Exchange 2011.09

The Exchange

Magazine

Volume 4, Issue 1 / SEPTEMBER 2011

DISCLAIMER The views expressed in this publication do not reflect the views of the University of Toronto and/or Rotman Commerce Programs Office.

Table of Contents

3 The Exchange Team

4 The RCFA Executives

7 Get Involved!

8 Upcoming Events

9 Personal Finance 101

10 Financial Sources

11 Interviews

13 World Briefs

14 Sponsorship

The Exchange Team Who are we and what do we do? Find out about the three ladies who are working around the clock to get make The Exchange flow!

Name: Margarit Jo Year/College: 2

nd, St. Michael’s

College Home cities: Ilsan, South Korea / Thornhill, Ontario One weird fact about me: Apparently my first word ever was ‘No’. My frosh experience: I got my feet into everything I could find; I took a variety of classes and finally discovered of which I had genuine interests. Like many first-years, I was amazed by the number of people in the program, let alone the school, and I had the pleasure of meeting some of the best people in my life. As a student living on the east side of the campus, I had the opportunity to enjoy my first taste of adulthood in the midst of high-end clothing stores, awesome restaurants and friends to chill with all around the neighborhood – and the subsequent responsibility! Favorite books: Basically anything by Margaret Atwood, particularly The Handmaid’s Tale. I have a strange liking for A Series of Unfortunate Events as well as short stories by Bernard Werber. Favorite finance person: Peter Lynch Three things I’d want to have with me if I was stranded on a deserted island: a water filter, a fishing rod, a pet

Name: Shirley Zhou Year/College: 2

nd, St. Michael’s

College Home city: Essex Junction, Vermont One weird fact about me: I hate dairy. Favorite books: Harry Potter, Pride and Prejudice, Jane Eyre, Brave New World Favorite Finance Person: George Soros Three things I’d want to have with me if I was stranded on a deserted island: a knife, Harry Potter, water

Name: Junyi Wang Year/College: 2nd, Trinity College Home city: Shanghai, China One weird fact about me: I love birds. My frosh experience: AMAZING, I made a lot of friends there. Favorite books: Angels and Demons, Harry Potter, Mansfield Park, The Dress Lodger Favorite Finance Person: Warren Buffett Three things I’d want to have with me if I was stranded on a deserted island: fire, water, a sleeping bag

**CALLING ALL WRITERS!**

Are you interested in joining

RCFA’s very own magazine? Do

you want to get more involved

in RCFA events? Then don’t

hesitate to contact The

Exchange magazine by

submitting a piece of your

writing to show us what you’ve

got to contribute. It is a chance

for you to participate in

Exchange’s upcoming issues and

to see your work published

under Feature articles,

Interviews, or Promotions!

Please contact the Exchange via

[email protected]

with your name, year of study,

and a brief introduction about

yourself and we will get back to

you as soon as possible!

The RCFA Executives Meet the team behind all the events, competitions, and seminars! See if you can spot all the executive members around campus – and if you do, don’t forget to say hello!

“The Boss” Name: Dawoon Chung Year/College: 4th year in Woodsworth College Role: President Hometown: Victoria, Canada / Seoul, South Korea One weird fact about me: I’m an obsessive Raiders fan. Most memorable 1st year experience: Watching my friend giving Tony a bad haircut in Woodsworth residence Favorite finance person: There are too many … Vision for the year: Position our organization to accommodate Rotman Commerce Finance students' needs.

“The Athlete” Name: Tony Chuang Year/College: 4th year in Woodsworth College Role: Vice President Hometown: I was born in Taiwan, but lived the majority of my life in Victoria, BC. One weird fact about me: Come meet me and find out yourself. Most memorable 1st year experience: Burning 2 pots in a span of 2 days when learning how to cook rice in a pot (one of the pots wasn’t even mine)

Vision for the year: A wonderful year!

