Tag Archives: Canada

Thinking is Dangerous, by Francis Marion

Hat tip to Francis Marion at theburningplatform.com:

Canadian government departments have quietly blocked nearly 22,000 Facebook and Twitter users, with Global Affairs Canada accounting for nearly 20,000 of the blocked accounts, CBC News has learned.

Moreover, nearly 1,500 posts — a combination of official messages and comments from readers — have been deleted from various government social media accounts since January 2016. CBC Nov 2017

Trudeau to Facebook:

Fix your fake news problem or face stricter regulations…

The Star.com Feb 8, 2018

Advertisements

Bank of Canada’s Poloz Is Right to Be Worried, by Peter Diekmeyer

Canada’s central bank has had a role in the “all-everything” bubble. From Peter Diekmeyer at Sprott Money via wolfstreet.com:

Three possibilities come to mind.

Bank of Canada governor Stephen Poloz cited numerous worries plaguing the economy during his speech to Toronto’s financial elites at the prestigious Canadian Club. However, the title of Poloz’s presentation, “Three things keeping me awake at night” seemed odd, given positive recent Canadian employment, GDP and other data.

Poloz highlighted high personal debts, housing prices, cryptocurrencies and other causes for concern, along with actions that the BoC is taking to alleviate them. His implicit message was (as always) “We have things under control.” But if that’s all true, then Canada’s central bank governor should be sleeping like a baby. So, what is really keeping Mr. Poloz up at night? Three possibilities come to mind.

The Poloz Bubble

Firstly, far from just a housing bubble, Canada’s economy shows signs of being in the midst of an “everything bubble.” Bitcoin, for example, hovered near CDN $23,000 this week. Stock and bond valuations are not far behind in their relative loftiness. Worse for Poloz, who took office four years ago, his fingerprints are all over those bubble-like levels.

Canadian stock, bond and house prices were already at dizzying heights when Stephen Harper hired Poloz with the implicit expectation that he would juice up the economy, in preparation for what Canada’s then-Prime Minister knew would be a tough upcoming election.

Poloz didn’t disappoint, promptly delivering a nice Benjamin Strong-styled “coup de whiskey” to asset prices in the form of two interest rate cuts, which brought the BoC’s policy rate down to just 0.50% during the ensuing months. Although Harper lost the election, loose BoC policy continues to provide the Canadian government with free money to borrow and spend as it wishes.

Here’s Canada’s ballooning Money Supply  M2 (via Trading Economics):

More broadly, the Poloz BoC’s current policy, like that of the US Federal Reserve, is to boost asset prices even higher in the hope that the resulting wealth effect will trickle down to spur economic activity among ordinary Canadians.

To continue reading; Bank of Canada’s Poloz Is Right to Be Worried

After Fake Promises of Transparency, NAFTA Negotiations Start in Secrecy. And Lobbying is Heating Up, by Wolf Richter

Meet the new trade agreement, same as the old trade agreeement. From Wolf Richter at wolfstreet.com:

Americans aren’t allowed to know what’s being negotiated at their expense.

The first round of re-negotiating the North American Free Trade Agreement between the US, Canada, and Mexico began on Wednesday and is scheduled to last through Sunday. And the one thing we know about it is this: Despite promises in March by US Trade Representative Robert Lighthizer (USTR) that the negotiations would be transparent, the USTR now considers the documents and negotiations “classified” and they’ll be cloaked in secrecy.

But corporate lobbyists have access. And they’re all over it.

The Electronic Frontier Foundation put it this way:

Once again, following the failed model of the Trans-Pacific Partnership (TPP), the USTR will be keeping the negotiating texts secret, and in an actual regression from the TPP will be holding no public stakeholder events alongside the first round. This may or may not set a precedent for future rounds, that will rotate between the three countries every few weeks thereafter, with a scheduled end date of mid-2018.

But during his confirmation hearing in March, Lighthizer had promised to make the negotiations transparent and to listen to more stakeholders and the public. The EFF reported at the time that in response to Senator Ron Wyden question – “What specific steps will you take to improve transparency and consultations with the public?” – Lighthizer replied in writing (emphasis added):

“If confirmed, I will ensure that USTR follows the TPA [Trade Promotion Authority, aka. Fast Track] requirements related to transparency in any potential trade agreement negotiation. I will also look forward to discussing with you ways to ensure that USTR fully understands and takes into account the views of a broad cross-section of stakeholders, including labor, environmental organizations, and public health groups, during the course of any trade negotiation.

