David A.

Rosenberg May 3, 2010

Chief Economist & Strategist Economic Commentary
drosenberg@gluskinsheff.com
+ 1 416 681 8919

MARKET MUSINGS & DATA DECIPHERING

Breakfast with Dave

WHILE YOU WERE SLEEPING
IN THIS ISSUE
Risk appetite giving way towards risk aversion even after the weekend
announcement of yet another bailout in the Greek tragedy version of the Never- • While you were sleeping:
risk appetite giving way
ending Story (you know it’s bad when $145 billion of loans isn’t enough).
towards risk aversion
European equities are down 1% and Asian equity markets are also a sea of red
today — down for the fourth time in the past five sessions — in the aftermath of • Market thoughts — call it a
another PBoC tightening move (lifting banking sector reserve requirements for the rupture
third time this year by 50bps to 17%). Australia also unveiled plans to impose a • Ten reasons for a dose of
tax on mining companies — material producers in the region slid 2.4% today. caution
• U.S. GDP report in
As for bonds, they are consolidating for the most part. U.S. commercial banks perspective
have been net buyers of government securities now for five weeks running —
totalling $63 billion. In the FX market, the size of the rescue plan is being met • Defaults provide a boost?
A Morgan Stanley study
with doubts as the Euro slips, the greenback firms and the cyclically-sensitive
found that 12% of all
currencies like the Canadian dollar are also dropping from their lofty perch. And, mortgage defaults in
copper has just corrected back to a seven-week low (though oil and gold are February were “strategic”
hanging in).
• Getting ready for the
Canadian housing bust?
On the data front, the EMU purchasing managers index came in at a 46-month CMHC doubled its
high of 57.6 in April from 56.6 in March and various Asian manufacturing reserves to $1.3bln
diffusion indices were also quite buoyant — all eyes on the U.S. comparable
• Pessimism in the U.S.
today at 10 a.m. The re-stocking story, which accounted for half of U.S. GDP
prevails
growth in Q1 and two-thirds in Q4 of last year, is in its mature stages and policy
stimulus will soon start to wane, opening the door for a significant slowing in the • Barron’s interviewed
pace of economic activity in the second half of the year. PIMCO’s CEO Mohamed
El-Erian and indeed there
were some nifty nuggets
An investment landscape that has equities priced for peak earnings in 2011 and to glean at
junk bonds trading at par for the first time in three years, an unexpected
slowdown would most certainly not be seen as a very welcome development • A modern version of
Benjamin Roth’s story
(talk about an understatement). Market Vane bullish sentiment on the stock
from the Great
market is now flirting near the 60% mark — the upside to pricing is so far less Depression
than when this index was around 30% just over a year ago. This is not the time
to start picking up pennies in the middle of the freeway.

MARKET THOUGHTS — CALL IT A RUPTURE

Of course there was going to be a Greek bailout package! Combined,
European and American banks have $1.7 trillion of debt exposure to Portugal,
Ireland, Greece and Spain (the PIGS) with over half of that among German and
French lenders. No wonder this process is being led by the EU — it has to be.

Please see important disclosures at the end of this document.

Gluskin Sheff + Associates Inc. is one of Canada’s pre-eminent wealth management firms. Founded in 1984 and focused primarily on high net
worth private clients, we are dedicated to meeting the needs of our clients by delivering strong, risk-adjusted returns together with the highest
level of personalized client service. For more information or to subscribe to Gluskin Sheff economic reports, visit www.gluskinsheff.com
May 3, 2010 – BREAKFAST WITH DAVE

Once again, we are seeing governments intervene to socialize potential losses

(but allow the gains to be privatized ... no wonder the Volcker plan is gaining Even with the risk rally of
some legs in Congress). Think of Greece as the subprime problem in 2007 or the last 13 months, the
the Thai baht devaluation in 1997 — likely the start of a whole new domino debt deleveraging cycle
process. Both started off as seemingly small contained events, but proved to has not yet run its course
be the canary in the coal mine.

The bottom line is that even with the risk rally of the last 13 months, the debt
deleveraging cycle has not yet run its course. And, just as the re-regulation in
the form of Sarbanes-Oxley in 2002 upset the apple cart after what looked like
one heck of a rally in the opening months of that year, do not think for a
second that re-regulation in the financial sector will not lead to a re-rating of
the banks? Well, it’s already starting.