“The Gentleman” Name: Rae Kim Year/College: 2nd year in Woodsworth College Role: Director of Internal Affairs Hometown: Daejeon, South Korea One weird fact about me: I get addicted to things easily… like ice cream, computer games, and coffee Most memorable 1st year experience: Woodsworth Frosh and 2011-2012 RCFA Executive Elections Favorite finance person: Peter G. Peterson Vision for the year: Trying my best to create an exceptional learning experience for the A-Team members and ensure communication runs smoothly within RCFA.

“The Money Maker” Name: Diki Dolkar Shrestha Year/College: 2nd year in New College Role: Director of Finance Hometown: I was born in Nepal, moved to Quebec when I was seven, and have lived in Toronto since Grade 8! One weird fact about me: I love languages. While able to speak English, French, and Nepali, I can understand brief words and phrases of 4 languages including: Korean,

Mandarin, Spanish, and Hindi. Most memorable 1st year experience: Hard to choose ONE; have too many! Overall, it was honestly just meeting the best friends I have today! The answer, however, might just have to be practicing for the RCSA's Rotman Commerce Talent Show. For those who remember… good times ;) Favorite finance person: Warren Buffett. This is probably the most frequent - "typical" - answer, and for good reason. Warren Buffett embodies success in every way, and the guy gives great quotes. Vision for the year: I would like to continue to grow as a student. There is something new to learn every day. My vision for the year is that I never guard myself against a new experience that makes me step outside of my comfort zone - to be "open" and even challenge myself occasionally. I've learned so much during my first year meeting so many intelligent and AMAZING people. This year, I hope to meet new students, reunite with the fellow Rotman classmates, and make even more memorable experiences here at U of T! I'd like to also take advantage of everything U of T has to offer (including the Athletic Centre, Math Aid Centre, the Writing Centre, extra help for economics, et cetera). All this, while maintaining a good GPA!

“The Party Animal” Name: Steven Ge Year/College: 3rd year in University College Role: Director of Events Hometown: Xi An, China One weird fact about me: I love singing when I am walking down the street. Most memorable 1st year experience: Commerce Frosh! Definitely! Favorite finance person: No one… but I will choose Bruce Wayne if he counts! Vision for the year: I believe RCFA will provide a professional platform for finance students to network and learn. Also, we really want to be your friends and listen to your thoughts so that we can improve ourselves effectively!

“The Sweetheart” Name: Megan Jiang Year/College: 2nd year in Innis College Role: Director of Events Hometown: Canada & the Garden State One weird fact about me: I’m a Jane Austen aficionado. Most memorable 1st year experience: My first breath of independence in university has led me to some fabulous people and on numerous exciting adventures. Many memories from first year enter my mind, though most memorable stem from my experience as an RCFA A-Team and RCSA PD intern, including preparing for and MCing at the enVision Conference 2011, during which I developed a deep love for the art of event planning and finance. Favorite finance person: While Warren Buffett is renowned and respected for his investing aptitude, I also admire his generous nature: his understanding of and support for meaningful philanthropy. In addition, I also greatly admire Colleen Johnston, CFO of TD Bank. Her strong leadership and accomplishments are especially inspiring in a predominantly male industry. She’s certainly a role-model. Vision for the year: I firmly believe that RCFA serves the students, and I’ll strive for open dialogue with the Rotman Commerce community. Our events are designed to reflect the student population and fulfill a need. Of course, we can’t do that without your input. So let us know your thoughts and opinions regarding a certain event that has occurred or has not but should. We’re listening.

