First off, after a glorious summer, Labour Day weekend was mostly miserable, so it was three wasted days, which means lots of reading. Certain themes resonated for Canada:
- Swiss national bank pegs the Swiss Franc – they’ve had enough of the wild ride. Not sure how it will work, because commentaries from the ECB seem to indicate that this was all news to them. This means that many countries that are perceived to be sound (Canada, Switzerland, Sweden, Norway and Australia) may resort to the same process. We know that the Bank of Canada is very concerned about all they “hot” money flowing into Canada (about 7% of GDP). How do such economies protect their industry and citizen from global market fears?
- Europe decided that a good old fashion panic was on the cards for Monday – while America celebrated “something” – but certainly not labour. Spider futures were wild on Monday, but Tuesday morning things cooled down. BTW as of 6 am Tuesday AM (EST) the yield on 1 year Greek debt was 81% -- the two year paper is around 57%. Greek default is priced in, haircut is around 80% (that’s the new 21%). Ackermann of DB gave a terrific speech on Monday – he said that if Europe’s bank had to take provisions for their Sovereign bonds they would be nearly insolvent…lovely!
- Confusion in the media: Zero Hedge reported that protesters were in front of the Italian stock exchange on “labour day” as a significant protest… except Labour Day in Europe is May 1st, not September 1st (or 5th for the matter), our American cousins once again confuse ‘merica, for the rest of the world.
- New research on Canadians’ attitude vis-à-vis Americans; five years ago Canadians envied Americans, today we feel sorry for them, truth be told we never wanted to be them. How many of my Canadian friends living and working in the US were asked when they were getting their US passport – their answer that they would never give up their Canadian citizenship was met with surprise and disbelief (Americans have been brainwashed into believing that everyone in the world wants to be them!). Today any conversation about America ends with a head nod – we wish them well, we like them, but we really don’t want to be them.
So that's the highlight of the weekend read. I'm also looking at the whole story behind the "Etat Généraux" for the soveregnist movement in Quebec -- It's like a headless chicken, dead but keeps on running around.