Dave Rosenberg 11/23/09 by etfdesk

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									David A. Rosenberg Chief Economist & Strategist drosenberg@gluskinsheff.com + 1 416 681 8919

November 23, 2009 Economic Commentary

MARKET MUSINGS & DATA DECIPHERING

Breakfast with Dave
DUE TO BUSINESS TRAVEL, BREAKFAST WITH DAVE WILL NOT BE PUBLISHED TOMORROW, BUT RETURNS ON WEDNESDAY WHILE YOU WERE SLEEPING Risk taking back on the table to start the week: most equity markets around the globe in the green column (MSCI World index up about 1.0% so far today); the U.S. dollar slumping again (DXY index barely above 75); commodity prices firming (copper and oil both up over 2.0% in overnight trade) with gold hitting yet another fresh record high (touching $1,167.88/oz); resource-based highbeta currencies back on the rise (first time in six days, led by a 1.5% spurt in the South African Rand); and corporate default swap prices highlighting reduced bond risks. Perhaps part of this exuberance stems from comments made by St. Louis Federal Reserve Bank President Bullard (who will be a FOMC voter in 2010) yesterday that the Fed may well extend beyond the current March expiry date strategy of adding mortgage-backed securities to its balance sheet in order to revive the moribund housing industry. That in turn means more U.S. dollar printing, which is bullish for the basic materials complex, especially precious metals. It does seem rather certain after last week’s central bank commentary — from the Bank of Canada too — that there is a policy push to fight deflation, not inflation, that downside risks trump upside risks to growth in the “official forecasts” and that there is no concern right now over asset bubbles being created. (The IMF has also released a statement overnight stating that any “exit strategies” should err on the side of being too late, not early.) Meanwhile, Chicago Fed President Evans gave his own forecast today in the FT and sees the unemployment rate hitting 10.5% (and the just-released National Association of Business Economists (NABE) survey has the U.S. jobless rate at 9.6% a year from now — just in time for the mid-term elections). So little wonder that Treasury bill yields are basically at zero. All systems are go! As we said earlier, Ben Bernanke is playing the role of Jerry Lewis in the “Nutty Professor’ and during his tenure, half of the country’s monetary base has been created; and a time when mined production of gold has been stagnant. You don’t have to do much more than draw supply and demand curves to understand why gold is rallying — in every currency (ie, even in Canada, the BoC has allowed base money to growth at over an 11% YoY rate). IN THIS ISSUE • While you were sleeping — risk taking back on the table to start the week • Oh Canada … Sale-ing north! Canadian retail sales is solid, rising 1.0% MoM in both September and August • Utility in utilities — the utilities sector in the U.S. have managed to enjoy much ‘growthier’ returns than growth sectors • The chicken and the egg — we may be the last skeptic alive to suggest that the recession hasn’t ended despite the 60%+ rally in the equity market from its March low • U.S. housing market back in disarray — housing starts at its lowest level in 10 months and mortgage purchase applications hit a 12-year low • Some indicators raising yellow economic flags • Some artificial help for the U.S. job market?

Please see important disclosures at the end of this document.

Gluskin Sheff + Associates Inc. is one of Canada’s pre-eminent wealth management firms. Founded in 1984 and focused primarily on high net worth 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, visit www.gluskinsheff.com