For Goldman Sachs, this is a repeat of the credit meltdown because its stock
price sank 15% last month in the steepest decline since October 2008. In the
aftermath of last week’s dual credit downgrades of Greece and Portugal, the VIX
index also posted its largest increase (up 32% for the week) since the height of
the credit crisis back in 2008. Leading market indicators such as the Shanghai
index fell 8% last month and leading economic indicators for the U.S. economy,
such as the ECRI leading index, just slipped to a 38-week low.

CHART 1: LEADING INDICATOR NOW AT A 38-WEEK LOW

United States: ECRI Weekly Leading Index Growth Rate
(percent)
30

20

10

-10

-20

-30
95 96 97 98 99 00 01 02 03 04 05 06 07 08 09

Source: Haver Analytics, Gluskin Sheff

For the week, the NYSE slid 3% and volume rose on the down-days — a classic
distribution sign — and suggesting that it paid to start selling before May came
around. An eight-week winning streak for the major averages came to a
screeching halt as investors discovered, pretty well for the first time in a year,
that equities can, and often do, move in both directions. Small caps were
crunched 3.4% for the week — the poorest showing since last October. And,
we’re not convinced that buying-the-dip is going to work this time around in
such an extended market where the headwinds are formidable.

Page 2 of 11
May 3, 2010 – BREAKFAST WITH DAVE

The ongoing positive tone in U.S. Treasuries (3.66% on the 10-year note!) The ongoing positive tone
remains the bee in the bonnet for the bulls. How can we possibly have a in U.S. Treasuries (3.66%
reflation of top-line growth when core inflation slides to a 51-year low as was on the 10-year note!)
the case in the first quarter? The bond market is telling the stock market that remains the bee in the
this consensus opinion of earnings managing to reach peaks as early as 2011 bonnet for the equity
can only be accomplished with more cost cutting. How this can be achieved at market bulls
a time when productivity-adjusted labour compensation is already running at a
record-low -4.7% pace is anyone’s guess.

Meanwhile, gold futures have jumped to a fresh 2010 high and have
massively broken out in Euro terms. Gold and bonds have been an excellent
barbell strategy for the past decade and remain the case today. And, oil
breaking back $86/bbl must be viewed as a margin crimp going forward.

TEN REASONS FOR A DOSE OF CAUTION

1. Markets were unimpressed with the size of the just-announced $145
billion rescue package or the ability of Greece to meet the terms. A
bailout of all Club Med countries would, according to estimates I’ve seen,
approach $800 billion. This is bigger than LEH.
2. China raised reserve ratio requirements 50bps for the third time this year
(to 17%). A decisive slowing in China and the U.S.A. is a crimp in the
near-term commodity price outlook.
3. Australia just unveiled a massive new mining tax. This is weighing on
material stocks overnight.
4. Possible criminal probe on Goldman weighing massively on the stock
price; financials being re-rated by rising spectre of financial re-regulation.
Shades of Sarbanes-Oxley. There has never been a financial crisis that
was not met afterwards with regulatory reform — it’s how the SEC was
created in the first place.
5. ECRI leading economic index just slipped to a 38-week low. With the
restocking phase complete and fiscal stimulus waning, prospects of a
second half slowdown loom large. Buy the recovery story when ISM is at
30 and policy stimulus in full swing (13 months ago); fade it when ISM
approaches 60 and stimulus subsides. Market Vane sentiment is
pushing towards 60% too — yikes! Too much priced in. As for the macro
scene, the U.S. economy is barely growing at all, net of all the federal
stimulus (+0.7% SAAR in Q1). And net of housing impacts, neither is
Canada … should set us up for a fascinating second-half.
6. Attempted terrorist attack in Times Square a reminder that geopolitical
risks have not gone away.
7. Treasury yields have collapsed nearly 35bps from the nearby highs and
are not consistent with the recent move by equities to price in peak
earnings in 2011. Junk bonds trading back to par for the first time in
three years.
8. The U.S. implicit GDP price deflator receded to its slowest rate in 60 years
in Q1 (+0.4% from +2% a year ago) in a sign that this profits recovery is
still being underpinned by cost cuts, tax relief and accounting shifts than
by anything exciting on the pricing front.

