It’s Probably Nothing

It's Probably Nothing 84 Comments

An SDA reader sent this by email this morning;

I don’t really like being the bearer of bad news, but this has me a bit rattled at the moment, and very concerned for what may be in the offing for the Canadian economy.
 
Raw material prices do not fall at an annual rate of -9.2% unless something larger is going on. These results were released about 30 minutes ago. I’ll wait for someone smarter than me, like David Rosenberg of Gluskin Sheiff to comment, but here’s the link to the report: https://www150.statcan.gc.ca/n1/daily-quotidien/190731/dq190731b-eng.htm?HPA=1
 
That’s a pretty good contraction.
 
As I sit here and stare at it, isn’t this somewhat to be expected as the underlying price structure of commodities gets shredded under the weight of tariffs. Any form of financial engineering associated with a commodity would be tied directly to the underlying borrowing to pay for the contract. A tariff taxes that loan directly, not the underlying cost of extracting/growing the good. Canada may be the canary in the coal mine for what should appear, globally, since all commodities are basically the same around the world, like iron ore or crude oil, the add ons being refinement, storage, & transport.
 
I may have misunderestimated how much financialization was baked into the pie, which would be the outlier.
 
Heads up, might get stormy.

84 Replies to “It’s Probably Nothing”

  1. Interesting article.
    Any kind of Steel production is very heavily dependant upon Energy input. And when it comes to non-ferrous, its higher yet. Be it an Electric Furnace used for making Stainless Steel to the Production of Aluminum from Bauxite. (95+% of the overall cost for AL.)

    So that those products dropped in Value, tells me there is something seriously wrong going on…as the cost of electricity sure as hell has not dropped – thanks to the imbeicles with their “Kill Coal” – Wind/Solar BS. And as such, actual demand for OUR Product has taken a Major dive…prompting lower pricing.

    TARIFFS

    This is what happens when a Grossly STUPID electorate votes in a 2 Bit trust Fund punk with less intellect than a Licked Dry DOG bowl.
    I’d See that POS hung….seriously.
    ……but in lieu, would preffer my own country.

    1. Theo in Calgary: EXACTLY my thoughts! Trudope and his ilk are taking us in a dangerous dive to poverty and Communism!

  2. STOP!!
    You’re scaring me.
    Should I bail out of the markets and buy gold and guns?

  3. People seem to think I’m kidding when I say that Fidel Junior and his Liberal Party are trading Canada’s First World standard of living straight up for the Third World’s standard of living.

    I’m not.

    Liberals are so generous with other peoples money(with appropriate commissions), and Junior plans to be the most bestest Liberal ever.

    Lionized by the Media.

    Just like Daddy.

    Lusted after by the most shallow of women.

    Just like Daddy.

    Math doesn’t matter.

    Just like Daddy.

    A danger to his people and their freedom.

    Just like Daddy.

    The only real question is “Which Daddy?”

    It’s all about Daddy issues.

    Canada is just the currency.

  4. More of the same trend that started in the latter half of 2014 for the oil & gas sector.
    We picked the absolute worst time to elect a green anti-oil leftist as PM in 2015.

    1. That was for damned sure Nold.
      2 bit Communist Ho that wore a Che Huevera watch no less..

    2. “We picked the absolute worst time to elect a green anti-oil leftist as PM in 2015.”

      Who is “WE”?

      1. That would be the Canadians “we” under a system that gives a party a majority with 39.42 % of total vote of 63%. The system is broken and the majority of citizens are rabid socialists. Canada will never return to conservative sanity and debt free balanced budgets, even with the massive wealth all around us. Canadians simply just are not smart enough and too many want what others have without working for it.

  5. Don’t forget that famous remark by PM Buttshead in which he stated that he didn’t want an alternate route for a certain pipeline, but an alternate economy. Well, he’s certainly getting his wish, isn’t he?

      1. I don’t think he wants an economic depression. I think he wants a return to pre-Magna Carta feudalism (or is it futileism?). After all, how much oil and gas is required for an economy powered by serfs and draft animals? His class, however, gets to live in absolute luxury.

        1. Can’t we just build a viable economy by selling each other handmade bird houses?

          1. We could all just sit around reading Margaret Atwood novels. 🙁

            Seriously, Butts and Trudeau know that destroying Canadian industry is the only way for Canada to meet Paris commitments.

        2. We have enough trees in Canada to cover all the CO2 that they think we’re… ahem.. polluting …and that includes animal flatulence!

          I’m worried. We don’t seem to have much choice. Bernier said he’d eliminate the Green New Deal. We need an economy. We need liberty, not a noose around our necks. The Liberals want to punish us for no good reason.

          .

          1. Nancy Ross: Maybe someone should ASK TRUDOPE leader of the LIE-brals what the reason IS I bet Trudope can’t answer!!! He will summons BUTTS to answer as I do believe he is this idiot that is running our country called Canada. VOTE OUT THE LIE-BRALS…VOTE OUT TRUDEAU…VOTE CONSERVATIVE 2019…a vote for the Greens Is a vote to destroy CANADA also…MISS Lizzy doesn’t LOVE CANADA. She only cares about herself!!