November 23, 2009 – BREAKFAST WITH DAVE

On the data front, deflation pressures are still intact everywhere, outside of the basic materials sector. Singapore just reported a -0.8% YoY print on its October CPI, versus -0.4% in September (consensus was -0.4%) and in negative terrain now for seven months in a row. So what the central banks around the world are doing is creating asset inflation as an antidote to the deflation in the consumer and producer arena … shades of 2003-04, and we know how that cycle ended. The central banks remain steadfast of the view that bubbles cannot be identified ahead of time, but they are to be cleaned up after the fact. Openended commitments to keep rates near zero (“mid-2010” in Canada — though that date will be pushed out, no doubt; and in the U.S.A., “extended period” smacks of what the Fed did when the fed funds rate was at 1% in 2003-04 with “considerable period” and “patience” in removing accommodation) are clearly at the root of the speculative behaviour we are seeing across all risky assets. (As an aside, the breakout in copper despite a seven-month high LME stockpiles — a sign of soft demand — attests to the speculative fervor starting to creep in.) While investors now have this tendency to ‘live in the moment’ we have to wonder if their timing will be any better than it was in either 2000 or 2007 when it comes down to having the resolve to shed the greed and take on some resolve as the prices for all these securities breach the economic fundamentals and rally simply on central bank liquidity and the illusion of recovery induced by massive doses of government intervention. OH CANADA .. SALE-ING NORTH! Canadian retail sales were solid — up 1.0% MoM for the second month in a row in September (August was revised up from +0.8% initially). The three-month trend is running now at a not-too-shabby 6.7% annual rate. Besides auto sales (+1.0% MoM), what stood out in the report was the 1.3% jump in food/drink sales (+1.3% on top of the 0.7% gain in August) and pharmacies (+0.5% and the with the YoY trend at +5.9%, it is the strongest of all categories; and over the past three months, sales here are running at a hot 10% annual rate). What was surprising was the weakness in building supplies given the hot housing market and the home renovation tax credit (sales dipped 0.2% and have declined now in three of the past five months). All in, retail sales have now turned in +1% gains in three of the past four months. This is impressive, but there is no reason why the domestic demand side of the economy should not be firm with fiscal policy highly stimulative, interest rates at rock-bottom levels and mortgage and consumer credit from the banks expanding at annual rates north of 10% over the past six months. Resource prices are surging, which is great news as long as you reside west of the Ontario border. The only fly in the ointment is the fragile state of domestic demand in the U.S.A. and the hit to exports from the 95 cent Canadian dollar — it’s a good thing that manufacturing is only 10% of the economy.

Deflation pressures are still intact everywhere around the globe

Canadian retail sales have now turned in +1.0% gains in three of the last four months

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November 23, 2009 – BREAKFAST WITH DAVE

UTILITY IN UTILITIES There is a great article on the utilities group in today’s Lex column of the FT (page 14 — Utility Players). In a deflationary environment, price protection from regulators is always key as is yield to investors. At 4.5%, not only is the dividend yield in the utilities sector the second highest among all S&P 500 groups (only telecom is higher at 5.7%) but is more than double the yield of the S&P 500; at least as high as what you can garner from the debt of most utility companies; and is more than the yield you can get from the long bond (and more than twice the yield of the 5-year Treasury note). Note that utilities have also managed to have enjoyed much ‘growthier’ returns than growth sectors themselves, with total returns of 37% over the past decade versus nearly -10% for the market as a whole. Owning ‘natural monopolies’ in an overall deflationary backdrop, which we have been in frequently over the past 10 years, is at least one way to secure returns that are minimally in line with overall nominal GDP growth (so far this decade, nominal GDP has risen barely over 40%). THE CHICKEN AND THE EGG We sifted through Barron’s over the weekend and found out in ‘The Trader’ column that Jim Paulsen of Wells Capital Management is “a favorite market strategist”. Well, everyone is entitled to their opinion and we have debated Mr. Paulsen in the past, and just as we may be looked upon as ‘perma-bears’, he most certainly is a ‘perma-bull’. We can’t lay claim to be able to pick every peak and valley but we have been consistent with our view that we are halfway through a secular bear market in equities, and while we were never quite optimistic enough during the credit and asset bubble from 2003 to 2007, we like to feel that we saved people who listened to us a lot of pain during what economists now call the Great Recession. We saw it coming, and admittedly we were early on the call, but after re-read Bob Farrell’s market rules to remember and Charles P. Kindleberger’s “Manias, Panics and Crashes” and we’re confident that the housing and credit bubble would collapse under its own weight of dramatic excess. We all make calls that in hindsight proved to be inaccurate. But the question is where you were on the really big calls. The calls that really mattered — that actually saved people their hard-fought wealth and capital. Well, on November 22, 2007, a month away from the steepest economic downturn since the 1930s, and as a matter of public record, Mr. Paulsen had this to say: “This thing hasn’t been about people losing their jobs and their incomes. It’s been more about CEOs getting fired, banks writing off hedge fund losses and a showdown between Wall Street and the Fed.”