He said that “we can do more” to ensure that we “have a broad and vigorous dialogue with the full range of stakeholders in our country.”

Senator Maria Cantwell tried to have Lighthizer address the skewed Trade Advisory Committees that currently advise the USTR, by asking:

“Do you agree that it is problematic for a select group of primarily corporate elites to have special access to shape US trade proposals that are not generally available to American workers and those impacted by our flawed trade deals?”

To continue reading: After Fake Promises of Transparency, NAFTA Negotiations Start in Secrecy. And Lobbying is Heating Up

“Investors Are Being Swindled”: Canadian Accountants Slammed, by Peter Diekmeyer

Don’t delude yourself that American standards are all that much higher than Canadian standards. From Peter Diekmeyer at wolfstreet.com:

People “mistakenly believe their pension plans, mutual funds, and other investments are safeguarded.”

Canada’s Finance Minister Bill Morneau was one of the country’s top pension fund management professionals before he went into government. But when he recently addressed Concordia University business students, not one asked about the country’s $4 trillion national debt, much of which is pension-related.

That’s not surprising – because, as the Fraser Institute notes, nearly three quarters of those debts are not included in the federal and provincial governments’ financial statements. So, Canadians have no clue how bad the country’s true financial situation is.

This lax reporting is spread throughout the system, including public companies, says one expert.

“Investors are being systematically swindled out of large amounts of retirement savings,” says Al Rosen, a forensic accountant and co-author of Easy Prey Investors, a recently-released book that details shortfalls of Canada’s lax reporting standards.

Accounting scandals abound

“Investors mistakenly believe that their pension plans, mutual funds, and other investments are safeguarded,” says Rosen. “In fact, they are suffering losses that are monumental, compared to individual publicized scams.”

A key challenge, says Rosen, relates to Canada’s use of International Financial Reporting Standards, which “assign excessive power and choice to corporate management, providing them the ability to inflate corporate profits.” Rosen cites a range of accounting scandals including Valeant, Nortel, and Sino-Forest as examples of Canadian laxness.

In one famous fraud case, Bre-X, auditors couldn’t be bothered to check if the company’s gold mine, its only major asset, actually existed. External accountants instead essentially relied on a manager’s claim that he had “found gold” in the core samples he presented to a valuation firm, when they signed off on the statements.

To continue reading: “Investors Are Being Swindled”: Canadian Accountants Slammed

Top Canadian Court Permits Worldwide Internet Censorship, by Electronic Frontier Foundation

Canada’s highest court just ruled that Canadian courts get to decide what people, including people outside of Canada, get to see on Google. From Aaron Mackey and Corynne McSherry and Vera Ranieri of the Electronic Frontier Foundation at wolfstreet.com:

A country has the right to prevent the world’s Internet users from accessing information, Canada’s highest court ruled on Wednesday.

In a decision that has troubling implications for free expression online, the Supreme Court of Canada upheld a company’s effort to force Google to de-list entire domains and websites from its search index, effectively making them invisible to everyone using Google’s search engine

The case, Google v. Equustek, began when British Columbia-based Equustek Solutions accused Morgan Jack and others, known as the Datalink defendants, of selling counterfeit Equustek routers online. It claimed California-based Google facilitated access to the defendants’ sites. The defendants never appeared in court to challenge the claim, allowing default judgment against them, which meant Equustek effectively won without the court ever considering whether the claim was valid.

Although Google was not named in the lawsuit, it voluntarily took down specific URLs that directed users to the defendants’ products and ads under the local (Canadian) Google.ca domains. But Equustek wanted more, and the British Columbia Supreme Court ruled that Google had to delete the entire domain from its search results, including from all other domains such Google.com and Google.go.uk. The British Columbia Court of Appeal upheld the decision, and the Supreme Court of Canada decision followed the analysis of those courts.

EFF intervened in the case, explaining [.pdf] that such an injunction ran directly contrary to both the U.S. Constitution and statutory speech protections. Issuing an order that would cut off access to information for U.S. users would set a dangerous precedent for online speech.  In essence, it would expand the power of any court in the world to edit the entire Internet, whether or not the targeted material or site is lawful in another country. That, we warned, is likely to result in a race to the bottom, as well-resourced individuals engage in international forum-shopping to impose the one country’s restrictive laws regarding free expression on the rest of the world.

