1. Friday March 13, 2009
S&P/TSX Composite +271.25 8282.27
CANADA
Dow Jones +239.66 7170.06
S&P 500 +29.38 750.74 The S&P/TSX Composite rose as resource and financial companies
NASDAQ +54.46 1426.10 extended their gains from the previous two sessions on hopes that the worst
S&P/TSX Venture +19.52 843.42 of the economic crisis may be over.
Philadelphia SOX +7.36 217.38
Crude futures climbed more than 10% to top US$47 a barrel, following
Crude Oil (US$/brrl) +4.70 47.03
better-than-expected U.S. February retail sales data and ahead of a
Gas (US$/mmbtu) +0.20 4.00
weekend OPEC meeting. Oil stocks such as Suncor (SU), Canadian Oil
Copper (US$/lb) +0.03 1.65
Sands Trust (COS.UN) and Canadian Natural Resources (CNQ)
Gold (US$/oz) +13.30 924.00
moved higher in tandem.
Nickel (US$/lb) -0.06 4.41
Palladium (US$/oz) +0.00 197.50 Former tech darling Nortel Networks (NT), which filed for bankruptcy
Platinum (US$/oz) +1.00 1053.75 protection earlier this year, is looking to break itself up by selling off major
Silver (US$/oz) +0.20 13.01 divisions, media reported. Instead of trying to rebuild itself under
Uranium (US$/lb) -0.25 43.50 bankruptcy protection, the company is considering offers from potential
Canadian Dollar +0.0037 0.7819 buyers who are interested in buying its wireless-gear business, as well as a
30 Year Canada -0.03 3.636 separate division that manufactures office telecom equipment.
30 Year U.S. -0.04 3.620
Health sciences company MDS (MDS) reported lower quarterly earnings
Volatility Index (VIX) -2.43 41.18
and revenue as customers deferred research projects. Likewise, commercial
One Less Reason For printer Transcontinental (TCL.A) swung to a quarterly loss as its
Newspapers… customers slashed spending.
A Quebec entrepreneur is
UNITED STATES
planning to bring
obituaries out of the back Stocks gained for a third straight day as General Electric (GE) said an
pages of newspapers to a S&P credit-rating downgrade will not hurt business and the government
new home on the small said retail sales beat estimates.
screen.
Bank of America (BAC) frontlined a continued ascent in financials after
Gerald Dominique hopes “Je me souviens”, a announcing it will not require further U.S. government aid. Moreover, the
niche network dedicated to broadcasting
bank said it was profitable during the first two months of 2009, echoing
digital obituaries, will be ready to begin
comments from Citigroup (C) a few days earlier.
broadcasting by the summer.
Steelmakers fell after JPMorgan Chase cut its earnings estimates for the
The French-language speciality channel will
industry and said AK Steel Holding (AKS), U.S. Steel (X), ArcelorMittal
charge a fee to broadcast obituaries, prayers, (MT) and Steel Dynamics (STLD) could “potentially be at risk of
hospitalization notices and messages of violating their debt covenants” should the metal’s prices and shipments fail
thanks. to recover this year.
The Quebec entrepreneur obtained a licence
Intel (INTC) surged after AmTech upgraded the chipmaker, citing the
in February from the CRTC and plans to
company’s pursuit of new revenue sources. Conversely, Microsoft
expand the channel to the rest of the country, (MSFT) lagged as the world’s largest software maker had its earnings
under the moniker “Remember the Name.” estimates reduced at Morgan Stanley, which said the PC market will
remain “choppy” this year.
“The goal of this channel is to tell
stories…How many stories are lost all over
Smithfield Foods (SFD) advanced as the pork processor posted a loss
the world each year – great stories about
excluding some items of only 15 cents a share, half the average estimate of
people’s lives – those are the stories we hope analysts.
to tell,” Dominique told the Canadian Press.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

2. – Canadian and U.S. Comments for Friday March 13, 2009 2
ECON 101
CANADIAN Data Today: This morning, the Unemployment Rate (February) is expected to be 7.4%, slightly worse than
7.2% in the previous month. Net Change in Unemployment (February), on the other hand, is projected to be a loss of 55,000
jobs, better than a loss of 129,000 in January. International Merchandise Trade (January) is thought to have fallen by $1
billion, wider than an earlier $500 million.
U.S. Data Today: This morning, the Trade Balance (January) is expected to have shrunk by $38.0 billion, compared to
$39.9 billion in December. Finally, Import Prices (February) likely fell by 0.7%, slower than 1.1% last period.
