Tuesday Jul 22, 2008 Economy 'losing steam'
The weakening U.S. economy, the strong Canadian dollar and competition from offshore companies are draining the energy out...
Wednesday Jul 16, 2008 Stocks, oil fall on fear of inflation
The TSX closed down more than 383 points yesterday after the Bank of Canada warned that inflation will...
The TSX closed down more than 383 points yesterday after the Bank of Canada warned that inflation will rise a lot more than expected, even as economic growth slows.
That warning was echoed by U.S. Federal Reserve Board chairman Ben Bernanke, who said there are risks to growth and more signs that consumer prices will continue to rise: "The possibility of higher energy prices, tighter credit conditions and a still-deeper contraction in housing markets all represent significant downside risks."
Oil prices plunged by $6.44, the biggest dollar amount in 19 years, after Bernanke's remarks. The drop also curtailed the loonie, which closed up 29 basis points, at 99.77 cents U.S., after briefly soaring above parity with the greenback.
Wednesday Jul 16, 2008 Dark cloud inflates over Canadian economy
The Canadian dollar soared briefly above parity with its U.S. counterpart yesterday and the stock market plunged more than...
Wednesday Jul 16, 2008 Fannie, Freddie downgraded despite rescue effort
Investors unloaded shares of Fannie Mae and Freddie Mac again yesterday after a credit agency cut their financial strength..
Saturday 12 July 2008 Worst Fears Ease, for Now, on Mortgage Giants Bush administration officials had worked into the early morning hours on Friday drawing up contingency plans to rescue the companies, Fannie Mae and Freddie Mac, should their financial plight worsen. And when both companies’ stocks fell 50 percent initially, some investors feared the worst.
Tuesday 01 July 2008 OTTAWA: ECONOMY RALLIES MILDLY
Statistics Canada reports that the economy grew by a slight .4 per cent in April, in all likelihood keeping the economy out of recession. The result exceeds economists' predictions and reverses two previous months of negative growth. Most of the growth came in the troubled manufacturing sector, with motor vehicle production up by seven per cent. Most economists are now forecasting a growth rate of under one per cent in the second quarter and about the same for the rest of the year.
Sunday 29 June 2008 OTTAWA: CENTRAL BANK PESSIMISTIC
The Bank of Canada has issued an essentially pessimistic quarterly report on the state of the country's economy. The report reversed its previous economic prediction of better times in the present quarter and now forecasts growth of only .3 per cent for the quarter. However, the Bank predicts a rebound of 1.8 in the second half of 2008. The report says that the international credit crisis that began in the U.S. last summer with the turmoil of subprime mortgages will continue for two years, with the result that Canadian businesses and consumers will continue to pay about three-quarters of a percentage point more to borrow. Exports will decline. On the positive side, the Bank predicts that the economy won't lapse into recession because of high commodity prices, strong employment and robust consumer confidence.
Monday 23 June 2008 What Happens if We’re Wrong? IN 1995, home prices in the United States rose by 1.7 percent. They kept climbing over the next 10 years at an accelerating rate. The climax was in 2005, when the increase was 15.7 percent, putting home prices at more than double their 1995 level. Except for the early years after World War II and during the great inflation of the 1970s, home prices in the United States had never doubled in the short space of 10 years.
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Tuesday 10 June 2008 Risk of US downturn 'diminishes'
The threat of a major decline in the US economy has waned, says Federal Reserve boss Ben Bernanke.
Playing down recent unemployment rises, he said a series of interest rate reductions combined with tax cuts was helping the US offset its difficulties.
Earlier, Democratic presidential candidate Barack Obama attacked his rival John McCain's economic policies.
Friday 30 May 2008 TORONTO: TRADE SURPLUS UNEXPECTEDLY UP
Statistics Canada reports that the country's trade surplus in the first quarter amounted to $5.6 billion. The figure is almost twice as high as what analysts had predicted. The Canadian Press cites an economist with the Bank of Montreal as saying that the chief explanations are higher commodity prices, particularly oil, and a lower travel deficit. StatsCan reported the first trade deficit in eight years in the fourth quarter of last year, but revised its evaluation on Thursday to a small surplus.
