Financial Update

Market sentiment was shaken by a report from the International Monetary Fund that forecast write-down losses related to the credit crisis could reach $945 billion.

· TSX -17.48 (Reuters) The Toronto Stock Exchange's main index snapped its six-day
winning streak and closed slightly lower on Tuesday, hurt by softer commodities and
recurrent worries over the impact of the U.S. economic slowdown.
· Dow -35.99
· Dollar -.39c to $ $98.69US
· Oil -$0.59 to close at $108.50 US per barrel Retail gasoline prices pulled back slightly
from record levels yesterday and gave some consumers a small break, but a new
government forecast said gas could reach as high as $4 US a gallon in the United States
during the summer driving season
· Gold -8.70 to $914US Shares of gold producers lost 1.7 percent as the price of bullion was
stung by profit-taking. Barrick Gold was among the day's biggest weighted decliners

Bond Rates: http://www.bankofcanada.ca/en/rates/bonds.html


Mortgage crisis 'in final innings,' CEO predicts
MARY ALTAFFER, THE ASSOCIATED PRESS

Joe Bel Bruno The Associated PressMorgan Stanley chief executive John Mack said yesterday that Wall Street is facing the most difficult conditions that he has seen in 40 years, but he feels the global credit crisis might be "in the final innings.''

Mack, who easily won re-election to Morgan Stanley's board along with 10 other directors, said at the investment bank's annual meeting that he still plans to "go slow'' because of the market's turbulence. The bank wrote down billions of dollars worth of securities linked to risky subprime mortgages and other debt since last year.

"We're keeping powder dry,'' he said. "We feel the risks on the market, the run on Bear Stearns, and we think it is important to have very liquid positions and we're working toward that.''

He expects more bad news will come out as the world's banks recover from the subprime mortgage crisis, particularly from "overseas and some small retail banks in this country.''

However, Mack said he thinks the market is turning and that could provide opportunity.
In fact, Mack said that Morgan Stanley is seeing opportunities in the same mortgage market that caused Wall Street's pain this year.

"I don't know if this is the bottom or close to the bottom, but at some point it will be wise to invest there,'' he said.

Mack faced a tough test at this year's annual meeting after three pension funds aligned themselves against the nomination of Morgan Stanley's slate of directors. However, all secured easy re-election, according to preliminary tallies.

Bill Patterson, executive director of CtW Investment Group, said more is needed to ensure Morgan Stanley and other banks don't take excessive risks.