Posted: Wed Dec 05, 2007 3:18 am Post subject: Re: Canada Cuts!
Tyler_JC wrote:
Not to make this thread about the Euro, but all EU countries are required to join the Euro as mandated by EU Law.
Fortunately, the Commission is full of folks who will not enforce their own laws in this regard.
Otherwise, the addition of the much weaker eastern European economies (as well as the current account deficit loving British) would dramatically lower the value of the Euro.
The EU-25 has a net trade deficit and a net budget deficit.
The addition of Romania and Bulgaria (EU-27) only made the picture worse.
Canada, on the other hand, has both a budget surplus and a trade surplus.
This translates into a current account surplus which is strengthening its currency.
Careful, Tyler, only 11 of the original 15 EU members joined the euro with Greece joining only afterwards. The rest negotiated opt-out clauses. They are not compelled to join unless they want to.
Slovenia joined later and Cyprus and Malta will join the EMU in January 2008. These are the first three of the ten new accession countries to join the eurozone. All of the ten new EU members are bound by treaty to ever closer economic and political unity including joining the ERM. Twelve including Bulgaria and Romania now, although their ERM debut will be in no less than at least 10-years. Maybe! Ironically, Lithuania was kept out when Slovenia joined even though its fundamentals are better than some existing members of the ERM.
But strip out Germany's exports and the trade surplus for the EU disappears.
The strong euro is definitely hurting other EU exporter's competitiveness as well as increasing Asian imports into the eurozone, especially from China where the yuan is estimated to be 40% undervalued against the euro. This hurts country's like Italy and France who have not increased their labor productivity relative to Germany, for example, since being given the gift of lower interest rates and currency stability since joining the ERM in 1999.
Meanwhile global imbalances are being shifted from the USA onto the EU's (and the euro's) shoulders. But same underlying trade and investment problems. Different victim. _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Joined: Sep 29, 2004 Posts: 2330 Location: Pennsylvania, USA
Posted: Wed Dec 05, 2007 9:58 am Post subject: Re: Canada Cuts!
Starvid wrote:
A strong currency comes from having a strong and well managed economy, which is the explanation for the weakness of the dollar.
A strong currency comes from offering higher interest rates than other currencies. Am I missing something here? There are advantages and disadvantages to having stronger and weaker currencies. It depends on where you are at and where you are trying to get to. Unique economic conditions require unique strategies. There is no universal definition of how to manage an economy. There are rules of thumb though; history has shown that free trade produces wealth worldwide. While each country has to deal with large numbers of citizens who do not adapt well to changing conditions (job displacement, etc), that is always the case whether you embrace free trade or try to restrict it. All countries are guilty of restricting trade, face it, everyone wants to have it both ways. _________________ "That's the problem with mercy, kid... It just ain't professional" - Fast Eddie, The Color of Money
Posted: Wed Dec 05, 2007 10:05 am Post subject: Re: Canada Cuts!
Kingcoal wrote:
History has shown that free trade produces wealth worldwide.
Tell that to indebted-to-the-ears Third World countries... _________________ What are you doing about peak oil?
I am doing this
(click on the www button) v
Posted: Wed Dec 05, 2007 10:52 am Post subject: Re: Canada Cuts!
Doly wrote:
Kingcoal wrote:
History has shown that free trade produces wealth worldwide.
Tell that to indebted-to-the-ears Third World countries...
That is over-simplistic bullsheet, Doly, but I do not have time to take you to task this evening. I am off until Monday next week. 'Til then... _________________ The organized state is a wonderful invention whereby everyone can live at someone else's expense.
Posted: Wed Dec 05, 2007 1:27 pm Post subject: Re: Canada Cuts!
Quote:
Canada, on the other hand, has both a budget surplus and a trade surplus.
Canada's trade surplus will be gone in a month or so. For the first time in over a decade Canada will be running a trade deficit.
Curriencies fluxuate over time. The dollar is no weaker today than it was in 1988. It did not result in anything unusual then and I seriously doubt it will do so today.