“The Wonder Woman” Name: Hailey Vasyliw Year/College: 2nd year in Trinity College Role: Director of Corporate Relations Hometown: Toronto One weird fact about me: I am terrified of squirrels… Most memorable 1st year experience: performing with RCFA at Rotman’s Got Talent and being a member of RCFA’s A-Team! Favourite finance person: Jim Cramer Vision for the year: It is my vision to ensure that RCFA continues in its path to becoming one of the strongest student groups in the Rotman Commerce program as measured by the quality of our events, the cohesiveness of our executive team, and our ability to exceed the needs and expectations of our members. As Director of Corporate Relations, I hope to maintain past relationships with corporate sponsors and to seek new and mutually beneficial partnerships with other influential organizations and companies in the finance industry. I hope to establish a solid branding strategy for RCFA to ensure that our sponsorship package can be used as an effective tool to not only gain sponsorship but to consistently market our organization to external stakeholders from year to year. I also hope to contribute to the overall succession planning efforts of the organization so that the executive turnover process is as smooth as possible moving forward.

“The Spirit Squad” Name: Ting Zhang Year/College: 3rd year in Woodsworth College Role: Director of Marketing Hometown: China One weird fact about me: I like my grapes frozen Most memorable 1st year experience: FROSH WEEK, especially the parade! It was my first taste of university life. The crazy and hyper component of it definitely leads up to my excitement for the start of this journey. Favorite finance person: Michael Lewis. His books always grab my attention immediately, mainly because the diction is very sincere. It makes me feel as if I was experiencing with the author. Vision for the year: I see RCFA as a club growing not only to be even better spoken among students but also a

leading finance club in Ontario. For myself, other than helping our organization to achieve greater goals, I would like to experiment with new things and embrace greater challenges!

“The Creative One” Name: Emiry Yu Year/College: 2nd year in University College Role: Director of Website Hometown: Utsunomiya, Tochigi, Japan One weird fact about me: I did not jaywalk until I came to U of T. Most memorable 1st year experience: The round of applause at the end of the final lectures in the year Favorite finance person: The banker at my home RBC branch. Vision for the year: Pass my second year courses.

“The Dreamer” Name: Evens Xu Year/College: 4th year in Trinity College Role: Director of ICC Hometown: Zhejiang, China One weird fact about me: I am nervous around birds... Most memorable 1st year experience: At 3AM on the night before my final exam, I was photocopying astronomy notes and past tests in Robarts Library. Favorite finance person: The Branch Manager who works in the CIBC branch downstairs of my apartment. He is passionate and good at his job. He has a career goal and is working his way towards it.

Get Involved! Looking for an opportunity to be a part of our awesome team but don’t know where to

start? Be a part of the A-Team, RCFA’s very own first-year internship committee!

The RCFA A-Team of 2010-2011

What is RCFA’s A-Team?

RCFA's A-team is a committee that is designed to bridge the gap between the Rotman Commerce Finance

Association and 1st year Rotman Commerce students. The A-Team will be actively involved in the planning

and execution of the various parts of RCFA.

What will I gain throughout the experience?

Through the Mentor and Mentee Program, the A-Team members will be able to gain knowledge and insight

into what each executive does for the organization. They will work closely with Finance Relationship manager

at Career Center to help him create events that Finance students would be interested in. Also, they will be

planning Forays into Finance event for RCFA to help fist years to gain understanding in topics regarding

Finance. Through attending the events offered by RCFA, they will have the chance to meet many

professionals working in the industry along the way.

Who is eligible, and how do I apply?

We are looking for dedicated, enthusiastic, and passionate first-year Commerce students to join our team! Please read the A-Team Job Description posted on our website: www.rotmancommerce.utoronto.ca/rcfa to find more detailed information about what A-Team members will be doing throughout the year. Please email [email protected] with your application form and resume attached. The deadline for all application forms is 12AM on October 6th, 2011. We thank everyone for their interest!

*Please be advised that no late application forms will be accepted.*

Upcoming Events What’s next up on our list? Make sure you mark the dates for these exciting events

hosted by the RCFA!

