Monthly Archives: October 2015

What Does Trudeau’s Win Mean for Canadian Economy?

Earlier this week Canadian voters elected Justin Trudeau as their prime minister and a clear liberal majority.  My concern is not based on just this article, however the Canadian Bloomberg commentator in the interview is doing all he can to hold back his concern.  Trudeau is a liberal, who has already said he is going to increase government expenditures and return to deficit spending, undoing Canada’s balanced budget.  He says he will focus on the environment, global warming and many other things, none of which are good and all of which will damage the Canadian economy.  Because of this change, I have concerns about the Canadian Dollar (CAD).  Currently the Australian dollar and New Zealand dollar are basically on par with the CAD, and like the CAD, have a lower value than the the USD. Both of these are good alternatives to the CAD.  I am still going to retain some CAD and for those of you who have hundreds, you should be fine, but those who have thousands may want to consider making some adjustments.  This is not an emergency, nothing is imminent, it will take time for the new government and prime minister to institute their new agenda and programs.  However, it’s important that you understand a shift is coming, and you want to stay ahead of that shift.

What Does Trudeau’s Win Mean for Canadian Economy? (10-20-15)

3rd Quarter Results in: $11 Trillion Wiped Out in Global Stock Market Wealth & Central Banks Creditability Dropping Like Commodities

“What goes up, must come down, spinning wheel got to go around…, You got no money and you got no home, spinning wheel spinning all alone, Hey your talking about your troubles and you never, never learn, ride a painted pony let the spinning wheel turn.” Do you find a directing sign on the straight and narrow highway…” (Spinning Wheel | by Blood Sweat & Tears | ) Blood Sweat and Tears didn’t know in 1969 that their lyrics would accurately describe world markets and central banks in the second half of 2015.  The markets are going up and down, the central banks have no directions and no money and have completely deviated from the straight and narrow fiscal highway, via massive non-stop intervention.

There is so much financial information flying across the internet, newspapers and TV, going in every direction you could think of.  The result is no one knows what direction to take, so they do nothing.  The only thing everyone agrees on is that there is no agreement, no clear direction and that uncertainty reigns.  Beneath this back drop the third quarter ended and the fourth quarter began and $11 trillion of global wealth was wiped out and the respect and confidence in the world’s largest central banks is waning. The IMF and Central bankers have been meeting in Peru and many of the participants along with US business leaders are tired of the Federal Reserve’s lack of direction and inability to make a firm decision.  The Fed has lost credibility and global markets are focusing attention elsewhere, Janet Yellen and the Fed are fast becoming more and more irrelevant, much like President Obama has.

Central banks around the world are selling U.S. government bonds at the fastest pace on record, the most dramatic shift in the $12.8 trillion Treasury market since the financial crisis. – WSJ

Finding well-paying jobs is becoming more difficult, defaults are increasing, and many companies are announcing layoffs.  The Atlanta Fed lowered growth estimates for the third time this year to.9% and joining the IMF who lowered global growth for the third time as well.

$11 Trillion in Global Stock Market Wealth Was Wiped Out In Q3 & It’s Not Over (10-3-15)
Once the Biggest Buyer, China Starts Dumping U.S. Government Debt (10-7-15) | WSJ
Atlanta Fed’s Q3 ‘GDPNow’ Forecast Plunges to 0.9% (10.1.15)
The Big Jobs Miss (10-2-15) WSJ |
Why September’s Lousy Jobs Report Isn’t Surprising (10-1-15) NY Post
Wal-Mart Preparing to Cut Hundreds of Headquarters Jobs This Week (10-1-15) WSJ
Fed Has Caused Global Uncertainty (10-9-15)
Fed’s Policies How Wrong Have They Been (10-5-15) Bloomberg Video
One Chart That Shows the Federal Reserve Is Losing Credibility (10-5-15)
A Core Tenet of How Central Bank Stimulus Supports Growth Doesn’t Fit the Data, According to Deutsche Bank (10-5-15)
The 5th Convergence Why This is Not a Buy-and-Hold Market! (10-2-15) Harry Dent

The IMF Annual Meeting

At their annual meeting the IMF downgraded global growth again to 3.1% and warned of potential global recession.  The IMF warned that asset prices around the globe aren’t adequately reflecting the hazards from investors moving into riskier markets with support from central banks’ extraordinary action in recent years.  The IMF estimates developing nations—led by China—may have over-borrowed by roughly $3 trillion, and is warning that those countries could face a wave of corporate defaults.

Surprisingly after all that’s happened, Treasury Secretary Jack Lew said Tuesday that the U.S. would support the yuan’s inclusion in the IMF’s basket of global reserve currencies, if the emergency lender’s conditions were fulfilled.  With the fear of a US veto removed, it looks like the IMF will be adding China to their list of reserve currencies and to their SDR basket of currencies.

IMF Emerging-Market Troubles Risk Triggering Asset Fire Sales (10-7-15) WSJ
IMF Downgrades Global Economic Outlook Again (10-6-15) WSJ
China Begins Disclosing Reserves to IMF (9-30-15) WSJ
Markets Gain Confidence in China’s Yuan (10-8-15) WSJ
Devaluation Strengthens China’s Hand at IMF (9-2-15) WSJ
A Wave of Defaults May Be Just Around the Corner Says Deutsche Bank (10-5-15)
The World Map Of Public Debt by Visual Capitalist • October 8, 2015
What if we were to redraw the world map based on the sustainability of national debt levels?
The IMF Just Confirmed The Nightmare Scenario For Central Banks Is Now In Play (9-6-15)