Posted: Wed Dec 05, 2007 5:34 pm Post subject: Re: Canada Cuts!
LoneSnark wrote:
Canada's trade surplus will be gone in a month or so. For the first time in over a decade Canada will be running a trade deficit.
I originally did a search to debunk that statement but found that you may be right lonesnark. Our trade surplus was $5.5B in June, and now its down to $2.6B in October
LoneSnark wrote:
Curriencies fluxuate over time. The dollar is no weaker today than it was in 1988. It did not result in anything unusual then and I seriously doubt it will do so today.
To compare 1988 to today is a VERY big stretch for both Canada and the US. Canada's large resource base compared to its economy also means it has a natural hedge against inflation compared to most other countries. The BOC will have a very hard time keeping the loonie low if the US FED continues to devalue the USD (which they will do until the system breaks)
And ultimately your statement is incorrect. The US dollar index is now hitting all time lows.
Here's the Historical
The recent low of 74.50 is off the bottom of the chart _________________ Angry yet?
Posted: Wed Dec 05, 2007 6:47 pm Post subject: Re: Canada Cuts!
Yes, we are setting records against some currencies (not sure which ones), but we are not setting records against the loonie:
As of today, $1 US is equivalent to $1.0119 Canadian. Yes, you must go back to the 1970s to reach such exchange rates, but they are not unheard of.
Besides, is there any doubt that the current low dollar is well beyond fundamentals? Books and other goods cost more in Canada, they still do, that was never an exchange rate issue. The loonie is simply worth less in Canada than the dollar is in America. This is why the current account is shifting so quickly towards surplus for America (from 7% of GDP deficit last year to 5% this year) and so quickly towards deficit for Canada: the current exchange rate is not inflation driven, as such it is temporary and will go away as soon as the imbalance that created it goes away.
Posted: Thu Dec 06, 2007 12:51 pm Post subject: Re: Canada Cuts!
LoneSnark wrote:
Yes, we are setting records against some currencies (not sure which ones), but we are not setting records against the loonie:
you're being selective of your data. The loonie reached $1.08us at the beginning of November which is a record. Admittedly that was a bit of over shoot, but it'll come back once the FED cuts (0.5%?) next week and Heating oil demand starts kicking in
LoneSnark wrote:
Besides, is there any doubt that the current low dollar is well beyond fundamentals? Books and other goods cost more in Canada, they still do, that was never an exchange rate issue. The loonie is simply worth less in Canada than the dollar is in America.
again, a selective sample. Medical, education, housing and food is far cheaper here in Canada than in the US. The loonie's low purchasing power in Canada is a result of our taxes, but that gives us other benefits (namely low prices on the above). Ultimately the cost of living in Canada is lower than in the US, even if we do have to pay 30% more for a book.
LoneSnark wrote:
This is why the current account is shifting so quickly towards surplus for America (from 7% of GDP deficit last year to 5% this year) and so quickly towards deficit for Canada: the current exchange rate is not inflation driven, as such it is temporary and will go away as soon as the imbalance that created it goes away.
Everyone I know that went on a shopping spree in the US recently came back very disappointed (my wife included). The fundamentals of your country are not as pretty as you think they are.
I've been purchasing electronics in the US for 7 years. What cost me $70cnd when the loonie was $0.60us still cost me $70cnd when the loonie is on par. The difference being I have to buy a much higher quality brand (at a higher USD price) to get the same value. Look around at what you're buying today compared to what you use to buy 4 years ago. The price maybe the same but the quality is not.
your comments suggest you're are falling into some of the common misconceptions of currency and modern banking.
Joined: Dec 04, 2004 Posts: 2337 Location: perpetual state of exhaustion
Posted: Sun Dec 16, 2007 1:38 pm Post subject: Canada: Charting the legal fallout of ABCP
It's been 99 days and thousands of docketed legal and accounting hours since the Pan Canadian Committee of investors was formed to oversee the restructuring of the third-party, asset-backed commercial paper (ABCP) market. Are investors further ahead? Not really. At press time the various parties were still squirreled away with a gun to their head trying to hammer out the "details" of a restructuring term sheet.
