• Tag Archives Canada
  • Would A Leveraged Buyout Help Sears Turnaround Its Business?

    Practically since the day he took the reins at Sears, CEO and Chairman Eddie Lampert has been steadily stripping the once mighty retailing behemoth of assets and protecting his hedge fund’s investment as the company continues its steady march toward bankruptcy.
    Any customer with the temerity to visit one of the remaining Sears or K-Mart stores will be greeted with the same depressing vision: Shelves that are mostly vacant of the most popular consumer brands, as many of Sears’ suppliers have become wary of working with the company. Displays are unkempt, and even the selection of appliances that were once Sears’ bread and butter has been dramatically reduced.
    Back in October, Sears Canada announced its plans to liquidate, leaving behind only this video to remind investors and customers just how bad things got before the plug was pulled.
    But despite all of this, Swiss asset manager Memento, a firm that primarily manages assets belonging to Switzerland’s Spadone family, believes the short-selling of Sears’ stock is the most pressing obstacle plaguing the floundering retailer.

    This post was published at Zero Hedge on Dec 7, 2017.


  • Get Government out of the Welfare Business

    Fighting poverty is a favorite pastime of government because politicians get to portray themselves as champions of the poor. However, the unfortunate few tend to be far fewer in number when aid is extended privately instead of through tax funded programs.
    Government Bureaucracies Benefit from Welfare Programs
    Coercion is used to acquire the revenue (taxes) to finance welfare programs. As evidenced by the commission it retains prior to redistributing this wealth, government bureaucracies are one of the beneficiaries of these programs, and thus highly incentivized to claim a perpetual need for the programs. I live in Canada, where the number of federal government welfare program employees increased by 43% between 2006 and 2012. Clearly, it serves the interests of politicians and bureaucrats to create (impose) a culture of dependency. As Murray Rothbard wrote in For a New Liberty:
    Since welfare families are paid proportionately to the number of their children, the system provides an important subsidy for the production or more children. Furthermore, the people being induced to have more children are precisely those who can afford it least; the result can only be to perpetuate their dependence on welfare, and, in fact, to develop generations who are permanently dependent on the welfare dole.

    This post was published at Ludwig von Mises Institute on Dec 4, 2017.


  • Key Events In The Coming Week: Jobs, Brexit, PMI, IP And More

    The first full week of December is shaping up as rather busy, with such Tier 1 data in the US as the payrolls report, durable goods orders and trade balance. We also get UK PMI data and GDP, retail sales across the Euro Area, as well as central bank meetings including Australia RBA and BoC monetary policy meeting.
    Key events per RanSquawk
    Monday: UK PM May To Meet EU’s Juncker & Barnier Tuesday: UK Services PMI (Nov), RBA MonPol Decision Wednesday: BoC MonPol Decision, Australian GDP (Q3) Friday: US Payrolls Report (Nov), Japan GDP (Q3, 2nd) The week’s main event takes place on Friday with the release of November’s US labour market report. Consensus looks for the headline nonfarm payrolls to show an addition of 188K jobs, slowing from October’s 261K. Average hourly earnings growth is expected to slow to 0.3% M/M from 0.5%, while the unemployment rate and average hours worked are expected to hold steady at 4.1% and 34.4 respectively. Hurricane induced volatility should be absent from the November release, and consensus points to a headline print much more in-keeping with trend rate.
    Other key data releases next week include the remaining October services and composite PMIs on Tuesday in Asia, Europe and the US, ISM non-manufacturing in the US on Tuesday, ADP employment report on Wednesday and China trade data on Friday.
    Focus will also fall on Wednesday’s Bank of Canada (BoC) interest rate decision, with the majority looking for the Bank to leave its key interest rate unchanged at 1.00%, although 3 of the 31 surveyed by Reuters are looking for a 25bps hike. Following the BoC’s back-to-back rate hikes in Q3, interest rate markets were pricing in a 40-50% chance of a hike at the upcoming decision, that has now pared back to 25% as the BoC has sounded more cautious in recent addresses, highlighting that it expected the economy to slow (GDP growth moderated to 1.7% in Q3 on a Q/Q annualised basis, from 4.3% in Q2) while stressing that it remains data dependant. RBC highlights that ‘the BoC has been focused on the consumer’s reaction to the earlier hikes and is content to wait-and-see for the moment. Wage growth – another key metric for the central bank – has improved in recent employment reports (reaching the highest level of growth since April 2016 in November’s report). Despite its softer tone, the BoC continues to stress that ‘less monetary stimulus will likely be required over time’ and as a result the statement will be scoured for any changes in tone. At the time of writing, markets are pricing a 57.2% chance of a 25bps hike in January, with such a move 91.0% priced by the end of March.