Great article on the utilities sector in today’s FT. This sector of the S&P 500 has enjoyed a much ‘growthier’ returns than growth sectors

We were confident that the housing and credit bubble in the U.S. would collapse under its own weight of dramatic excess

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November 23, 2009 – BREAKFAST WITH DAVE

Mr. Paulsen wasn’t the only one to dismiss the credit bubble bursting and what was to follow. But just because he stayed bullish and caught this year’s government-induced rally, pundits like him are now viewed as being a “favourite” in one of the most influential business journals is rather incredible. But it does attest to the ‘what have you done for me now’ mentality that has gripped an equity market that has stayed so short-term focused. A reader of our daily missives reminded us last week that as for the current non-fundamentally based situation, we might want to reference the beginning of Annie Hall when Woody Allen tells the joke about the family thinking about institutionalizing their crazy uncle who believes he’s a chicken. Here it goes: This guy goes to a psychiatrist and says, “Doc, uh, my brother's crazy. He thinks he's chicken.” And, uh, the doctor says, “Well, why don’t you turn him in?” And the guy says, “I would, but I need eggs.” That just about sums up a market that can rally more than 60% over a span when the economy managed to lose three million jobs and organic personal income hit new lows for the cycle. It goes to show that if the government can change accounting rules in the middle of the game, take a 40% stake in Citigroup, GM, and a 100% stake in Fannie and Freddie, have the Fed orchestrate a controversial bailout of AIG, allow the FHA to dominate the mortgage lending market with a 3.5% down-payment and encourage consumption through an array of housing and auto subsidies, at a time when the deficit has ballooned to over $1 trillion, then anything is truly possible. There is a tremendous amount of psychology and emotion when it comes to investing. To this end, we highly recommend that everyone reads the editorial by Robert Shiller on page 5 of the Sunday NYT biz section — What if a Recovery Is All in Your Head?. To wit: “Beyond fiscal stimulus and government bailouts, the economic recovery that appears under way may be based on little more than self-fulfilling prophecy … For now, our common efforts at building confidence appear to be working somewhat. But the economy has still not recovered by any means … we may still be at a tipping point.” Indeed, it may pay to consider that the term “Great Depression” was not coined until 1934 in a book by that title by Lionel Robbins (as Mr. Shiller points out) which was fully two years after GDP and the stock market bottomed. But the point we have tried to make repeatedly is that (i) GDP is not the only measure of economic well-being, and (ii) stock market bottoms can still be followed by years of pronounced volatility and sharp downswings.

A ‘what have you done for me now’ mentality has gripped an equity market that has stayed so shortterm focused

There is a tremendous amount of psychology and emotion when it comes to investing

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November 23, 2009 – BREAKFAST WITH DAVE

What the economists call the “Great Recession” today so as to generate any fear that what we endured was in fact, a depression (recessions are not generally touched off by credit collapses and asset deflation, but economists — with few exceptions — tend to be a polite group). The most widely held view out there right now — a universal view, in fact — is that the recession has ended because the stock market, which after it accurately foreshadowed at least two recoveries in 2008, is telling everyone so; Bernanke has told us that (the man who told us the problems in housing and subprime mortgages would be contained back in 2007); and everyone wants to believe it. (Didn’t cash-for-clunkers induce a spurt in auto sales and production? Didn’t the government just expand the housing subsidy? Aren’t jobless benefits going to be extended and isn’t there going to be a hiring tax credits for businesses coming soon? And what about those shovel-ready infrastructure projects?) It was amazing last week when the markets were on pins and needles ahead of the weekly jobless claims data as hopes were high that finally the claims number would break below that 500,000 mark (never in the past was the prospect of a 499,000 print on jobless claims viewed as such a momentous event … it may have to await another week). This is what we mean about psychology — is there a big difference between 499,000 and 501,000? Both are data-points generally reversed for recessionary episodes in the economy. And now, the scuttlebutt on Wall Street is that we may see a positive nonfarm payroll print, or at worst a small negative, when the November data roll out? The reason, a ‘friendly’ seasonal adjustment factor! Our question for Mr. Market is how he would even treat such an event, for he has managed to rally over 60% with the economy losing three million jobs since March and all the cost-savings, productivity-improvements and margin-boosts that have come with the ongoing employment contraction. Why ruin things by having employment go up and be forced to share the income spoils with the proletariat? Even the notion of a ‘double dip’ assumes that the current recession has ended. There is no doubt that with the government applying life support to the financial system and the Fed and the Federal government’s balance sheet losing any sanctity it may have ever enjoyed before the credit collapse have managed to give the appearance that overall macro and market conditions are stable, it could well be that an appropriate forensic accounting of the economy would reveal that, sorry, the recession (however defined) is not over. Even if the recession is over, the historical record shows that downturns induced by asset deflation and credit contraction are different than a gardenvariety recession induced by Fed tightening and excessive manufacturing inventories since the former typically induce a secular shift in behaviour and attitudes towards debt, asset allocation, savings, discretionary spending and homeownership. The latter fades more quickly.