To continue reading: Top Canadian Court Permits Worldwide Internet Censorship

The Sound of One Wing Flapping, by James Howard Kunstler

Things have gone all calm, according to James Howard Kunstler, calm enough for a black swan or two to land. From Kunstler at kunstler.com:

And suddenly the storms of early Trumptopia subside, or seem to. The surface of things turns eerily placid as the sweets of May sweep away the toils of an elongated mud season. Somebody stuffed Kim Jong Un back in his bunker with a carton of Kools and the Vin Diesel video library. France appears resigned to Hollandaise Lite in the refreshing form of boy wonder Macron. It’s been weeks since The New York Times complained about the Russians stealing Hillary’s turn as leader of the free world. We’re given to understand that Congress managed overnight to cook up a spending bill that will avert a Government shut-down until September. Rest easy America… oh, and buy every dip.

A calm surface is exactly what Black Swans like to land on, though by definition we will not know they’re out there until our reveries are broken by the sound of wings flapping. Some kind of dirty bird showed up on Canada’s thawing pond last week when that country’s biggest home loan lender suffered a 60 percent pukage of shareholder equity and had to be bailed out — not by the Canadian government directly, but by the Ontario Province’s Health Care Workers Pension Fund, a neat bit of hocus pocus that amounts to a one-year emergency loan at ten percent interest.

If that’s a way for insolvent public employee pension plans to find enough “yield” to meet their obligations, then maybe that could be the magic bullet for the USA’s foundering pension funds. The next time Citibank, Goldman Sachs, JP Morgan, and friends get a case of the Vapors, let them be bailed out by the Detroit School Bus Drivers’ Pension Fund at ten percent interest. That ought to work. And let Calpers take care of Wells Fargo.

The situation across Western Civilization is as follows: virtually every major financial institution has become a check-kiting operation or a Ponzi scheme, and we’ve reached the point where they can only pretend to be rescued. Bailout or not, the Toronto-based Home Capital Group is still stuck with shit-loads of non-performing sub-prime mortgage loans — its specialty — and Canada’s spectacular real estate bubble has hardly begun to pop. The collateral is starting to turn, like dead meat in the May sunshine, and the odium will waft across the border.

To continue reading: The Sound of One Wing Flapping

Panic Bank Run Leaves Canada’s Largest Alternative Mortgage Lender On Edge Of Collapse, by Tyler Burden

Absent government intervention, Canada’s largest alternative mortgage lender is going belly-up, and its depositors know it. From Tyler Durden at zerohedge.com:

After two years of recurring warnings (both on this website and elsewhere) that Canada’s largest alternative (i.e., non-bank) mortgage lender is fundamentally insolvent, kept alive only courtesy of the Canadian housing bubble which until last week had managed to lift all boats, Home Capital Group suffered a spectacular spectacular implosion last week when its stock price crashed by the most on record after HCG revealed that it had taken out an emergency $2 billion line of credit from an unnamed counterparty with an effective rate as high as 22.5%, indicative of a business model on the verge of collapse .

Or, as we put it, Canada just experienced its very own “New Century” moment.

One day later, it emerged that the lender behind HCG’s (pre-petition) rescue loan was none other than the Healthcare of Ontario Pension Plan (HOOPP). As Bloomberg reported, the Toronto-based pension plan – which represented more than 321,000 healthcare workers in Ontario – gave the struggling Canadian mortgage lender the loan to shore up liquidity as it faces a run on deposits amid a probe by the provincial securities regulator. Home Capital had also retained RBC Capital Markets and BMO Capital Markets to advise on “strategic options” after it secured the loan.

Why did HOOPP put itself, or rather its constituents in the precarious position of funding what is a very rapidly melting ice cube? The answer to that emerged when we learned that HOOPP President and CEO Jim Keohane also sits on Home Capital’s board and is also a shareholder. But how did regulators allow such a glaring conflict of interest? According to the Canadian press, Keohane had been a director of Home Capital until Thursday, but said he stepped away from the boardroom on Tuesday to remove the conflict of interest when it became clear HOOPP might step in as a lender.

To continue reading: Panic Bank Run Leaves Canada’s Largest Alternative Mortgage Lender On Edge Of Collapse