    This post was published at Zero Hedge on Dec 4, 2017.


  • Senate Approves Trump’s Tax Reform

    The U. S. Senate on Saturday narrowly approved a tax reform, moving Republicans and President Donald Trump a big step closer to their goal of slashing taxes which will create an economic boom in the United States and draw-in capital from around the globe.
    This will put tremendous pressure upon Europe, Canada, and even Japan which all tax their economies significantly to the suppression of economic growth. The United States will have the lowest unemployment rate if this passes compared to the lost generation in Europe of high unemployed youth.
    Armstrong Economics

    This post was published at Armstrong Economics on Dec 2, 2017.


  • Australian Banks – First The Housing Bubble Bursts, Now A Public Inquiry

    We keep returning to the subject of Australia and the growing signs that its bubble economy is bursting. Earlier this month, we discussed how the world’s longest-running bull market – 55 years – in Australian house prices appears to have come to an end. We followed this up with ‘Why Australia’s Economy Is A House Of Cards’ in which Matt Barrie and Craig Tindale described how Australia’s three decades long economic expansion had mostly been the result of ‘dumb luck’.
    As a whole, the Australian economy has grown through a property bubble inflating on top of a mining bubble, built on top of a commodities bubble, driven by a China bubble.
    Last week, in “The Party’s Over For Australia’s $5.6 Trillion Housing Market Frenzy”, we highlighted some scary metrics for Australia’s housing bubble – notably how the value of Australian housing is more than four times gross domestic product – higher than other nations with housing bubbles, e.g. New Zealand, the UK and Canada. Two days ago, we noted the number of Australians optimistic about the year ahead had plunged to a record low.

    This post was published at Zero Hedge on Nov 30, 2017.


  • Is The Left Self-Destructing, Or Is Something Else Going On?

    The temptation to revel in the implosion of the extreme political Left is high, and it’s understandable. I could go through a long list of insane offenses by the cultural Marxist cult of the church of “social justice,” but I think this latest example summarizes the problem nicely. In this video, teaching assistant Lindsay Shepard at Wilfred Laurier University in Canada is reprimanded and brow beaten by two professors for daring to commit the heresy of showing her students BOTH sides of the debate over transgenderism and pronoun politics.
    The zealotry on display here by these professors is indicative of a deep-rooted cancer within the Left. Shepard was not attempting to troll her class with misinformation or subtly manipulate them with propaganda, in fact she wasn’t seeking to pressure them to support either viewpoint. She was not violating anyone’s private property rights to assail them with her arguments, either. Her only goal was to show people in a public space that there are in fact at least two opposing viewpoints on the issue in question. But in a cult it is unacceptable to acknowledge that there are different ways of thinking from the prevailing doctrine. Other beliefs and evidence must be filtered out completely, otherwise, the devout members of the cult might be faced with uncertainty.
    If an ideological system is so fragile that it cannot tolerate the slightest hint of legitimate counter-evidence, then something is very wrong with that system. If that system is incapable of arguing its merits using facts and instead relies on the argument of “How dare you!,” the only things that could possibly keep it alive are threats of force and terror.

    This post was published at Alt-Market on Thursday, 30 November 2017.


  • Canadian Households Most Debt-Heavy in the World

    Time to get some financial consulting from those who are not paid to sell us debt and risk. Listening to the banks/broker/dealers/auto sellers have dug undisciplined households a very deep hole. Debt weight will continue to hold back our economy, savings, and investment until it is paid down and written off over the coming years and months. In a heavily indebted world, Canada is leading the pack in terms of household debt to GDP. Nothing to be proud of here. This data is at the end of Q4 last year, debt has climbed further in 2017.

    This post was published at FinancialSense on 11/29/2017.