MARKET MOVERS
Technical Indicators:
TSX TSX-V NYSE NASDAQ AMEX
Advancers 1035 410 2787 2227 340
Decliners 458 465 318 464 143
Net +577 -55 +2469 +1763 +197
Notable 52-Week Highs:
No Notable Highs.
Notable 52-Week Lows:
Arbor Memorial Services ABO.B $ 16.21 Intertape Polymer Group ITP $ 0.39
African Copper ACU $ 0.01 Lanesborough REIT LRT.UN $ 1.49
Alaris Royalty AD $ 6.71 Miranda Technologies MT $ 4.40
Akita Drilling AKT.B $ 6.25 Newalta NAL $ 2.40
BELLUS Health BLU $ 0.16 Opta Minerals OPM $ 1.01
Belzberg Technologies BLZ $ 1.34 Railpower Technologies P $ 0.03
Canfor Pulp Income Fund CFX.UN $ 1.31 Sabretooth Energy SAB $ 0.19
Contrans Income Fund CSS.UN $ 2.98 Skylon Intl Advantage Yield SIA.UN $ 15.10
The Data Group Income Fund DGI.UN $ 2.77 Sierra Wireless SW $ 3.71
FP Newspapers Income Fund FP.UN $ 3.24 Sceptre Investment Counsel SZ $ 3.27
Fortress Paper FTP $ 4.62 TerraVest Income Fund TI.UN $ 2.22
Global Plus Income Trust GIP.UN $ 5.00 West Fraser Timber WFT $ 22.01
Geovic Mining GMC $ 0.46 Western Canadian Coal WTN $ 0.36
Hardwoods Distribution HWD.UN $ 0.50 Zarlink Semiconductor ZL $ 0.21
First Asset Income & Growth IGF.UN $ 4.85
CANADIAN EQUITIES OF INTEREST
Listed Alphabetically by Symbol
Pensions
The pen(sion) is mightier than the sword. Statistics Canada reported yesterday that employer-sponsored pension funds dropped
by 8.7%, or $83 billion, to $869 billion in the third quarter. This was the largest quarterly decline in a decade. Pension fund
assets peaked at $955 billion at the end of 2007. As a result of the decline in equity over the past year, the market value of
stocks and equity funds accounted for 34.2% of total pension fund assets at the end of the third quarter, down from 38.4% in the
same quarter in 2007. Prior to the market downturn in 2001 and 2002, stocks and equity funds accounted for up to 45%. The
market value of bonds accounted for 36.0% of total pension fund assets in the third quarter of 2008. Real estate investments
represented 8.4%, mortgages 1.7%, and short-term investments 3.3%. The remaining assets, which include pooled foreign
funds, accounted for 16.3%. The value of pension funds held in foreign investments has fallen for six consecutive quarters. At
the end of the third quarter, foreign investments accounted for 28.9% of total pension fund assets, down from the most recent
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

3. – Canadian and U.S. Comments for Friday March 13, 2009 3
peak of 31.3% during the first quarter of 2007. Expenditures of $22.8 billion in the third quarter exceeded revenues of $17.0
billion, for a negative cash flow of $5.8 billion. This was the largest quarterly net income loss in six years and the second time
in 2008 that pension funds experienced a negative cash flow. Collectively, pension fund managers reported $8.5 billion in third
quarter losses, the largest net loss on sale of securities recorded for trusteed pension funds. Total revenue from contributions in
the third quarter of 2008 amounted to $8.3 billion, down 1.6% from the second quarter. Pension benefits paid to retirees grew
5.8%, reaching a high of $9.8 billion. Benefits exceeded pension contributions made by employers and employees for a fifth
quarter in a row. In total, about 5.8 million Canadian workers are members of employer pension plans. Of this group, 4.6
million workers are members of trusteed plans. The remaining 1.2 million members with employer pension plans are managed
principally by insurance company contracts. Data in this release refer only to trusteed plans and their pension funds.
Oil Futures April 2009 (OILC : NYMEX : US$47.03), Net Change: 4.70, % Change: 11.10%
To cut or not to cut, that is not the question. With global economic conditions tapering off since the last OPEC meeting, you’d
think that talk of additional production cuts would be dominating headlines leading into this Sunday’s OPEC meetings in
Vienna. However, the debate hasn’t really been around whether the cartel will or will not cut, but rather compliance (or lack
thereof) with the OPEC’s previously announced production cuts. According to media reports, OPEC has so far made about 80-
85% of the 4.2-million-barrel-a-day cuts already announced. The Wall Street Journal, citing PFC Energy, a consultancy that
tracks OPEC, estimates that five cartel members – Angola, Ecuador, Iran, Nigeria and Venezuela – have failed to deliver on
more than 50% of their pledged cuts, based on February production data. According to Saudi media reports, the country wants
OPEC members to improve compliance with current production cuts before considering more production cuts. The cartel has a
poor track record of adhering to production cuts over more than a couple of months. We have said this for awhile now and it’s
worth repeating: oil traders know there are three certainties in life, namely taxes, death, and OPEC cheating. For those of you
who are still handicapping the chances of an OPEC cut, oil traders are saying that there’s a 50% chance of another 1.0-million
barrel-a-day cut on Sunday.