Page 3 of 11
May 3, 2010 – BREAKFAST WITH DAVE

CHART 2: GDP DEFLATOR AT A FIVE-DECADE LOW

United States: GDP Implicit Price Deflator
(year-over-year percent change)

12

10

0
60 65 70 75 80 85 90 95 00 05

Shaded region represent periods of U.S. recession

Source: Haver Analytics, Gluskin Sheff

CHART 3: GDP DEFLATOR LEADS BOND YIELD BY A YEAR

United States

16
R = 71%

14

12
10-Year Treasury
Note Yield
10 (percent, 4-quarter lag)

4 GDP Deflator
(YoY % change)

0
55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 00 03 06 09

Source: Haver Analytics, Gluskin Sheff

9. The latest Case-Shiller house price index confirmed that we are into a
renewed leg down in home prices. Financials, retailers and homebuilders
are not priced for this outcome.
10. Initial jobless claims, around 450k, are not consistent with sustained
employment growth, notwithstanding what nonfarm payrolls tell us this
Friday. A new peak in the unemployment rate and a new trough in home
prices stand as the most pronounced downside surprises for the second
half of the year.

Page 4 of 11
May 3, 2010 – BREAKFAST WITH DAVE

GDP REPORT IN PERSPECTIVE

We won’t deny that we have a statistical recovery on our hands in the U.S. —
We won’t deny that we
after all, if the economy was not managing to expand at all with all the
have a statistical recovery
massive policy stimulus in the system then that would truly be a disaster. But
on our hands in the U.S.,
we ran some simulations and found that netting out the monetary and fiscal
but the big question is:
stimulus in the system, real GDP growth would have come in at the oh-so-lofty what happens once the
rate of 0.7% annualized in Q1 — versus the posted 3.2% advance. So, one can stimulus cupboard is bare?
say the stimulus is working in keeping the economy above water; however, we
would say that the recovery thus far lacks the same organic vigour we saw in
that failed recovery and risk asset rally in the opening months of 2002.

The question is what happens once the stimulus cupboard is bare. At least
heading into 2003 we had a massive credit expansion and huge housing
inflation to spur on the economy, even if it was a truncated five-year business
cycle. It truly is difficult to assess what sector will carry the baton outside of
capital spending but it is barely 10% of GDP. It is tough to believe that exports
will carry the day with Europe likely heading back into malaise mode — home
to half the foreign profits derived from U.S. corporations. With inventories now
having been swung back in line with sales, re-stocking cannot be relied upon
to contribute as it has in the past three quarters. Meanwhile, housing,
commercial construction and State & local government spending are all likely
to remain on their downtrends through year-end and into 2011.

The gig is up. Real final sales, despite all the government’s efforts, have only
managed to recover at a 1½% annual rate since the recession supposedly
ended last summer. In a typical post-recession bounceback, the rebound is
closer to 3½% and with far less intervention out of the Fed, Treasury, White
House and Congress.

CHART 4: NOT MUCH OF A BOUNCE AT ALL

United States: Real Final Sales of Domestic Products
(quarter-over-quarter percent change at an annual rate)

-4

-8
80 85 90 95 00 05

Source: Haver Analytics, Gluskin Sheff

Page 5 of 11
May 3, 2010 – BREAKFAST WITH DAVE

DEFAULTS PROVIDE A BOOST?

Indeed, a Morgan Stanley study found that 12% of all mortgage defaults in According to a MS study,
February were “strategic” in the sense that folks simply decided they could get 12% of the mortgage
away from paying off their monthly obligation. This is unheard of but it has defaults in February were
certainly managed to free up anywhere from $100 to $200 billion of money to “strategic” … this is
spend on other goods and services, which help explain why retail sales have
unheard of, but it did free
up anywhere from $100-
been holding up so well.
200bln of money to spend
GETTING READY FOR THE CANADIAN HOUSING BUST? on something else
Well, the CMHC is getting braced for something because the housing agency
has doubled its reserves to $1.3 billion — ostensibly to be used as claims rise
during the imminent BoC rate-hiking cycle.

