Financial Update

· TSX +10.11pts (Reuters)
· Dow +26.62pts
· Dollar +.22c to $95.38US
· Oil +$1.16to $116.17US per barrel
· Gold +2.40to $828.10US per ounce

Articles on the front page of the Globe and Mail -Report on Business August 27, 2008 confirm financial market worries over anticipated poor quarterly results.

CIBC takes $885-million hit

Canadian Imperial Bank of Commerce, the third big bank to report its third-quarter earnings, said Wednesday that it earned $71-million, down from $835-million a year ago, as it took a hit of more than $880-million relating to risky securities. CIBC is the Canadian bank that's been hardest hit by the U.S. subprime mortgage crisis, because of its large exposure to securities tied to subprime housing. The exposure caused it to take a $2.48-billion writedown in the previous quarter

BMO burned by subprime mortgage exposure Bank of Montreal has been dragged further into the subprime mortgage crisis, putting aside hundreds of millions of dollars for troubled loans tied to the U.S. real estate sector.

At the same time, BMO continues to be tripped up by a variety of complicated investment products, demonstrating that financial markets continue to sour.

Chief executive officer Bill Downe – who was cautiously optimistic earlier this year that things might get better – said Tuesday that the challenging times aren't going to let up soon. With the U.S. economy continuing to slow, “falling house prices, rising unemployment, tightening credit standards and high gasoline and grocery bills are all expected to depress consumer spending,” he said. “In particular, house prices will continue to decrease until the large inventory of unsold houses is absorbed.” BMO’s profit fell by 21%.