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Showing posts from April, 2013

The state of democracy in the OECD

Most of us learned that democratic governments have three separate but equal branches; the legislative, the executive and the judiciary.  Right now we are seeing a major shift in the importance and relevance of each branch.  First off, the legislative branch is getting its ass kicked (we are excluding the US for now from the discussion).  Here in Canada the role of the legislative has never been weaker, in part because of the central role undertaken by the "party" the reality on the ground is that backbenchers (those who's party is the government but are not part of the executive) no longer have any say, and even don't have the right to ask questions or propose new legislation (which was often done in the past).  
Prorogation -- a strange device that fundamentally changed the relationship between the executive branch and the legislative branch, has further weakened our Canadian democratic process.   In effect, the executive branch was able to shut down the legislati…

Inflation is just not playing its part

This is bad, not "really bad like the Dutch housing crisis" but bad insofar as the Bank of Canada has been trying for a while now to get inflation back on track into the 2.0% and 3% range that has been the BoC's policy for the past few years.
As Mark Carney prepares to leave for Greener pasture (Bank of England) he must be disappointed.  Canada's economy is slowing, as demand for primary goods falters, inflation is well below the BoC's traget level, and Canada remains attached to the hipe to the US economy.   If the latest figures from Caterpillar (NYSE:CAT) are to be believed the global economy's expansion is faltering.  Demand for Steel, Aluminum, Copper (and hence demand for things that move the raw material that make-up those products) is faltering.  CAT is particularly gloomy with global GDP growth at 2.5% and Chinese growth at 8% -- funny enough most economists have GDP growth in China at 7% for 2013/14...
Anyway back to Canada
Pension Manager balk at B…

Trudeau as a credible prime Minister

Justin Trudeau son of Pierre Elliot Trudeau -- a famous and outspoken past prime minister was "anointed" as the leader of the Federal Liberal Party.  I say anointed because although there was an election he won with nearly 80% of the ballots cast -- in the first round.  Today we are at least two years away from a Federal election, and the election of Trudeau as the leader of the Federal Liberal Party is the "buzz" across the nation (to be fair its mostly the MSM talking to itself out of sheer boredom) .  His father was famous for bringing Canada's constitution back from Great Britain, and for introducing a Bill of Rights (to the ever damnation of the Quebec separatists).  So a 30 year old guy follows in the footstep of his father, many have been there before
Could Trudeau be a good prime minister?  Who knows, guys with spectacular resumé kind of sucked and some with ordinary achievement records were great.  Reading biographies of political leaders it is clear …

Inflation is back -- maybe, hopefully, it could still happen

So earlier this week StatsCan published the IPPI; basically the price of industrial production and the RMPI that shows the rise in cost of raw materials.  Good news if you are from the Bank of Canada -- that has been desperate to get inflation back on track of the 2% to 3% zone.  IPPI and RMPI are both up after having been flat for months.



Both charts show one thing -- which is not especially good, all the price increase in industrial production comes from raw material costs -- none of it from general price inflation -- in an economy that is 60% services -- that's a reflection of a weak economy.  There is no pricing power.
Canada's policy makers have run out (like the rest of the world) of macro-economic tools to affect the economy.  Interest rates are low, velocity of money is not rising (which is different than falling) and the fiscal tool shed is empty -- mainly because the government will not consider an expansionary (and deficit growing budget) so that they can achieve th…

You go away for a few days!!!

So North Korea has decided that there's isn't enough tention in the world, that we need to push that button a little harder.  You know that things are bad when the US president will not talk about it!  The fact that B2 bombers are in Korea tells you something.  What is missing from all this is a sense of what is going on in the hermit kingdom?  Is the new president playing is grandfather's game and if so why moving so fast to the full confrontation mode.
In other news the French government is modifying its new income tax laws so that the courts can approve, but bottom line is that income in excess of Euro 1 million will be effectively confiscated by the state -- taxed at 75%.  Of course the law of unintended consequence applies here -- French footballers who earn considerably more than Euro 1 million are threatening to leave the country.
In other news (really all that stuff was an excuse to talk Canadian stuff) it looks like TansCanada pipeline is confident of getting app…