• Tag Archives Canada
  • “Markets Have A Mind Of Their Own” But One Trader Warns “Nothing Lasts Forever”

    Despite new record highs in stocks, Bloomberg’s former FX trader Richard Breslow fears other markets (the dollar’s downfall, collapsing rates/curves, crashing commodities) have become too “fatalistic” amid the summer doldrums.
    Let’s start with some of the things we know with certainty. Yield curves will keep on flattening. Probably invert and drive home the point to everyone that the Fed committed a dreadful policy mistake. The dollar will never rally again. Just look at the numbers and you have to be a U. S. bear. And look how efficiently the latest European bank bailouts were handled this weekend. They really have their act together. Oil? It’s going to single digits, of course. And there’s nothing you can do to stop it or the carnage it will cause in places like Norway and Canada.
    It’s summer, markets have a mind of their own and there’s no percentage in fighting the tape.
    In fact it’s odd how fatalistic people seem to be. We used to furiously debate where and when we’d find the canary in the coal mine warning of an imminent market reversal to pounce on. Now, there seems to be blanket resignation that the trend is your master.

    This post was published at Zero Hedge on Jun 26, 2017.

  • Gold mine output turning down this year. Is Peak Gold with us? — Lawrie Williams

    The latest weekly Precious Metals newsletter from London-based specialist consultancy Metals Focus at last sees gold output growth grinding to a halt during the current year. Many commentators have been predicting this to happen almost every year since the metal price fell back sharply in 2011, largely ignoring new mega-projects already under construction and too far advanced to be dropped (like Pueblo Viejo in the Dominican Republic) and the industry’s propensity to switch to mining higher grades, where this was possible, to counter declining revenues. As a result of these trends annual global gold output has actually been rising over the past few years, albeit relatively slowly, but Metals Focus now sees this increasing output trend coming to a halt during the current year.
    And along with the halt in increasing gold output, the consultancy sees All in Sustaining Costs (AISC) beginning to increase again. The newsletter notes global AISC rose in Q1 2017, both quarter on quarter(+4%) and year on year (+8%), driven by a recovery in some key producer currencies (most notably the South African rand), the general pickup in the commodities sector (which is fuelling an increase in labour expenses and the costs of mine-site consumables) and an increase in sustaining capital expenditure (as the industry looks to adequately reinvest following a period of austerity).
    Indeed, Metals Focus comments that the annual supply of new gold (as opposed to recycled material) has grown by around 800 tonnes since 2008, an increase of around 25-30%. It puts this growth trend down to being driven by production increases in countries like China, Russia and Mexico coupled with a number of new mine startups across Africa (outside of South Africa) and a recovery in more mature mining jurisdictions, such as Canada and Australia. But now it sees this increasing production pattern coming to an end. Could Peak Gold, so beloved of gold bulls actually be with us at last?

    This post was published at Sharps Pixley

  • The Fed Is Now Preparing For The Next Economic Crisis, Here’s How – Episode 1313a

    The following video was published by X22Report on Jun 22, 2017
    Sears Canada decided to announce that it will be declaring bankruptcy, approximately 3000 people will lose their jobs. Warren Buffett steps in and purchases Home Capital Group, big surprise since they were on the verge of collapsing. Junk bonds are signalling the great debt binge is now coming to an end. The Fed announced that will start to unwind its balance sheet, why now? The obvious reason is that the bubbles are at the top, its time to unload and prepare for the next economic crisis.

  • Sears Canada Announces Bankruptcy; Fires 2,900

    Update: Sears Canada was authorized to obtain financing of C$450 million. The bankrupt company said it would close 20 full-line locations plus 15 Sears Home stores, 10 Sears Outlets and 14 Sears Hometown locations; it would also cut 2,900 positions across retail network, corporate head office in Toronto.
    * * *
    It’s official – the US ‘retail apocalypse’ has moved north as Sears Canada (and some of its subsidiaries) have applied to Ontario Superior Court of Justice for protection under the companies’ Creditors Arrangement Act (CCAA), in order to continue to restructure its business.
    Sales at Sears Canada have fallen sharply since it was spun off from its equally-troubled US-based parent in 2012; the slump coincides with a broader shift in consumer preferences away from brick and mortar retailers and toward e-commerce.
    This shouldn;t come as a surprise to anyone, in an admission last week, Sears Canada said it has ‘significant doubt’ that it can continue to operate for much longer. Meanwhile, its American counterpart announced that it would lay off 400 employees as part of an initiative to produce $1.25 billion in savings after admitting back in March that the future of its business is also in serious jeopardy, as Fortune reported.