The house-price bust has a long way to go
(The Economist) SOUNDING more like a cartographer than a central banker, Ben Bernanke this week showed off the Federal Reserve’s latest gizmo for tracking America’s property bust: maps that colour-code price declines,
Friday 09 May 2008 Wed1365 page2 for a good report on the The economy
Thursday May 1, 2008 Economy weakens more than expected
Canada has edged closer to a recession, while the United States appears to have skirted one - at least for now.
Sunday 27 April 2008 Wall Street, Run Amok
How did all of the mechanisms operated by the mind-bogglingly well-paid men and women of the Street go so wrong?
Tuesday 22 April 2008 OTTAWA: GOVT. COULD FALL INTO DEFICIT
The Dominion Bond Rating Service says that the federal government could incur a deficit for the first time in more than a decade. The government recorded its 11th straight budget surplus in the 2007-2008 fiscal year. But DBRS says that Finance Minister Jim Flaherty's prediction of 1.7 per cent growth and a $2.3 billion budget surplus could be too optimistic. The rating service says this is because of "a deteriorating growth outlook" combined with major tax cuts over the past year. Two weeks ago, the International Monetary Fund predicted that growth in Canada would slow to 1.3 per cent in 2008 because of the economic difficulties of the country's biggest trading partner, the U.S.
Wednesday 16 April 2008 U.S. Economy
"I guess I've always lived the glamorous life of a star. It's nothing new - I used to spend down to the last dime." - Freddie Mercury. Standard and Poor's warned that Fannie Mae (FNM) and Freddie Mac (FRE) could cause the U.S. to lose its triple-A rating if the government were forced to rescue them. These government sponsored enterprises enjoy implicit government guarantees. S&P wrote, "Even though...credit damage from GSEs is unlikely, the greater risk to the U.S. lies with them than with broker-dealers." The cost in such an event could be as high as 10% of GDP (about 2.5x the annual U.S. defence budget)
while the Fed's bailout of Bear Stearns (BSC) and other credit facilities to brokers has cost less than 1% of GDP. Freddie and Fannie have been expanding their exposures to housing of late, adding to the risk. "These potential risks are not a prediction, but a risk worth mentioning," said S&P.
Tuesday 15 April 2008 OTTAWA: CANADA'S COMMODITIES SEEN AS BUFFER AGAINST RECESSION
One of Canada's big banks says the country's booming commodities sector will act as a buffer against being dragged into the recession which it predicts for its biggest trading partner, the U.S. CIBC World Markets has issued an economic forecast in which it predicts a recession for the U.S. in the first half of 2008 due to that country's worst housing slump since the Great Depression of the 1930s. But the report says that although there are parts of the Canadian economy that will be affected, the resilience of Canada's resource markets, particularly energy, mean a "new measure of economic independence..." However, the bank predicts that the national economy will grow by only 1.6 per cent this year, down considerably from 2.7 per cent in 2007.
Tuesday 15 April 2008 EDMONTON: PORK FARMER PAID TO CULL PIGS
The federal government has announced it will pay pork farmers $50 million to slaughter 150,000 of their animals in an unprecedented measure to stave off the industry's collapse. The target is a 10-per cent reduction of the numbers of swine. Most of the meat will be turned into pet food but some will be made available to food banks. Pig farmers are struggling with the effects of low prices, increasing feed costs and the high value of the dollar. The farmers also face higher costs because of new country-of-origin labelling rules for meat products that will go into effect in the U.S.
Monday 14 April 2008 World Bank tackles food emergency
The World Bank backs emergency measures to tackle rising food prices around the world. 100 million people in poor countries could be pushed deeper into poverty by spiralling prices.
The crisis has sparked recent food riots in several countries including Haiti, the Philippines and Egypt.
