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Showing posts from August, 2015

Why cant Canadian elections be like in America?

I mean that's a justifiable question!  We get Harper, Trudeau and Mulcair, three reasonable guys who rarely say anything outrageous, Where are our Donald Trump, and our Scott Walker -- who today on Meet the Press indicated that building an almost 9,000 km wall (even across the great lakes) between America and Canada was "an idea that should be considered".  Personally I am all for it especially if its the American paying for the thing, after all how are we going to keep the zombie armies out of Canada, and when President Trump is elected and decides that Canada's oil is really America's oil and takes over Alberta a wall will help in slowing things down a bit, right?
America's crazies (aka the Tea party, and the Far far right) are absolutely certain that all crimes are committed by these Mexicans Canadians crossing the border illegally -- I mean look at the Ted Cruz, a prefect example of a Canadian gone South.
But back to our subject why are Canadian election…

Electric cars, the sharing economy and the slow decline of the car manufacturing industry

I've been thinking about this post for a while, it strikes me that we are seeing some very interesting and potentially fundamental economic changes in one of the key component of our nation's economic activity; namely the car industry.

The arrival of the Tesla changed to the electric car landscape, it went from a hippy Prius owner to the rich guy considering a BMW or a Tesla and picking a Tesla.  The reality of the electric car business remains a rich people issue; to date you need a garage(s) (in which to store your battery charger) and long distance driving can be anxiety inducing that still make electric cars a luxury item. However, my guts are that over the next 5 years this will change -- and the sharing economy will be a major part of the solution.

Musk & friends are working on replaceable battery packs here and self connecting battery system here.  Google is working on self driving cars and Drivy is "driving" the shared personal vehicle space (the Airbnb o…

Is this the end? Stocks down 3% on Friday, 6% in 48 hours

Although I know little about the dynamics of stock prices I can read a chart as well as anyone else. The real truth is that over the past year stock prices have been static (some up and downs).  On August 22, 2014 the S&P 500 closed at 1,988, last night the market closed at 1970 a 0.1% drop over 12 months!  Hardly what I would call a massive correction -- lets not forget that "smart" investors are suppose to invest and forget for a few months -- churn is the enemy of the successful investor (ask Buffet).  Sill there is the past 48 hours and the breathless comments and worries -- is this the big one?
Yes Thursday and Friday were bad, but aside from weak oil prices, China going crazy trying to maintain an artificial market up (for no apparent good reasons) the place is more or less unchanged. There's always talks of war in Ukrain, Iran Syria... the usual trouble spots but nothing over the past few weeks justifies a 6% correction.  There is a certain uneasiness in the …

Thanks to Vox I finally understand why Trump is so popular

For weeks now I've been mystified as to the enduring popularity of Donald Trump as the GOP's leading candidate.  You assume that they (GOP members) can't really all be that dumb...but weeks later you are forced to concluded that yes maybe they are that dumb.  However, this rejection of a large percentage of the population as 'functioning imbeciles" never sat well with me.  Vox here explained what's going on.  
First off, Trump is a "nativist" which is fine -- its a label of course, and not that kind either, but its a true reflection of the man and his message; America can be great, Immigration is bad and causes 100% of all the crimes.  So far Trump has not spoken of the Non-latino population -- but I'm virtually certain that over the next few weeks that will change -- the words "lazy" and "stupid" and "welfare queens" will somehow emerge. All republicans candidates are nativists; maybe not in such harsh terms as tho…

So Eximbank is on holidays -- for ever!

Believe it or not, the GOP (Congress and the Senate) in their eternal wisdom have decided that the U.S. Import Export Bank is a luxury that America can no longer afford, and so on June 30th it was shut down as its mandate expired without being renewed !  
As a whole the US economy will not be impacted -- at least until Boeing and its buddies decide to move operations elsewhere, because international trade is such a small percentage of the US economy (less than 25% of GDP; compared to more than 50% in Canada).  However, some high paying high tech job (the kind the Republicans clearly hate) could well be in jeopardy.  If Boeing decided that more of its aircraft can be built outside the US, and gain access to other credit agencies.  Until now, Boeing has been very careful that at least 51% of the value added in its new aircraft are "American" just so that it can qualify for Eximbank's loan guarantee program.  Now that the loan guarantee or "off the table for the fores…

China's stock market

Having been away from the news (mainly because the internet was down) for a few days, I missed the latest and greatest about the Chinese stock market.  The news is not good, granted the panic seems to have ebbed but it remains that the past few weeks have been painful for investors (who are very leveraged).

Rumours are that there is an implicit price target of 4,500 for the Shanghai Composite index (the S&P 500 for China's main market) that today closed at around 3,600 off from its high of 5,100 (or about 35% lower -- which is bad).  The Chinese government has been working hard (and I mean really hard) at convincing the market that the market will go up, it has "encouraged" brokers to take large positions, ended the ability to IPO, it has made many stock "un-tradable" thereby reducing the volume of shares available.  In fact, the Chinese government has dubbed sellers as traitors!

If these rumours are true, and the Government can make the market calm down an…

Export Import bank of the United States of America -- Now that's intersting

The tea party has won, this fight anyway, it looks like US Eximbank's  may end up in the dustbin. The long term impact is minimal, the US can work to remove the other export import banks.  For companies the short term is more serious.  Exim Bank provided credit support to many many companies from confirmation of letters of credit to loan guarantees to Boeing.  For some reason America's far right has real issues with Boeing and the aerospace and defence sector, as a Canadian I can only say -- bring it on, because Canada would be a natural home for a lot of Boeing's non-defence work, these are very high paying jobs that require lots of skills and once the jobs are gone, they tend not to come back.

Canada has an export import bank called EDC, they too use Canada's credit rating to provide Canadian exporters with long term finance, letters of credit etc.  the cost to the Canadian tax payer has been nil for several years, in fact, EDC has only used Canada's borrowing ca…