    This post was published at Zero Hedge on Jun 22, 2017.

  • Sears Canada Melts Down

    Files for bankruptcy protection. Shareholders rue the day. Sears Canada and its subsidiaries, which operate 95 department stores, 29 Sears Home stores, 71 Hometown stores, 16 Outlet stores, 69 Sears Travel offices, and 32 Corbeil appliance stores, and thus lease a lot of mall space, filed for bankruptcy protection today.
    The company was partially spun off from similarly struggling Sears Holdings in the US in 2012, which still holds a 12% stake, and whose CEO Eddie Lampert owns a 45% stake in part via his hedge fund, ESL Investments.
    In the announcement, Sears Canada said that it has applied to the Ontario Superior Court of Justice for protection under the Companies’ Creditors Arrangement Act (‘CCAA’), in order to restructure its debts. It doesn’t plan to liquidate.
    ‘Sears Canada Reinvention Continues,’ it says. Despite sales having plunged for years, it points at its ‘brand reinvention,’ how it ‘rebooted its customer experience and service standards,’ and how its ‘newly designed site built in-house by a new technology team’ and some other factors are going to make this work.

    This post was published at Wolf Street by Wolf Richter ‘ Jun 22, 2017.


    GOLD: $1244.20 DOWN $9.80
    Silver: $16.48 DOWN 15 cent(s)
    Closing access prices:
    Gold $1244.20
    silver: $16.53
    Premium of Shanghai 2nd fix/NY:$8.22
    LONDON FIRST GOLD FIX: 5:30 am est $1251.10
    LONDON SECOND GOLD FIX 10 AM: $1255.40
    For comex gold:
    TOTAL NOTICES SO FAR: 2589 FOR 258,900 OZ (8.0528 TONNES)
    For silver:
    For silver:
    15,000 OZ/
    Total number of notices filed so far this month: 914 for 4,570,000 oz

    This post was published at Harvey Organ Blog on June 19, 2017.

  • China’s “Ghost Collateral” Arrives In Canada, “Heralding A Crisis”

    Two weeks ago, a key China-linked concern that made headlines back in 2013 and 2014 reemerged after an extensive analysis by Reuters reporter Engen Tham found that China’s “ghost collateral” problem, or collateral that was either rehypothecated between two or more loans, or simply did not exist, had not only not gone away but was still as prevalent as ever if not worse.
    The report, a continuation of extensive reporting conducted on this site, said that 60% of all loans issued in China’s system are backed by property, and that China’s property values are ‘wildly misleading, which is part of the reason that China’s credit rating was recently downgraded.” Reuters reported that Chinese lenders are prone to fraud with loan officers turning a blind eye to the quality of collateral and knowingly accepting dubious and even fraudulent documents.
    Now, in a follow up by the Vancouver Sun’s Sam Cooper, the real estate reporter explains that China’s “ghost collateral” problem has jumped across the Pacific and is threatening the Canadian banking system.
    As Cooper notes, “as a result of the flood of money pouring from Mainland China into Vancouver real estate in recent years, some financial experts say they believe Canadian banks are directly exposed to shadow lending in China and the risks of so-called ‘ghost collateral’, collateral that may not exist or is used continuously to secure loans for multiple borrowers.”
    And the stunner: “Postmedia confirmed that Canadian banks are allowed by the federal regulator, the Office of the Superintendent of Financial Institutions, to accept collateral from China to secure real estate mortgages in B. C.”

    This post was published at Zero Hedge on Jun 18, 2017.

  • The Next Economic Crisis Is Going To Leave The Majority Of People In Shock – Episode 1307a

    The following video was published by X22Report on Jun 15, 2017
    EU has decided to put Greece further into debt. It is becoming clear that Greece will never get out of this debt hole. 70% of the people support the BREXIT. Canada’s existing home sales has declined rapidly. Bitcoin dropped on worries about cyber attacks and regulations. Nike cutting 1500 people. The US manufacturing industry declines once again. Illinois is worse now than back in the great depression of the 30s. Bloomberg’s Mike Cudmore says the Fed has just pushed us into a recession, what he really means a collapse of the economy. Japan has decided that they will look into joining China’s belt and road trade system. The Fed is now pushing the collapse is not holding back, most of the people are going to be shocked when this hits.

