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Rag Tag Stuff:

Snow in Canada:

Saturday we got a foot (20cm) of snow in Montreal, the city is beautiful all in white, sidewalks are still a little slippery, but the streets are more or less clear of snow.  I guess we are used to the white stuff, which reminds me I cannot think of anything scarier than flying from a “southern” airport after snow storm.  These guys don’t know what deicing is all about.

Canadian dollar, Yield Curve and Interest rates

Still trading above parity with the US dollar, it seems a permanent fixture now.  The interest rate differential on 30 year bonds between Canada and the U.S. (89 bps) seems to be permanent.  The Bank of Canada has the option of raising rates on March 1, 2011.  Some (David Rosenberg) believe that the BoC will retain overnight rates at 1%, I disagree, although 65% of the new January jobs were government related, 23k were created by private enterprise (which is more than the target jobs growth penciled in for Canada by pundits).  The only issue for the BoC is can we afford to have such a dramatic difference between U.S. overnight rates (0.25%) and Canada (1.25%).  Of course if the world ends tomorrow, copper price fall, energy prices fall the loonie will take a hit.

Manufacturing productivity

Some very interesting research done by a Canadian bank came into my possession.  Basic message is that manufacturing productivity in Canada (and more important unit labor costs) is very positive for Canada – despite a 30% appreciation of the CAD for the past 4 years (they compare very favorably to the U.S.).

Canadian House Prices

What is one to say, a REMAX study today shows that over the past decade the average annual increase in the Canadian house price has been around 7%.  Not many markets can claim this kind of growth…. We’re rich, we’re all very rich!

Spring Elections

I don’t watch that much TV, but I’ve seen my third political add in the past 10 days – on how great a job the current government is doing.  Seems to me that we can expect elections in the spring.  How about May 15/16 would seem optimal, it will give the government a chance to make a nice “give away” budget.

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