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Posts Tagged ‘Canada’

Welcome To The Double-Dip!

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 24.08.10 at 17:10

Well, just be sure you are on the right side of the dip…… TCW invites you to an international conference call on September 1th.

Follow the link below to sign up:

Double Dip Is Here!

September 01, 2010

Webcast Details

Date: Wednesday, September 01, 2010

Time: 1:15pm PT / 4:15pm ET

Register for Webcast

Dial In: (888) 713-4199
International Dial In: (617) 213-4861
Passcode: 16292396

Register for Conference Call

Legal Disclosures

Obtain a Prospectus
You should consider the investment objectives, risks, and charges and expenses of the Fund carefully before investing. The Fund’s prospectus and summary prospectus contains this and other information about the fund. To receive a free Prospectus, please call (800) 386-3829 or you may download the TCW Funds Prospectus. Read it carefully before you invest or send money.
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The TCW Funds are distributed by TCW Funds Distributors.
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Founded in 1971 and based in Los Angeles, TCW manages a broad range of innovative, value-added investment products that strive to enhance and protect clients’ wealth.
TCW clients include many of the largest corporate and public pension plans, financial institutions, endowments and foundations in the U.S., as well as a substantial number of foreign investors and high net worth individuals.
According to the company‘s website, TCW works in close partnership with Financial Advisors to help build their businesses and meet the needs of their clients.

“Our highest priority is sustaining our clients’ trust and confidence. We challenge ourselves to innovate and excel across a broad range of investment products. We actively manage our clients’ assets with unwavering integrity and discipline. We use our investment expertise to enhance and protect our clients’ wealth in a changing world,” they write.

PS:

Third Hindenburg Omen Confirmation (Zero Hedge)

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G20 Protesters Turns Violente; Police Cars On Fire, 150 Arrested

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics on 27.06.10 at 11:49

Black-clad demonstrators broke off from a crowd of peaceful demonstrators outside the G20 Summit yesterday afternoon, torching four police cruisers and smashing store windows with baseball bats and hammers. About 150 people have been arrested.

“This isn’t our Toronto and my response is anger.”

David Miller


Police with shields and clubs earlier pushed back another small group of demonstrators who tried to head toward the security fence surrounding the perimeter of the Group of Twenty global economic summit site. Demonstrators hurled bottles at police, setting fire to four police cars and smashing windows at stores and banks.

According to CBC at least 150 protesters have been arrested, and the area around the  G20 meeting is now practically sealed off.

The size of the protest crowd was estimated as high as 10,000.

At least 150 people were arrested as violence broke out after thousands of anti-G20 protesters marched through downtown Toronto on Saturday, prompting police to use tear gas in the city for the first time.

Transit Halted

The boundaries include Wellington Street to the north, Lakeshore and Bremner boulevards to the south, Windsor Street and Blue Jays Way to the west and a section of Bay Street to the east.

Downtown subway service remained suspended, with no service in the loop between Bloor and St. George stations, and there were no streetcars or bus service in the area.

GO train service into and out of Union Station has also been stopped.

The airspace over downtown Toronto was closed, as was the Gardiner Expressway, one of the city’s major traffic arteries.

Some hospitals, hotels, businesses and the tourist attraction the Eaton Centre were also under lockdown.

Police Cars On Fire

“We have seen windows broken and police cars burned. It is very regrettable that such vandalism and violence could not be prevented. I want to assure you that the persons responsible will be held accountable,” Toronto police Chief Bill Blair said at a news conference.

“I am profoundly disappointed in the criminal acts which have taken place,” he said.

Four police vehicles were set ablaze, store and bank windows were smashed and much of the area was put under security lockdowns.

At least 150 people were arrested, the Integrated Security Unit said.

Throughout the evening, police moved people east along Queen Street. Police were still trying to move small groups out of the downtown core early Sunday, hours after most demonstrators had gone home.

Shortly before 8 p.m., a police vehicle that had been damaged earlier in the day on Queen Street, just east of Spadina Avenue, was torched. Police in riot gear descended near the burning wreckage to push people back.