Sunday 13 April 2008 Greenspan, Volcker square off on U.S. woes
The more Alan Greenspan whines about his tarnished legacy since leaving the helm of the U.S. Federal Reserve, the more his predecessor Paul Volcker looks to claim the title as the ``greatest central banker who ever lived.''
Sunday 13 April 2008 Billionaire sees trouble
His doom-and-gloom forecast on economy may actually have found the mark this time.
"I consider this the biggest financial crisis of my lifetime,'' George Soros said during an interview last week in his office overlooking Central Park. A "superbubble" that has been swelling for a quarter of a century is finally bursting, he said.
Friday 11 April 2008
At the age of 77, Mr. Soros, one the world’s most successful investors and richest men, leapt out of retirement last summer to safeguard his fortune and legacy. Alarmed by the unfolding crisis in the financial markets, he once again began trading for his giant hedge fund — and won big while so many others lost.
Friday 11 April 2008 OTTAWA: CANADIAN TRADE SURPLUS RISES SHARPLY
Exports rose and imports fell as Canada's merchandise trade surplus grew by more than $2 billion in February--to $4.9 billion. Statistics Canada says it was the largest monthly surplus since last May. Bank of Montreal Deputy Chief Economist Doug Porter said Thursday the jump in the trade surplus was a surprise and he called it nothing short of shocking. He said the real eye-opener was that the improvement was driven by volumes and not booming commodity prices. He said the rise comes at a time of weakening US spending, the parity of the US and Canadian dollar that dampens Canadian exports, and still-robust Canadian spending trends. Statistics Canada said exports climbed 3.8 per cent from January to $39.3 billion and imports slid two per cent to $34.4 billion. The trade surplus with the US soared to $8.1 billion, the biggest in more than a year. Canada's exports to the US increased by 3.6 per cent. Imports dropped by 3.4 per cent.
Friday Apr 11, 2008 Trade surplus skyrockets
Canada's trade surplus jumped an unexpected 78 per cent in February to $4.9 billion from a revised $2.8 billion in January... Canada's trade surplus jumped an unexpected 78 per cent in February to $4.9 billion from a revised $2.8 billion in January, Statistics Canada said yesterday. This was the largest monthly surplus since May 2007 and the biggest rise since June 2004.
Thursday Apr 3, 2008 Our market may come up short
This week's wild party on U.S. stock markets ran out of steam yesterday as Fed chairman Ben Bernanke admitted for the first... But spirits remained much higher in Canada, where shares of resource producers managed to keep the market rising, despite a gloomy reaction among financial issues.
Such Canadian outperformance has become a pattern over the past several months, National Bank market strategists Pierre Lapointe and Clément Gignac say, but it might be unwise to think that it will continue.
Tuesday 01 April 2008 Economy bounces back
January saw Canadian economy grow 0.6 per cent, recovering from a dismal contraction in December
Sunday 23 March 2008 Split Is Forming Over Regulation of Wall Street WASHINGTON — As Congress and the Bush administration struggle to contain the housing and credit crises — and prevent more Wall Street firms from collapsing as Bear Stearns did — a split is forming over how to strengthen oversight of financial institutions after decades of deregulation.
The US economy is on the brink of recession, according to the Organisation for Economic Co-operation and Development (OECD).
The OECD has slashed its growth forecast for the US economy and hardly expects it to grow at all in the first six months of 2008.
But the OECD says it is "premature" to say the US is in recession.
Thursday Mar 20, 2008 TD Bank predicts federal deficit
Ontario's economy will be pushed into a recession and Canada's to the brink by a prolonged slump in the U.S. economy, driving... ...Canada's economy will grow by just 1.1 per cent this year, down from the 1.9 per cent expected three months ago, but will post a modest recovery to 1.8 per cent in 2009, while U.S. growth will be a stagnant 1.1 per cent this year and next, it forecast. The Canadian economy will shrink 0.4 per cent this quarter, but start to recover in the spring quarter with marginal growth of 0.2 per cent.
Wednesday 12 March 2008 Fed Hopes to Ease Strain on Economic Activity
By EDMUND L. ANDREWS
The Federal Reserve offered to let the biggest investment banks on Wall Street borrow up to $200 billion in Treasury securities.