The universal view is that the recession has ended in the U.S. just because the equity market is up 60% from the lows

Even the notion of a ‘double-dip’ assumes that the current recession has ended

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November 23, 2009 – BREAKFAST WITH DAVE

This is why people didn’t figure out that it was the Great Depression until two years after the worst point in the crisis in the 1930s; and why it took decades, not months, quarters or even years, for the complete transition to the next sustainable economic expansion and bull market. Japan is seeing this play out much the same way, but it is year 19 and the U.S.A. is now about to enter year 3. This by no means suggests that investors, even in the 1930s in the U.S.A. or in the 1990s in Japan, could not make money. The former was good for gold (in Sterling terms) and high-grade corporate bonds; the latter again was positive for fixed-income securities and for defensive-growth sectors like health care. We may well be the last skeptics alive to suggest that the recession hasn’t necessarily ended despite what Mr. Market has been signaling since March. Production had been bolstered by an auto rebound and sales helped from various government incentives, but employment and organic income have yet to bottom, housing looks to be correcting downward again, and manufacturing output dipped last month. On top of all this, how can it possibly be that the economy is fully recovering when tax collections slid 11% YoY across 44 states in the third quarter (see page A4 of the WSJ for more on this file). HOUSING MARKET BACK IN DISARRAY At least we know now just how the economy looks when the government isn’t compelled to play the role of saviour. Take away cash-for-clunkers, and the organic pace in auto sales is 10 million units at an annual rate (even with the subsidy, the best we could do was a paltry 14 million units — there is no demand in this economy). Then we have the ‘fear’ that the government will actually do what it had already set out to do, which was to let the first-time homebuyer tax credit expire, and lo’ and behold, housing starts collapse more than 10% to a six-month low. Not only that, but mortgage applications for new home purchases hit a 12-year low in the middle of November (down 22% in the past month!), fully two weeks after the Administration said it was going to not only extend but expand the program to include higher-income trade-up buyers. Once again, there is minimal demand for autos and housing, and that is partly because the market is still saturated with both of these credit-sensitive big-ticket items after an unprecedented credit and consumer bubble that went absolutely parabolic in the seven years prior to the collapse in the financial markets an asset values. Not only is there a record 19 million of vacant housing units nationwide and 250 million autos and light trucks on the roads for a domestic labour force that totals barely more than 150 million, and a 130% household debt-toincome ratio that is still more than $5 trillion above what households ever managed to carry on their books relative to wages and you can see that, flashy bear market rally or not, we are probably not even one-third of the way through this deleveraging cycle. Tread carefully.

But remember, this recession was induced by asset deflation and credit contraction, which tends to be prolonged given that it also induces secular shifts in behaviour towards debt, savings and spending

