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Showing posts from August, 2017

Crystal ball time; will I get it wrong...again!

First let me be very honest, by crystal ball has been remarkably out of wack.

I got Greece wrong -- I don't know what the ECB had on Greek leaders but it was enough to get them to back down from leaving the Euro/ECB.  The consequences for the country and its citizen has been dire!  Unemployment is still very high, retiree are still suffering from massive cuts to their pensions.  The system has broken downThankfully young Greeks with some language skills have been able to leave the countryBrexit:  Although I though there was some very good reasons for Britain to leave Europe the reason's my compatriots decided to leave were for jingoistic reasonsSterling has so far done rather wellThe economy has not collapsed -- its even growing againThe Euro:  She strength of the Euro; now around 119 to the greenback is unsettling insofar that it shows a greater confidence in Europe, than in America -- who's currency has been rather weak -- against everything except the Canadian dollar.  I…

Not being prepared: Its a feature of the American System (update)

[Update:  A good friend made the following comment earlier this week:  "50 inches of rain is 50 inches of rain -- whatever you do, what ever you plan, you don't plan for 50 inches of rain.  Despite that the water evacuation system for the city of Houston works as planned... but 50 inches of rain is 50 inches of rain, even with the best planning there will be massive flooding.  Houston is ridiculously flat, there is simply no technology (or even green spaces) that can deal with 50 inches of rain"]

Last Friday I friend was flying to central America via Houston -- as NOAA was announcing that Harvey (which made land fall as a cat 4 hurricane) was approaching the coast of Texas, and where Houston, although not at the centre of the storm, was on the leading edge.

United the airline that was routing her via Houston would not change her flight, that as long as the airport was not closed -- they would continue to route passenger via that airport.  The business of flying passenger…

A 1000 Cuts -- revisted

Several months ago I wrote that the ending (effective rather than legal) would be the results of a 1,000 cuts; none of the issue serious in themselves, but together they would kill Trump's presidency.  Clearly, Trump is a loud mouth that cannot stay away from Twitter -- to say that his inauguration crowd were larger than that of Obama -- well in fact destroying his first ever news cycle with that (in fact this lasted almost a week), was telling.

What I could not (no one could) predict is that 99% of the cuts were self inflicted!  You may be a racist idiot but you still understand that equating neo-nazi and far right fascist organization with anti-fascist organization is not the same kettle of fish!  Yet, in Trump's mind those who want to exclude people based on ethnicity have the same moral rights that those who preach inclusion.

Even if you are a racist (and there is little doubt now that Trump is just that) as a politician you know what can and cannot be said -- granted tha…

Hatians fleeing the USA...what?

The images at certain Quebec/NY border crossing are not on the scale of what you see in war zones where "the people" are fleeing advancing armies, and America's right wing may be ridiculing the whole endeavour but it remains a powerful image that blacks are fleeing the US...call it what you want, the change in US immigration policy -- a fallout of the ending of Obama's open arm gesture to Haiti following the earthquake of 2010!

Quebec  is obviously a natural destination for Haitians; obviously the idea of living in the land of "gold and honey"  aka the United States of America has come to an end for many of them.  They are not going to a more "natural destination" that is Quebec, where the already very large Haitian population and the language commonality are important factors.

Still black people fleeing the USA is a powerful image.  So far its a small number (in total over the last 10 days it has been somewhat around 4 to 5 thousands.  However, I…

Externalities, Prediction and the Reality of the future!

The events of the last week, with Trump saying that he's getting ready to be serious with Iran, and it turns out two days ago, with North Korea (apparently most Americans think that North Korea is in Canada...).

Two important externalities that may (or may not) affect the global economy!  The issue arose when meeting a new client (yeah) this morning and reviewing the world at large.  Two years ago we discussed his possible investment in the US retail sector -- while the numbers were still "ok" the underlying factors were not.  My point at the time was that the retail landscape was changing -- the internet was/is modifying shopping behaviours and this increases investor risk.

Externality 1  Internet shopping:  Most people don't understand risk adjusted returns; they get the difference between government bonds, but even there, they have limits (Portugal is not the same as the US government).  Looking at this real estate play (in retrospect) would have generated a 7.5% t…

Economic growth Canada Vs. USA

Canadians look and sound (mostly) like Americans.  To a Canadian to be referred to as an American is a huge insult (well maybe not that big, but we are always concerned with foreigners hating Americans...why take a chance!).  Anyway, while the rest of the world suffered from America's mortgage binge of 2008, few in Canada were affected -- excluding my old firm.  So when the world went crazy, Canada just slowed down a bit.  Canadian banks had to use the liquidity of the Bank of Canada, and its (the BoC) balance sheet grew, but within a few quarters that liquidity was fully repaid.  For Canadian banks this was an opportunity to shop for talent south of the border, with great success for some (thinking of you RBC, BMO) and less so for others (CIBC, TD and NBC).

Canada's economy slowed a bit, as oil prices dipped as did commodities but the people's principal asset (their houses) hardly faltered, it has been a constant upswing in Canadian house price with only a brief slowdown…