Wednesday 12 March 2008
Wednesday 12 March 2008 OTTAWA: TRADE SURPLUS REBOUNDS
Canada's trade surplus rose by 3.6 per cent in January from December to $3.3 billion, up from $2.3 billion in the former month. Exporters sold $38 billion worth of goods. The January figure reverse a downward trend that had persisted through most of 2007, due in part to the strong Canadian dollar.
Tuesday 26 February 2008 WASHINGTON: IMF LOWERS GROWTH PREDICTION FOR CANADA
A weakening U.S. economy has prompted the International Monetary Fund to lower its economic growth forecast for Canada. In its October forecast, the IMF predicted economic growth of 2.3 per cent this year. On Monday, it reduced that forecast to 1.8 per cent. The IMF says that growth in Canada slowed toward the end of last year and will slow down even more, reflecting a sharp downturn in the United States.
Thursday 21 February 2008 The Federal Reserve has revised downwards its prediction for economic growth. Minutes of a closed-door meeting between Chairman Ben Bernanke and his associates on Jan. 29-30 expressed worry over the continuing housing slump and the credit crisis. The Federal Reserve at that meeting lowered a key interest rate by one-half a percentage point, having lowered the same rate by three-quarters of a point eight days prior. According to the minutes, apprehension was expressed that even these aggressive step wouldn't be enough. The Fed now estimates yearly growth at between 1.3 and 2 per cent, down from a previous estimate between 1.8 per cent and 2.5 per cent.
Sunday 17 February 2008 OTTAWA: MANUFACTURING SECTOR IN FREEFALL
Statistics Canada reports that sales for manufacturing sector fell to their lowest level in three years in December. The agency says sales amounted to $48.6 billion, a drop of 3.4 per cent from November. The drop is mainly due to the closure of several auto plants. The chief economist for J.P. Morgan Securities Canada, Ted Carmichael, explains that the effect on Canadian manufacturers of the slowdown in the U.S. has been more rapid than foreseen and that therefore the perspective of a recession in Canada have increased.
Thursday 14 February 2008
George Bush signed an economic stimulus package that will supply $168 billion—$152 billion of it this spring. The measure forms part of a government endeavour to stave off a recession in America. It ensures that rebates of up to $1,200 will be posted to households and also provides businesses with new tax breaks. Earlier, Hank Paulson, the treasury secretary, announced another initiative to help struggling homeowners by placing a 30-day freeze on certain kinds of foreclosures. RealtyTrac, an online property firm, said that foreclosures in America's largest urban areas rose by 78% last year, to 1.8m. See article
Feb 7th 2008 | WASHINGTON, DC
From The Economist print edition George Bush’s fiscal plan will set off an epic fight
APART from its record-breaking size—over $3 trillion, for the first time ever—the most memorable novelty of George Bush’s budget proposal was the method he used to submit it to Congress. On February 4th Mr Bush held up a tablet PC and showed off his 2009 e-budget. “It saves paper, it saves trees, it saves money. I think it’s the first budget submitted electronically,” he noted. All the easier for the Democrats to drag it to the recycling bin.
BUSINESS Thursday 07 February 2008
US economy plan fails in Senate
The US Senate fails to agree on a different version of the White House-backed economic stimulus plan.
US chain Macy's to cut 2,300 jobs
US department store chain Macy's is to cut 2,300 jobs, as it announces a 7.1% fall in sales in January.
Friday Jan 25, 2008 Canada Federal surplus running at $6.7 billion The latest monthly report on the government's finances suggest it easily has the cash to cover the cost of other tax measures - such as the GST cut, which kicked in on Jan. 1 - and meet its commitment to provide $1 billion in relief in the upcoming budget to help offset the impact on manufacturing and forestry industries of the strong dollar and weakening U.S. economy.
In November, however, the surplus was just $100 million, down from $400 million a year earlier, suggesting that the flow of cash into government coffers may be slowing with the economy.
