Economists present their 2008 outlooks

TheStar.com - Business - Economists present their 2008 outlooks

STEVE RUSSELL/TORONTO STAR

Doug Porter, chief economist at BMO Capital Markets, foresees an average oil price of $81 (U.S.) per barrel and a loonie ending the year near 95 cents.

Most expect stock market returns of less than 10% as investors deal with impacts of slower U.S. growth

January 01, 2008

Madhavi Acharya-Tom Yew
Business Reporter

It was a high-flying year – and then some – for the Canadian dollar and oil.

While the Bank of Canada raised interest rates, then promptly cut them, and the stock market managed to eke out a single-digit gain on the year, it was the loonie and crude oil prices that sent financial markets reeling in 2007.

The price of oil hit an all-time high of $99.29 (U.S.) a barrel on Nov. 21, though the story of its rise started in 2003. The price of oil has quadrupled in four years, driven by surging demand from China and other developing economies.

Meanwhile, production cuts by the Organization of Petroleum Exporting Countries and rising geopolitical turmoil have put the squeeze on the supply side. The price rose about 58 per cent from the start of this year alone, leaving the average for 2007 at about $72 per barrel.

Yesterday, light crude oil prices settled at $95.98 a barrel, off two cents, on the New York Mercantile Exchange.

The Canadian dollar soared to parity with its U.S. counterpart for the first time in 30 years in September.

The currency rose to an all-time high of $1.10 on Nov. 7, though it has since hit some turbulence. The loonie – which closed yesterday at $1.0088 – has risen about 18 per cent this year, strengthened by higher commodity prices.

The S&P/TSX composite index scratched out a small gain yesterday, leaving the benchmark Canadian market up about 7 per cent for the year.

That's enough for investors to breathe a sigh of relief after the global credit crunch that wreaked havoc on the stock markets through the summer and fall, but it's also a far cry from the healthy 14.5 per cent gain the market saw for 2006.

The Bank of Canada, worried that a surging Alberta economy would boil over, raised the key overnight bank rate by 25 basis points to 4.50 per cent in July. It then cut the rate back to 4.25 per cent in December, much to the relief of exporters and manufacturers in Ontario and Quebec who have been broadsided by the loonie's rise.

What's in store for the next year?

The Toronto Star asked three economists for their outlooks for 2008 on oil prices, the Canadian dollar, the S&P/TSX composite index, and whether the Bank of Canada will raise or lower interest rates.

Benjamin Tal, CIBC World Markets

Oil: "We believe oil prices will remain elevated. This is not an oil shock. This is a permanent structural change in the economics of oil.

"We have huge demand coming from China, India, and supply is limited. We see oil prices averaging about $100 (U.S.) in 2008."

Canadian dollar: "We see the Canadian dollar losing some ground over the next six months and then regaining this ground and closing the year at about $1.05.

"It will stay below par for six months or so, reflecting some softness in commodity prices, but we believe by the second half, we will see overall recovery in global economic growth and the U.S. economy."

Interest rates: "We see the Bank of Canada cutting interest rates by 25 basis points because of the credit crunch early in 2008, then taking a break for the rest of the year, with potentially starting to raise them toward the end of the year."

Stock market: "We are bullish on the stock market. We think the next few months will continue to be very volatile.

"Beyond that, we believe we will see a significant rebound in the stock market as the credit crunch will come to an end, and it will end up to be not as bad as some people believe.

"We also think the North American economy will start the process of recovery. We see the S&P/TSX ending 2008 at roughly 16,000 points."

Clément Gignac, chief economist at National Bank Financial

Oil: "We see oil prices averaging $75 (U.S.) for 2008, largely because of a deceleration of the worldwide economy, with a huge headwind from the U.S. side.

"I think we will find that gasoline demand is probably more cyclical than structural. If you lose your job, and go less often to the restaurant, the shopping centre, and less often to Florida, you will use less gasoline."

Canadian dollar: "On one side, I see a headwind on commodities and oil prices. On the other end, I see rate cuts on the U.S. side, which will support the Canadian dollar. After five years of aggressive targets on the Canadian dollar, this year I'm very low profile with my target. I predict a trading range of 97 cents (U.S.) to $1.03."

Interest rates: "We're working with assumption of a significant easing on the U.S. side to avoid a recession. We expect easing in Canada as well, though not as much since the economy is running at full capacity already with tame and friendly core inflation. We see the Bank of Canada cutting rates by a maximum of 50 basis points."