Two police cruisers were torched earlier at the corner of King and Bay streets in the heart of the financial district, sending plumes of black smoke into the air.

As one vehicle burned, protesters surrounded officers who were trying to protect the second car, CBC reporter Amber Hildebrandt reported on Twitter.

Officers Assaulted

Toronto police Chief Bill Blair blamed the destruction on violent “anarchists” and said several of their leaders were arrested.

Blair said that throughout the day some of his officers were pelted with rocks, bricks and bottles, spat upon and assaulted, but none suffered major injuries.

Blair confirmed that tear gas was deployed once — for the first time in Canada’s largest city — “after a warning was given to the public about its impending use.”

But he denied that rubber bullets were used.

As the evening wore on, the area around the Ontario legislature at Queen’s Park emerged as a major focal point. Several hundred police in riot gear — many on horseback — ringed government buildings and lined streets in the area, as well as the nearby park grounds, nationalpost.com reports.

This Isn’t Our Toronto

“This isn’t our Toronto and my response is anger,” Toronto Mayor David Miller told CP24 television.

David Miller also blamed a small group of “thugs” for the violence.

“People are calling them protesters. That is not fair to the people who came to protest,” he said.

Previous major world summits have attracted massive, raucous protests by anti-globalization forces. But so far the Canadian demonstrations have been smaller, with rain apparently discouraging some.

Bill Blair said police were sent to that area because many members of a mob were seen going there to change clothes.

Asked whether police were slow to respond to the violence, Blair said a mob had emerged from the initially peaceful protest and broke into several groups of vandals.

“It did take us some time to move our resources,” he said.

Blair later said police are reviewing their tactics, “what worked and what didn’t work as well.”

A spokesman for Prime Minister Stephen Harper said free speech is a principle of our democracy “but the thugs that prompted violence earlier today represent in no way, shape or form the Canadian way of life.”

With the violence escalating in the heart of Canada’s largest city, the entire area around the G20 political summit site at the Metro Toronto Convention Centre — enclosed by concrete barricades and fences — was under a security lockdown.

You’re able to follow the G20 meeting live at Reuters.

Related by the Econotwist:

Norway’s Foreign Minister Makes “Chainsaw Massacre” of G20 Meeting

Global Economy On Fast Track To Disaster

Secret Plan To Undermine The EU Parliaments Authority?

Romania’s Pension Cuts Ruled As Illegal

Desperation Gets A Grip: Greece Puts Islands Up For Sale

Pressure On Spain To Cut More

2010 EU Deficit Exceed 7% – Commission Suggest “Cold Showers”

EU Officials Fears Second Depression And War

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Dissecting The U.S. Labor Report

In Financial Markets, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 06.02.10 at 05:19

As most news headlines have pointed out; the U.S. jobless rate down is down from 10,0% to 9.7%, the employment ratio up to 58.4% from 58.2%, and even the broad U6 measure of the unemployment rate slipped to a five-month low of 16.5% from 18.3%. So, what can we make of this? Chief economist David Rosenberg helps us out.

“The working-age population in the U.S. plunged 92k in January; such a decline has occurred but five times since 1951.”

David Rosenberg


“To put the -20k headline payroll result into perspective, history shows us that what is normal is that fully 24 months after a recession begins we are printing employment gains of 100k. In other words, labour market conditions can still be described as being somewhat abnormal and fundamentally soft even if the pace of deterioration has abated,” Mr. Rosenberg at Gluskin Sheff writes in a note to their clients.

In the overall scheme of things, considering the intense fiscal problems in Euroland, the prospect of sovereign debt defaults and the future of the regional monetary union, today’s U.S. payroll report is really a secondary event, David Rosenberg points out.

The headline payroll result was below expected at -20k (consensus was +20k) and there were downward revisions of 930k to the back data (April 2008 to March 2009) from the much-anticipated benchmark revisions.

“To put the -20k headline payroll result into perspective, history shows us that what is normal is that fully 24 months after a recession begins we are printing employment gains of 100k. In other words, labour market conditions can still be described as being somewhat abnormal and fundamentally soft even if the pace of deterioration has abated.”