Believe it or not, getting to this stage has been the easy part. The real legal fun starts when, if ever, the committee issues a plan. That's because investors holding the notes will have to decide whether to sign onto the package or unleash their legal attack dogs and sue.
Doing both likely won't be an option. That's because the price of admission to the settlement table will include waivers and releases not to sue the parties that created this mess.
Assuming the committee delivers, most investors will likely hold their nose, sign on the dotted line and cross their fingers, hoping to recover as much as possible. But for those investors who face 50% losses or more, there's little incentive at this stage to sign away your rights to sue. Expect to see a scorched-earth policy from some disgruntled investors.
In fact, don't be surprised to see some type of class-action suit. One major player in the ABCP saga has already approached a leading class-action law firm and told it to keep itself available for a potential lawsuit, concerned at the prospects of where this is heading.
We've already seen signs of how messy it can get in two suits launched to date. Aastra Technologies sued its investment management firm, HSBC Securities Canada, for negligent misrepresentation in selling ABCP.
The more interesting suit involves a Vancouver businessman who sued Canaccord Capital Corp. for selling him ABCP. He alleges negligence, breach of contract, breach of fiduciary duty and negligent misrepresentation.
Canaccord denied liability in a statement of defence, but in an eyebrow-raising legal manoeuvre, it also issued a third-party notice to Scotia Capital Inc., and Scotia Capitaux Inc., manufacturers of some of the ABCP that Canaccord sold. The notice warns that Canaccord will seek to recover money from Scotia for any damages it has to pay. Canaccord alleges that Scotia was negligent, engaged in negligent misrepresentations, breached its contract and fiduciary duties and breached securities laws in the marketing and sales of the ABCP.
These allegations have yet to be heard by a judge, but you see where this can head. Brokerages face the most exposure now, but they will quickly drag in the institutions that created the market, which are looking to be shielded from litigation in any restructuring proposal.
Litigation likely won't stop there. Chatter in legal circles is how long Dominion Bond Rating Service can avoid a legal writ. As the only agency to rate the ABCP, it wears a rather large bull's eye on its back.
Perhaps the juiciest piece of litigation is whether the conduits, assuming they survive, will ever be in a position to sue the banks that failed to provide the liquidity needed in the first place to roll over the paper.
This litigation will likely never see the light of day for a variety of reasons, the biggest being that banks likely won't co-operate without assurance they are not going to be sued by the entities that they will effectively help bail out.
Given that $35-billion is at stake, the final price tag for the workout could easily hit $200-million or more. For investors, those few extra basis point they got in return for buying ABCP is looking very expensive.
http://www.financialpost.com/story.html?id=169910
Joined: Nov 15, 2007 Posts: 289 Location: US East Coast
Posted: Wed Jan 16, 2008 7:34 pm Post subject: Re: CANADA THREAD
Canadian_Roughneck wrote:
I just came across a site that has some good industry information. It's called www.canadianwellsite.com.
Has anyone seen it before? Its very useful. Found a Job there in the Classifieds a few weeks ago.
Canadian_ROughNeck
RoughNeck - the link did not work for some reason.
To all, hello, I just found this thread. Seems like there was a lot of activity that has just faded away. A shame.
I'm a dual US/Canadian citizen living and working in US. I have land in Nova Scotia and my wife is buying land in Newfoundland, in my Mother's home outport.
We vacationed in NL the last few years and my wife really likes it, in summer at least. I moved my sailboat from NS to NL last year with the intention of farting around on that during the summer.
We have no definite plans except to keep on visiting and getting familiar with the Marintimes. I intend to plant some fruit and nut trees on my NS land this spring.
I'm too old to get too worked up about PO, there is too much inertia in the machinery of state to hurt me too bad. My daughter? That's a different situation but I have only so much influence on her anyway.