  • As Australia’s Housing Bubble Bursts, Optimism For The Year Ahead Crashes To Record Low

    Zero Hedge readers might have noted our increasingly bearish tone on all things Australian – economic that is, since the cricket team just whipped the English in the first test match in Brisbane. The focal point of our concern is the housing market and, earlier this month, we discussed how the world’s longest-running bull market – 55 years – in Australian house prices appears to have come to an end. We followed this up with ‘Why Australia’s Economy Is A House Of Cards’ in which Matt Barrie and Craig Tindale described how Australia’s three decades long economic expansion had mostly been the result of ‘dumb luck’.
    As a whole, the Australian economy has grown through a property bubble inflating on top of a mining bubble, built on top of a commodities bubble, driven by a China bubble.
    Last week, in “The Party’s Over For Australia’s $5.6 Trillion Housing Market Frenzy”, we highlighted some scary metrics for Australia’s housing bubble cited by Bloomberg. In particular, we showed how the value of Australian housing is more than four times gross domestic product. This is higher than other western nations, like New Zealand, Canada and the UK, which are experiencing their own housing bubbles. The ratio of house values to GDP in the US seems positively tame in comparison.

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


  • Whose Private-Sector Debt Will Implode Next: US, Canada, China, Eurozone, Japan?

    Canadians, fasten your seat-belt. Here are the charts. The Financial Crisis in the US was a consequence of too much debt and too much risk, among numerous other factors, and the whole house of cards came down. Now, after eight years of experimental monetary policies and huge amounts of deficit spending by governments around the globe, public debt has ballooned. Gross national debt in the US just hit $20.5 trillion, or 105% of GDP. But that can’t hold a candle to Japan’s national debt, now at 250% of GDP.
    And private-sector debt, which includes household and business debts – how has it fared in the era of easy money?
    In the US, total debt to the private non-financial sector has ballooned to $28.5 trillion. That’s up 14% from the $25 trillion at the crazy peak of the Financial Crisis and up 63% from 2004.
    In relationship to the economy, private sector debt soared from 147% of GDP in 2004 to 170% of GDP in the first quarter of 2008. Then it all fell apart. Some of this debt blew up and was written off. For a little while consumers and businesses deleveraged just a tiny little bit, before starting to borrow once again.

    This post was published at Wolf Street on Nov 22, 2017.


  • Nebraska Regulators Approve Keystone Pipeline Route Days After South Dakota Leak, Shutdown

    TransCanada received its final required pipeline route approval, winning Nebraska’s permission to build its long-delayed Keystone XL crude oil pipeline across the state… just days after a 5,000 barrel spill in South Dakota shut the pipeline.
    The decision will almost certainly be challenged in court.
    Just a few short days after 210,000 gallons of crude oil spilled in South Dakota, Bloomberg reports that Nebraska’s Public Service Commission voted three to two Monday, removing one of the last hurdles to the Calgary-based company’s construction of the $8 billion, 1,179-mile conduit (1,897-kilometer), which has been on its drawing boards since 2008.
    For those who aren’t familiar with the project, the pipeline links Canada’s Alberta oil sands to U. S. refineries. While a portion of the pipeline has been operating, part of it had still not been approved by state regulators… until today’s decision by Nebraska.

    This post was published at Zero Hedge on Nov 20, 2017.


  • Canadians Paying Dearly for Their Housing

    Another housing study has come to familiar conclusions: Canada boasts the least affordable housing in North America. With a median family income of just under $65,000 a year, it would take 7.5 years for a family to pay off the median-priced home valued at 485K. That’s if they were able to live on air and direct every single dime of income to pay off just their home for 7.5 years.
    According to the latest International Housing Affordability Survey, a multiple of 3x income and under is considered affordable, and multiples over 5.1 are considered severely unaffordable. In Vancouver, this multiple is now 17.3 and in the greater Toronto area 7.5x. You can look up comparables on other NA cities at this link.

    This post was published at FinancialSense on 11/17/2017.


  • Nobody Is Going to Bail Out Venezuela

    Henkel Garcia U, Andres Bello Catholic University (UCAB)
    Venezuela, the South American country convulsed by economic and humanitarian catastrophe, has defaulted on some of its debt after missing an interest payment due in October.
    Even as investors meet in Caracas to discuss restructuring US$60 billion in foreign debt, the country is in urgent need of international financial assistance.
    Yet few nations are rushing in to offer financial assistance to the ailing country. Under the authoritarian regime of Nicols Maduro, Venezuela is isolated in Latin America, and the United States, Canada, and the European Union have all imposed sanctions against Venezuelan officials. Maduro has at times suggested he would not even accept humanitarian aid.
    Still, no indebted nation is totally alone in this world. As a financial analyst, I know there are always international players who see opportunity in the problems of others. And for Venezuela, my home country, all hope of a bailout rests with China, Russia, and the International Monetary Fund.
    Will they do anything to help?

