As the brokers and traders reviewed the events of the previous week they found that for the 27th week of 2008 the Dow Jones Industrial Index had eased by a further 0.5%, with the S&P 500 Index down by 1.2%, and the NASDAQ Exchange off by 3.0%. To the north, the Canadian exchanges faired no better, as the TSX Composite Index gave back a further 2.4%, and the TSX Venture Exchange was down by 1.2%. Some of the new notable 52-week highs of last week were Creststreet Power & Income Fund (CRS.UN-T) at $6.91, Dover Industries (DVI-T) at $21.14, and Upper Lake Oil & Gas (UP-T) at $2.00, while some of the new lows of note were AbitibiBowater Canada (AXB-T) at $8.01, Corby Distilleries (CDL.B-T) at $15.74, Nova Chemicals Corp. (NCX-T) at $23.22, and WestJet airlines (WJA.A-T) at $11.26.

American Automobile Association (AAA) - "The fewest Americans in the last three years traveled over the 4th of July weekend as record gasoline prices and a slowing economy forced consumers to curtail spending"

Commerzbank AG - "Investment demand has been driving oil prices higher. Longer-term pension funds, investment funds, but also banks and insurance companies, are pouring their money out of the equity markets, out of the U.S. dollar and into commodity markets and especially oil."

FirstEnergy Capital - "The whole Iran nuclear issue seems to have lost some steam. This might prompt additional selling and the return to regular trading."

"Hot Wheels and Matchbox are basic, low-priced toys, so they appeal to consumers in the U.S. and especially affluent countries who may not be able to afford more expensive toys." - comments Needham & Co. as for the first time in history, the market cap of toy car maker Mattel Inc. (MAT-N) surpasses those of big three car maker General Motors (GM-N).

Sometimes, when markets are down, investing in yourself is the best way to go, as Potash Corp. of Saskatchewan (POT-T) announce they will continue with there plan to repurchase up to 5% or 15.82-million of their common shares from the open market.

Under the heading of 'Good as Gold' - Technical analyst Don Vialoux - "Gold and gold equities have a history of moving higher from the end of July to the end of September.The major reason for seasonal strength during the July to September period is incremental purchases of gold by fabricators who purchase gold to make jewellery for the Christmas season and Diwali, the festival of lights in India at the end of October. Gold jewellery accounts for 70% of the demand for gold produced each year. The largest consumer of gold is India.Gold and gold equities have improving technical profiles. Gold recently bounced from near its 200-day moving average. Previous bounces from its 200-day moving average have led to new highs..Gold equities are more attractive than gold. The ratio between gold equities and gold remains near the bottom of a six-year range."

And then on Monday, July 7th -

With crude oil trading last week to within a hair of US $145 a barrel, Canaccord Capital calculates that the price of black gold has doubled in the last year.

According to OPEC president Chakib Khelil, the price of crude oil trades inversely to the U.S. dollar in the ratio of - "A 1% fall in the U.S. dollar means 4-dollars more on the price of oil."

Former Chrysler CEO Lee Iacocca is 'Mad as Hell, and He's Not Going To Take It Anymore' as - "Am I the only guy in this country who's fed up with what's happening? Where the hell is our outrage? We should be screaming bloody murder. We've got a gang of clueless bozos steering our ship of state over a cliff, we've got corporate gangsters stealing us blind, and we can't even clean up after a hurricane much less build a hybrid car. But instead of getting mad, everyone sits around and nods their heads when the politicians say, "Stay the course.""

The Canadian markets fall into the abyss as crude oil and gold bullion once again correct sharply.

U.S markets fair little better as the share price of Fannie Mae (FNM-N) and Freddie Mac (FRE-N) drop by 17% on a Lehman Brothers (LEH-N) report that the mortgage lenders will once again have to refinance billions of dollars to stay viable.

Tuesday, July 8th -

Monday's drop into a black hole on the TSX only allows Canaccord Capital's Morning Coffee to report 2 new 52-week trading highs and a shocking 103 new lows. Some of the many new lows of interest were Atna Resources (ATN-T) at $0.67, CIBC (CM-T) at $54.35, Rona (RON-T) at $11.61, and Telus (T-T) at $40.69.

Yesterday's 10-point drop in the S&P 500 Index brings the broad based U.S exchange down by the same 20% from its high as is the Dow Jones Industrial Index. And on a related note, with Morgan Stanley reporting that with America's and most of the world's stock exchanges, except for the TSX Composite, are in bear markets, we think back with some amusement to only a few short years ago when the 'talking heads' insisted that Canadian investors underweight their domestic market and have a least 30% of their holdings in U.S and global securities.