  • Despite Bank Of Canada Hubris, Existing Home Sales Crash In May

    The Bank of Canada is stuck between the rock of a housing bubble (textbook-based trickle-down confidence-inspiration) and a hard place of a housing bubble (total lack of affordability) as it proclaimed this week that it may withdraw stimulus because, paraphrasing, everything was awesome. Well, today’s existing home sales collapse may change that tune quickly…
    Bloomberg reports that in a speech she’s delivering in Winnipeg, Manitoba, Senior Deputy Governor Carolyn Wilkins highlighted how the nation’s recovery is broadening across regions and sectors, giving policy makers ‘reason to be encouraged.’
    ‘As growth continues and, ideally, broadens further, Governing Council will be assessing whether all of the considerable monetary policy stimulus presently in place is still required,’ Wilkins said in the text of a speech she’s giving Monday.
    ‘At present, there is significant monetary policy stimulus in the system.’

    This post was published at Zero Hedge on Jun 15, 2017.

  • ‘Retail Apocalypse’ Moves North As Sears Canada Admits Its Future Is In “Serious Doubt”

    The retail apocalypse that has caused the closing of thousands of department stores in the US – not to mention the evaporation of tens of billions of dollars in market capitalization – is moving north: Sears Canada revealed Tuesday that it’s exploring a sale or a possible restructuring as it draws nearer to bankruptcy. In an admission that shouldn’t come as a surprise to anyone who has ever shopped online, Sears Canada said it has ‘significant doubt’ that it can continue to operate for much longer. Meanwhile, its American counterpart announced that it would lay off 400 employees as part of an initiative to produce $1.25 billion in savings after admitting back in March that the future of its business is also in serious jeopardy, as Fortune reported.
    Sears Canada’s shares slid as much as 40% on the news.

    This post was published at Zero Hedge on Jun 13, 2017.

  • Jayant Bhandari on Gold, Submerging Markets and Arbitrage

    Maurice Jackson Interviews Jayant Bhandari We are happy to present another interview conducted by Maurice Jackson of Proven and Probable with our friend and frequent contributor Jayant Bhandari, a specialist on gold mining investment, the world’s most outspoken emerging market contrarian, host of the highly regarded annual Capitalism and Morality conference in London and consultant to institutional investors.
    Here is a brief summary of the topics Jayant discusses in the interview:
    An overview of a recent speech he delivered in London entitled ‘Gold in India: Current Market Dynamics and Future Opportunities’ (Indian street prices of gold are 10% above prices elsewhere in the world, but they should be even higher – why is that so?) Recent political developments in India, where cows (which are considered sacred animals by many people) have become more popular than seems to be good for anyone walking on fewer than four legs. The increasingly dire situation in another submerging market, namely South Africa.* A developed market that seems set on becoming a submerging market, namely British Columbia in Canada. After an election in early May delivered a hung parliament, the province is threatened by a shift to the political left, with socialists and greens joining forces to form an authoritarian watermelon. A long list of outrageously absurd anti-free market policies are now hanging like the sword of Damocles over what was up until now the fastest growing region in the fastest growing G7 economy. Billions in planned investments in energy projects are inter alia at risk (those of the economically viable sort, not the cronyism and theft that is euphemistically referred to as ‘alternative’ energy).** Recent arbitrage opportunities developing in gold mining stocks. A reminder regarding this year’s Capitalism and Morality conference, which will host numerous very interesting speakers – there is still time to register.***

    This post was published at Acting-Man on June 14, 2017.

  • A Surgeon Stands Up

    No, this is not the first thing Ramin has posted on this general topic, and no, it’s not the first time he’s gone after the real issue. It is, however, particularly poignant given the circumstances and worth a read.
    Americans pay four to 10 times more for prescription drugs than what citizens of other developed countries pay. It’s true that drug prices must be high enough to pay for research and development, but there is no reason that only American consumers should bear that cost. We effectively subsidize the generous national health systems of Canada and other western countries by allowing them to get away with paying much lower prices that don’t reflect the much greater R&D costs of the drugs they use.
    When I point out that I can reduce the cost of medicine in the United States by 80% in a single day without screwing one patient or killing one person by withholding (rationing) care I usually get blank stares in response. It’s utterly true, however; when you pay 4-10x — or even 1,000x as much as a market price for something that simply putting a stop to that takes 60-90% or more out of the cost.