PESSIMISM PREVAILS
Floyd Norris really struck a raw nerve with his excellent column on page B3 of
the Saturday NYT (As Recession Ebbs, Many Still See Gloom). Before this
recession, there has never been a time when the Conference Board’s
Consumer Survey showed more Americans believing their income would be
lower six months out than the number thinking their income would be higher.
The chart below is truly telling and is yet another signpost that while the
recession may technically be over, the depression lingers on.

CHART 5: MORE AMERICANS BELIEVE THAT THEIR INCOME WILL BE

LOWER SIX-MONTHS OUT
United States: Conference Board Consumer Confidence Survey: Income
Expectations For The Next Six Months: Increase minus Decrease
(percentage point gap)

40

30

20

10

-10

-20
80 85 90 95 00 05

Source: Haver Analytics, Gluskin Sheff

INTERVIEW WITH MOHAMED EL-ERIAN

Barron’s interviewed Pimco’s CEO (page 37) and indeed, there were some
nifty nuggets to glean at.

Page 6 of 11
May 3, 2010 – BREAKFAST WITH DAVE

First — he prefers northern exposure: “You have much more robust earnings
dynamics from emerging economies, Australia, Canada, than countries that
relied on structured finance as the engine for growth, like the U.S. and U.K.”

Second, what he said about the U.S. outlook echoes what we have been
saying for some time, and with all deference to the whippy bear market rally of
the past year. To wit:

“The U.S. is on the verge of an increase in regulation, which will inevitably

lower the speed limit for growth ... the market is pricing in an easy handoff
from temporary sources of growth, such as consumer demand. That's
overoptimistic. The consumer faces headwinds in the form of income growth,
credit availability and demonetization of home equity. People will worry about
how the budget is financed over the medium term, about how the budget is
financed over the medium term, about higher taxes and higher inflation, and
they will postpone consumption.”

THE MODERN VERSION OF BENJAMIN ROTH'S STORY

We have long been advocating that everyone read “The Great Depression: A
Diary" — the story of Benjamin Roth. It’s the only human account of the
1930’s depression and after reading it, you will see first-hand the vagaries of
life after a credit collapse — brief multi-month bouts of euphoria followed by
despair; governments throwing money aimlessly at the economy to preserve
social stability; and fleeting rallies in risk assets.

I received this email from a “subscriber” on Friday and received permission to

reprint it. I call it a modern-day version of Benjamin Roth’s journal, and the
diatribe below, taken verbatim, solidifies my view that there is truly nothing
organic about this stimulus-induced economic recovery. Read on — this one’s
from Jim’s diary (view from the west coast):

As a long time follower of your newsletter I am always looking for “signs” of

economic life. Your newsletters point out the shape of the U.S. economy, but I
thought you would find the following confirming of your statistics.

I read reports, statistics, surveys, and then I go out and walk around and look
at what is happening, kind of like what Peter Lynch used to say he did — he
would go to the mall with his kids to find out what was happening. Anyway,
our family takes a week each year and travels away from the rain and dark
sky in Oregon and we drive to Palm Springs, Ca., for a week of sun and 95
degree weather — a nice break (I enjoy the drive and I see more than sitting in
an airport, and it only takes about twice as long to drive when you count the
time waiting for connecting flights).

Page 7 of 11
May 3, 2010 – BREAKFAST WITH DAVE

I have been keeping a mental journal of economic activity in Palm Springs as

it is truly a regional and national destination point (only 120 miles from L.A.)
that attracts people with money to spend. Last year in April the mood and
economic activity (my own perceived index) was on a scale of 90% to 93%
compared to previous year — we noticed a bit of a drop off in activity, things
were slowing down. This year there was a marked slowdown in activity —
there were many, many vacant store fronts located in the “hot spot” of down
town Palm Springs, with vacancies extending out into the surrounding
communities, we waited for over an hour last year to eat at our favorite local
restaurant, this year there was no wait and we noticed empty tables at 6 p.m.
dinner hour.

