Financial Update

· TSX +40.80 pts (Reuters) led by a jump in gold stocks -as investors snapped up beaten down shares following a huge selloff over the last 2 sessions. Traders were also encouraged after a report showed Canada unexpectedly added jobs in Oct.
· DOW +248.02pts with energy shares fronting the gains, as bargain hunters stepped in after two days of losses, helping foster hope that global intervention will help an economy that shed nearly a quarter million jobs in October.
· Dollar +.26c to $84.18US.
· Oil +$0.27to $61.04US per barrel. Increasing evidence that OPEC production cutbacks were taking hold also helped support prices.
· Gold +$2.00to $733.20US per ounce

Government restructures AIG bailout WASHINGTON (Reuters) - The Federal Reserve said on Monday the U.S. government would buy $40 billion of shares in insurer American International Group as part of a restructured bail-out package intended to prevent the firm from collapsing.

Flaherty eyes measures to ease credit flow Paul Vieira, Financial Post Sat Nov 8,08
SAO PAULO -- The Finance Minister, Jim Flaherty, acknowledged Saturday that funding pressures remain in Canada, with banks reluctant to lend to certain ailing sectors, and is in talks about undertaking further measures aimed at easing the flow of credit.

"There are credit constraints in the Canadian economy, and naturally the banks are concerned extending credit in certain sectors in the Canadian economy, because of their concerns about the viability of their customers," said Mr. Flaherty in Sao Paulo, where he is attending a meeting of Group of 20 finance and central bank officials.

He said that Department of Finance officials have spoken with the federal banking regulator and the chartered banks about the credit tightness. "I can look at additional measures that we could take."

Nancy Hughes Anthony, president of the Canadian Bankers Association, said the Minister was right to acknowledge that funding pressures exist in Canada.

"While banks are open for business and are active in providing credit, we are all working hard to ensure that our banks and financial sector remain strong while at the same time meet the credit needs of businesses that are having a tough time because of the economic downturn," she said Saturday.

It is one of the first acknowledgments from Mr. Flaherty that measures taken to date, by Finance and the Bank of Canada, are not entirely having their desired effect.

The central bank has made nearly $27-billion available to financial markets, and expanded both the type of collateral it will accept and the number of market players that can access its cash. Meanwhile, the federal government has pledged to acquire at least $25-billion of bank mortgages and has offered to backstop interbank lending through a temporary insurance scheme.

This past week, a coalition of manufacturers called on Ottawa to issue a temporary guarantee on loans and lines of credits because credityworthy producers of goods remain unable to access cash. Also, Canada's top bank and insurance executives have urged Ottawa to take fresh steps to ease funding pressures, mainly by cutting the price for banks to participate in the government-backed insurance program.

The fee to access the insurance on wholesale debt was set at 1.6%, which financial institutions must pay to get the government's guarantee. This was Ottawa's response to moves by other governments, most notably the United States, to issue guarantees on lending, and ensure that Canadian banks were not put a competitive disadvantage compared to their peers.

One of the potential outcomes of this weekend's G20 meeting is a co-ordinated response by industrialized and emerging economies to take measures that would mitigate further economic damage to countries as a result of the U.S.-originated credit crunch.