Ludicrous

David Rosenberg says it’s “ludicrous” for the Bureau of Labor Statistics to assume that the economy has been  generating net new jobs from business creation.

“As a result of the changes made to the ‘birth-death’ model, we had downward revisions in four of the prior five months (totalling 245k — for example, December was revised to show a 150k loss versus the initial -85k print). Excluding the federal government hiring last month, payrolls would have declined 53k. And, while the diffusion indices for private payrolls and manufacturing did improve, they do remain squarely below 50, which suggests that the plurality of employers are still in the process of shedding labour, more than two years after the recession officially began.”

The report shows that the the workweek rose an aggregated 0,3% to 33.3 hours in January from 33.2 hours.

Annual weekly earnings jumped 0,6%.

“The Household survey did show a nice rebound of 541k in January and almost half the gains were in full-time positions. Not only that, but the number of folks working part-time for economic reasons plummeted 849k, or by nearly 10% — talk about an eye-popper.”

“Keep in mind that the January rebound in Household employment fell short of recouping the entire 589k plunge in December and the job count here is still 1.5 million lower today than it was in July. After four months of decline, the labour market rose 111k and together with the rebound in Household employment, all the job market ratios improved.”

Rife With Bad Sampling

“The working-age population plunged 92k in January and such a decline has occurred but five times since 1951 and they most happen in January, so we could well be spending an inordinate amount of time analyzing a report that is rife with bad sampling. For example, we also found that despite the great headline in the Household survey, adult-male employment actually fell 75k and has declined now for 18 months in a row. Moreover, the adult-male unemployment rate yet again was at 10% in January, a level it has either been at or breached for six straight months in unprecedented string dating back to 1947.”



Meanwhile adult-women employment over the age of 20 posted a 529,000 job increace. In the battle of the sexes, Venus clearly took January.

Mr. Rosenberg writes: “Almost 10% of what was once considered the ‘breadwinner’ part of the workforce has been extinguished during this recession. How can anyone realistically be excited about recovery prospects knowing this?”

“Taking a big picture viewpoint, the U.S. labour market remains fundamentally weak. Despite the clarion calls for recovery from the legions of Wall Street economists and strategists, the reality is that labour market gaps remain very wide; here we are more than two years after the recession officially started and the ranks of the long-term unemployed continue to swell.”

The average duration of unemployment rose to a record 30.2 weeks from 29.1 weeks in December; and for the first time ever, we have more than 6.3 million Americans who have been looking for a job with no luck for at least six months.

That is an unprecedented 41.2% share of the pool of unemployment.

While there will be many economists touting today’s U.S. employment report as some inflection point, the reality is that the level of employment today, at 129.5 million, is the exact same level it was in 1999

“While there will be many economists touting today’s report as some inflection point, and it could well be argued that we are entering some sort of healing phase in the jobs market just by mere virtue of inertia, the reality is that the level of employment today, at 129.5 million, is the exact same level it was in 1999. And, during this 11-year span of Japanese-like labour market stagnation, the working-age population has risen 29 million. Contemplate that for a moment; fully 29 million more people competing for the same number of jobs that existed more than a decade ago. That sounds like pretty deflationary stuff from our standpoint.”



A Technically-driven Market

On the current market conditions, David Rosenberg notes the following:

“Yesterday’s sharp and broadly based decline in the equity markets was the worst session since April 20 of last year. Fast Money came on the tube and it was almost laughable to see them all grappling for the reasons why the selloff occurred. China here. Greece there. No, sorry. Remember Bob Farrell’s eleventh rule: “it’s the market that makes the news; not the other way around.”

“This is a stock market that is as overpriced as it was heading into the October 1987 crash and as the case back then, it wasn’t about the fundamentals but about policy discord between the U.S., Japan and Germany. A market priced for perfection requires perfection on all fronts.”

“The comments on Fast Money were that the fundamentals hadn’t changed — this selloff is pure emotion. Really? We had a 70% rally from the March low in advance of any serious turn in the economic data — this was purely a bear market rally that was rooted in the technicals (and short coverings). How do we know? Because at the January 19 high in the S&P 500 of 1150 it had completed a 50% retracement off the slide from the October 2007 highs to the March 2009 trough.”


