Canada's Economy Faces Massive Debt Collapse

It Gets Messy in Canada

“All of that negative news has kind of put a downer on consumer sentiment,” is how Jharonne Martis, director of consumer research at Thomson Reuters, explained the crummy consumer confidence reading on Friday.

The Thomson Reuters/Ipsos Canada Primary Consumer Sentiment Index had dropped to 51.6, the lowest so far this year and well below the 56.4 of last August before the oil-price crash soured the mood. By comparison, since 2010, the index has mostly been in the mid-50 range.

The “negative news” has extended beyond the price of oil. She pointed at some well-known retailer chains that have shut their stores in Canada recently, including Target, Future Shop, and photography retailer Black’s.

Already on March 30, Bank of Canada governor Stephen Poloz had warned that economic growth would be “atrocious” in the first quarter “because the oil shock is a big deal for us.” And he was right, with GDP dropping 0.6% annualized, the first quarterly decline since 2011. 

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INVESTORS' INSIGHTS - Beware Liquidity Drying Up Global Bond Markets

Liquidity Mirage Causes Volatility

In Government Bonds

At the moment, volatility in the government bond market continues to be a huge theme in the market and one that investors need to consider and address.  Whatever the initial causes of the adjustment in relative and absolute yield curves and there are plenty of potential culprits – Federal Reserve rate expectations, European Central Bank quantitative easing, inflation forecasts etc. – the subsequent severe volatility has been without doubt exacerbated by the lack of liquidity.

What is particularly worrying is that this lack of liquidity is occurring in global government bond markets, which are deemed to be the most-liquid fixed-income sectors.  To highlight this issue, Bloomberg reported that on ICAP's  BrokerTec  platform's (an electronic trading system for FI markets) April volumes fell 14 per cent from a year ago and were the lowest in six years. Read More.

INVESTORS' INSIGHTS  - "Today's Edge" 

Sooner or later the bond market will run out of bigger fools as inflation is much higher than reported by governments while investors are losing principal with negative real returns. In essence we are seeing a global debasement of all currencies under present policies.

When the bonds crash they will bring down the markets too. Time has come to unload those highflyers that have no earning because they can drop like a stone from dollars to pennies, all in the blink of young girl's eyes.

International Offices

May 19, 2015 

HSBC TITANIC Warns "Economic Iceberg Dead Ahead"

HSBC WARNS: The World Economy 

Faces a 'Titanic Problem'

HSBC chief economist Stephen King is already thinking about the next recession.

In a note to clients Wednesday, he warns: "The world economy is like an ocean liner without lifeboats. If another recession hits, it could be a truly titanic struggle for policymakers."

Here's King (emphasis added):

Whereas previous recoveries have enabled monetary and fiscal policymakers to replenish their ammunition, this recovery — both in the US and elsewhere — has been distinguished by a persistent munitions shortage. This is a major problem. In all recessions since the 1970s, the US Fed funds rate has fallen by a minimum of 5 percentage points. That kind of traditional stimulus is now completely ruled out. Read More

Remember When?  ... Once More...

Platinum Wealth Partners - Top Investors Edge

Since 2008, we have been warning so-called global industry captains that their is a HUGE economic iceberg in our path .Now the HSBC Titanic "does not" think that we if  just re-arrange the deck chairs we can avoid its certain fate. For sure, the band plays on -

"Once more... " 

International Offices
May 18, 2015

More Rumblings of Economic Dangers

We Are Nearer Economic Collapse Than Most People Think , Or In The Case Of Governments, Admits To.

We are nearer economic collapse than most people think, or in the case of governments, admits to. The Eurozone is done but still they cling on making noises about recovery and a return to financial normality. In the US, the lies of the federal reserve and the ever rising debt ceiling are combining to bring an economic disaster that will make the ‘credit crunch’ look like a kids party.

A Financial Typhoon Warning For Hong Kong

…Even HSBC’s house broker, Credit Suisse, appears alarmed at the storm clouds gathering over China and recently cut its recommendation on the bank’s shares from “buy” to “sell”, warning about the potential unwind of the dollar-renminbi “carry” trade.

Although neither HSBC nor Standard Chartered are likely to have lent much directly to mainland Chinese businesses the issue is more a question of whether they have lent to financial institutions that have lent to businesses that could be hit hard in the event of a severe downturn.

Victor Wang at Credit Suisse points out that it is almost impossible to distinguish “real” trade financing from “carry trade”, but estimates that the speculative trading could be worth at least $200bn (£120.5bn).

Hong Kong’s financial supervisor is widely seen as one of the world’s best macro prudential regulators, but Innes-Ker questions whether even the super-savvy Hong Kong Monetary Authority (HKMA) can save the territory from the crisis that could be unleashed if China’s credit bubble were to burst in an uncontrollable fashion.

“The biggest risk is that you’ve got a financial sector that is several times the size of the economy and you have to question whether the authority’s ability to step in is relatively constrained,” he says.

Others are more sanguine about the risks.

"pictures talk better than words"

“The Chinese economy is so controlled they will be able to manage any issues. The idea that the authorities don’t see these problems is ridiculous. If something is happening it is because they tolerate it,” says one Hong-Kong based banker.

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Comments:

This all ties into the market warnings set out by Investors' Insights this morning. 

With the world's biggest economies experiencing  huge troubles, destiny's hand slams down  hard outcomes. What if there is no higher ground? What if?

Platinum Wealth Advisors

April 8, 2014 - 7:00 am, EST