QEC Fraser M. still buying Retail RBC still Selling

Credit crisis losses total $1.4-trillion -- IMF

Tuesday, October 07, 2008
WASHINGTON — The International Monetary Fund Tuesday increased its estimate of global losses from the financial meltdown to $1.4-trillion (U.S.) and warned that the world's economic downturn was deepening.

“Declared losses on U.S. loans and securitized assets are likely to increase further to about $1.4-trillion,” the IMF said, increasing the loss estimate from $945-billion in April and slightly up from $1.3-trillion it cited last month.

In its quarterly assessment of global capital markets, the IMF said global economic activity is slowing down as growth in advanced economies decelerates and emerging economies start to lose momentum.

“Despite better-than-expected performance early this year, rising financial turmoil has led to a downgrade in the IMF's baseline forecast for global economic growth in 2008-09,” it said.
The IMF called for a well co-ordinated response to restore confidence and to avert a more protracted economic slowdown, but warned that central banks would need to continue injecting cash to calm the unprecedented turmoil.

“The risk of a more severe adverse feedback loop between the financial system and the broader economy represents a critical threat,” the IMF said.

“The combination of mounting losses, falling asset prices, and a deepening economic downturn has caused serious doubts about the viability of a widening swath of the financial system,” it added.

Separately, a senior International Monetary Fund official said Tuesday that globally co-ordinated policy actions are needed to address the current financial crisis, but not all measures need to be exactly the same.

“Co-ordinated action can help alleviate what is now a difficult situation in financial markets,” Jaime Caruana, director of the IMF's monetary and capital markets department, told a news conference.

© Copyright The Globe and Mail

Questerre On Verge Of Testing Utica Commerciality: Dundee
Dow Jones Newswires

TORONTO (Dow Jones)--Questerre Energy Corp. (QEC.T) is on the verge of testing commerciality of the Utica shale play in the St. Lawrence Lowlands of Quebec, leading Dundee Securities to initiate coverage of the company at buy with a stock-price target of C$8.25.

Recent improvements in horizontal drilling and completion methods have opened up many tight reservoirs and shale plays that have previously been uneconomic, including those in the St. Lawrence Lowlands, Dundee analyst Victor Rodberg said.

He added that, based on his model of the well economics of the Utica shale combined with well test data to date, he believes Questerre has the makings of a commercial project. He noted several near-term catalysts for Questerre's share price, which is at C$2.84 in Toronto Friday, up nearly 22%.

The largest near-term catalyst by far, he said, is horizontal initial production rates from Forest in the deep Utica. Drilling is underway with Forest and Rodberg expects to hear news on initial production rates in October. Additionally, Talisman Energy Inc. (TLM) has recompleted a previous well with Questerre that provided an 18-day well test of the Utica but should also give us a future glimpse at the prospectivity of the Lorraine shale.

Questerre is also drilling a well with Gastem Inc. (GMR.V) to test the shallow acreage of the Utica shale. Dundee doesn't have an investment-banking relationship with Questerre, nor does Rodberg have a stake in the Calgary company. Company Web site: http://www.questerre.com -

Tara Zachariah, Dow Jones NewsWires;

(c) 2008 Dow Jones & Company, Inc.

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Capitulation nation

Monday, October 06, 2008

As an investor, Bob Hoye is as sickened by Monday's stock market selloff as anyone. But as a professional market watcher who often delves into the historical nitty gritty, the editor and chief investment strategist at Institutional Advisors, can see an upside to the market plunge.

He noted that sharp downturns in the stock market can last 55 trading days, from start to finish.
The most recent leg of the downturn, for the Dow Jones industrial average and the S[amp]amp;P 500, began in late August. That[amp]nbsp;means that this one may near its conclusion toward the end of October.

History also suggests that if you suffer through a stock market disaster in the autumn, the volatility will usually conclude – again – before the end of the October.
Third, his firm has an in-house model, using six parameters, which gives them a signal of capitulation for the Dow and the S[amp]amp;P 500. If the model sends another downward signal this week, it will show a capitulation level seen only eight times since 1900.

“It looks like this week is going to be down,” said Mr. Hoye, a long-time bear. “When we conclude this signal, the rebound can be within a week or a maybe another week after that. But the rebound is inevitable.”

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© Copyright The Globe and Mail

Stocks in freefall as financial crisis spreads

STEVE LADURANTAYE
Monday, October 06, 2008
Stocks in Toronto plunged Monday, joining a global selloff sparked by concerns about a $700-billion (U.S.) bailout package for the U.S. financial sector and the spreading bank crisis in Europe and Asia.

The S&P/TSX - down 11 per cent earlier in the session - lost 5.95 per cent, or 642.32 points, to 10,161.03 by 11:45 a.m. (ET). The index last closed below 10,000 July 4, 2005.
The Dow Jones industrial average traded 4.38 per cent lower, down 452 points to 9,873.38 – the first time it has traded below 10,000 since April 2005. The S&P 500 fell 4.70 per cent, or 51.68 points, to 1,047.55.

“Breaking below 10,000 is a psychologically significant thing for investors,” said Kenneth Norquay, a partner at CastleMoore Inc., a portfolio-management company in Oakville, Ont. “Those big round numbers – like $1,000 gold, 10,000 on the indexes – can become very important as benchmarks. Just how important, I guess we're about to find out.”
The energy sector – which is weighted second behind financials on the S&P/TSX, fell 9.5 per cent in morning trade as oil slipped below $90 a barrel for the first time since April. It touched $88.99 a barrel early in the session, but recouped some losses to trade at $90.82 – still a loss of $3.06.

“The Canadian market is going to keep getting lower because of the effect of commodities,” said Brandon Osten, president of Venator Capital Management Inc. in Toronto. “Get the hell out of commodities - it's not too late for you. Oil can go back to $65 a barrel. Any out there who thinks $90 oil is low by historical levels needs to take another look.”

No sector was untouched – utilities and health care were each off about 7 per cent, industrials fell 5.6 per cent and consumer staples 6.8 per cent. Technology was faring the best, down 1.12 per cent.

The American bailout plan was created to get banks lending to each other again, after the subprime-mortgage crisis wreaked havoc on American financial markets.
The U.S. government was forced to take over mortgage lenders Freddie Mac and Fannie Mae in September to protect $5-trillion in mortgages, and also rescued insurer AIG Corp. with an $85-billion investment.

Meanwhile, Lehman Brothers Holdings Inc. declared bankruptcy, Merrill Lynch & Co. Inc. was taken over, and Goldman Sachs and Morgan Stanley restructured into depository institutions.
The ripple effects extended deeper into Europe over the weekend, with Germany bailing out Hypo Real Estate AG, and France's BNP Paribas throwing a lifeline to financial group Fortis. The European Central Bank flooded markets with $50-billion Monday, while the Bank of England contributed another $10-billion.

Losses on major indexes around the world Monday included 4.5 per cent drops in China and Japan, a 5 per cent drop in London, and a 5.1 per cent drop in Germany. Norway's commodity-heavy index was off 9.95 per cent.

“There are worries rushing round the banking sector as markets try to account for the potential disparity that could be seen in savers' trust in deposit accounts and the knock on effect this will potentially have on the viability of institutions,” said London-based CMC Markets dealer Jimmy Yates. “All told it's not looking pretty and it does seem as if we may now have to resign ourselves to seeing further casualties along the way.”

More to come
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