Thursday 24 January 2008 OTTAWA: CANADIAN ECONOMY SHOWING WEAKNESS
Canada's economy showed no growth in the last three months of 2007, the longest continuous period of weakness in six years. The composite leading index had zero growth in October and November, and a dip of .1 per cent in December. Statistics Canada blames the dip on unusually heavy winter snow that prevented housing construction. Consumer spending was mixed. Some increases were seen in sales of furniture and household appliances. Auto sales were weak, but appeared to rally in December. New orders in the United States for Canadian manufactured goods remained low, another sign of a slowdown in the U.S. economy.
Wednesday 23 January 2008 OTTAWA: PRE-CHRISTMAS SALES STRONG
The value of retail sales in Canada in November hit $34.8-billion, a rise of 0.7 per cent. Statistics Canada attributed the increase to strong sales of gasoline, along with a recovery in general merchandise store sales. It was the third month in succession that retail sales rose. Looking ahead, Ritu Sapra, an economist with TD Bank, says "while gathering economic storm clouds in the U.S. and the elevated loonie (Canadian dollar) will continue to give non-resource exporters in Canada serious migraines, the domestic side of Canada's economy, including the household sector, should continue to bear up well."
anuary 19, 2008 The Education of Ben Bernanke (NYT Magazine) Ben Bernanke’s first exposure to monetary policy was reading the works of Milton Friedman, the Nobel laureate. That was 30 years ago, when Bernanke was a graduate student at M.I.T., and he has been studying central banking ever since.
Thursday 17 January 2008 Economist.com
Fed Chief Backs Quick Action to Aid Economy
Ben S. Bernanke endorsed quick passage of a stimulus package and aggressive action by the Fed, but said that a recession is probably not on the horizon.
Tuesday 15 January 2008 There is growing talk on Wall Street about the possibility of a recession. Since the beginning of the year three Wall Street firms (Merrill Lynch, Morgan Stanley and Goldman Sachs) have all stated they believe we are either in a recession already or are very close to a recession. In other words, it's no longer a matter of if a recession happens but when it will happen and how long it will last. In response to these developments, various presidential candidates have proposed various solutions. However, none of these will work, largely because this is not a typical slowdown caused solely by slowing consumer spending or business investment. Instead, it is a slowdown caused by inflated asset prices and a nation gorging on debt. As a result, it will probably take a lot longer to come out from under this problem.
huffingtonpost.com/hale-stewart/the-great-debt-crisis-beg
Saturday 12 January 2008 OTTAWA: TRADE SURPLUS EXPANDS AGAIN
Canada's trade surplus expanded for the second straight month as merchandise exports rose in November while imports increased at a slower pace. It was only the third export increase in 2007 and halted a three-month decline. Canadian companies exported $37.9 billion worth of merchandise, a 3.1 per cent increase, while imports rose 1.7 per cent to $34.2 billion. Canada's trade surplus with the world expanded to $3.7 billion, up from a revised $3.1 billion in October. While exports have grown since early 2006, the share of Canada's exports to the United States has fallen. Exports to the United States accounted for 75 per cent of the total in November, compared with 82 per cent in January 2006.
TORONTO: RBC PREDICTS SLOWER GROWTH IN 2008
The latest forecast from RBC says difficult conditions in the trade sector will slow Canada's economic growth this year. In a statement released Friday, RBC predicts the national economy will grow by 2.1 per cent in 2008, down from 2.6 per cent last year. RBC is forecasting strain on the trade sector due to the high Canadian dollar and weak economic performance in the US But the report says the sluggish performance in trade will be offset by a strong labour market and rising wages, as well as the recent percentage point reduction in the GST. RBC says the same factors should help boost consumer spending across the country. The forecast calls for slower growth in the first half of the year as a result of the plummeting housing sector and credit market tightening south of the border.