The One-eyed Man In The Land of The Blind

According to David Rosenberg the U.S. dollar rally is more a reflection of the problems overseas than anything overly encouraging state-side.

While many others see the charts as a flight-to-safety not unlike what we experienced in late 2008 and early 2009, Rosenberg says it is a “countertrend rally”.

“We are currently seeing a countertrend rally in the U.S. dollar… all of a sudden, the USD looks like the one-eyed man in the land of the blind.”

“But this could last a while longer”, he adds.

“The DXY tested the 90 threshold in the last such up-move nearly a year ago, which would imply another 10% rise from current levels (ie, this countertrend rally may only be 40% of the way done).”

“Countertrend rallies in the U.S. dollar are not generally associated with upward movement in the commodity complex, so expect to see further near-term declines in the resource space. Although the chart of gold against the euro and many other currencies still looks quite constructive.”

Unbelievable Data

U.S. productivity growth came in at a startling 6.2% annual rate in Q4, and this followed a 7.2% spurt in Q3 and a 6.9% runup in Q2.

“At no point in the past five decades has productivity risen so sharply over a three-quarter period — up at a 6.7% annual rate. And, look at the pattern since the third quarter of 2008: -0.1%; +0.8%; +0.3%; and then all of a sudden +6.9%; +7.2%; and +6.2%. Somehow, with no capital deepening during the 2002-07 expansion and no innovation to speak of (sorry, but iPhones don’t cut it), we are seeing a productivity burst that is almost without precedent.”

“Despite the loss of 452,000 jobs in the final quarter of the year, output in the nonfarm business sector exploded at a 7.2% annual rate. This is indeed the Houdini recovery. And with the downward revisions to employment, these productivity numbers are likely to show double-digit gains and make a mockery of the advances we saw during the tech revolution of the 1990s. Catch my drift — GDP growth is dramatically overstated and by perhaps as much as three percentage points.

Full Press Release from Bureau of Labor Statisics

The Full Analysis from Chief Economist David Rosenberg at Gluskin Sheff.

U.S. Markets Snap Shots:

Standard & Poor’s 500 (Relative Strength Index and On-balance Volume Indicator)

EUR/USD


GOLD

Panic On The Trading Floor

Greece: From Bad To Worse?

The Greek Bond Bomb Keeps Ticking

“The Houdini Recovery”

U.S. GDP Grows Faster Than Expected

May Never See A Recovery

Global Market Analysis: “This Is It?”

US Jobless Claims Increase More Than Estimated

U.S. Labor Market Is Shrinking

The Magic of Statistics

US Recovery: “It’s a Miracle”

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Update: 1920-similarities

In Health and Environment, International Econnomic Politics, National Economic Politics on 01.01.10 at 02:51

Here’s a little update on the earlier post; “Norway‘s Prime Minister Fears Social Unrest“.

This Letter to The Editor was written by the newly appointed U.S. Press Secretary of Norway, Arne Kildal, in 1920 and published in The New York Times on september 12. the same year.

Source: The New York Times - Archives

The letter is a warning of social unrest in Norway because the government has taken the methods of communism(Bolshevism) in use to enforce their ideas “regardless of the majority of the people.”

About: Arne Kildal

Here’s a copy of the original letter, as found in the archives of The New York Times.

Here’s what Norway’s Prime Minister said last week:

Norway’s Prime Minister Fears Social Unrest

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Crisis In A New Light

In Financial Markets, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 26.10.09 at 02:42

Bank of International Settlements has released a new report on what led to the financial crisis and the coordinated internatonal respons. According to the report the crisis was initially caused by large european banks that went on a buying spree with borrowed low priced dollars, and at the same time became more depending on short time funding. When the money market froze, the whole global banking system was in fact bankrupt. Federal Reserve had no other option than to give the european banks unlimited accsess to the United States‘ funds, the report shows. It also concludes that the worlds largest banks have become so integrated that they has to been seen as one single bankingsystem. This means that is almost impossible to recognize all risk in one bank just by looking at the companys balanse sheet. BIS consider this risk to be substantial.