Stock market: "I'm working with a 12,800 target on the S&P/TSX – a negative return. Even with a negative return, 30 to 35 per cent of stocks will deliver a positive return. Some sectors will be better than others ... For instance, life insurance stocks will continue to outperform banking stocks and gold will outperform base metals."

Doug Porter, BMO Capital Markets

Oil: "We're looking at an average price of $81 (U.S.). A lot of the spectacular increase we've seen over the last six months would be sustained, but we do think there's a bit of air built into those prices, so it could come off a bit from current levels."

Canadian dollar: "We see it hanging around parity for the first half of the year and then slowly receding to about 95 cents by the end of the year. That would still leave the currency with an average exchange rate of about 98 cents. Most of the spectacular gains we've seen since the spring would be sustained."

Stock market: "We see a mild to modest gain of under 10 per cent for 2008. The market will be dealing with slower growth and softer profit gains on one side, but lower interest rates on the other side.

"But the stock market always tends to surprise. There's always the possibility it could have a nice bounce if the U.S. economy turns out to be better than expected and interest rates come down and inflation pressures ease. That's the combination it would take to fire the market up."

Interest rates: "We see modest interest-rate reductions by the Bank of Canada.

"The decline in core inflation and slower growth leave the door open for further cuts, but I don't think they're going to embark on a major rate-cutting campaign, because the unemployment rate remains so low.

"We see one 25-basis-point rate cut early in the year and possibly a second one after (new Bank of Canada governor Mark) Carney takes over."

The year Timminco soared 7,000% TheStar.com - Business - The year Timminco soared 7,000%

Ore, fertilizer, BlackBerrys helped 2007 markets while debt crisis, recalls and patent losses took toll

January 01, 2008

Gary Norris
THE CANADIAN PRESS

It was the best of times, for those who bought stock in Timminco Ltd. a year ago and watched it gain more than 7,000 per cent.

It was the worst of times for shareholders in Coventree Inc., Menu Foods Income Fund and even former blue chips like Quebecor World or Loblaw Cos.

The benchmark S&P/TSX composite index gained about 7 per cent for the year but, as always, the average concealed a tumultuous cavalcade of thrills of elation and pangs of agony.

Shares in Timminco, a Toronto-based maker of specialized metal, ended 2006 at 30 cents on the Toronto Stock Exchange. By the end of this year, jolted by sales of high-purity silicon for solar-power applications, it was at $21.95, a gain of 7,216 per cent. The company, majority owned by AMG Advanced Metallurgical Group NV, lost $4.6 million in its latest quarter as sales slipped 2 per cent to $43 million.

At the other extreme, the "nobody's perfect" contingent featured Coventree, a company few had heard of before Aug. 13 but which had found a profitable business issuing asset-backed commercial paper. Coventree stock started 2007 at $14.80 and hit $16.30 before the summer credit-market convulsion. It traded yesterday at 77 cents, down 95 per cent on the year.

Among other conspicuous calendar-year ups and downs:

Research In Motion rode rampant over the threat of Apple's iPhone, a stock-option-grant review and fears that financial-market turmoil would decimate the ranks of BlackBerry-thumbers in expensive suits. RIM stock split three for one and ended the year at $112.56, up from $49.67 – a gain of 127 per cent.

Posting a steeper if less widely tracked gain than RIM was Major Drilling International, a provider of drilling services for the global mining industry, based in Moncton, N.B. MDI closed 2007 at $62.60, up 140 per cent for the year.

Fertilizer bloomed as demand boomed. Potash Corp. of Saskatchewan rose 158 per cent, while Agrium Inc. added 102 per cent and China-centred Hanfeng Evergreen Inc. grew 243 per cent.

While it was a miserable year in the forest industry – Tembec Inc., for example, lost 80 per cent of its market value – TSX-listed Chinese tree-farm operator Sino-Forest Corp. rose 173 per cent.

Infrastructure was also big. Aecon Group Inc. saw a 256 per cent stock-price rise on the year, outpacing 50-per-cent-plus gains for fellow engineering providers SNC Lavalin Group and Stantec Inc.

It was a tough year for many in the oil patch. Precision Drilling Trust fell 44 per cent, but Petrobank Energy and Resources Ltd. rose 238 per cent.

