Posts Tagged ‘Canada’

Notes From Underground: Canada Casts Aside the Liberal Party as Ignatieff Rolled the Dice and Crapped Out

May 3, 2011

The election that never should have happened is in the books and the result proved that personal arrogance masquerading as public policy is a poison unless you live in a totalitarian dictatorship. Michael Ignatieff pursued a no-confidence in the hope of achieving his desire to become prime minister of Canada. His roll of the dice has cost the long esteemed LIBERAL PARTY its position in parliament and brought to the fore a more left-oriented NDP.


Notes From Underground: It is May Day and the Markets are Truly International

May 1, 2011

Elections are tomorrow in Canada. The polls are tight as the surprise is coming from the gains in the polls for the  New Democratic Party (NDP), a party led by Jack Layton and is further left than the Liberal party that moved to start the NO-CONFIDENCE VOTE, which forced the early election. It seems that the TORIES will hold their numbers but the desire by Prime Minister Harper to become an outright majority party will not be realized. The political situation in Canada can become very confused as the LIBERALS/NDP may be able to forge a government if the most current polls are accurate. The markets have paid little attention to the polls as the Canadian Dollar closed the week and month out almost on its recent highs–another statement about the U.S. DOLLAR.


Notes From Underground: Franco/German spat ahead of this week’s SUMMIT of LOVE

March 23, 2011

This Thursday and Friday the European Union had hoped to put the finishing touches on the European Stability Mechanism that will go into effect in 2013. The Sarkozy/Merkel-crafted plan would give succor to Chancellor Merkel ahead of this Sunday’s elections in Baden-Wurttemberg and hopefully halt the German voters’ antipathy toward all things EU. However, there appears to be friction between the giants of the European Union. Sarkozy is reportedly furious at the Germans for abstaining on the UN vote to impose a no-fly zone in Libya. Also, the French believe that Frau Merkel played politics and an anti-French card by moving to halt electricity production at seven NUCLEAR POWER plants, thus making the French look bad as well as having the impact of driving up electricity prices.


Notes From Underground: How could a citizenry have NO CONFIDENCE in the best-run G-7 nation?

March 21, 2011

There is a story circulating that the Canadian Parliament may have a “NO CONFIDENCE” vote on Prime Minister Stephen Harper’s government. The Conservative Party holds power but it is not a majority government and therefore always susceptible to losing a vote. Tomorrow, Finance Minister Jim Flaherty is to table the new budget. The problem appears to be the opposition to the proposed cuts in the corporate income tax that will cost the government C$6 BILLION in revenue.


Notes From Underground: The markets will labor with the unemployment report

January 6, 2011

Let me state out again as to why the FOREX markets are going to be a difficult investment in 2011. The emerging markets and commodity-based currencies have been the repositories of global capital seeking to take advantage of the Chinese and India growth phenomena without having to actually invest in the countries themselves. If you like China, buy the Australian equity or currency as it provides a proxy on Beijing’s growth policies: A classic case of providing picks and shovels rather than mining yourself.


Notes From Underground: Pimco calls for some of the PIIGS to leave the STRAW HOUSE AND HIT THE BRICS

December 20, 2010

A note from Andrew Bosomworth, head of Pimco’s European Portfolio, suggests that Greece, Ireland and Portugal would be better off leaving the euro currency until they get their houses in order. Bosomworth wrote it will be difficult but it can be done and the currency devaluations that will be part of exit will aid the PIG in its attempt at economic recovery.


Notes From Underground: Swiss go CucKOO for COCOs

December 13, 2010

Something to put on your radar screens for the new year: contingent capital, or CoCo bonds. These instruments are contingent convertible and will be a very respected form of TIER 1 capital under the foggy regulations of Basel 3. The regulators like these instruments as they are DEBT that converts to equity if/when the bank-in-question’s equity/capital ratio falls below a certain level. Rather than the BOND holders getting a free ride and the equity owners bearing the burden with an equity raise, the CoCos will automatically convert to EQUITY, which will lower the level of DEBT and increase equity capital to a regulatory acceptable level. Credit Suisse announced it’s going to do a $30 billion CoCo so you can be certain that other large multinational banks will be joining in. It has yet to be determined what effect CoCos will have on the markets overall. If its popularity catches on, as I suspect, it could provide a boost to the global behemoths as it would lower the need to float more stock to reach the needed capital levels.


Notes From Underground: Just like Frank Zappa, the markets are like a Penguin in Bondage

December 8, 2010

During the last two days the markets have heard from the Australian and Canadian central banks and both institutions held its rates steady. Both banks cited its strong currencies and the still-fragile state of the global economy outside of emerging Asia as the primary reasons for holding.  (more…)

Notes From Underground: Wikileaks confirms it–the Walrus was Paul; and Chinese data is suspect

December 7, 2010

Last night, the RBA voted to hold Australian rates steady at 4.75 percent. Governor Stevens showed us his usual, steady hand in the BANK‘s statement as he provided us with a global view that weighed heavily on Aussie monetary policy. The strength of the Aussie dollar kept the RBA from raising rates as the bank had unexpectedly raised rates in November and was content to see if the U.S. and European economies can overcome their current malaise. The Chinese and Indian demand were responsible for the best terms of trade for OZ since the 1950s and growth in other Asian nations was brightening the jobs and capex picture even more. In a few paragraphs, Governor Stevens and his comrades are very clear that Australia is the epicenter of the Asian growth story and the RBA will be watching for indicators that Australian employment is getting too tight for the BANK to move rates higher.


Notes From Underground: OOPS, got it way wrong on the JOBLESS CLAIMS

December 2, 2010

Well, my guesstimate on jobless claims was way off as the previous number was not supported by further improvement. The consensus was 425,000 and the number actually reported was 436,000, well above what I anticiapted and hoped would be a three handle.



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