Here is the full report.

(Article in norwegian)

dollar_party_las_vegas.jpg

The Financial Crisis: Wall Street invented the game – but the players was European.

Organisasjonen Bank of International Settlements har undersøkt hva som egentlig utløste finanskrisen. Funnene er oppsiktsvekkende; det viser seg blant annet at en vesentlig årsak var europeiske bankers elleville lånefest finansiert av billige dollar.

Denne uken offentliggjorde Bank of International Settlements (BIS) en 30 siders rapport om hva som førte til finanskrisen og den koordinerte redningsoperasjonen blant verdens sentralbanker.

bis_tower2-kopi.jpg

Bank of International Settlements, Basel, Sveits.

Analysen fra BIS viser at den amerikanske sentralbanken Federal Reserve i praksis har refinansiert hele det globale banksystemet.

Og at risikoen for et sammenbrudd i finanssystemet trolig er like stor nå som den var før krisen.

Global dollarfest

Veksten i finansnæringen økte fra en årlig rate på 10 til 30 prosent fra årtusenskiftet og frem til midten av 2007.

dollar_soppet.jpg

Dollar i overflod ble brukt til spekulasjon i annen valuta.

Veksten ble finansiert med billige amerikanske dollarlån som ble kjøpt i store mengder for å investeres i annen valuta som ga større avkastning.

I sin rapport har den 80 år gamle institusjonen, som har til oppgave å koordinere sentralbankenes virksomhet, rekostruert de globale bankvesenets balanse slik den var før krisen startet sommeren 2007.

Tallene viser at bankene i overnevnte periode mellom endret den grunnleggende finansieringen (fundingen) fra å være basert på kortsiktige innlån finansiert med langsiktige utlån, til langsiktige innlån i dollar finansiert av kortsiktig spekulasjon annen valuta og nye typer kredittderivater.

Det var nøyaktig den samme strategien som førte til at den sagomsuste Wall Street-banken Bear Stearns kollapset over natten i mars 2008.

Misforholdet mellom langsiktig og kortsiktig funding (finansiering), og den akutte mangelen på dollar som oppstod da bankene sluttet å låne hverandre penger, er den egentlige årsaken til finanskrisen, fremgår det av BIS sin analyse.

Global kollaps

I perioden mellom 2000 og 2007 økte bankenes utestående krav fra 1 000 til 3 500 milliarder dollar.

utenlandsk-dollarettersporsel_2.jpg

Veksten i dollarkjøp fra ikke-amerikanske banker og investorer frem til midten av 2007.

Det viser seg at det først og fremst var europeiske banker som gikk fullstendig bananas på denne tiden.

For eksempel økte de sveitsiske bankene sine utenlandsreserver i dollar fra fem til sju ganger verdien av landets brutto nasjonalprodukt.

De engelske bankene fulgte hakk i hel.

Etter Lehman-konkursen i oktober 2008 ble det full stopp i det kortsiktige lånemarkedet som storbankene var avhengige av for å finansiere den daglige driften.

Kort tid etter gjennomførte sentralbanker over hele verden en koordinert aksjon der styringsrentene ble kuttet og enorme mengder dollar pumpet inn i finanssystemet.

På et tidspunkt befant det globale finansystemet seg i nøyaktig samme situasjon som Bear Stearns et halvt år tidligere – den kortsiktige fundingen (som ble brukt til å finansiere den langsiktige) var plutselig vekk.

Global panikk

Hele det globale banksystemet var i realiteten konkurs.

Sannsynligheten for at vi bare var timer fra et totalt sammenbrudd er stor.

Hadde CNN fått tak i denne opplysningen, ville det mest sannsynlig utløst en verdensomspennende panikk i løpet av et par minutter.

BIS slår fast at sentralbankene ikke hadde annet valg hvis man skulle unngå et fullstendig sammenbrudd i verdens banksystem.

Hadde ikke Federal Reserve steppet inn og skrudd pengepumpen på full styrke, hadde en global bankkollaps vært et uunngåelig resultat.

us-deficiteconomy.jpg

Utenlandske banker er nødt til å investere i amerikanske dollar for at den skal beholde sin verdi. Deres egen valuta er avhengig av det.