To the north, Monday's Triple digit loss on the TSX Composite Index effectively wipes out all of Canada's senior exchange's gains for the year.

And on a related note, the Conference Board of Canada reports that Canadian consumer confidence has suddenly dropped to a level not seen since the threat of Quebec separation induced low last experienced in 1995.

The Gartman Letter - "Crude oil could trade all the way back down to US $125 and not have done damage to the efficacy of the bull move."

Under our continuing heading of 'A Billion Here And A Billion There And Pretty Soon You're Talking About Real Money' - The Congressional Research Service reports that in the last year, with $140 oil, America's thirst for imported oil has risen by US $14-billion to US $38-billion a month.

U.S. President George W. Bush - "It took us a while to get into the energy situation we're in. It's going to take a while to get out of it."

Wednesday, July 8th - Capitulation! As Tuesday's continued sell off on the TSX leaves Canada's senior exchange reporting zero new 52-week trading highs, but an amazing 127new 52-week lows. Some of the many notable new lows were Adanac Molybdenum (AUA-T) at $0.48, Boston Pizza Royalties (BPF.UN-T) at 411.04, Forzani Group (FGL-T) at $13.60, Liquor Stores Income Fund (LIQ.UN-T) at $16.80, and Stornaway Diamond (SWY-T) at $0.26.

Notley's Notes - "All market sectors are in intermediate downtrends which in broad market terms is the second down leg in the ongoing bear originating October 2007. The exception is the gold sector is the gold sector which is originating its second intermediate up leg in its cyclic bull originating in August 2007 at US $650. Gold has been counter-cyclical to the broad market for the past year, performing as a safe harbour against the bear."

Technical analysts David Tippin & Ron Meisels - "The Toronto market is undergoing a normal correction. After a 25% rally from January to June, the Toronto market was due for a healthy correction of its gains - and that is exactly what is occurring. Market action in Toronto, encouragingly, remains above the 200-day moving average - in contrast to the U.S. indices."

The Gartman Letter - "The multi-year bull market in commodities has not ended. It is very much intact and shall be intact for years into the future."

Under the heading of 'Come Fly With Me' - Two of the high flyers on yesterday's otherwise down day were Canada's WestJet Airlines (WJA-T) and America's Southwest Airlines (LUV-N) who announce they are forming a cross border ticketing alliance as among other things, they both are low cost carriers, use only Boeing 737 jetliners, and don't already intrude on each others routes. Leaving Southwest's Lee Lipton to comment - "You won't likely find two carriers more alike than us." (What a concept.)

John Templeton (1913 - 2008) - "The four most dangerous words in investing are 'This time it's different.'" (tech stocks, housing...)

Thursday, July 10th -

Wednesday seemed like a day of exhaustion selling as even though the markets turned in another round of triple digit losses, the TSX still managed to produce 2 new 52-week trading highs and a lesser than Tuesday 79 new lows. Some of the new lows of interest were Burnt Sand (BRT-T) at $0.09, Coeur D'alene Mines (CDM-T) at $3.37, Canfor Corporation (CFP-T) at $7.26, and Sleep Country Canada (Z.UN-T) at$17.63.

ScotiaMcLeod - "The sour mood hasn't gone away. Every once in a while, people get a little bit enthusiastic. And after they run things up they realize market conditions don't warrant it, so they unload and make a mess again."

Haywood Securities estimates that uranium prices are set to rise as - "Demand currently far exceeds primary production. Last year, uranium production totalled 107.1-million pounds while demand reached 167-million pounds. There are 439 reactors in operation around the world today, with 36 under construction, 93 planned and 218 proposed."

And on a related note, the Bank of Montreal estimates that the average Canadian family is now spends a record high 7% of its disposable income on energy.

And on a still related note, Statistics Canada reports that higher fuel prices were a direct contributor to number of same-day American car trips to Canada dropping by 21.5% in the 1st half of this year to 743,000 trips.

America oil tycoon T. Boone Pickens - "One of the benefits of being around a long time is that you get to know a lot about certain things. Like many of us, I ignored what was happening with crude oil consumption..It's extreme, it's dangerous and it threatens the future of our nation."

German chancellor Angela Merkel - "We have to look at different ways to fight high oil prices."

