Canada Ping!
Posted on 01/29/2015 9:09:37 AM PST by george76
Sometimes it looks like the Canadian economy is unraveling like a giant surprise package right in the face of economists and the Bank of Canada. We’ve got big data revisions, shock bank rate cuts, a falling Canadian dollar. Through it all, nobody saw it coming. They didn’t see a thing.
Statistics Canada’s labour force data are notoriously wonky and revision prone. Still, Wednesday’s revamp wiped out 50,000 jobs that economists had assumed had been created during 2014. In an economy with almost 20 million employed, the revisions are small, but they cast doubt on the state of the economy and the outlook for 2015. Institutional economists who did not see it coming now see the labour data as a sure sign the Bank of Canada will lower interest rates again in March.
Down in the U.S., meanwhile, the Federal Reserve bubbled with optimism. It said economic activity has been “expanding at a solid pace” with “strong job gains and a lower unemployment rate.” Best of all, “business fixed investment is advancing,” the Fed said in a statement Wednesday. Some economists say the Fed may raise interest rates later in the year.
...
Canada was settling in to a new world of high oil prices, and the outcome did indeed seem unambiguously good. But then came the change in oil prices that nobody saw coming.
(Excerpt) Read more at business.financialpost.com ...
The McKenzie brothers will be saddened.
Just keep giving money to THE GOVERNMENT
they know all and see all and know what’s best for everyone
Who saw $40 a barrel crude oil?
I just came from Vancouver a month ago. Coincidentally, went to Target to try to use the gift cards my friends gave me. (didn’t work) Never thought after I flew back that they announce Target will get out of canada and 17,000 canucks are out of the job.
Scott Shellady - The Cow Guy.
Erudite! I will look him up.
Canada Ping!
Crazy...is it that bad that businesses are pulling out?!?!
Don`t worry. Lil Justine to the rescue. Big plan to spend the money from the Canada Pension Plan on his pet projects.
Boom! Instant govt. McJobs for all !
It depends. I also went to Wal Mart there, and gosh, it was always packed. Wal Mart understood how canadians shop. Target had barely stuff on their shelves. It’s mostly American driven brands there like American Apparel, Victoria’s Secret, Iphones (Apple is kicking ass there) etc. I like it there but I wouldn’t live there. Too gloomy for me LOL
Didn't Obungo call taxes an "investment"? In that case, US corporations have the highest investment rate in the world.
In late Summer 2014 I saw a fall in oil prices coming. Early 2014 I was signing supply orders for spot shipments of Bakken Crude (NDS) to refineries shipped via Burlington Northern. I kept trying for a longer term contract like 18 to 36 months at market plus logistics and the purchasing managers said to wait and see. By the time September 2014 came the purchasing managers were saying they were flooded with offers. Terminal storage had filled up, pipeline construction was being rushed and pipeline direction routing was being planned and rushed.
Canadian crude from Alberta was also available via the Trans Mountain Kinder Morgan operated pipeline to Vancouver and then by oil barge to the Pacific Northwest refineries. And the Canadian crude was heavily discounted from market. However, the Canadian dollar reached parity with the US dollar and their oil became less competitive.
Bottomline was there was oil coming from everywhere. What started 5 to 6 years ago as a group of hydraulic fracturing directional drilling companies bloomed into a swarm numbering tens of thousands of oil rigs dotting the countryside. Labor was needed and if someone one needed a job all they needed to do was show up and demonstrate they could see lightning and hear thunder and they got the job. Truck drivers with the right class commercial license could make $150,000 a year easy. Man camps were established where workers could eat steak and lobster everyday and all other kinds of expensive buffets. The region was not a pretty region to live in but the pay was awesome and construction was booming.
I also saw in early 2015 Saudi Prince Alwaleed go apoplectic over the US domestic oil production surge. He made statements on TV and in the press that the US oil production surge was the greatest threat to the Saudi Kingdom and to OPEC. So I saw a price war coming because the Saudis are committed to destroying the US domestic oil production.
And I had Arabs and Nigerians (Nigeria sells a lot of light crude) who were residing inside the US calling me asking to purchase Bakken crude to resell to US refineries where they had purchase orders. But I knew they were just fishing for information (spying).
It costs $5 to $6 to pump oil out of the ground in Saudi Arabia. It costs on average $35 to pump it in the US.
So I’ve advocated a ‘floor’ of protected oil pricing at around $35. It’s a conservative position because it protects American jobs and strengthens national security. I say ‘floor’ and not a tax. If the Saudi’s want to bring crude to US refineries as they do now, then they need to sell it at $35+, otherwise the contracts fall into the hands of domestic producers. We all benefit from $35 oil. Any lower and it destroys the golden goose we have working for us now.
The view that supports no government intervention at all is the libertarian view and it is retarded. It is what the Saudis want. It enables them to destroy American production companies and take back market share where they control pricing.
A ‘floor’ is preferable to a tax because taxes grow and are near impossible to get rid of. A floor tells foreign producers that US oil industry is based on $35 pricing to protect domestic production.
As technology improves, the floor can be lowered but in the meantime the Saudis can look at US Markets as a bygone era for them.
Ted Cruz is right. We should lift the ban on exporting domestic crude because there is plenty to go around without pressuring prices and we would keep a vital US industry growing that employs Americans with really good paying jobs.
OK first of all Terence, you should know better than to believe the economic BS coming from the US. Second of all, any one with a brain knew the Canadian economy was barely inching along, only moving forward because of the energy economy. Ontario manufacturing has been in shambles for half a decade all ready.
OK, the article says “with almost 20 million employed”...out of a population of just under 36 million?
Geez, I wish we could see that kind of workforce participation rate here in the States...
Target is getting out of Canada?
But they just got in did they not?
Falling oil prices are bad for Alberta—but they are great for Ontario. The falling loonie also helps to mitigate things—oil may be $45 USD/a barrel, but that puts it at close to $57/CDN a barrel, and as people are paid, and taxes are collected, in CDN, things are not quite as bad as they might appear. If oil recovers to $60, and the loonie drops to 0.75—not an unrealistic pair of assumptions—that will put oil at $80/CDN a barrel, which should leave Alberta in o.k. shape, and be very good for Ontario.
Unexpected!
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