Among other notable gains, Thompson Creek Metals was up 65 per cent, WestJet climbed by half and Bell Canada showed a 26 per cent increase thanks to the country's biggest-ever corporate takeover, by a group led by the Ontario Teachers' Pension Plan.

Coventree had no shortage of company in the doghouse, including pet-food maker Menu Foods Income Fund, down 90 per cent on the year after an adulterated ingredient from China poisoned pets.

Investors in CV Technologies Inc. kept feeling worse all year. The maker of the cold and flu remedy pitched by Don Cherry bombed, ending down 78 per cent from a year ago, afflicted by disappointing sales, accounting woes and allegations of lobbying irregularities.

Bigger and more established drug maker Biovail Corp. tumbled 46 per cent as generic competition ravaged its Wellbutrin antidepressant franchise amid U.S. regulatory approval delays and the retirement of founder Eugene Melnyk.

So how about stashing your cash in a massive international commercial printer? Quebecor World churned out an 87 per cent loss, hurt by operational woes, executive-suite uproar and a deepening financial crisis. Parent company Quebecor Inc. finished down just 2 per cent, supported by its Vidéotron cable-TV subsidiary and media holdings. But the year was less kind to TV and newspaper operator CanWest Global Communications Corp., down 35 per cent.

Another family-controlled giant, Loblaw Cos., slumped 32 per cent during 2007 as Galen Weston Jr. struggled to turn around Canada's largest supermarket company. Parent company George Weston sagged 28.5 per cent.

Toy maker Mega Brands Inc. tumbled 76 per cent as its woes piled up after a major recall of magnetic building sets blamed for injuring children who swallowed the pieces.

Also down by three-quarters on the year was Cinram International Income Fund as investors tuned out the world's biggest maker of pre-recorded CDs and DVDs in an increasingly online world.

The Canadian banking industry had its most profitable year ever, but the debt crisis took a toll on share prices. Hardest hit was CIBC. Itsexposure to securities based on the U.S. mortgage market knocked its stock down 28.5 per cent. TD Bank finished the year almost exactly where it started.

Pescods chats up PDP + CDH again

Institutions NOW own 25.18% of the stock!

Petrolifera Petroleum Ltd PDP.TO (TSX)

12,621,295 institutional shares on 12/19/2007 PDP $9.14 # of Holders: 26 % Shares Owned: 25.18%
7,775,825 institutional shares on 12/01/2007 PDP $10.40 # of Holders: 24 % Shares Owned: 15.52%
7,775,913 institutional shares on 11/29/2007 PDP $10.35 # of Holders: 24 % Shares Owned: 15.52%
7,775,913 institutional shares on 11/28/2007 PDP $10.59 # of Holders: 24 % Shares Owned: 15.52%
7,775,913 institutional shares on 11/26/2007 PDP $10.23 # of Holders: 24 % Shares Owned: 15.52% PV38,055 (20%)
7,669,913 institutional shares on 11/22/2007 PDP $10.47 # of Holders: 24 % Shares Owned: 15.30% PV38,055 (20%)
7,669,913 institutional shares on 11/03/2007 PDP $10.60 # of Holders: 24 % Shares Owned: 15.30%
7,669,913 institutional shares on 11/13/2007 PDP $13.70 # of Holders: 24 % Shares Owned: 15.31%
7,669,913 institutional shares on 11/03/2007 PDP $17.10 # of Holders: 24 % Shares Owned: 15.31%

Click Here For The Institutional Holdings

Dundee Corporation Acquires Further Interest in Breakwater Resources Ltd.

Dundee Corporation Acquires Further Interest in Breakwater Resources Ltd.

ccnm



TORONTO, ONTARIO--(Marketwire - Dec. 31, 2007) - Dundee Corporation (TSX:DC.A)(TSX:DC.PR.A) announced today that it has indirectly acquired through a wholly owned subsidiary 6,122,449 flow through common shares of Breakwater Resources Ltd. ("Breakwater") at $1.96 per share, in a private transaction, which represents an approximate 1.09% interest in Breakwater. Following this transaction, Dundee Corporation will own, directly and indirectly, an aggregate of 108,002,510 common shares, representing an approximate 25.37% interest in Breakwater.


The common shares of Breakwater were acquired for investment purposes and Dundee Corporation's position in Breakwater may be increased or decreased in the future as considered appropriate in light of investment criteria, market conditions and other factors and in accordance with the provisions of applicable securities legislation.