    This post was published at Market-Ticker on 2017-06-13.

  • The Inconvenient Truth… Of Consumer Debt

    Oh, but for the days the hawks had a hero in Sydney. Against the backdrop of a de facto currency war, the Reserve Bank of Australia stood as a steady pillar of strength. The RBA held the line on interest rates, maintaining a floor of 2.5 percent, even as its global central bank peers drove rates to the zero bound and beyond into negative territory.
    The abrupt end to the commodities supercycle drove the RBA to join the global currency war. The mining-dependent nation’s economy was so debilitated that policy makers felt they had no choice but to ease financial conditions. In February 2015, after an 18-month honeymoon, the RBA reduced its official rate to 2.25 percent, marking the start of a cycle that ended last August with the fourth cut to a record low of 1.5 percent.
    The Bank of Canada has taken a similar journey in recent years. It embarked upon a mild tightening campaign in 2010 that raised the overnight loan rate from a record low of 0.25 percent to 1 percent in September 2010. The bank maintained that level until early 2015. Two weeks before the RBA’s first cut, the Bank of Canada lowered rates to 0.75 percent. The January move, which shocked the markets, was followed in July 2015 with an additional ease to 0.5 percent, where it remains today.
    Bank of Canada Governor Stephen Poloz, who replaced Mark Carney after he departed to head the Bank of England, explained the moves as necessary to counter the downside risks to inflation emanating from the oil price shock to the country’s economy.

    This post was published at Zero Hedge on Jun 11, 2017.

  • How gold can rescue pensions

    The World Economic Forum, in conjunction with Mercers (the actuaries) recently estimated that the combined pension deficit currently stands at $66.9tr for eight countries, rising to $427.8tr in 2050. The eight countries are Australia, Canada, China, India, Japan, Netherlands, UK and US. Of the 2016 figure, $50.5tr is unfunded government and public employee pension promises.
    Yes, we are now talking in hundreds of trillions. Other welfare-providing states missing from the list have deficits that are additional to these estimates.i
    $66.9tr is roughly 1.5 times the GDP of the eight countries combined, and $427.8tr is nearly ten times. Furthermore, if we take out the non-productive government element, the figures relative to the private sector tax-paying base are closer to twice productive GDP today, and thirteen times greater in 2050. That 2050 deficit assumes a 5% compound annual growth rate. This is a linear projection, but the deterioration in finances for unfunded government pensions may turn out to be exponential, in line with the accelerated increase in the broad money quantity since the great financial crisis.
    The problem is mainly in the welfare states, so we know that the welfare states are in big trouble. Governments routinely offer inflation-protected pensions to state employees, funded out of current taxation. The planners in government treasury departments are coming alive to the scale of the problem, though the politicians would rather ignore it. Government finances are already being subverted by both unfunded pension obligations, and by additional rising healthcare costs for aging populations.
    Furthermore, people are living longer. Someone born in Japan ten years ago who retires at 60 can expect to live to 107, leaving the state picking up a forty-seven-year welfare and pensions bill. And it’s not much less expensive in other countries, with 50% of North American and European babies born in 2007 expected to live to 103.
    The global dependency ratio, those in work relative to those in retirement, is expected to deteriorate from 8:1 to 4:1 by 2050. When most people retire, they stop paying income tax and become a burden on the state welfare system. Therefore, retirement ages must rise. Not only must they rise, but they must rise by enough to pay for those who are otherwise fit but mentally incapacitated by dementia, Alzheimer’s and Parkinson’s, set to spend the last decades of their lives expensively kept.
    That is the background to a global problem. But we shall just say ‘poor taxpayers’, and move on. Instead, this article focuses not on the problems of funding state pensions (which is admittedly 75% of the problem), but is an overview on why the current low growth, low interest rate environment is so detrimental to private sector pensions.

    This post was published at GoldMoney on JUNE 08, 2017.