Finance 101 Are you a first-year student, eager to search the wonders of the finance industry? Come out for Finance 101, an evening hosted by the RCFA! This seminar, specifically catered to first-years, is a great opportunity for freshmen to learn about the bare basics of the finance stream, get insightful advice about the resources, listen to experienced keynote speakers, learn about our first-year internship opportunities, and get a sneak peek of our upcoming agenda. At the end of the event, there will be a networking session where you will be able to mix and mingle with RCFA executives and fellow first-years. Mark your calendars, and get ready to explore! Date: Tuesday, October 4, 2011 Time: 6PM - 9PM Location: Kruger Hall, Woodsworth College (WW) Audience: All first-years who are interested in the RCFA Dress code: Business casual

Commerce Trading Competition The Commerce Trading Competition (CTC) is one of the most exciting events of the year. It is a chance for students interested in the Commerce program to experience day trading by using the Rotman Interactive Trader. It is an opportunity you don’t want to miss! The top ten winning teams can get a chance to tour a real trading floor and see for themselves traders at work. The top three teams can will win cash prizes! Date: Friday, November 11, 2011, Time: 12:30 PM - 8:00 PM Location: Rotman Financial Research and Trading Lab Audience: All Rotman Commerce students Dress Code: Casual Prize: 1st Place - $600; 2nd place - $400; 3rd place - $200

Rotman Commerce Finance Conference The RCFA proudly presents the Rotman Commerce Finance Conference. As a new initiative this year, RCFC is an integration of two seminars of previous years. This one-day conference aids students in exploring newly emerging topics within the financial industry and delve into greater depths of various designations. With a strong emphasis on more intimate networking opportunities, students will have the chance to meet the keynote speakers and panel speakers, as well as participate in workshops and seminars. As spaces are limited, we advise early purchase of tickets. Date: Friday, November 25, 2011 Time: 9AM - 7PM Location: 89 Chestnut Hotel Audience: All Rotman Commerce students Dress code: Business formal

Personal Finance 101 Gone are the days when Mom and Dad would pay for all of your expenses. What do you

do, now that you start campus life for the first time? These are the things you’ll never

learn from textbooks. Find out ways to spend – and save – most effectively! With the growing costs of post-secondary education, becoming more adept in money management is crucial

for the future. The money in your hands can quickly disappear if you aren’t savvy about financial planning. But

fear no more! The Exchange is here to provide a couple of advices for students! To take a step in the right

direction, here are a few tips to consider:

Set a budget. By taking control and managing your financial life, you’ll know exactly how much money will be coming in and how much is needed to pay the bills. Establishing a budget or a spending plan means making smarter choices with your money and prioritizing your needs.

P.Y.F. or Pay Yourself First. Saving is an important aspect of financial planning. “Pay yourself first” means setting aside a certain amount of money into an account designated for long-term financial goal. With temptations to spend money on things like food, clothing and entertainment, paying yourself first ensures that you have an adequate fund to pay for the more important expenses.

Use credit wisely. Credit is an amount of money that is loaned on trust by an institution with the expectation that it’ll be repaid with interest. Having a credit card and most importantly, a good credit is a necessity. Furthermore, a credit history is needed for a mortgage and an auto loan. However, it is imperative to exercise caution in using credit cards and avoid paying interest.

Be aware of your credit score. A credit score is a number that reflects one’s credit risk and tracks one’s success in money management. Lenders typically examine your credit score to know the risk they would take in lending money to you. Maintaining a good financial habit and building a good credit history are beneficial in the long run. Make sure you always pay your bills on time; have consistent saving patters in your savings account; maintain a low balance on one card per month and pay it off before the grace period ends; and be selective about your credit cards.

Prevent identity theft. Identity Theft involves someone using your name, Social Insurance Number,

credit card number, or other personal information unbeknownst to you to access resources. Secure your personal information through: never giving your social insurance number and credit card number over the phone; signing new credit cards as soon as you receive them; reviewing monthly bill statements carefully; and ensuring the website is secure before making an online purchase

Take advantage of insurance. By sharing the risks, insurance can guarantee financial protection against any chance of loss. The premium is the payment for an insurance policy you pay to protect yourself from a potentially large risk. Factors that affect your premium include your age, credit history, marital status, geography, etc. Drive down the cost of your insurance policy by shopping around. Shopping around for different policies is an opportunity to find the most suitable coverage and save more. Getting all of your policies -- such as auto, renter's and homeowner's -- from the same insurance company for good discounts saves you money as well.

