Financial Update

In their battle over who can best bring stability to the Canadian economy, politicians have added another element of instability to the Toronto stock market.

· TSX +59.21pts (Reuters) In Canada, December has been the best-performing month over the past decade, with the S&P/TSX Composite rising in every Dec, for an average gain of 3.1%.
· DOW +259.18pts
· Dollar +44c to $78.68US..
· Oil -$2.86 to $40.81US per barrel. after data revealed that the U.S. economy had lost more than half a million jobs in Nov. The commodity fell 23.3% over the week to end at its lowest closing price since Dec. 10, 2004.
· Gold -$13.30 to $750.50US per ounce amid the deepening recessionary outlook, which would result in lower demand.
· www.bankofcanada.ca/en/rates/bond-look.html Canadian bond prices

Bankruptcy totals up sharply compared to last year Bankruptcies in Canada numbered 9,468 in October, up 7.2 per cent from September and 21.1 per cent from October 2007, with the pain concentrated among individuals. Record news services

Deteriorating economic conditions expected to persuade BoC to cut interest rates Canadians can look forward to more interest rate relief this week with the Bank of Canada expected cut its key interest rate again. It is widely anticipated the central bank will cut the rate by at least half a point to 1.75 per cent to deal with rapidly deteriorating economic conditions. The Canadian Press
White House, Democrats agree to $15B auto aid

Kevin Drawbaugh and John Crawley, Reuters WASHINGTON -- U.S. Democratic leaders and the White House reached a deal to provide billions of dollars in relief to the ailing U.S. auto industry, a senior congressional aide told Reuters on Friday.

The package, which Democratic leaders hope to win passage of next week and send to President George W. Bush, totals between US$15-billion and $17-billion, the aide said, speaking on condition of anonymity.

The plan would tap an existing US$25-billion Energy Department fund for advanced technology, a source with knowledge of the discussions told Reuters on Friday.

A stalemate between the White House and Congress over the source of money to help Detroit ended when Democratic leaders agreed to use the Energy Department money, the source said, speaking on condition of anonymity. However, crucial details such as what specific conditions to impose on automakers in exchange for the money had yet to be worked out and would be discussed over the weekend, the source said.

The amount is far less than the $34-billion requested this week by General Motors, Ford Motor, and Chrysler, but Democratic leaders believe the money will keep them going until Barack Obama replaces Bush as president on Jan. 20 and a new effort can be made for a rescue plan.
Harper pressured to act fast regarding auto sector

Paul Vieira in Ottawa and Nicolas Van Praet in Toronto, Financial Post After averting certain defeat by getting Parliament shut down, Prime Minister Stephen Harper now faces the unenviable task of deciding how to help the near-bankrupt Detroit automakers, and figuring out where his government will find the money

The Detroit three automakers have turned to Ottawa and Ontario for emergency aid totalling an estimated $6-billion, saying in submissions to the two levels of government that they need immediate help to stabilize their operations in Canada and fund future manufacturing.

"Regretfully, North American economic conditions now make it necessary for us to seek government assistance to sustain our business and supply chain," Arturo Elias, General Motors Corp.'s top executive in Canada, said in a statement.

GM, Canada's largest automaker, confirmed it is seeking $2.4-billion in repayable loans from Ottawa and Queen's Park, including an immediate $800-million infusion