sheff in connection with the legal proceedings or matters relevant

to such proceedings.

Any information relating to the tax status of financial instruments discussedherein is not intended to provide tax advice or to be used by anyone toprovide tax advice. Investors are urged to seek tax advice based on theirparticular circumstances from an independent tax professional.

The information herein (other than disclosure information relating to GluskinSheff and its affiliates) was obtained from various sources and GluskinSheff does not guarantee its accuracy. This report may contain links to

third-party websites. Gluskin Sheff is not responsible for the content of anythird-party website or any linked content contained in a third-party website.Content contained on such third-party websites is not part of this report andis not incorporated by reference into this report. The inclusion of a link in

this report does not imply any endorsement by or any affiliation with GluskinSheff.

All opinions, projections and estimates constitute the judgment of theauthor as of the date of the report and are subject to change without notice.Prices also are subject to change without notice. Gluskin Sheff is under noobligation to update this report and readers should therefore assume thatGluskin Sheff will not update any fact, circumstance or opinion contained in

this report.

Neither Gluskin Sheff nor any director, officer or employee of Gluskin Sheffaccepts any liability whatsoever for any direct, indirect or consequentialdamages or losses arising from any use of this report or its contents.

Page 11 of 11

Breakfast With Dave: How is this not a Depression?

Documents

Transcript of Breakfast With Dave: How is this not a Depression?