Cameco* (CCO : TSX : $19.80), Net Change: -0.24, % Change: -1.20%, Volume: 2,068,763
Paladin Energy* (PDN : TSX : $2.60), Net Change: 0.17, % Change: 7.00%, Volume: 2,983,115
Uranium One* (UUU : TSX : $2.24), Net Change: 0.17, % Change: 8.21%, Volume: 13,385,896
AREVA Derche? Speaking at the Reuters Global Mining and Steel Summit in New York on March 11, Cameco’s CEO Jerry
Grandey disclosed the company’s intent to pursue a potential uranium acquisition in the $1.0-2.0+ billion range. Cameco
believes that there are currently opportunities to take advantage of undervalued and underfunded miners, which would further
strengthen the company’s position in the market. To our knowledge there are very few publicly listed uranium miners with a
market capitalization greater than $1.0 billion; these include Uranium One, Paladin Energy and Energy Resources of Australia.
Of these, Canaccord Adams Metals & Mining Analyst Orest Wowkodaw believes Paladin and Rio Tinto’s (RTP) 68% stake in
ERA (currently worth F$2.5 billion) would be the most logical targets. Both Paladin and ERA would further diversify the
company’s producing asset base in relatively attractive regions. Alternatively, Cameco may be looking to make a further direct
investment in Kazakhstan, although Wowkodaw believes this to be a low probability given the company’s mixed experience to
date at Inkai. There are also media reports that the French government may be looking to sell a minority stake in AREVA,
which would also likely interest Cameco. We note that AREVA has ownership stakes in McArthur River and Cigar Lake,
among others. With the recent $460 million equity raise, Canaccord Adams estimates that Cameco will end Q1/09 with a cash
balance of $870 million but a net debt position of $443 million. Wowkodaw says the company’s balance sheet would not
support a transaction in the $1.0-2.0+ billion range without raising additional equity.
Capital Gold* (CGC : TSX : $0.81), Net Change: 0.02, % Change: 2.53%, Volume: 168,500
Gammon Gold* (GAM : TSX : $9.59), Net Change: 0.43, % Change: 4.69%, Volume: 568,291
Why that’s a capital idea. Gammon announced that it entered into a letter of intent to acquire the shares of Capital Gold, a
small-cap gold producer in Mexico. This is an all-share transaction of 0.1028 Gammon Gold shares for each Capital Gold
common share outstanding. At yesterday’s close, it appears to value Capital Gold at roughly $0.98 per share, which is a 29%
premium. The total value of the transaction is about $195 million. Capital Gold’s key asset is the El Chanate Mine in Sonora
Mexico. In its latest quarter ended January 31, 2009, it produced 13,646 oz. Gammon should realize synergies with its own
Mexican operations. The transaction is subject to satisfactory completion of due diligence, receipt of Capital Gold shareholder
approval, regulatory approvals and certain other conditions. The letter of intent states that the parties plan on reaching a
definitive agreement by March 31 with a break fee of US$4 million.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

4. – Canadian and U.S. Comments for Friday March 13, 2009 4
Contrans Income Fund (CSS.UN : TSX : $3.20), Net Change: -1.00, % Change: -23.81%, Volume: 355,839
It’s beautiful and so are you, dear Prudence. The freight and transportation company announced that it will temporarily
suspend payment of current distributions and that future distributions will be made quarterly instead of monthly as a result of
the current business environment. But don’t worry: the company remains confident in its ability to compete and create long-
term value (of course, they say nothing about the short-term). The trust had paid a $0.1042 per unit distribution in February. The
company is affected by a slowing economy and by reduced shipments of autoparts across the US/Canada border. The only thing
that surprises us is how greatly the units sold off. Should it really be surprising that another trust has cut distributions? It’s the
prudent thing to do.