In past years we have been in downtown Palm Springs, walking the streets
when the people were shoulder to shoulder; this year it looked like a ghost
town. We asked one of the local businessman (has owned a nursery for 50
years in Palm Springs) he said yes things have slowed down significantly and
even the people with money were not spending it.

There was a huge unexplained observation that we noticed and that was the
huge outlet shopping mall just west of Palm Springs, I believe Cabazon, Ca.,
this mall is huge. We stopped there on Sunday, just to look around and we did
notice that they were very busy with many shoppers having 2-3 bags of
purchases, usually when I go to the mall, I just see people walking around
eating, but not buying stuff. These people at the outlet mall were buying. The
interesting point here is that over 50% to 60% were Asians and that is
apparently a huge portion of this mall’s business. Over head announcements
on the PA system were in Japanese or Chinese, obviously as I said the foreign
shoppers were a huge portion of their business. In the past I have seen many
tour buses that haul foreign shoppers in from Los Angeles to shop here,
maybe they are Chinese nationals looking at how to set up a mall in China?
So lots of activity at the outlet mall and Palm Springs looked like a ghost town
in comparison to earlier years.

Head lines in yesterday’s Eugene Register Guard: “Austere Proposal Closes

Budget Gap.” [C]ity manager says $5.7 million gap in Eugene’s $384.5 million
budget … proposes laying off 40 city employees.”

Head line in today's Eugene Register Guard: “County Expecting Budget Gap.”
“The surprise $10 million shortfall gives Lane County officials a difficult
decision — cut now or cut later.”

Both the city of Eugene, and Lane County Oregon knew there were going to be
budget problems last year when they wrote those budgets and now even with
the anticipated shortages, it is worse than they thought, kind of like Greece …
but I don’t think anybody at the local level here in Oregon was lying about the
problem, it just seems to be getting worse than what was planned.

Page 8 of 11
May 3, 2010 – BREAKFAST WITH DAVE

The budget gaps are attributed to shortfall in revenues, etc. Wait until this
November when property taxes are due, and then we will see all that
projected revenue that was supposed to come from real estate property taxes
not exist and then more headlines about how the local government is out of
money… it’s like a train wreck, you can see it coming, but you can’t stop it. I
anticipate that the state level of budget shortfalls will run a similar line and
the state will start laying off employees, etc.

I know you have been saying that this governmental budget process and
shortfalls were coming, and yes you are (were) right — here it is.

Almost all the stores I go into today show the signs of inventory reduction — I
like to look at what I call the “floor factor” (I have had 40 years experience in
retail). One can look at the floor and see where the aisles have been moved
and the aisles are wider — the wax on the floor and the wear marks that are
left from the previous position of the floor fixtures tells it all — almost every
store shows that the aisles are wider, more fixtures have been removed and
less inventory — again something I know you have been writing about, but
until I see this change, I cannot believe things are getting better.

I especially admire your work because you always back your analysis up with
facts, documented surveys and statistics that can be verified. Anyway, just so
you don’t get some “nut” from Palm Springs, or California going ballistic, let
me just add a little additional clarification. I implied that years 2007 & 2008
were perceived at 100% (April), 2009 was perceived at 90-93% activity (I only
saw a 7-10% drop off in activity from prior years), this year 2010 my perceived
level of economic activity was 75-80% of base year 2008. Some would argue
that this is not “ghost town” activity, but my point was that a 20-25% (drop of
in activity from 2 years earlier) in Palm Springs of all places was to me
significant.

One other observation on the night that we went out to dinner in Palm Springs,
the restaurant where we ate appeared to be 75-85% full with no waiting line.
Many other restaurants up and down the core area of down town Palm
Springs were virtually empty! Several of the nicer restaurants had their
waiters and service people sitting at one or two tables by the
sidewalk/window to make it appear that there was someone in the restaurant.
It’s a pretty sad sight when the only people sitting at the tables in the
restaurant are the staff people — being used either as props or just simply
because they have no customers.

Page 9 of 11
May 3, 2010 – BREAKFAST WITH DAVE

Gluskin Sheff at a Glance

Gluskin Sheff + Associates Inc. is one of Canada’s pre-eminent wealth management firms.
Founded in 1984 and focused primarily on high net worth private clients, we are dedicated to the
prudent stewardship of our clients’ wealth through the delivery of strong, risk-adjusted
investment returns together with the highest level of personalized client service.