In a concerted effort to stave off the housing pitfalls of our American neighbours, the Canadian government introduces legislation shortening the amortization period of a residential mortgage by 5-years to 35-years, and that each homebuyer must put down at least a mortgage insured 5% down payment.

Rodney Dangerfield - "I met the surgeon general - he offered me a cigarette."

This just in - General Motors (GM-N) and Ford Motor Co. (F-N) report record 1st half of 2008 auto sales...in China, as increased their Chinese 1st half car sales by 12.7% to 590,126 units, while newcomer Ford increased their 1st half sales in China by 21% to 172,411 units.

With the TSX Venture Exchange once aging testing the major support level of 2400, Canaccord Capital's Junior Mining Weekly suggests - "Investors should focus on junior companies with proven, experienced management teams and high-quality exploration and development projects in safe political jurisdictions on prospective land packages."

Chessmaster Savielly Grigorievitch Tartakower - "Victory goes to the player who makes the next-to last mistake."

Under the heading of 'The Air We Breath' - With the Summer Olympics less than one month away, and after spending some $20-billion upgrading air pollution standards, Beijing, in a last ditch effort to present their city as aesthetically pleasing as possible, has started the process of shutting down some 300-factories in the area, and restricting automobile use in the city to odd & even days based on vehicle license plate numbers.

Friday, July 11th, Short Strokes -

Thursday's financials weak, resources strong day of trading leaves today's Canaccord Morning Coffee to report 2-new 52-week trading highs and another disappointing 88 new 52-week lows. One of the new notable new highs was Canadian Energy Services (CEU.UN-T) at $13.20, while some of the too many new lows were Air Canada (AC.A-T) at $5.56, Baja Mining (BAJ-T) at $1.24, Canaccord Capital (CCI-T) at $6.68, CIBC (

CM-T) at $53.47, Canadian Tire (CTC.A-T) at $51.47, and Sun Life Financial (SLF-T) at $40.54.

U.S. financial stocks were once again under pressure after UBS cut their target price of Mortgagers Freddie Mac (FRE-N) and Fannie Mae (FNM-N), and Wachovia Bank

(WB-N) warns of increased 2nd quarter losses.

Like the 'Dance of a Thousand Veils', General Electric (GE-N) only two months after offering to sell their trademark appliance division, the world's largest conglomerate now reports its intent to sell its entire Consumer & Industrial group.

Lewis Carroll - "If you don't know where you are going, any road will get you there."

U.S. Airways (LCC-N) announce that in an effort to lighten their payloads, they will remove their 500-pound in-flight movie projection systems and produce an extra

US $10-million a year in order to purchase jet fuel.

Newmont's Pierre Lassonde - "Say thank you. These are the most valuable words in any language."

In spite of all the screaming by the 'talking heads', the U.S. Bureau of Economic Analysis reports the cost fuel has been more been more expensive in the past, as in the 1960s it cost the average American family 5% of their personal consumption expenditures on all types of fuel,..and now they spent 4% on the same items.

Soybeans advance by 11¢ to reach a new record high of US $16.20 a bushel.

Crude oil gains $3.09 to close at a new all time high of US $145.49 per barrel.

The Euro gains 1.4¢ to close at a new record high of US $1.5923.

For the Week -

The DJII lost 188 points to 11,101, the S&P 500 lost 23 to 1,204 the TSX lost 307 points to 13,709, the NASDAQ lost 6 to 2,239, and JVX lost 171 points to 2,392.

Gold gained $31.10, to $966.80, Silver gained $0.69 to $18.92, and Oil gained $1.41 to $145.49. Natural Gas lost $1.63 to $11.94, and Copper lost $0.14 to $3.74.

The CRB Commodities Index followed soft commodities lower to lose 10.93 points and end the week at 461.43.

The Canadian dollar gained 1¢ against its US counterpart to end the week at US $0.9903. The Euro gained 2.25¢ against the greenback to end the week at US $1.5923.

And Finally -

After many years of heated camping or BBQ debate, and now a court challenge, the High Court of London has ruled that Proctor & Gambles Co.'s (PG-N) 'Pringles' are not potato chips, as it found that for British tax purposes, "Pringles don't look like a chip, don't feel like a chip, and don't taste like a chip." (There, now that that's settled, you can go back to debating how they get the caramel into the 'Caramel Bar'.)

There will not be a commentary next week as one of us will be chasing golf balls around the Okanagan, while the other will be just too busy to publish it alone.

Interesting times, and...thanks

Rod and Manjeet

(604)643-7567

www.rodblake.com

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