Breakwater is a mining, exploration and development company which produces and sells zinc, copper, lead and gold concentrates to customers around the world. It's concentrate production is derived from four mines located in Canada, Chile and Honduras.


Dundee Corporation is an asset management company dedicated to wealth management, real estate and resources. Its domestic wealth management activities are carried out through its controlled subsidiary, DundeeWealth Inc., a company with $60.2 billion in assets under management and administration. Dundee Corporation's real estate activities are conducted through its 77% owned subsidiary, Dundee Realty Corporation which manages $5 billion of Canadian commercial real estate, including a land and housing business in Canada and the United States. Resource activities are carried out through its wholly-owned subsidiary, Dundee Resources Limited.



FOR FURTHER INFORMATION PLEASE CONTACT:

Dundee Corporation
Ned Goodman
President and Chief Executive Officer
(416) 365-5665

Breakwater Resources Ltd. Raises $12 Million for Exploration

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TORONTO, ONTARIO--(Marketwire - Dec. 31, 2007) - Breakwater Resources Ltd. (TSX:BWR) is pleased to announce that it has raised $12.0 million by issuing 6,122,449 flow-through common shares at a purchase price of $1.96 per common share. The shares were issued by way of a private placement to a wholly-owned subsidiary of Dundee Corporation and have a four month hold period. Dundee Corporation currently holds approximately 24% of the issued and outstanding shares of Breakwater.


The proceeds of the flow-through financing will be used for an exploration program in Quebec in 2008 which Breakwater has budgeted in excess of $13 million. Additional exploration expenditures may be incurred in Quebec depending on exploration success.



FOR FURTHER INFORMATION PLEASE CONTACT:

Breakwater Resources Ltd.
Ann Wilkinson
Vice President, Investor Relations
(416) 363-4798 Ext. 277

A Happy New Year isn't likely for the economy

Markets anticipate a light trading day

RTGAM


With light action expected for North American stock markets in the last trading day of 2007, global indicators are mixed and the Canadian dollar remains above parity with the greenback.
The loonie opened at 101.96 cents (U.S.), down just three one-hundredths of a cent from Friday's close.

Wall Street futures suggest a modestly higher open as investors await a report on U.S. home sales and look to close a volatile year.
Light sweet crude oil rose 19 cents to US$96.19 per barrel in pre-market electronic trading on the New York Mercantile Exchange.

Overseas, Britain's FTSE 100 fell 0.57 per cent and France's CAC-40 fell 0.45 per cent.
On Friday, the Toronto stock market racked up a solid gain of more than 100 points, with almost all sectors positive in a broad-based advance led by financial and energy stocks. It was a different story in New York, where early strong gains disappeared after a grim report on the U.S. housing sector.

Toronto's S&P/TSX composite index closed up about 145 points to 13,821.
In New York, the Dow Jones industrials drifted about six points higher to 13,365. The Nasdaq composite index slipped two points to 2,674, while the S&P 500 index edged up two points to 1,478 as data showed that sales of new U.S. homes plunged last month to their lowest level in more than 12 years.

Copyright 2001 The Globe and Mail

TheStar.com - columnists - A Happy New Year isn't likely for the economy

CP PHOTO

Governor David Dodge leaves the Bank of Canada building in Ottawa, in this October 2005 file photo.

December 30, 2007

David Crane

In the New Year just ahead, our biggest challenge will be to clean up the financial mess from 2007, in the hope that 2009 will be better.

This means that 2008 won't be a fun year. Rather, it will be a year in which many people could lose their homes, while others lose their jobs and many businesses find they can't get the credit they need to survive and grow.

Canada is in a somewhat better position than the U.S., although the Bank of Canada has also had to play a supportive role in financial markets and special arrangements are having to be made to restructure $33 billion of asset-backed commercial paper in Canada.

Perhaps more importantly, Canada will feel the spillover impact of slow growth south of the border or across the Atlantic in Europe. This means our own economy will slow, with export sectors such as autos and softwood lumber especially vulnerable.

As Stephen King, the chief economist at HSBC puts it, "the excess liquidity of recent years has gone down the plughole. In its place is a credit squeeze," which indicates "a financial system in crisis."

This credit crunch – the most important economic development in 2007 – means that banks are hanging on to their cash and have become more cautious both in who they lend to and how much they want to lend.