Forsys Metals* (FSY : TSX : $5.25), Net Change: -1.00, % Change: -16.00%, Volume: 4,677,194
KEYWORDS: NO LATER THAN. Concerns over a potential delay in the closing of the Forsys buyout sent some investors
hurrying to the exits late Thursday. At last update, a news release from the George Forrest Group provided some confidence that
the plan of arrangement whereby George Forrest International Afrique S.P.R.L. (GFI) will acquire all the issued and
outstanding common shares of Forsys at $7.00 per share in cash and all of the outstanding in-the-money options and warrants
for total consideration of $579 million will close as early as March 12 “BUT NOT LATER THAN” March 18. Canaccord
Adams Senior Mining Analyst Eric Zaunscherb says that all of the major boxes, save issuing and cashing the cheque, have been
checked. The recent news release by George Forrest Group helps reduce the risk. Zaunscherb believes that Forsys’ share price
will continue to move toward GFI’s $7.00 offer price. At yesterday’s close, the spread represents a potential 33% short-term
return by March 18.
Manulife Financial* (MFC : TSX : $12.70), Net Change: 1.47, % Change: 13.09%, Volume: 16,801,299
Sun Life Financial (SLF : TSX : $19.96), Net Change: 2.04, % Change: 11.38%, Volume: 2,844,198
“There are worse things in life than death. Have you ever spent an evening with an insurance salesman?” – Woody Allen.
Insurers on both sides of the border had a big day yesterday. The Wall Street Journal published an article highlighting how a
dozen life insurers have pending applications for aid from the government’s US$700 billion Troubled Asset Relief Program,
and are expecting an answer to their request for a bank-style bailout in the coming weeks. One stumbling block is that the
industry is overseen by state regulators and not a single federal agency. That means there’s no group of federal officials
responsible for it, or with a deep understanding of its challenges. For now, the Treasury Department hasn’t said whether life
insurers will be eligible for TARP funds. Industry group ACLI (American Council of Life Insurers) expects the Treasury to
decide whether insurers will be eligible for federal aid some time later this month. Canadian insurers also participated in the
rally. On Tuesday, Bloomberg reported how the Canadian government said a program to guarantee borrowing by life insurers,
such as Manulife, will be available this month. The insurers can use the backstop program until December 31. The government
is insuring debt and buying back as much as $125 billion in bank mortgages to revive lending.
MDS* (MDS : TSX : $7.19), Net Change: 0.32, % Change: 4.66%, Volume: 444,418
MDS* (MDZ : NYSE : US$5.69), Net Change: 0.41, % Change: 7.77%, Volume: 217,281
The microbe is so very small. The life sciences company posted quarterly results, which saw the company earn $2 million, or
$0.02 per share, down from $16 million, or $0.16 per share, last year. Adjusted earnings were $0.06 per share, down from $0.07
per share last year and slightly off the $0.07 Reuters consensus. Adjusted EBITDA fell 16% to $32 million. MDS said
restructuring and productivity initiatives that were implemented to help adjust for market softness generated $14 million in
savings in the latest quarter. In early February, MDS announced it had set up a committee of independent directors to review
strategic options. The company’s MDS Nordion division contributed $66 million of net revenue in the latest quarter, up 10%
from a year earlier. Revenue would have increased 48% were it not for the negative impact of foreign exchange and the sale of
certain product lines. MDS said revenue growth at MDS Nordion was driven by year-over-year strength in medical isotope sales
resulting from a competitor’s nuclear reactor shutdown in Europe during the first quarter of 2009 and an unscheduled shutdown
of Atomic Energy of Canada Ltd.’s NRU reactor in the first quarter of 2008. MDS Pharma Services’ net revenue was down
12% to $106 million. Analytical Technologies net revenue declined 27%.
Nexen* (NXY : TSX : $18.63), Net Change: 0.84, % Change: 4.72%, Volume: 5,228,816
OPTI Canada (OPC : TSX : $0.90), Net Change: 0.27, % Change: 42.86%, Volume: 4,328,805
Putting the OPTI before the Nexen? Rumours of Total SA’s (TOT) renewed interest in Nexen didn’t hurt OPTI on Thursday
– if Total were to buy Nexen, wouldn’t they buy OPTI as well? If that Total scenario sounds too far fetched, how about the
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

5. – Canadian and U.S. Comments for Friday March 13, 2009 5
rumour that Nexen is looking to buy OPTI? In January, Nexen acquired an additional 15% interest in the Long Lake project and
joint venture lands from OPTI for $735 million. The acquisition increased Nexen’s interest in Long Lake and joint venture lands
to 65% upon closing, up from its existing 50% interest, with OPTI holding the remaining 35% interest. Nexen also became
operator of the Long Lake upgrader (the company is currently the operator of the SAGD operations at Long Lake). On a
resource basis (2P+contingent), the transaction equates to an implied value of $0.83 per barrel of bitumen resource in the
ground. The transaction price of $735 million implied a total project value of $4.9 billion or an implied value of $1.66 per OPTI
share. Even with yesterday’s runup, wouldn’t it be relatively inexpensive for Nexen to acquire OPTI’s remaining 35% interest?