Global bailout

Sommeren 2007 hadde de globale storbankene et akutt behov for rundt 2 000 milliarder dollar for å betjene sin kortsiktige gjeld i interbankmarkedet.

Tar man med alle de kortsiktige forpliktelse, inkludert lån fra ikke-finansielle foretak, var bankenes kapitalbehov på svimlende 6 500 milliarder dollar.

Data fra BIS, som er den institusjonen som har best oversikt over bankvesenet, viser at en global “Bank Run” allerede var i emning.

Først og fremst ved at lokale sentralbanker begynte å trekke reservene sine ut av de kommersielle bankene.

Federal Reserve opprettet nye kredittlinjer for til sammen 250 milliarder dollar til sentralbankene i Canada, Europa og Japan i desember 2007.

united_states_rebate_check.jpg

Federal Reserve hadde ikke annet valg en å refinansiere hele det globale banksystemet.

Etter Lehman-konkursen i september 2008 ble FED-kreditten doblet og kredittlinjer ble opprettet til så å si alle nasjonale sentralbanker i den vestlige verden.

the-fed-network.jpg

Slik reddet Ben Bernanke hele det globale banksystemet. Pilene viser hvor pengene er gått, tykkelsen illustrerer mengden. Det er første gang vi ser et kart over den amerikanske sentralbankes nettverk.

13.oktober 2008 ble den europeiske, sveitsiske og engelske sentralbanken gitt ubegrenset kreditt.

Hvor mye penger det europeiske bankvesenet egentlig har fått tilført fra Federal Reserve kan ikke sies med sikkerhet, men det anslås at det dreier seg om minst 500 millarder dollar.

Av dette har over 80 prosent gått til bankene i Sveits og i Storbritannia, ifølge BIS.

I dag er de europeiske bankenes dollarreserver redusert med 50 prosent, men systemet med å langsiktige innlån og kortsiktige utlån er ikke vesentlig endret.

BIS som påpeker at dette misforholdet stadig utgjør en betydelig risiko i finanssystemet.

Flere skjulte tap

Ifølge BIS er det lite som har endret seg i bankenes finansieringspraksis.

De baserer seg stadig på korte lån i pengemarkedet for den daglige driften, mens de kjøper langsiktige lån i dollar, for eksempel amerikanske statsobligasjoner.

BIS hevder også at bankene fremdeles skjuler potensielle tap i sine regnskaper, og anslår at de europeiske bankene kan bli nødt til å skrive ned verdier for ytterligere 880 milliarder dollar før regnskapene er “rene” igjen.

Det er et adskillig høyere beløp enn de 500 milliardene som den nylig gjennomførte stresstesten EU har gjort blant de største regionale bankene beregner.

BIS konkluderer også med at risikoen i banksystemet sannsynlig er langt høyere enn det som oppgis.

Årsaken er at bankvesenet er smeltet sammen til ett system, og den reelle risikoen i de enkelte nasjonale bankene kan ikke oppdages i ved å studere deres regnskaper.

globale-penger.jpg

Banksystemet er globalt. Risikoen som eventuelt skjuler seg på nasjonalt plan er nærmest umulig å oppdage.

Til det skjuler det seg for mange ukjente faktorer. Blant annet såkalt tredjepartsrisiko som ingen vet hvor befinner seg.

I nytt lys

Analysen fra Bank of International Settlements setter finanskrisen i et helt nytt lys.

Den allmene oppfattningen er at det var de grådige Wall Street-bankene som utløste krisen.

Faktum er at de europeiske storbankenevar enda grådigere.

Wall Street sørget for billige lån, nærmest etter subprime-modellen, og bankfolkenene i USA opplevde en gigantisk bonusfest som følge av den økte omsetningen.

Europeiske banker gikk totalt av hengslene i en ellevill kjøpefest basert på billige dollarlån.

USA konstruerte spillet, men spillerne var europeiske.

Du kan studere hele rapporten fra Bank of International Settlements her.