This year, central banks like the Bank of Canada have been concerned primarily with injecting liquidity into the financial system in order to prevent a financial collapse. A liquidity crisis occurs when financial institutions cannot generate immediate cash to meet their obligations because the assets they hold cannot be quickly converted to cash.

To keep the system afloat, central banks have made more than $500 billion of cash available in loans to banks in Canada, the United States, Britain, the Eurozone and Switzerland while also cutting the interest rate they charge banks on what are supposed to be short-term loans. More financial support, and further interest rate cuts, may be needed in the coming year.

The Bank of Canada recently cut its overnight target rate from 4.50 per cent to 4.25, and some economists expect it to decline to 3.50 per cent by this time next year.

But while the focus this year has been on maintaining liquidity in the financial system, the challenge in 2008 will be all about solvency. Banks will be forced to revalue their outstanding loans and the extent to which they may need capital infusions to keep them alive. They may find that they have made billions of dollars in bad loans.

In fact, a number of large banks, including some in Canada, have already been forced to take major write-downs. But more are expected in the coming year. If the news is really bad, then governments may be forced to intervene in an even bigger way.

This revaluation has already forced some of the world's biggest banks to seek new capital from government-owned sovereign wealth funds in the Middle East, Singapore and China. This trekking is probably far from over.

Middle Eastern and Asian governments, through these funds, will end up owning significant chunks of the world's top U.S., British and Swiss banks.

What makes all of this even scarier is that no one really understands how the New Year will unfold. One reason is that we don't know how much bad debt is hidden in the books of the banks. Another is that we don't know how quickly confidence and trust can be restored.

While we all wish one another Happy New Year, the reality is that 2008 is unlikely to be a happy year.

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David Crane's column on Global Issues appears Sundays.

Subprime fiasco to dominate early 2008 TheStar.com - Business - Subprime fiasco to dominate early 2008

TOM STATHIS/ASSOCIATED PRESS

A sign advertises a bank repossessed home for sale in San Clemente, Calif., Aug. 5 in continuing fallout from the U.S. subprime mortgage crunch

We should learn in new year the extent of fallout from crisis

December 30, 2007

Madhavi Acharya-Tom Yew
Business Reporter

The first few months of 2008 may bring some clarity on how much money will actually be lost to bad loans made to high-risk borrowers in the subprime mortgage debacle, economists and stock market watchers say.

Observers are asking, will the tally be as high as the $400 billion (U.S.) some predict, or will the actual damage come in at less than that.

Either way, the financial crisis is likely to rank as one of the biggest the U.S. has seen. On the other hand, escaping the worst-case scenario would be a boon to a U.S. economy teetering on the brink of recession.

An estimated $1.3 trillion in subprime mortgages are outstanding. About one-tenth of those are now in foreclosure. Some are predicting that foreclosures will grow to a staggering $400 billion. But will those predictions come to pass?

"We've had some defaults up until this point, but the really heavy period for resets is really in the first quarter of next year," said Mark Chandler, senior fixed income analyst at RBC Capital.

Subprime borrowers, who have poor credit histories and don't qualify for the usual bank mortgages, were allowed to "self assess" their income and ability to pay back the loans. Such borrowers have since come to be known as ninjas – no income, no jobs or assets.

Subprime mortgages carry a higher interest rate – as high as 12 per cent. But the would-be U.S. home owners were offered teaser rates – or 2/28 mortgages, which offered a low introductory rate for two years, followed by a higher one for the remaining 28.

Many of those mortgages are due to reset with higher monthly payments in January and February.

But there's reason for optimism.

U.S. President George W. Bush has hammered out a relief plan that will freeze interest rates for some home owners, keeping their monthly payments manageable and helping them hang on to their homes.

"The actual realization of the performance of those loans and those mortgages is the next real hurdle," Chandler said. "The rates could be frozen and there may be less in the way of foreclosures and defaults than people think."

Given the risk of huge write-offs and foreclosures, banks have become skittish about lending to consumers, and to each other, but central banks in many Western nations, including Canada, have stepped in with emergency funds meant to keep the cash flowing.

Banks and other financial institutions, those that made subprime loans directly as well as those that invested in securities that used subprime loans as collateral, are scrambling to give themselves a cushion. They're taking huge writedowns, trying to remove billions of dollars of suspect assets from their books with the stroke of a pen, and a flurry of headlines.

Analysts said last week that Citigroup may have to write off $18.7 billion in the fourth quarter, up sharply from the $8 billion to $11 billion initially estimated.