Pacific Rubiales Energy* (PRE : TSX : $4.88), Net Change: 0.58, % Change: 13.49%, Volume: 1,509,015
More fuel to the fire. Pacific Rubiales closed the previously announced debt facility for approximately US$200 million. The
credit facility will be drawn down in two tranches: the first, representing approximately US$130 million, will be on or about
March 13, 2009, and the second, representing approximately US$70 million, will be on or about April 1, 2009. The facility has
an interest rate of DTF (Colombian base rate for fixed rate deposits over 3 months) + 5%, a maturity of five years with a one-
year grace period and blended quarterly payments. The facility will ensure financing for the completion of Phase 1 of the
Rubiales pipeline project. Debt financing for Phase II is presently being arranged by Ecopetrol and Pacific Rubiales via other
sources. Pacific Rubiales says Phase II enables production at full capacity, estimated at 160,000 bopd (gross) by first quarter,
2010. To add to takeover speculation: when Pacific Rubiales announced its shareholders’ rights plan, did you notice that the
company also announced it was retaining two investment bankers to “provide financial and strategic advice to the company”?
This move is a little out of the ordinary isn’t it? When companies announce plans to implement a shareholder rights plan, very
seldom do they ever appoint financial advisers in the same breathe.
Provident Energy Trust* (PVE : TSX : $4.00), Net Change: 0.72, % Change: 21.95%, Volume: 704,409
Yesterday’s biggest gainer in the energy trust sector. Units of Provident rebounded in what some were calling an “oversold
rally”. The Trust announced Q4/08 and year-end results, updated reserves and lowered its monthly cash distribution. Funds flow
from continuing operations was $82 million ($0.32 per unit) in the quarter, and for the year, increased to $518 million ($2.57
per unit). Capex for Q4 was $54.9 million, and for the year came in at $246.9 million. Provident left its 2009 capital budget
unchanged at $118 million. Upstream was allocated $88 million and Midstream was budgeted $27 million. For 2008, finding,
development and acquisition (FD&A) costs including revisions and future development capital (FDC) were $35.28 per boe of
proved plus probable reserves. Total proved plus probable oil and gas reserves at year-end decreased 3% to 97.8 million barrels
of oil equivalent (mmboe) from 101.2 mmboe in 2007, while total proved plus probable reserve life index (RLI) was stable at
10 years. Provident has lowered its monthly cash distribution to $0.06 per unit from $0.09. The Trust’s current annualized cash
distribution rate is now $0.72 per trust unit. Provident’s Canadian bank debt was reduced by 45% to $505 million in 2008. The
Trust has a total capacity of $1.125 billion in its revolving credit facility.
U.S. EQUITIES OF INTEREST
Listed Alphabetically by Symbol
Mark to Market
Never mix business and politics, unless you’re a bank. Chairman Robert Herz of the Financial Accounting Standard’s Board
(FASB) told lawmakers of the House Financial Services subcommittee on capital markets that the board “could have the
guidance in three weeks.” This commitment came amid a display of congressional power at a hearing on the so-called mark-to-
market accounting rules. The head of the House panel, Republican Paul Kanjorski, D-Pa., had held out the threat of legislation
to pressure the standard-setting board and the Securities and Exchange Commission (SEC) to take steps that would give relief to
battered banks. The banking industry has been pushing for the accounting relief. Mark-to-market, which compels banks to value
assets at current market prices, is blamed by some for exacerbating the financial crisis because the illiquid market for certain
instruments such as mortgage-backed securities has forced financial institutions to write down the value of their holdings.
Balance sheets have been gutted, even though assets could eventually recover their value before the banks sell them. Many of
the committee members receive sizable campaign contributions from banks and other financial institutions. Spencer Bachus of
Alabama, the senior Republican on the committee, said, “Given our current market conditions, the lack of urgency on the part of
the SEC and FASB is disappointing and unacceptable. Relief is needed now and action must be taken immediately to help bring
certainty to the markets.”