Financial Sources As Winston Churchill once stated, true genius ‘resides in the capacity for evaluation of

uncertain, hazardous, and conflicting information’. Here are a couple of websites on

which you can check out to see what’s going on in the markets.

1. The Economist (http://www.economist.com/)

This weekly newsmagazine, commonly characterized as taking a more conservative viewpoint of the

economy, covers critical global topics such as free trade, globalization, education spending, government

welfare, etc.

2. The Wall Street Journal (http://online.wsj.com/home-page)

As a daily newspaper published by the Dow Jones & Company, it is currently the largest newspaper by

circulation. This newspaper predominately publishes topics of the American economy, financial news, and

international business.

3. Bloomberg Businessweek (http://www.bloomberg.com/)

Bloomberg Businessweek, also known as Businessweek, is a weekly business magazine. This magazine

offers news and detailed analysis of the economy, global business and finance.

4. Yahoo! Finance (http://finance.yahoo.com/)

Yahoo! Finance is the top financial research website in the US. It provides updated information such as

stock quotes, financial reports, company account releases, stock exchange rates, etc. It also offers a message

board for investors to discuss current news and investments.

5. Reuters (http://www.reuters.com/)

Reuters.com provides readers news from around the world, including updated news in politics,

business, entertainment and technology.

Interviews The Exchange invited two alumni from Rotman Commerce who are currently working

in the finance industry. We thank the gentlemen once again for insightful interviews!

Good afternoon, David. Thank you for consenting to an

interview with The Exchange! Please briefly introduce

yourself and your job for our readers.

My name is David Hao, and I am a recent graduate of the

Rotman Commerce program. I have a specialist degree in

Commerce and Finance, and I am currently part of the

Investment Division Rotational Program at Manulife

Financial. Because I am a part of the rotational program, I

have the opportunity to develop various skills that are

required for the industry.

How does the rotational program at Manulife work?

In a time span of two years, Rotational Analysts rotate

through four different areas of the Investment Division:

Portfolio Management, Investment Analysis, Marketing and

Client Services, and Support Functions. You are given the

chance to be in a different environment every six months, so

you can have a better understanding of the industry. It’s a

great opportunity for someone who is new in the field.

- I am sure it is a very effective way for new graduates to

expose themselves into the industry, getting a taste of

each function before deciding what is best for them.

What are the necessary skills for your role?

Well, most importantly, analytical skills are a must. You

should be able to accurately comprehend the information

that are given to you, and be able to communicate with your

colleagues regarding the coherency and validity of such data.

Every case is different from another, so a strong skill for

situational analysis is imperative. In addition, you should

not be afraid of asking a lot of questions. During the

meetings, discussions fly over your head and often a

beginner might not exactly catch 100% of the discussions.

Senior analysts will be more than happy to fill you in with

any missed details. When you have trouble understanding

certain things, don’t worry about it but learn about the things

you don’t understand.

Are they any required licenses?

No licenses are required but the Chartered Financial Analyst

designation is a definite asset.

Aside from the technical aspects, what are the key

lessons you have learned from your experience at

Manulife?

I know this has become a cliché, but I will say it once again

just for emphasis: Be yourself. You should not be

intimidated by your work. Sure, it may seem overwhelming

at the beginning, but you have come this far because you are

qualified for the job. Don’t be shy to express your opinions

if you have the knowledge about a certain subject. Another

lesson that I have learned is that it is absolutely necessary to

be aware of fine details. Double- and triple-check your work.

One of the key steps to gaining your supervisors’ trust is to

make sure that your responsibilities are completely fulfilled,

error-free.

As a recent graduate of the Rotman Commerce program,

how was your overall experience?