CIBC said earlier this month its profits may take a $1 billion hit because of its investment in a U.S. company with subprime real estate exposure. That's on top of a $9.8 billion writedown already taken.

The grim accounting has some economists asking whether markets are now overestimating the damage after months of being exposed to bad news.

"It's possible the market is overestimating, as it usually does. Most of the bad news may be already discounted – and that may be the good news," said Benjamin Tal, senior economist with CIBC World Markets.

On the economic side, the picture is bleak, with many signs pointing to slowdown. In the past 12 months, sales of new homes across the United States have plunged by 34 per cent – the biggest year-over-year slide since early 1991.

And the latest economic figures show that orders for durable goods rose only slightly in November as businesses received fewer orders for machinery, computers and communications equipment.

Maurice Levi, finance professor at the University of British Columbia, is worried about the impact on consumer spending.

He says he's more concerned about the people who just barely manage to hang on to their homes. "If it were me, I wouldn't want to throw in the towel. I would find other ways to try to make those payments, not change the cars, not take a vacation. Even the others who aren't in such critical condition might be spending less. This might bring a very slow economy."

The problem the central banks face is that if they don't inject enough liquidity into the market, the country may slip into recession. If they overdo it, it creates an excess supply of money – inflation.

"Getting it right is unbelievably difficult. This is not something that is a repeated event from many times before where you've had an opportunity to learn. We've never had subprime problems before," Levi said.

Some suggest the government's intervention will only prolong the trouble. After all, the West spent the 1990s hectoring Japan to just own up to its bad loans, suffer the economic consequences – unemployment, bankruptcies – and move on. "It's always easier to tell other people to take harsh medicine," said Doug Porter, deputy chief economist at BMO Nesbitt Burns.

"I think the best thing for policy makers is try to cushion the blow but not distort the market. Let the real value of credit and homes come through and then deal with the aftermath. But that's a lot easier said than done."

Fearless forecasts for 2008 TheStar.com - Business - Fearless forecasts for 2008

Day in history

Born this date in history, this Welsh actor is best-known for his character Hannibal Lecter in Silence of the Lambs.

(Answer, reverse:

Sinkpoh Ynohtna.) =Anthony Hopkins

December 31, 2007

Caveat emptor: "Avoid making predictions – especially about the future."

–Sam Goldwyn

1. The Summer Olympics and spectacular new Beijing architecture erases the tainted-import stories of 2007.

2. Dynamic French president Nicolas Sarkozy emerges as the leading voice for Europe, abetted by British PM Gordon Brown, less of a Europhile than his predecessor.

3. The recent addition to Europe's passport-free Schengen zone of nine members, bringing the total to 24 countries with 400 million people, prods a 2008 expansion to include Switzerland, one of the world's most isolationist nations. This increases pressure on Britain to join on economic grounds of lower transport costs, and on Russia not to thwart Ukraine, Romania and other former Soviet satellite states from membership in an economic power bloc already eclipsing the U.S.

4. Afghanistan and Pakistan's western border region finally become the central front in the struggle against terrorism by Islamic extremists, as they should have been from the start. The pro-U.S. Sarkozy sends additional troops which, in contrast with the current French concentration in relatively stable Kabul, are deployed in the more dangerous east and south, bolstering Canadian and British forces in Kandahar and Hellmand provinces. Britain increases its troops in the southwest, and Australia joins the cause. The U.S. steps up its redeployment of forces from Iraq to Afghanistan.

5. In part to enhance his party's electoral prospects in Quebec, Stephen Harper unveils a revamped reconstruction and humanitarian-relief program for Afghanistan.

6. In referenda, Colombia and ethnically divided Belgium narrowly vote against national breakups. Kosovo and Chechnya continue to lack sufficient outside support to separate from Serbia and Russia, respectively, although Kosovo unilaterally declares its independence.

7. Newly elected Russian president Dmitry Medvedev, 42, is predecessor Vladimir Putin's puppet, as expected, but the Deep Purple music fan starts calling his own shots by year-end.

8. Kevin Rudd, new Australian PM after defeating John Howard last year, rejects Australia's George W. Bush-granted status as America's local "sheriff." The Aussies continue their decades-old humanitarian and conflict-resolution work in the Solomons and elsewhere in the region but on their own terms.

9. Stephen Harper forms a second minority government in a fall election. Stephane Dion retires from the Liberal leadership after a miserable Grit showing.