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

6. – Canadian and U.S. Comments for Friday March 13, 2009 6
Steel
The Men of Steel – able to walk through a tall building in a single file. JP Morgan lowered its 2009 EPS estimates for seven
carbon steel producers yesterday: AK Steel (AKS), Commercial Metals (CMC), Gerdau AmeriSteel (GNA), ArcelorMittal
(MT), Nucor (NUE), Steel Dynamics (STLD) and United States Steel (X). Their analyst thinks a restocking rebound in
demand is likely going to be pushed out into H2/09. JP Morgan has created a “stress test” scenario for its carbon steel earnings
models in 2009 and identified who could potentially be at risk of violating their debt covenants, namely AK Steel,
ArcelorMittal, Steel Dynamics, and U.S. Steel. JP Morgan thinks minimills are likely to fair much better, saying under the stress
test scenario, minimills Nucor, Gerdau, and Commercial Metals should hold up well in relation to their debt covenants.
Separately, Steel Dynamics yesterday replaced its forecast of a first-quarter profit with a forecast of a loss amid an industry-
wide utilization rate of only 43%.
Apple (AAPL : NASDAQ : US$96.35), Net Change: 3.67, % Change: 3.96%, Volume: 27,414,804
Fat fingers, unite! Analysts at Piper Jaffray and Kaufman Bros. say Apple is probably working on a new generation of the iPod
Touch that connects to the Internet via Wi-Fi networks, creating a device that bridges the gap between media players and
portable computers. The new display, which is purported to be two to three times bigger than the current 3.5-inch touch screen,
would make the Touch more like a tablet computer or portable entertainment device, making it easier to watch movies, play
games and surf the Web. The company also may introduce a low-cost notebook with a 10-inch screen, the analysts said. That
would let Apple compete with netbooks that sell for $500 or less. Apple themselves have previously described the Touch as a
jumping-off point for new types of devices. “The iPod Touch has the potential to grow the iPod from being just a music and
video player into being the very first mainstream Wi-Fi mobile platform, running all kinds of mobile applications,” COO Tim
Cook told analysts last year (note that Cook is running day-to-day operations at Apple while CEO Steve Jobs is on medical
leave). Cook has said that current netbooks do not appeal to many customers because of their limited featuresets. Even so,
Apple “has some ideas” for that market, he told analysts in January.
General Electric (GE : NYSE : US$9.57), Net Change: 1.08, % Change: 12.72%, Volume: 354,701,729
The Fonz – the last remaining triple Ayyyyy! The market was buoyed after Standard & Poor’s lowered the conglomerate’s
long-term debt rating from AAA to AA+, but raised its outlook to “stable,” comforting investors who feared a more dramatic
cut. GE, which held the top rating since 1956, said in a statement it doesn’t foresee “any significant operational or funding
impacts.” The S&P analyst who covers GE said in an interview that the ratings committee balanced the “excellent risk profile”
of GE’s industrial businesses against the prospects of weaker earnings or a “modest net loss” at GE Capital. “We’re not
expecting any real earnings or cash flow from GE Capital this year or next year,” he wrote. Without the support of the parent
company, GE Capital’s rating would be an A, lower than the previous A+ assessment, S&P added. S&P left GE and GE
Capital’s commercial paper ratings at A- 1+ and said the rating for debt backed by the Federal Deposit Insurance Corp. remains
AAA. While the company’s rating was upgraded to stable, that may not last for long. The firm provided some scenarios which
could precipitate negative changes to the outlook. One such scenario would be if cash flows fall below a certain level this year,
which the agency says could partly be caused by revenues falling more than 5%. This is entirely feasible, given that GE
management recently forecast that revenues will be flat to down 5% this year. Also, S&P says its outlook could change if GE
Capital reports “significant losses for an extended period of time.” The company could face substantial losses on U.K.
residential mortgages, Eastern European consumer loans, and $36.6 billion of commercial real-estate equity investments. While
in 1982 there were 60 publicly traded companies with AAA ratings, now only six hold this rating: Automated Data Processing
(ADP), Berkshire Hathaway (BRK), Exxon (XOM), Johnson & Johnson (JNJ), Microsoft (MSFT), Pfizer (PFE), and of
course, The Fonz (FONZ).