    This post was published at FinancialSense on THE CONVERSATION /1/15/2017.


  • Canada Builds $300 Million Highway To Nowhere, But Is There A Hidden Agenda?

    A new $300-million first of its kind ‘permanent’ highway will officially open in the Northwest Territories of Canada on Wednesday.
    This will be the first time in Canada’s history that the national highway system will be linked to all coasts. The completion of the four-year project is said to connect the tiny Arctic coastal town of Tuktoyaktuk with the rest of the communities to provide better transportation for residents.
    We think there could be another reason why Canada would build a highway to nowhere.
    As explained by one citizen in the video below, the new route is called ‘road to resources’, it’s where major reserves of oil and gas reside, and at one time inaccessible due to poor infrastructure.

    This post was published at Zero Hedge on Nov 14, 2017.


  • GATES, BUFFETT, AND BEZOS ARE AS RICH AS THE BOTTOM HALF OF AMERICA

    Microsoft founder Bill Gates, Amazon CEO Jeff Bezos, and business magnate Warren Buffett – the three richest people in the world – are as wealthy as the bottom half of the U. S. population combined, according to a report from the Institute for Policy Studies.
    The poorest 50 percent of America amounts to roughly 160 million people or 63 million households.
    America’s top 25 billionaires has as much wealth as 56 percent of the population, equivalent to 178 million people or 70 million households, according to the Institute for Policy Studies’ report.
    The 400 richest people in the U. S. have a combined wealth of $2.68 trillion and collectively have more than the gross domestic product of Britain, the study found. Furthermore, that group owns more wealth than the bottom 64 percent of the U. S. population (240 million people or 80 million households). This is more people than Canada and Mexico have combined.

    This post was published at The Daily Sheeple on NOVEMBER 9, 2017.


  • When Canadian Homeowners Walk Away From Negative Equity, Taxpayers at Risk

    As Canadian household debt hit an all-time high in 2017 (see chart), a new study by TD Bank finds that 97% of Canadian homebuyers say they wish they’d factored in their other financial obligations when determining the mortgage they could afford. (Too bad their mortgage broker/architect/advisor was not required to factor these ‘obligations’ into their loan approval consideration either.) We are not talking about extraordinary, unexpected expenses here: 54% of those surveyed wish they’d considered property taxes and maintenance costs, and a third cite overall lifestyle expenses.
    Lenders have been encouraged to be more lax in their approval process, because Canadian taxpayers are backstopping some 55% of Canada’s $1.6 trillion residential mortgage loans -$496 billion through CMHC, plus 90% of the $400 billion+ underwritten by Genworth MI, plus an undisclosed exposure through Canada Guarantee co-owned with the Ontario Teachers’ Pension.

    This post was published at FinancialSense on 11/09/2017.


  • Rising Gold Prices Lag Crude Oil as Saudis Accuse Iran of War, Equities Rise With Bitcoin

    Gold prices held most of yesterday’s 1.0% jump against the Dollar and touched new 3-week highs for Euro investors on Tuesday, trading higher as crude oil rose and Saudi Arabia accused Iran of “direct military aggression” tantamount to a declaration of war.
    Wall Street’s S&P500 index of US stocks ended Monday with its 11th new record closing high in a month.
    Crypto-currency Bitcoin today rallied to regain half of Monday’s 6% drop, trading back above $7000 after hitting 5 new daily all-time highs in succession last week.
    Listen to Tom McClellan on Stocks and Real Estate; Keith Barron on Peak Gold
    Crude oil spiked Tuesday to new 2.5-year highs, while Arabian stock markets fell hard – down over 3% – as news broke of further detentions and sanctions against senior Saudi figures by new crown prince Mohammed Bin Salman.
    “We expected to some interest in gold following the close above $1280,” says one Asian trading desk in a gold price note, “[but] Chinese selling appears to be capping the market.”
    “Stocks are at record highs, so you don’t need gold,” says George Gero at the wealth management division of Canada’s RBC.

    This post was published at FinancialSense on 11/07/2017.