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This year will go down as the year that the Fed, the Treasury, Congress and the White House saved the economy, but the question for 2010 and the years that follow is what the final cost will be from all the fiscal largesse, the distortions from saving mismanaged insolvent big banks, not to mention the politicization of the Fed and how, if ever, all the hundreds of billions of housing loans that it has accepted on its balance sheet can ever possibly be unwound. What we do know is that the latest Gallup poll shows that President Obama’s approval rating has slipped below the 50 mark. Who would have thunk? But the independents who had been expecting a leader to lead from the center instead of the center-left (or in Nancy Pelosi’s case, just the left), are now shifting their preferences with a year to go before the mid-term elections. In the interim, yet another fiscal package is being contemplated (see the front page of the Saturday NYT — New Consensus Views Stimulus as Worthy Step: Talk of a 2nd Infusion). Yet the President himself said last week that the out-ofcontrol deficit could risk a double-dip recession (you can’t make this stuff up). How another fiscal package can be afforded is a good question — even according to current rosy projections from the Congressional Budget Office (CBO), by 2019, the deficit will still be north of $1 trillion (see The Coming Fiscal Disaster op-ed piece on page A19 of the WSJ). Not only is the White House scrambling for support, but so is the Bernanke-led Fed (see page A2 of the weekend WSJ — Congress Grows Fed Up Despite Central Bank’s Push) — the Gallup poll reveals that only 30% of Americans think the Fed is doing either a good or excellent job — that’s less than the IRS (at 40% )! The Fed is now facing a congressional push (like allowing the GAO to audit monetary policy as well as shift the Fed’s bank supervisory powers to a congressional agency) to change the central bank’s responsibilities like we have not seen since 1935. Mr. Bernanke himself is going to have to face the Senate on his confirmation hearings for a second four-year term on December 3rd. Should prove interesting. Speaking of all the fiscal largesse, we will be reminded again this week that somehow all the fun has to be financed somehow — $118 billion in 2, 5 and 7year note auctions. SOME INDICATORS RAISING YELLOW ECONOMIC FLAGS For example, a 10% slide in housing starts in October, a flat housing market index (according to the National Association of Home Builders), a 0.1% MoM dip in manufacturing output last month, or how about a 3.3% decline in electricity demand this year. How does all this exactly jive with economic recovery?

The latest Gallup poll shows that President Obabma’s approval rating has slipped below the 50% mark

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November 23, 2009 – BREAKFAST WITH DAVE

What about the fabled ECRI leading indicator, the one that grabbed all the media attention during the age of the green shoot, but now is nowhere to be mentioned in the brown shoot era? Indeed, the index fell another 0.4 point last week and now stands at a nine-week low. Yet Lakshman continues to assure us that “it is still pointing unambiguously to a continued economic recover” (ahhh…but is it still pointing to the 10% GDP growth that Jim Grant was fantasizing about just a short two months ago?). Oh yes — and all of a sudden the earnings news isn’t so “rosey”. D.R. Horton and Dell both miss their revenue and profit targets, and what about Ann Taylor raining on the bulls’ parade by daring to suggest that sales activity will be more downbeat in the current quarter than previously expected? Didn’t Target just report tepid consumer demand so far in November? And did Home Depot not just report that its 2010 sales outlook has received a bit of a haircut? UPS also cut its 2010 ground shipment rate down to 4.9% and trimmed two percentage points from its fuel surcharge. And on the financial front, the 124th regional bank failed on Friday (the Commerce Bank of Southwest Florida) — nice to see that the credit crunch is over. And in the markets, the transports never did confirm the new highs recently made in the industrials; it looks like tech is losing favour; the emerging market equities failed to make new ground after testing 15-month highs; and now the cyclically sensitive currencies of the world are giving it up (the Australian dollar was down 2.3% last week; the New Zealand Kiwi down 2.5%; and the Loonie off 1.6%). We can’t ignore leading stock markets like the Nikkei and the FTSE (riding a four-day losing streak) rolling over, either. Meanwhile, gold continued to make new highs of $1,150/oz (taking silver, platinum, palladium and copper along) even in the face of the nascent recovery on the U.S. dollar. News that Chinese demand for bullion soared 12% YoY in Q3 to a record of 120.2 tons on top of the report out of Barclay’s showing net inflows into commodity funds totaling $55 billion year-to-date (surpassing the 2006 peak of $51 billion) provided a sentiment lift to be sure. All that said, as we said last week, the biggest risk over the near-term for anything “risky” is a possible countertrend rally in the U.S. dollar — the bear trade here is about the most crowded trade we have ever seen. But there are ways you can protect yourself against this prospect — see Dollar Bulls, Here’s Your Trade on page 44 of Barron’s. But for those with a longer-term perspective, especially on where the global economic momentum is shifting and on the fundamental outlook on the commodity sector, then flip a few pages and have a look at If Current Trends Continue … How Will America Deal With it when China Rules the World? on page 50.