Joined: Oct 27, 2004 Posts: 635 Location: Salt Spring Island, Cascadia
Posted: Wed Jan 16, 2008 11:13 pm Post subject: Re: CANADA THREAD
I've been having a "Canadian Moment" for a few weeks now -- unreasonable neighbors. I never had this problem in the US, although once I had a neighbor mention that there was a "meth lab" in the neighborhood, while glancing suspiciously at a 55 gallon drum labeled "METHANOL" that I use to make biodiesel...
Anyway, these neighbors are light sleepers, and strongly objected to our rooster. We were in the process of taking good-faith amelioration measures -- stacking straw bales around the coop, putting a pond liner over the fiberglass top to make it darker in there, even moving the entire coop further away from our neighbors -- when they called the cops. Or more correctly, the "bylaw control officer."
So Wolfgang came over, asked us about our "farm status" (in process of application), and a bit about what we were doing, and we had a lovely chat about farming. I introduced him to Permaculture, and he said he would come over and get some biodiesel from me for his truck.
As my research had revealed, we were covered by British Columbia's Right To Farm Act.
This is something worth researching in your area; many states and provinces have something similar. BC's appears to be stronger in favour of the farmer than many other such laws.
Simply put, if you are in an area zoned or designated for agriculture (we are) and you have a certain level of farming income ($2,500 for our size parcel, which we have), and follow "standard" or "innovative farm practices," (we do) you are protected from "nuiscance" complaints from neighbors regarding noise, dust, odours, etc. from your farm operations.
"Now I'll go over and tell the city people," Wolfgang said in his German accent, "how things work around here."
I imagine this must have caused some fuming, because about a week or two later, the building inspector came over and said, "We've had a complaint about some kind of 'ecovillage' going in here." He then asked one of our Advisory Council members, who was renting the cottage, "How many people are living here?"
We sometimes have lots of people here, during planting or harvest, but only had one at the time, which I guess is "below regulatory concern." The inspector looked around, as though seeking out something he could find fault with.
He spotted our renter's 19' yurt, and asked what it was used for, and if he could have a look. "It's for meditation and storage," our renter truthfully stated. The inspector and assistant measured the tent, and looked inside, and only then noticed it was on a wooden platform.
"This has to come down," he said, "It's on a structure built without a permit." It turns out that if it had been on the ground, or if it had been on a concrete pad, it would be legal, but because it was on plywood and 2"x6" boards, it could not be built without a permit.
I've been corresponding with our regional district elected official, trying to ascertain if we are the victim of "selective enforcement" and "regulatory abuse." I don't really blame the building inspector -- he's just doing his job -- but there has to be some limit to the regulatory scrutiny we have to endure, just because a neighbor is pissed off.
Obligatory disclaimer: I am making an assumption that we have just one neighbor problem, because most of the others have expressed support for what we are doing. Complaints are anonymous by law. But we had an "open house" last year, and every neighbor attended and had punch and home-made muffins and got a tour and were able to express their concerns and/or support. But that also included the neighbor who complained about the rooster, so I guess it could be anyone. Whatever happened to "live and let live?" _________________ :::: Jan Steinman, Communication Steward, EcoReality, a forming sustainable community. Be the change! ::::
Joined: Oct 27, 2004 Posts: 635 Location: Salt Spring Island, Cascadia
Posted: Thu Jan 17, 2008 1:24 am Post subject: Re: CANADA THREAD
threadbear wrote:
Is the rooster waking them up early in the morning? At this time of year, that shouldn't be a problem.
It occasionally goes off before 6AM. In the summer, it's more like 4:30! :-)
The ironic and surreal part of this whole mess is that, just prior to their first complaint to us about the rooster, they had gotten a donkey and put it right on the street, opposite our bedroom window. That sucker goes off at 6AM sometimes, too!
They are angry people inside with other problems. I try not to take it personally. _________________ :::: Jan Steinman, Communication Steward, EcoReality, a forming sustainable community. Be the change! ::::
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Canadian_ROughNeck