OVERVIEW INVESTMENT STRATEGY & TEAM

As of December 31, 2009, the Firm
managed assets of $5.3 billion.
Gluskin Sheff became a publicly traded
corporation on the Toronto Stock
Exchange (symbol: GS) in May 2006 and
remains 54% owned by its senior
management and employees. We have
public company accountability and
governance with a private company
commitment to innovation and service.
Our investment interests are directly
aligned with those of our clients, as
Gluskin Sheff’s management and
employees are collectively the largest
client of the Firm’s investment portfolios. shareholder-minded management and a
We offer a diverse platform of investment
strategies (Canadian and U.S. equities,
Alternative and Fixed Income) and
investment styles (Value, Growth and
1 December 31, 2009
Income).
The minimum investment required to
establish a client relationship with the
Firm is $3 million for Canadian investors
and $5 million for U.S. & International
investors.
PERFORMANCE
$1 million invested in our Canadian Value which we have the highest conviction.
Portfolio in 1991 (its inception date)
would have grown to $10.7 million on
2
We have strong and stable portfolio
management, research and client service
teams. Aside from recent additions, our Our investment
Portfolio Managers have been with the interests are directly
Firm for a minimum of ten years and we
aligned with those of
have attracted “best in class” talent at all
our clients, as Gluskin
levels. Our performance results are those
Sheff’s management and
of the team in place.
employees are
We have a strong history of insightful collectively the largest
bottom-up security selection based on client of the Firm’s
fundamental analysis.
investment portfolios.
For long equities, we look for companies
with a history of long-term growth and
stability, a proven track record,
$1 million invested in our
Canadian Value Portfolio
share price below our estimate of intrinsic
in 1991 (its inception
value. We look for the opposite in
date) would have grown to
equities that we sell short.
$10.7 million2 on
For corporate bonds, we look for issuers
with a margin of safety for the payment
versus $5.5 million for the
of interest and principal, and yields which
S&P/TSX Total Return
are attractive relative to the assessed
Index over the same
credit risks involved.
period.
We assemble concentrated portfolios —
our top ten holdings typically represent
between 25% to 45% of a portfolio. In this
way, clients benefit from the ideas in
Our success has often been linked to our

