And more.
Central banks are puzzled by recent events….
I have to suggest a new title for this piece: “Arsonist alarmed at rapid spread of fires”.
The Bank of Canada doubled down on its concern over the red-hot real estate market, using its latest checkup on the health of the financial system to warn that speculation in some of the biggest cities has made the country more vulnerable to a debt crisis.
The central bank singled out the Greater Toronto Area, Hamilton and Montreal as experiencing worrisome signs of “extrapolative behaviour,” which is the way Governor Tiff Macklem and other policy-makers describe market dynamics that they see as out of line with the fundamentals of supply and demand.
Zero percent interest rates necessarily result in supply and demand becoming completely out of line. What other outcome did these functionaries expect?
Is the prevailing narrative losing momentum?
I have to marvel at the fact that this particular story actually made it to the front page of any mainstream media outlet, so maybe there’s hope for this country yet. If only Doug Ford and a few others would get this message and cut out their passive/aggressive posturing. If the op-ed is correct, it will still take a long time to undo the psychological, let alone economic, damage.
North America is now definitively entering the final days of COVID-19. Even in Canada — with ongoing third waves in both Ontario and Alberta — deaths remain way down from their January highs and mass vaccination is rapidly shielding whole sections of the population from lethal harm. But as our pandemic deliverance approaches, physicians and researchers are now warning of a new public health challenge: When normalcy arrives, many may refuse to accept it.
Now, as COVID wanes across the developed world, psychiatrists are warning of a wave of COVID-centric anxiety. “Those with severe health anxiety are likely to become abnormally avoidant, continuing to isolate and practise repeated hand washing, checking their body temperatures, respiratory function, and even testing their ability to smell … over and over again,” reads a paper on “COVID-19 health anxiety” in the journal World Psychiatry.
Capital can arise from nothingness, right?
As months of lockdowns drag on, there’s this less than encouraging, but not at all unexpected, news from the Financial Post.
New data show that consumer insolvencies filed in Canada jumped 22.8% in March, the biggest monthly increase in more than 10 years. That’s also the largest single month of new filing activity since the onset of the pandemic more than a year ago.
America In Rerun
Related: The 70’s Show
Stand Firm, Warrior Gretchen!
The state of Michigan has told a Canadian energy company it must shut down a controversial oil and gas pipeline by Wednesday amid growing fears that a spill would be catastrophic to the region, in a feud which threatens to strain relations between Canada and the United States.
The company’s refusal to comply with the order, and swift support from top Canadian officials, highlights the politicized nature of pipelines, which campaigners have used as a target in the fight against climate change.
For nearly 67 years, Enbridge has moved oil and natural gas from western Canada through Michigan and the Great Lakes to refineries in the province of Ontario.
But Michigan says the one section to the pipeline – Line 5 – is too risky to continue operating.
More, from the Great Reset sampler plate: Gas stations along the U.S. East Coast are beginning to run out of fuel as North America’s biggest petroleum pipeline races to recover from a paralyzing cyberattack that has kept it shut for days.
The Green New Deal: Trial Run
That’s not an emergency — it’s practice;
The Colonial Pipeline, responsible for the country’s largest fuel pipeline, shut down all its operations Friday after hackers broke into some of its networks. All four of its main lines remain offline.
The emergency declaration from the Department of Transportation aims to ramp up alternative transportation routes for oil and gas. It lifts regulations on drivers carrying fuel in 17 states across the South and eastern United States, as well as the District of Columbia, allowing them to drive between fuel distributors and local gas stations on more overtime hours and less sleep than federal restrictions normally allow. The U.S. is already dealing with a shortage of tanker truck drivers.
The emergency order extends through June 8, and can be renewed. Colonial has yet to declare a date it expects it will resume full operations.
The left hates oil, until they don’t have any.
How come this debt isn’t paying for itself?
A debt load of $47 billion for a province of 500,000? A new report is recommending that the Newfoundland government slash health care and education spending while selling off any number of government owned enterprises.
In order to rein in a soaring public debt and end the long pattern of deficit spending, Greene recommended a five per cent reduction in core government spending, and that operating grants for Memorial University and the College of the North Atlantic be slashed by 30 per cent, at a rate of five per cent annually.
Some of her sharpest points were directed at the health system, which accounts for 37 per cent of public spending. The province also spends 24 per cent more per capita on heath than the Canadian average.
Lest anyone think that Newfoundland is alone in this sinking boat, if every provincial government in this country were as honest as this lot when calculating their actual debt burden, most provinces would not be far behind. Most will wind up, eventually, as wards of the Bank of Canada.
The Great American Recovery Watch Goes On High Alert
The U.S. economy added 266,000 jobs in April, sharply missing economists’ expectations.
The unemployment rate unexpectedly rose to 6.1% — well below the April 2020 peak of 14.7%, but about twice the pre-crisis level, the Labor Department said in its monthly payroll report, released Friday morning. Economists surveyed by Refinitiv expected the report to show that unemployment fell to 5.8% and the economy added 978,000 jobs.
Reset: Democrats Blamed After U.S. Steel Cancels $1.5B Project in Pennsylvania
Pretty sure that’s already here — Inflation May Be Coming
Another zero percent interest miracle!
In a normal, growing economy, each generation can expect a higher standard of living than the previous one. In Canada, we seem to be going in the opposite direction of normal. If the trend noted in this article continues, millennials will be lucky to buy a principal residence at about the time they would like to retire.
In the epicenter of the housing bubble, it’s particularly bad for an average income earner:
In Toronto, for example, where the median home price crossed $1 million in the first quarter, it now takes 278 months (23 years) to save up for a down payment. In Vancouver, where the price of a representative home is $1,381,274 and you need an income of $237,201 to afford it, you would have to save for 389 months (32.4 years) just for the down payment.