Hanesbrands (HBI : NYSE : US$8.33), Net Change: 1.92, % Change: 29.95%, Volume: 4,540,949
Wearing it well. The maker of Playtex bras, Champion hoodies and Hanes T-shirts was looking PHAT after lenders raised the
interest rate on $990 million of term loans and a revolving credit line in exchange for relaxed terms on the debt. Banks
increased the interest rate by 3 percentage points, Hanesbrands announced yesterday, saying it expects net interest expense to
rise this year to $165 million from $155 million in 2008. The amendment raises the maximum allowable ratio of debt to
EBITDA to 4.25 from 3.75 this quarter, gradually tightening to 3.00 in the third quarter of 2011. Hanesbrands, which expects
low to mid-teen percentage unit volume declines in early 2009 amid lower consumer spending, said it was highly unlikely that it
would meet its long-term sales growth target of 1-3% in 2009, adding it does not expect to achieve its long-term profit growth
goal of 10-20% in 2009. Last month the company said 310 jobs will be cut when it closes its Barnwell, S.C., sock-knitting plant
and moves production to El Salvador by the end of April.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

7. – Canadian and U.S. Comments for Friday March 13, 2009 7
Intel (INTC : NASDAQ : US$14.52), Net Change: 0.56, % Change: 4.01%, Volume: 84,841,354
Star Wars, Episode VII: Attack on new revenue sources. This was what AmTech cited as a reason to be bullish on Intel,
sending shares up as much as 5%. The broker said that investors have yet to price in the effect of new revenue streams,
including the upcoming release of Intel’s Larrabee graphics processing unit. Moreover, the broker drew attention to Intel’s
willingness to do business with non-PC customers, explaining this will bring positive news flow to the name over the next six to
nine months. “We believe that upside now outweighs downside risk at the current stock price, and recommend accumulating
shares with a (six to nine) month trading horizon,” it wrote in a note to investors. AmTech upgraded its rating and target price
on the release.
Microsoft (MSFT : NASDAQ : US$17.01), Net Change: -0.10, % Change: -0.58%, Volume: 93,614,878
Now offering blue-screens of death on your mobile phones. The world’s largest software maker fell the most in the Dow,
although on a day where every other stock went up, that isn’t saying much. Broker Morgan Stanley suggested that Microsoft’s
earnings will suffer as the PC market experiences “choppyness” for the rest of the year. The firm trimmed its earnings forecast
to $1.65 a share from an earlier projection of $1.73. Separately, details emerged on Microsoft’s new marketplace for mobile
phone software. Ever since Apple (AAPL) came out with its store a year ago, competitors including Research in Motion
(RIM) and industry posterboy Google (GOOG) have matched with great success. Yet whether Microsoft will enjoy similar
fortunes remains to be seen. First off, its Windows Mobile platform is less popular, and will therefore gather less developer
interest. Secondly, Microsoft is expected to make developers pay $99 to be become a certified vendor, as well as $99 for every
app submitted to the store. Apple, by contrast makes developers pay $99 to become a vendor, but they can submit as many apps
as they want with no charge. We can think of many other things nerds would like to spend their money on, like say, the latest
NVIDIA Quadro FX 5800 GPU. Don’t ask how we know that…
Men’s Wearhouse (MW : NYSE : US$13.92), Net Change: 3.05, % Change: 28.06%, Volume: 4,932,533
Because the name “Dude Shack” didn’t quite work. Men’s Wearhouse didn’t need a place to hide after eking out a profit on a
gain from selling a distribution centre, despite struggling with weak sales and margins in its fiscal fourth quarter. For the quarter
ended January 31, the retailer of men’s clothing reported net income of $1.5 million, down from $14.8 million a year earlier, as
revenue fell 11% to $476.4 million, with U.S. same-store sales falling 9.9% and gross margin falling to 38.4% from 42.8%.
Amid the economic downturn, the company cut costs during Q4 and said it is aiming to cut overhead expenses, excluding
advertising, by at least 7% in this year’s first half. Men’s Wearhouse also set a capital budget of $50-55 million, down from
$88.2 million last year, with plans for as many as 10 store openings. A number of analysts upgraded the shares, noting the
company’s K&G brand is performing better, while the women’s category is improving with comp sales outperforming men’s.
Moreover, Macy (M), Dillard’s (DDS) and Nordstrom (JWN) are allowing their suit inventory to thin, likely declining
significantly more than each company’s total inventory decline. This essentially gives market share to Men’s Wearhouse.
Smithfield Foods (SFD : NYSE : US$7.97), Net Change: 2.02, % Change: 33.95%, Volume: 7,715,559
Homer: Are you saying you’re never going to eat any animal again? What about bacon? Lisa: No. Homer: Ham? Lisa: No.