10. In narrow victory over John McCain, Hillary Rodham Clinton is elected 44th U.S. president.

11. Barack Obama accepts president-elect Clinton's offer to nominate him U.S. secretary of state.

12. Food is the new oil. Biofuel and developing-world demand will keep soaring prices for wheat, corn and other agricultural commodities high. Investors like fertilizer giant Potash Corp., grain handlers Agrium and Viterra (the former Saskatchewan Wheat Pool), and farm-equipment makers Deere, Caterpillar and Case New Holland.

13. Nuke stocks glow. North America is slowly shedding its wariness of nuclear power, also poised for big gains in Europe and Asia. Investors go for uranium producers including Canada's Cameco, and turbine makers GE and France's Alstom.

14. Safer than sorry stocks are in favour amid continuing upheaval in capital and equity markets. Sound "buy and forget" stocks include GE, Procter & Gamble, PepsiCo, Shoppers Drug Mart, United Technologies (Otis, Carrier, Pratt & Whitney) and reasonably priced utilities.

15. GM emerges as an unlikely turnaround play, as benefits begin to kick in from production cuts, reduced healthcare burden and more vehicles with showroom appeal.

16. With a massive oil discovery off its Atlantic coast this summer, Brazil is poised to attain the status of an OPEC producer, and may well join OPEC by 2010.

17. Rupert Murdoch, whose long ownership tenure at the Times of London has not restored the Times' prestige, surprises fretful journos by making only cosmetic changes to his newly acquired Wall Street Journal.

18. Ottawa raises no objections to takeover bids for Canadian-owned oilpatch giants Suncor Energy Inc. and EnCana Corp. by consortia formed among Britain's BP PLC, Anglo-Dutch producer Royal Dutch/Shell Group PLC, France's Total SA, Italy's ENI SpA and Spain's Repsol YPF.

19. A troubled Palm Inc., pioneer in PDAs and once a potentially formidable rival to Ontario-based BlackBerry maker Research in Motion Ltd., puts itself on auction block.

20. Hapless Nortel, having this year abandoned its third-generation wireless (3G) business – once a cornerstone of future growth prospects – talks merger with Cisco, the healthiest survivor of the telecom crash of 2000-02.

21. Hapless Motorola, after this year sacking its second CEO in three years, talks merger with a Nokia seeking a stronger foothold in North America.

22. Hapless French telecom giant Alcatel-Lucent wearies of CEO Patricia Russo's failure to deliver on turnaround plans; opts this time for a CEO fluent in French.

23. Amid continuing distribution woes at partner Loblaw Cos. that keep its Joe Fresh apparel boutiques out of stock, design maven Joe Mimran begins devoting most of his time to his other businesses.

24. Auto-parts investors shift into Linamar and Martinrea, two straightforward companies with appealing growth potential, and out of Magna International Inc., soon to be controlled by a convoluted partnership between founder Frank Stronach and Russian oligarch Oleg Derapaska, overly dependent on sales to Detroit's ailing Big Three, and a backdoor financier of a Stronach racetrack enterprise that seems fated never to succeed.

25. Lingerie merchant La Senza, now owned by the parent of Victoria's Secret, begins rebranding itself under the better-known VS banner, despite protestations to the contrary by La Senza CEO Irv Teitelbaum at the time of company's 2007 sale.

26. Quebecor Inc. spins off basket case Quebecor World, briefly the world's largest printer, but now close to unsalvageable after acquisition-related culture clashes, price wars and failure to keep costs down in a sector with notoriously thin margins.

27. In a bid for critical mass, Royal Bank of Canada explores merging its southeastern U.S. retail banking franchise with Atlanta-based SunTrust Banks, the dominant regional player, in exchange for a controlling equity stake in the combined firm.

28. The troika spearheading the Loblaw Cos. turnaround bid, including Galen Weston Jr., will show substantial progress in solving the firm's distribution crisis or will be replaced by year end with a distribution expert from logistics-savvy Wal-Mart or Target.

29. London widens its lead over New York as the world's financial capital as subprime-mortgage defaults and soured loans to precariously financed private-equity buyouts further weaken the balance sheets of America's largest banks and brokers.

30. Oscar loves Atonement.

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Quotable tycoon

"The difference between a skinflint banker and a reckless banker is a recession."

–Walter Wriston, CEO of Citibank (now Citigroup Inc.) in the 1980s.