Thursday 10 January 2008 TORONTO: >b>ECONOMISTS PREDICT SLOWER ECONOMY BUT NO RECESSION
Canada's leading bank economists predict that Canada's economy will slow this year, but the country will steer clear of a recession. They forecast growth at about two per cent. Economists from Canada's chartered banks spoke to an audience of the Economic Club of Toronto. They did not foresee a recession in the United States either. However many economic pundits in the United States are far less optimistic. Economists at the investment bank, Goldman Sachs, say that recent data suggest the U.S. economy is falling into mild recession.
Saturday 05 January 2008 FACTORY PRICES
Factory prices and the cost of raw materials surged in November. Statistics Canada reported Friday that prices charged by manufacturers for their goods rose 0.6 per cent in November after six straight monthly declines, while raw materials jumped 3.4 per cent, boosted by steep increases in oil and coal during the month.
ECONOMIZING
Faced with soaring fuel prices, Canadian consumers are ditching their gas guzzling SUVS for more fuel efficient crossover vehicles. Hybrid vehicles are seeing their sales go up, although they still represent a relatively small share of the market. Airlines, railways and trucking companies whose businesses rely on jet fuel and diesel are also seeking ways to keep their costs down, with many passing on fuel surcharges to customers.
Stephen S. Poloz VP EDC Economics Weekly Commentary Surprise of the Year: Deflation Dissipation - December 19, 2007
Each year, just before the holidays, we take a look back and recall the surprises that took place in the previous 12 months. 2007 was loaded with candidates.
Start with the world economy. We began the year with the world in decent shape, but concerned that the U.S. housing sector could surprise on the downside. Downside surprise indeed! Despite repeated reassurances from policymakers, the U.S. housing sector went into a meltdown and there is no evidence to suggest that it is over. The erosion of consumer confidence is affecting the rest of the economy, and economists are now open to the possibility of a U.S. recession. Past issues | his WN page
Commentary podcast.
Several of you have remarked on Jacques' unusually prolonged absence from Wednesday Night and we thought you would want to know that, thanks to the efforts of his friend Colette Birks, we have learned that Jacques was suffering very severe headaches and was in a state of "confusion". We are not sure exactly when this occurred. He was hospitalized, but is now in recovery at an undisclosed location. Colette was assured by a member of his family that he is "bien entouré" and recovering slowly, but is not yet up to talking on the telephone. At this stage we have no way of communicating with him, but as soon as we have further news, we will let you know. We know that your thoughts and prayers for a speedy recovery will be with him.
Diana & David
Thursday 20 December 2007 WASHINGTON: IMF SEES SLOWDOWN FOR CANADA
The International Monetary Fund has revised downward its economic growth forecast for Canada. The IMF says the economy will grow at less than its forecast of October of 2.3 per cent, without giving a second figure. Its report says that after five years of strong growth, the economy will slow because of the weakening U.S. economy which could fall into recession, the appreciating Canadian dollar also being a factor. The IMF also expects a slower domestic demand to "moderate" as financial conditions tighten. The IMF praised the Bank of Canada's decision on Dec. 4 to cut its lending rate by a quarter of a percentage point to 4.25 per cent, reversing its quarter-of-a-point increase in July.
Stephen S. Poloz VP EDC Economics Weekly Commentary Labour Shortages are Global - December 12, 2007
We hear about labour shortages a lot – there are not enough doctors, carpenters, plumbers, or skilled workers in general (except, perhaps, economists). This is becoming a global problem.
Economists will tell you that labour shortages are not supposed to happen. When something is in short supply, excess demand pushes the price up. This reduces demand and increases supply. When it comes to skilled labour, the supply response is by necessity gradual, and may be very difficult, since it requires education and, perhaps re-education of transitioning workers. Past issues | his WN page
Sunday 09 December 2007 OTTAWA: ECONOMY CHURNS OUT JOBS
The Canadian economy created 43,000 jobs in November, an achievement which exceeds economists' predictions by four times. However, Statistics Canada says that the unemployment rate rose by .1 per cent to 5.9 per cent because of the arrival on the market of 68,000 new job seekers. The jobless percenta
weekly 
BBC
Stephen S. Poloz VP EDC Economics Weekly Commentary