I graduated with a degree in Commerce and Finance; this

was prior to the change of degree name into Finance and

Economics. Through my experiences, I found it beneficial to

get involved with different student groups. That being said, I

think its key to only participate in clubs you truly care about.

It is better to be able to talk about the things you put on your

resume rather than have a lot of things on your resume you

can’t talk too much about. Your resume should be able to tell

a story to the recruiters about who you are as an individual.

Being involved in numerous organizations requires a

great commitment. Is it possible to juggle everything at

the same time?

Definitely. It is easier said than done, but time management

is crucial. Schoolwork comes first, that is unquestionable.

By managing your time wisely, you can definitely fit in all

the other commitments into your schedule.

If there is only one thing you could say to the incoming

freshmen for the 2011 year, what would it be?

It all goes back to finding your fit. Every company and

every role has its own characteristics. It’s still early for

students in their first or second year, but you should find out

the right fit for you, sooner the better. The key is to figure

out what you want to do and understand what you need to

do to get there.

______________________________________________

To view Mr. Hao’s LinkedIn profile, please visit http://

ca.linkedin.com/pub/david-hao/14/2a9/ab9.

Good afternoon, Vagh. Thank you for consenting to

an interview with The Exchange! Please briefly

introduce yourself and your job for our readers.

My name is Vagh Bakhshyan and I graduated from

Rotman Commerce with a specialist degree in Finance

and Economics in 2010. I’ve always known that

investment banking was something I wanted to do full-

time, and was fortunate enough to reconfirm this belief

after doing a summer internship with Genuity Capital

Markets. After graduation I joined Canaccord Genuity

as an Investment Banking Analyst in the Mergers &

Acquisition group. After about a year I switched over

to CIBC World Markets in the same role.

What are your specific responsibilities as an

Investment Banking Analyst at CIBC?

The analyst is usually responsible for all the

groundwork and financial analysis to get a deal done. I

will usually be part of a bigger deal team in which

everyone works together to pitch for business or

execute a deal. Along with the data analysis, another

key component to my work is the preparation of

presentation for clients. Aside from the main duties,

there are other small tasks such as being on due

diligence calls and creating/updating weekly company

updates or databases.

- What are the necessary skills and qualifications

for your role?

Having good grades is an absolute must. Setting a

certain cutline for marks helps firms narrow down the

number of qualified applicants, so set schoolwork

above everything else. It is also important to have

extra-curricular activities. Banks are always looking

for well-rounded individuals. In addition, you should

possess an aptitude in number analysis. Being familiar

with Excel spreadsheets is a definite asset as well. In

Canada, CFA is not required but recommended – its

use is more relevant to those who work in equity

research or in buy-side. Before you get into the

industry, ask yourself whether you will be complaining

about possible sleepless nights, especially in the first

two years.

Would you please describe a day of your life as an

analyst?

Sure. I arrive at my office around 8:30 in the morning.

Sometimes there are morning meetings, and I can

squeeze in a couple of minutes to refresh myself with a

cup of coffee. During the morning hours it’s usually

very busy with random tasks, whether it is jumping on

due diligence calls or fixing edits of the latest draft of a

presentation. After lunch things slow down a bit and I

can concentrate more on what I have on my plate. If

I’m working on any live deals then there’s probably a

model or a presentation waiting to be finished. During

the course of the afternoon I might be staffed on other

projects or get one off items from my seniors. Summer

months are a little bit lighter in workload, so the hours

could be a bit more manageable; however, during

busier times of the year, the workload keeps you past

midnight.

I must say those are quite long hours. What is the

favorite part of your job?

Let’s see… I like the thought of seeing an idea

originate from the beginning, making the pitch in front

your clients, winning the mandate, and being able to

successfully execute the transaction. It is a very

fulfilling being directly associated with this process. It

is also very inspirational working with some of the

best minds in the industry.

Let us move on to your life as a student back in

school. How was your overall experience as a

Commerce student?