long history of investing in under-

December 31, 2009 versus $5.5 million for
followed and under-appreciated small
the S&P/TSX Total Return Index over
and mid cap companies both in Canada
the same period.
and the U.S.
$1 million usd invested in our U.S.
Equity Portfolio in 1986 (its inception PORTFOLIO CONSTRUCTION
date) would have grown to $11.7 million In terms of asset mix and portfolio For further information,
usd on December 31, 2009 versus $9.2
2
construction, we offer a unique marriage please contact
million usd for the S&P 500 Total between our bottom-up security-specific
Return Index over the same period. questions@gluskinsheff.com
fundamental analysis and our top-down
macroeconomic view.
Notes:
Unless otherwise noted, all values are in Canadian dollars.
1. Not all investment strategies are available to non-Canadian investors. Please contact Gluskin Sheff for information specific to your situation.
2. Returns are based on the composite of segregated Value and U.S. Equity portfolios, as applicable, and are presented net of fees and expenses. Page 10 of 11
May 3, 2010 – BREAKFAST WITH DAVE
IMPORTANT DISCLOSURES
Copyright 2010 Gluskin Sheff + Associates Inc. (“Gluskin Sheff”). All rights
reserved. This report is prepared for the use of Gluskin Sheff clients and
subscribers to this report and may not be redistributed, retransmitted or
disclosed, in whole or in part, or in any form or manner, without the express
written consent of Gluskin Sheff. Gluskin Sheff reports are distributed
simultaneously to internal and client websites and other portals by Gluskin
Sheff and are not publicly available materials. Any unauthorized use or
disclosure is prohibited.
Gluskin Sheff may own, buy, or sell, on behalf of its clients, securities of
issuers that may be discussed in or impacted by this report. As a result,
readers should be aware that Gluskin Sheff may have a conflict of interest
that could affect the objectivity of this report. This report should not be
regarded by recipients as a substitute for the exercise of their own judgment
and readers are encouraged to seek independent, third-party research on
any companies covered in or impacted by this report.
Individuals identified as economists do not function as research analysts
under U.S. law and reports prepared by them are not research reports under
applicable U.S. rules and regulations. Macroeconomic analysis is
considered investment research for purposes of distribution in the U.K.
under the rules of the Financial Services Authority.
Neither the information nor any opinion expressed constitutes an offer or an
invitation to make an offer, to buy or sell any securities or other financial
instrument or any derivative related to such securities or instruments (e.g.,
options, futures, warrants, and contracts for differences). This report is not
intended to provide personal investment advice and it does not take into
account the specific investment objectives, financial situation and the
particular needs of any specific person. Investors should seek financial
advice regarding the appropriateness of investing in financial instruments
and implementing investment strategies discussed or recommended in this
report and should understand that statements regarding future prospects
may not be realized. Any decision to purchase or subscribe for securities in
any offering must be based solely on existing public information on such
security or the information in the prospectus or other offering document
issued in connection with such offering, and not on this report.
Securities and other financial instruments discussed in this report, or
recommended by Gluskin Sheff, are not insured by the Federal Deposit
Insurance Corporation and are not deposits or other obligations of any
insured depository institution. Investments in general and, derivatives, in
particular, involve numerous risks, including, among others, market risk,
counterparty default risk and liquidity risk. No security, financial instrument
or derivative is suitable for all investors. In some cases, securities and
other financial instruments may be difficult to value or sell and reliable
information about the value or risks related to the security or financial
instrument may be difficult to obtain. Investors should note that income
from such securities and other financial instruments, if any, may fluctuate
and that price or value of such securities and instruments may rise or fall
and, in some cases, investors may lose their entire principal investment.
Past performance is not necessarily a guide to future performance. Levels
and basis for taxation may change.
Foreign currency rates of exchange may adversely affect the value, price or
income of any security or financial instrument mentioned in this report.
Investors in such securities and instruments effectively assume currency
risk.
Materials prepared by Gluskin Sheff research personnel are based on public
information. Facts and views presented in this material have not been
reviewed by, and may not reflect information known to, professionals in
other business areas of Gluskin Sheff. To the extent this report discusses
any legal proceeding or issues, it has not been prepared as nor is it
intended to express any legal conclusion, opinion or advice. Investors
should consult their own legal advisers as to issues of law relating to the
subject matter of this report. Gluskin Sheff research personnel’s knowledge
of legal proceedings in which any Gluskin Sheff entity and/or its directors,
officers and employees may be plaintiffs, defendants, co-defendants or co-
plaintiffs with or involving companies mentioned in this report is based on
public information. Facts and views presented in this material that relate to
any such proceedings have not been reviewed by, discussed with, and may
not reflect information known to, professionals in other business areas of
Gluskin Sheff in connection with the legal proceedings or matters relevant
to such proceedings.
Any information relating to the tax status of financial instruments discussed
herein is not intended to provide tax advice or to be used by anyone to
provide tax advice. Investors are urged to seek tax advice based on their
particular circumstances from an independent tax professional.
The information herein (other than disclosure information relating to Gluskin
Sheff and its affiliates) was obtained from various sources and Gluskin
Sheff does not guarantee its accuracy. This report may contain links to
third-party websites. Gluskin Sheff is not responsible for the content of any
third-party website or any linked content contained in a third-party website.
Content contained on such third-party websites is not part of this report and
is not incorporated by reference into this report. The inclusion of a link in
this report does not imply any endorsement by or any affiliation with Gluskin
Sheff.
All opinions, projections and estimates constitute the judgment of the
author as of the date of the report and are subject to change without notice.
Prices also are subject to change without notice. Gluskin Sheff is under no
obligation to update this report and readers should therefore assume that
Gluskin Sheff will not update any fact, circumstance or opinion contained in
this report.
Neither Gluskin Sheff nor any director, officer or employee of Gluskin Sheff
accepts any liability whatsoever for any direct, indirect or consequential
damages or losses arising from any use of this report or its contents.
Page 11 of 11