  • Commuters & Computers: Mapping America’s Megaregions

    From California’s Bay Area to the highly-integrated Great Lakes Economy, megaregions are a dominating aspect of human geography and commerce. It should be no surprise then, that 85% of corporate head offices in the US and Canada are overwhelmingly concentrated in the core cities of great megaregions.
    We tend to think of cities as individual economic units, but as they expand outward and bleed together, defining them simply by official jurisdictions and borders becomes difficult. After all, as Visual Capitalist’s Nick Routley notes, many of the imaginary lines divvying up the country are remnants of decisions from centuries ago – and other county and state lines exist for more counterintuitive reasons such as gerrymandering.
    What if there was a more data-driven approach to examine America’s urban networks?

    This post was published at Zero Hedge on Nov 4, 2017.


  • Stop Canada’s War on “Passive” Investment

    While an unhampered market remains elusive in both countries, government policies are more anti-business in Canada than in the United States, and the gap appears to be widening. As state governments in the U. S. are trying to attract business investment, Canadian governments seem intent on granting their wishes.
    As an example, Ontario’s Liberal government is responsible for high electricity costs, new labour laws (including a huge increase in the minimum wage), a cap-and-trade program, and other regulations which are prompting many businesses, including Magna International, to reconsider their plans. A report published by the Fraser Institute on October 12th tells us:
    In July 2017 Magna testified at a government hearing on the proposed overhaul of labour legislation that the high cost of operating in Ontario had led it to reconsider future investments and production in the province, especially as neighboring states in the US are pursuing policies to attract investment.
    Bill Morneau, Canada’s Minister of Finance, is preparing to impose further restrictions on business investment. His proposed policy will limit ‘passive investment’ within a small business, because in his view this money should only be invested in ‘active business’ i.e. the actual business conducted by the small business corporation.

    This post was published at Ludwig von Mises Institute on November 4, 2017.


  • Canada in for a Rough Patch Even if Rates Stay Low for a Long Time

    The Loonie is tumbling and Canadian bonds rallying as the Bank of Canada backs away from its rate hiking plans in ‘surprise’ over the slowing Canadian economy.
    Meanwhile, a new report from the National Energy Board brings good news for the planet (that is bad for Canadian GDP in the short and medium run). See: Canada’s demand for fossil fuels will max out in 2 years: NEB
    The National Energy Board says Canada’s addiction to fossil fuels will peak in two years… The board’s annual energy futures report for the first time says with climate change policies and growth in clean energy, Canada’s consumption of fossil fuels to run cars and heat homes will max out before 2020, start to decline slightly and then flatline over the next two decades. Here is a direct video link.
    At the same time, the NEB says it thinks (hopes) that falling domestic oil demand will be offset by increasing oil exports, and thus not hurt Canadian GDP. This is unlikely.
    In reality, it’s not just domestic demand that will peak much sooner than previously estimated. The trend towards higher efficiency, renewable energy, and electric transportation, is global and only just getting started. In addition, new oil production technologies are enabling increased supply in most countries, including our historical oil export buyers.

    This post was published at FinancialSense on 10/30/2017.


  • “This Could Be Huge”: Gold Bar Certified By Royal Canadian Mint Exposed As Fake

    he last time there was a widespread physical gold counterfeiting scare was in the summer of 2012 when as we reported the discovery of a single 10 oz Tungsten-filled gold bar in Manhattan’s jewelry district led to a panic among the dealer community, which then resulted in local jewelry outlets discovering at least ten more fake 10-ounce “gold bars” filled with Tungsten. Fast forward to today when a similar instance of gold counterfeiting has been discovered, this time in Canada, and where the fake bar in question had been “certified” by the highest possible authority.
    According to CBC, the Royal Canadian Mint is investigating how a sealed, “pure gold” wafer with proper mint stampings has emerged as a fake. According to the Canadian press, the one-ounce gold piece, which was supposed to be 99.99% pure, was purchased by an Ottawa jeweller on Oct. 18 at a Royal Bank of Canada branch. The problem emerged when tests of the bar showed it may contain no gold at all. And, when neither the mint nor RBC would take the bar back, jeweler Samuel Tang contacted CBC news.
    “Who is going to make sure those [gold wafers] are real?” asked Tang. “I am worried there are more of those [gold wafers] out there, and no one knows.”
    Following the news, RBC felt an obligation to pick up the bar and returned it to the mint for testing, refunding Tang the $1,680 purchase price.

    This post was published at Zero Hedge on Oct 30, 2017.