Rotman Commerce prepares you very well for various

theoretical aspects of the field. However, simply taking

textbook knowledge and bringing it to your workplace

will not suffice. To apply more practical concepts

during interviews, I read other books out of the

curriculum and prepared ahead of time for interviews.

During my free time, I used to be on the varsity

freestyle wrestling team, participated in different

intramural sports and hung out with my regular group

of friends, in the end it was a remarkable experience.

To all the finance students in Rotman Commerce, my

advice is the following: Figure out what you want to

do in advance and go to great lengths preparing for

interviews. Try to network as much as possible using

family contacts, LinkedIn, or the alumni network.

There are more resources around campus than most

people know, and it would be a shame if these

opportunities just bypassed you. Do a lot of research

and see which organizations and student services could

give you the most help. At the end of the day, those

who prepared ahead of others will win the race.

To view Mr. Bakshyan’s LinkedIn profile, please visit

http://ca.linkedin.com/pub/vagh-bakhshyan/17/359/340.

World Briefs Greece

Amidst the global recession, concerns over a sovereign debt crisis developed among investors regarding particular European states. In Greece, with increasing sovereign deficits due to bank bailouts, a crisis of confidence surfaced with the widening of bond yield spreads and lowering of the Greece debt rating. In April of 2010, Standard & Poor decreased the Greece debt rating to BB+ days after the IMF/EU bailout package was activated. With fears of government default and the decline of the Euro currency, a series of austerity measures were implemented on May 1. These measures entailed government spending cuts and tax increases.

In June 2011, Standard & Poor decreased the Greece debt rating to CCC, the lowest in the world. The Greek government passed another contentious series of austerity measures to control the deficit crisis and prevent default. This package involves tax increases, wage cuts, government spending cuts, etc. Protests and riots erupted in central Athens in response to the austerity plans.

United States Since 2008, there has been a growing anxiety over increasing the statutory limit of the American debt

ceiling. With Republican legislators opposing any increase in taxes and democratic legislators supporting tax increase as vital for investments in infrastructure and education necessary for economic growth, the White House signed an agreement to avoid any political and financial calamity. A deal to raise the American debt ceiling and decrease government spending was reached on August 5 2011.

On August 6, Standard & Poor decreased the US credit rating from AAA to AA+. This suggests S&P’s “lost confidence” and negative outlook in the US government and the economy. The market consequences ensued following the announcement of this downgrade. On August 8 2011, all three major American indexes fell between 5-&% in one day and the global markets declined.

Italy Concerns over the Europe debt crisis has dispersed from Greece to Italy. With a declining economy, Italy holds the second highest public debt in Europe, after Greece. However, Italy is reputable for its high private savings. As the third largest economy in the euro zone, a financial crisis would pose a far greater threat to the welfare of the European Union than Greece. In August of 2011, the Italian government passes an austerity package to cut fiscal deficits and balance the budget in 2013. Despite supports by the European Union, such measures are highly opposed by unions for the increase tax burdens on the people.

Japan Japan’s economy is ranked the third largest in the world. From 1960, Japan experienced the Japanese

Post-War Economic Miracle in which economic growth persisted for three decades. However, the Japanese economic bubble collapsed abruptly at the second half of the 1980s, and the period of the 1990s and 2000s is known as the Lost Decades.

The March 2011 Earthquake and Tsunami of magnitude 9.0 had a detrimental impact on the economy. Major businesses such as Toyota, Honda and Nissan suspended production in response to the crisis. The Bank of Japan injected 15 trillion yen into the economy to maintain financial stability on March 14th. Despite these efforts, the Nikkei dropped over 1000 points on March 15th following the announcement of increasing radiation level from the nuclear power plant. The estimated cost of reconstruction is $122 billion.

Sponsorship On behalf of the RCFA, The Exchange magazine would like to show our deepest thanks

to our generous sponsors.

Canada Pension Plan Investment Board

Financial Planning Standards Council (FPSC)

The Canadian Institute of Chartered Business Valuators (CICBV)