  • Financial Fragility Reaching a Critical Mass

    There are several key factors that have contributed to the financial fragility of the masses and our economy today. First, is that over the past 30 years, globalization and technology have helped to reduce the number of middle-class jobs available domestically. Fewer jobs and superfluous workers have led to stagnating incomes for most. At the same time, living expenses for critical services that are domestically-produced like education, medical services, child-care, housing and fresh food have all strongly outpaced income gains.
    Today a middle-class lifestyle in America (ie., comfortable housing, transportation, food, health care and one family vacation a year), is estimated to require about 130k of annual household income for a family of 4. The median US household income, however – at 50k a year – is less than half the funds needed. In Canada, estimates of ‘middle class’ expenses vary in the range of 50-100k a year (see: Just who are middle-class). According to the latest 2014 StatsCan census, the median Canadian household income was $78,870.
    To plug spending deficits over the past 3 decades, families have increasingly added debt. American households now owe a record $12.7 trillion and Canadians $2 trillion, as of Q1 2017. Not only does servicing this debt further diminish disposable cash flow, but it also keeps people from building up net savings from their income.

    This post was published at FinancialSense on 06/07/2017.

  • Trump Talks Tough on Trade, but His Team Is Treading Lightly

    President Trump has called the Trans-Pacific Partnership deal a ‘rape’ of the United States. He has scolded Germany for being ‘very bad’ on trade because it runs a surplus. And in April he said that he was ‘psyched’ to terminate the North American Free Trade Agreement with Canada and Mexico, only to reverse course.
    Despite Mr. Trump’s incendiary talk, his top trade advisers are taking a more cautious approach to dealing with America’s trading partners, striking a more moderate tone than the president but still laying the groundwork for the changes he has promised.
    That more moderate tone has come as a relief to those who feared the Trump administration would swiftly usher in a wave of protectionism, while disappointing some people who hoped that a sweeping rewrite of trade deals would come in the administration’s early days.
    Signs of greater moderation were on display this week when Wilbur Ross, the secretary of commerce, suggested that the administration would actually try to build off some aspects of the Trans-Pacific Partnership trade agreement, or T.P.P., that Mr. Trump abandoned in January as NAFTA renegotiations begin this summer.

    This post was published at NY Times

  • Gold Has Outperformed The Dow/S&P 500 Year To Date

    Although it may not ‘feel’ like it, the price of gold has been in a nice – albeit ‘controlled’ –
    uptrend since late December (1-year daily, Comex continuous futures contract):
    Gold is up over 12% since 12/22/16. By comparison, the SPX is up 7% and the Dow Jones Industrials index is up 6%. AAPL is responsible for 13% of the SPX move higher and 25% of the Dow move higher. The primary drivers of gold besides elevated geopolitical risk are the expectation of an easing of monetary policy and the fall in value of the U. S. dollar:
    While I don’t think the effort will yield any success, the only way the Trump Government can stimulate economic growth other than by printing another few trillion and distributing it across the population, is to attempt to stimulate the demand for U. S. exports globally by devaluing the dollar vs. the currencies of our primary trading partners (Canada, Europe, China).

    This post was published at Investment Research Dynamics on June 4, 2017.

  • Canada Unveils $650 Million Lumber Industry ‘Bailout’ “To Stand Up To US”

    Canada’s Natural Resources Minister Jim Carr just announced C$867 million (around $650 million) in financial supports for softwood lumber producers and the communities where they are based…’Canada is standing up to the U. S., Canada is standing up for Canadians.’
    On Wednesday, the Conference Board of Canada released a report saying Canadian softwood producers would pay $1.7 billion in duties a year and cut 2,200 jobs and $700 million in U. S. exports over the next two years before the dispute is settled.
    And perhaps on the basis of that report, as Canadian Press reports, the package includes loans and loan guarantees to help cushion the blow for forestry companies and to help them exploring new markets and innovations.

    This post was published at Zero Hedge on Jun 1, 2017.

  • New Home Prices Are Over 50% Higher In Canada Than The US

    The price of new homes is quickly diverging in Canada and the US.
    Data from the Canadian Housing and Mortgage Corporation (CMHC) show that new homes are selling for substantially more than the same time last year.
    Meanwhile south of the border, data from the US Bureau of Census show that new home prices are on the decline.
    This has lead to an even wider gap between the average price of a new home in Canada and the US.
    Canadian New Construction Is Higher The price of a new home across Canada is up for the second month in a row. The average sale price in April was CA$751,881 (US$559,123). This represents an 11% increase from the same time last year, when measured in Canadian dollars. When compared in US dollars, that increase drops to a much more conservative 2.64%. Even after factoring in the loonie’s decreased buying power in Canada, new home prices still climbed.

    This post was published at Zero Hedge on May 28, 2017.