The fabled ECRI leading indicator for the U.S. is now at a nine-week low

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November 23, 2009 – BREAKFAST WITH DAVE

SOME ARTIFICIAL HELP FOR THE JOB MARKET? With jobless claims still north of 500k — let alone 400k — the economy is still losing jobs. And the reason why the market is waiting on tenterhooks to see claims break below 500k is because above this level (and we are now at 505k — on the cusp!), history shows that employment contracts 97% of the time! Only 97%, but when we drop into a 400k-499k on claims, the odds of seeing employment contract decline substantially to just under 50%. But that does not mean that some help is on the way. For example, there is growing talk of a very favourable seasonal factor bolstering the November payroll data when they are released on December 4. Of course, there is also growing chatter out of Washington that we could see tax credits for businesses for new hires. And we see on page A4 of the weekend WSJ that the Census, which comes every decade, is going to provide a lift right in time (for the mid-term election too!) because the Census Bureau is expected to add more than one million workers (though part-time) for the 2010 count. What better stimulus than that? Maybe this is why we always see recessions in years after the “0” digit at the end — 1961, 1981, 1991, 2001; they suffer from the hangover after the Census workers leaving the job market. We went back to the history books and found that indeed, in those years where the 10-year consensus is conducted, the swing in federal government employment (ex-postal) from the year before is just over 100,000 and the peak tends to take place in May. So while we hear that over one million census workers will be hired, on average, the swing is barely more than 100,000 from the year before, and the year after the Census worker hirings, federal government employment is always negative (and by an average of around 85,000). We’ll see if Mr. Market is smart enough to look through what is going to be a three to four months of a temporary hiring boost during the winter and spring. But make no mistake the U.S. labour market is one sick puppy. The jobless rate hit a new post-WWII high in 29 states in October, up from 22 in September (led by Michigan at 15.1%). But if you want to see what the future looks like – we are talking about years – after an asset and credit collapse, see the article on page A8 of the weekend WSJ – Deflation’s Return Weighs on Japan. WOULD YOU LIKE TO HAVE A REAL BREAKFAST WITH DAVE? Come and hear David Rosenberg in person on Thursday, November 26 at the Toronto Board of Trade starting at 7:30 a.m. Along with legendary bank analyst Hugh Brown, David will be giving his thoughts on the outlook for 2010. Breakfast really will be served! Click here for more details or contact Maria Locacciato: 416-306-0866

Make no mistake, the U.S. labour market is one sick puppy

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$1 million invested in our Canadian Value Portfolio in 1991 (its inception date) 2 would have grown to $15.5 million on September 30, 2009 versus $9.7 million for the S&P/TSX Total Return Index over the same period. $1 million usd invested in our U.S. Equity Portfolio in 1986 (its inception date) would have grown to $11.2 million 2 usd on September 30, 2009 versus $8.7 million usd for the S&P 500 Total Return Index over the same period.
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Investors in such securities and instruments effectively assume currency risk. Materials prepared by Gluskin Sheff research personnel are based on public information. Facts and views presented in this material have not been reviewed by, and may not reflect information known to, professionals in other business areas of Gluskin Sheff. To the extent this report discusses any legal proceeding or issues, it has not been prepared as nor is it intended to express any legal conclusion, opinion or advice. Investors should consult their own legal advisers as to issues of law relating to the subject matter of this report. Gluskin Sheff research personnel’s knowledge of legal proceedings in which any Gluskin Sheff entity and/or its directors, officers and employees may be plaintiffs, defendants, co-defendants or coplaintiffs with or involving companies mentioned in this report is based on public information. Facts and views presented in this material that relate to any such proceedings have not been reviewed by, discussed with, and may not reflect information known to, professionals in other business areas of Gluskin Sheff in connection with the legal proceedings or matters relevant to such proceedings. Any information relating to the tax status of financial instruments discussed herein is not intended to provide tax advice or to be used by anyone to provide tax advice. Investors are urged to seek tax advice based on their particular circumstances from an independent tax professional. The information herein (other than disclosure information relating to Gluskin Sheff and its affiliates) was obtained from various sources and Gluskin Sheff does not guarantee its accuracy. This report may contain links to third-party websites. Gluskin Sheff is not responsible for the content of any third-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 and is 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 Gluskin Sheff. All opinions, projections and estimates constitute the judgment of the author 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 no obligation to update this report and readers should therefore assume that Gluskin Sheff will not update any fact, circumstance or opinion contained in this report. Neither Gluskin Sheff nor any director, officer or employee of Gluskin Sheff accepts any liability whatsoever for any direct, indirect or consequential damages or losses arising from any use of this report or its contents.

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