A voice in the wilderness
This op-ed by David Rosenberg points out the problem with using GDP as the yardstick for measuring economic growth. If you discount the impact of governments borrowing capital that they have no intention of repaying as well as consumers borrowing to buy houses that they cannot afford, the economy is actually shrinking, not growing:
…the Canadian housing market has gone simply insane with ultra-low interest rates, easy access to credit, shifting preferences (work from home) toward more real estate and tremendous speculation. Total residential construction has surged 22.5 per cent in the past year and that has taken the housing share of GDP to a record high of 9.3 per cent — double the historical norm. Strip out housing, and GDP contracted 3.5 per cent in the past year (versus the actual decline of 1.5 per cent); strip out housing and government, and the economic contraction is -5.6 per cent.
One has to wonder what happens to the Canadian economy when the housing bubble finally does pop, the stimulus programs abate, and the commodity cycle runs its course. What is left? The reopening of the economy? I have news for you: If the real estate gravy train ever does end, considering the outsized impact it has exerted on the economy, there is no reopening large enough to offset the housing reversal and all the negative multiplier effects that will reverberate across the entire economy.
And then there is this related issue. Coincidence? I think not.
Dangerous precedents
Anyone half awake over the last year could see this one coming.
Now, spurred by alarming science, growing public fury and a deadly pandemic, government officials, corporate bosses and civil-society leaders are finally waking up to a simple idea whose time has come: climate is everything.
Five years later, the COVID-19 pandemic has given the E.U. the perfect opportunity to accelerate the remaking of its economic agenda with climate at its core—what Sefcovic calls the “new economy of the 21st century.”
The “new economy” will be the negation of the economy.
No Country for Young Men
Under the younger Trudeau’s administrations, a perfect storm of destabilizing factors has struck the country. Rampant immigration from third-world nations, predominantly Muslim, has led to sporadic terror attacks, ghettoization, and a depletion of public funds. A punitive and unnecessary carbon tax looks likely to eviscerate the farming community, hamstring commerce and industry, and severely impact ordinary households. Radical feminism has taken root not only in public schools and universities but in the governing cabinet as well, leading to decisions based on ideology rather than pragmatism.
Somebody, get us out of this place.
(h/t Larry)
The Great Reset
Pay no attention to the bobblehead behind your monitor.
Adding bricks to the camel’s back
While the CD Howe Institute is right about ditching Freeland’s $100 billion stimulus package, they go completely off the rails with the rest of the prescription.
The C.D. Howe as a result proposes a hike in GST from its current rate of five per cent up to seven per cent, reversing the previous Conservative government’s two per cent cut in 2006.
As if fearing that morale would not improve without further beatings, the report seems to believe that Canada’s carbon tax regime could use some additional help:
[The report] also proposes hiking GST on transportation fuels like gasoline and diesel by 10 per cent, which would “give consumers a strong price signal to discourage CO2 emissions,” it says.
“America is back.”
Russia and China — not to mention North Korea and Iran — are all on the move and don’t seem deterred by Washington. If disaster overtakes the Biden Harris restoration future historians will conclude that organized self delusion played a leading part. The cultural and political establishment belief in the Great Reset after Trump sputtered and instead of the predicted return to normal the global world has continued its descent into crisis. Perhaps the status quo overattributed the problems of the old global world to populist unrest and failed to address the basic weaknesses which caused them. They thought they could pick up where they left off and couldn’t. […]
Those “far enemies” are now giving Washington a headache. The actions of China and Russia show the actual Great Power perceptions at variance with the way the Biden-Harris administration sees itself in the media mirror.
Merriam-Orwell
But this isn’t real socialism!
No matter how much borrowing the government undertakes, the only thing one can be certain of is that socialists will always claim it was never enough.
Although the article concerns the American experience with an avalanche of Covid crisis borrowing, the lessons apply equally well to Canada.
“The idea that “governments alone” can provide the “expertise and judgment” necessary to lead the way during an economic crisis is one that fails to recognize the shortcomings of large bureaucracies.
Governments are necessarily unequipped to deal with economic crises partly because they suffer no consequences for their mistakes. It is the people, the business owners and consumers alike, who pay the ultimate price.
Government’s lack of skin in the game excludes their so-called expertise. After all, if a single mom who’s a shop owner in rural Indiana loses her livelihood because of the mandated lockdowns, the governor won’t suffer a thing over it. The shop owner, on the other hand, will lose her home and be unable to feed her children.”
Duty To Die
I’m old enough to remember when it was called “killing”.
The Senate has passed a bill to expand access to medical assistance in dying, including eventually to people suffering solely from mental illnesses.
By a vote of 60-25, with five abstentions, senators accepted Wednesday a revised version of Bill C-7, even though the government rejected or modified amendments made by the Senate. […]
The government had originally intended to impose a blanket ban on assisted dying for people suffering solely from mental illnesses. But, under pressure from senators who believed that exclusion was unconstitutional, it subsequently put a two-year time limit on it.
In the words of a former Saskatchewan NDP cabinet minister, we owe a duty to our health care system; to live healthfully and die quickly.
If we understand that a person in Canada consumes at least 60% of their life time cost to health care in the last two years of their life, should we not fear that the financial powers will see that reducing the last two years of life to one year of life could be the most cost effective approach to the problem. Is there a conflict of interest having the same system determine the services provided, who they will be provided to and when they will be provided, and containing cost in a society of competing values.
Another flashback.
If Women Ran The World
If they don’t lower cambat standards, the paunchy Fox opinion guys win.