Homer: Pork chops? Lisa: Dad, those all come from the same animal. Homer: Heh heh heh. Ooh, yeah, right, Lisa. A
wonderful, magical animal. The world’s biggest pork processor didn’t exactly bring home the bacon, posting its second loss in
three quarters because of high costs to feed hogs. The net loss of $103.1 million for the three months through January compares
with net income of $54.5 million a year earlier, even though sales rose 7.3% to $3.35 billion. “Our cost structure continued to
reflect high-priced grain purchased last summer, which kept our raising costs at near-record levels while hog prices remained
low,” management told analysts. “We expect that the recent decline in grain will begin to work its way through our cost
structure, thereby providing us with better performance in our hog production operations.” Going forward, analysts expect high
feed costs, an oversupply of market hogs, and softer pork demand to pressure results. Management themselves expect the
coming to be “difficult” because of continued “substantial” losses from hog production. Smithfield has cut its breeding hog
herds by 10% since February 2008 and sold its beef unit to Brazil’s JBS SA to reduce costs. The company also plans to close
six plants by December and cut 1,800 jobs to restructure its pork business. But Smithfield was more optimistic about the full
year, saying it expects its costs to “decline significantly.”
SunPower (SPWRA : NASDAQ : US$23.10), Net Change: -0.95, % Change: -3.95%, Volume: 3,304,045
“Running down a dream that never would come to me.” – Tom Petty. Sunpower ran out of steam after the solar panel maker
offered a clouded (!) outlook of its business in Germany and North America, prompting a downgrade at JP Morgan. “First, solar
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.

8. – Canadian and U.S. Comments for Friday March 13, 2009 8
demand and pricing trends continue to deteriorate, caused by a number of factors including lower year over year global
subsidies, increased borrowing costs for potential solar system owners, and module oversupply,” JP Morgan said in a note to
clients. “We are concerned that the company may need to raise additional funds within the next 12 months given its balance
sheet position.” AmTech notes while their most recent checks indicate Sunpower pricing remains strong, they are growing more
cautious on near-term residential and commercial rooftop business in the U.S. due to potential for push-outs in stimulus fund
distribution and indications installers are drawing down inventory. Their checks originally pointed to a September flow of
stimulus funds, they now believe the Department of Energy’s loan guarantees may not be processed and paid until at least
Q4/09. Raymond James cuts price target but remains bullish, as Sunpower is being seen executing its expansion plan without
tapping capital markets, and remains a “solar blue-chip” with its premium solar panels.
COFFEE BEANS
– Russia may cap domestic prices for essential pharmaceuticals to minimize the impact of the global economic crisis on its
population, but for now will not control food prices, a top government official said on Tuesday. (Reuters)
– Of the 49 teams NHL who have changed coaches with 30 or fewer games left in a season since the league expanded in 1967,
only 11 have managed to win a round in the playoffs. (National Post)
GO FIGURE
On March 10, 2009, Tim Geithner appeared on the Charlie Rose show. The following is a small extract from
the show’s transcript…
Charlie Rose: Will capitalism be different?
Secretary of Treasury Tim Geithner: I think capitalism will be different, and the financial system will be
dramatically different. It’s already dramatically different. Again, if you look at the scale of adjustment and restructuring in the
financial system, it’s already happened. It’s profound in scope already. So if you just look at the system today relative to what it
was through three years ago in terms of the institutions that existed then, and their basic shape has changed dramatically. And
there’s going to be more changes ahead. But I think it will emerge stronger. This will clean out a lot of the excesses and bad
practices, and those that don’t get cleaned out just by experience and knowledge now, better regulation oversight, better rules to
the game, enforced more cleanly, we’ll fix.
Charlie Rose: Final question, why are you confident that we’re going to come out of this?
Secretary of Treasury Tim Geithner: Because this is not about ability; it’s about will. And it’s about the will of government to
do what’s necessary to act to fix this. And I’m confident that this president of this country will have the will to do that, and if
you look again at the experience of other crises across history, the crises become deeper and longer lasting because of failures
of government to act effectively. And if government marshals the resources of this country, as we are doing now to get people
back to work, to stimulate private investment, to fix this financial system, to get credit flowing again, then this recovery will
come. It will come more quickly with a firmer foundation, and that’s what the president’s committed to do.
THE LAST DROP: Remember one thing about democracy. We can have anything we want and at the same time, we always
end up with exactly what we deserve.
– Edward Albee
* Canaccord Capital and its affiliated companies may have a Corporate Finance or other relationship with the company and
may trade in any of the Designated Investments mentioned herein either for their own account or the accounts of their
customers, in good faith and in the normal course of market making. The authors have not received, and will not receive,
compensation that is directly based upon or linked to one or more specific Corporate Finance activities, or to coverage
contained in the Morning Coffee.
This publication is a general market commentary and does not constitute a research report. Any reference to a research report
or a recommendation is not intended to represent the whole report and is not itself a research report or recommendation. This
commentary is for informational purposes only and does not contain investment advice. This publication may be wholly or
partially based on industry rumour, gossip and innuendo and as such is not to be relied upon as investment advice.