          2. @ 4:13 pm Lyn
            “She only cares about herself”

            …and that we pay her booze bill.

            In the Fall her husband is running for a seat. If he wins 2 elections and lasts 6 years we’ll have both their pensions to pay for.

            It’s such a waste to have so many parties in a two party system.

            (Too bad Lisa Rait interrupted her liquour fueled rant in front of EVERYONE that time, at a podium, giving a ‘smart’ speech. She was doing so well!)

  6. What? A recession just in time for what remains of the Libranos to blame it on the Dairy Queen? They’d be lucky.

    Even Chairman Powell at the Fed is apparently losing his taste for engineering another financial crisis—probably because the Chinese have figured out they would suffer a far worse blow than the Americans would.

    Look at the graphs yourselves. Raw materials prices are always volatile. I’d have to see a much more sustained drop to be that concerned that (as in 2014) Bay Street would start calling in overdrafts of mining and oil firms—and, if anything, lending conditions are likely to get easier, not more difficult.

    Justin should be more concerned that the House Democrats are in no mood to help ratify USMCA in time to save enough Canadian manufacturing jobs in Ontario and Quebec to save his skin.

    This is probably nothing, Kate. I think someone’s trying to scare us into buying something we don’t need.

  7. Not a big deal. Largest declines are in energy. Yes if you are an oil producer you are earning less but for the working stiff also less money to fill the truck, heat the house.
    And as an added bonus lead and copper jackets for your ammo will be cheaper too.

    1. Thomas Sowell: Global Warming Manufactured by Intellectuals?
      https://www.youtube.com/watch?v=rweblFwt-BM

      If intellectuals have elevated themselves into “a high priestly cast that can tell us all how to live and save the entire planet and in the meantime generate billions of dollars of government programs to fund their research initiatives …” then where are the unwashed masses who should be calling out this racket for what it is … a fraud.

      1. We know its a scam because the “intellectuals” of the climate elite continue to fly, drive gas guzzlers, live in multiple homes, etc.

        2. And invest in small island resorts in the $B’s as they know what they spew is BS.
          Development in the Maldives is in $B’s.
          They don’t seem to be concerned.
          Follow the money……

          1. Angel I left my glasses at work by mistake

            Not if we all vote PPC and tell the LibCons who havé governed our country for ever and have almost completely ruined it.

            It’s not Oct 21 2019 so please keep an open mind until then please.

  9. Ah well then.

    The feature in all this is that our social benefits are funded from taxes, and the majority of those taxes come from the sector of our economy that creates the most wealth.
    Ergo, if the federal government starts doing things that restrict that sector from creating wealth where pray tell does the wealth come from to sustain those benefits? This becomes a much more pressing problem for those that like to use those benefits as what defines Canadian.
    Currently the “its what makes us Canadian” advocates are placated by the contention that there is a so-called green economy we need to transfer to, while ignoring the government largess that was shelled out to keep those green industries from going out of business.
    To paraphrase Al Bundy .
    They wanted it, they asked for it, now they are going to get it.
    Good and hard to the point of seeing it for what it is.
    It works fine until you run out of other people’s money.

    1. Simply look to Cuba and Venezuela for your answer. The Socialist Provinces of Canada will simply seize the means of production (all businesses and assets in Canada) and steal every single dime of assets and income. Why “beg” for carbon taxes, when you can eat the whole enchilada.

      What could possibly go wrong with that? Fauxcohantus and Bernie Sanders laid it all out for you last night.

      1. Kenji: The voters that vote for Trudope do not understand so this is why they will keep voting for Trudope until they have to beg for their food!!

        1. well Lyn, you can now vote for the girl on the back seat of the bicycle built for two, her name is the Dairy Queen, and the handle bar she holds is fake, turD’Oh has the steering unit.

    2. “They wanted it, they asked for it, now they are going to get it.”

      As I’ve noted so many, many, times – some people need a lot of pain before they learn, and others will never learn.

    3. Under Agenda 21 the plan to coerce governments to force cur0tizens to abandon rural living us to declare look are swaths of a country to parkland where humans are not alliwedcro recreate even. People will be forced to relocate to an 800 sq ft box in the city where you will live without complaint, or else.
      Western governments a la Obama & Trudeau racked up & are racking huge debts that can never be repaid. The more land committed to zero people, ( deindustrualized, abandoned, people relocated) the more your debt is relieved by the World Bank.
      It is sinister, it is underway now and it needs to be halted.
      Total servitude.

      1. Sorry for the typos:
        force citizen’s to abandon rural living & to declare large swaths of the country to parkland !
        Discard the other line.

        If you want to see your 800 sq ft box go to Ikea who proudly display it.
        Don’t support Ikea.

      2. Can you trust the LibCon Scheer?

        I don’t as you all know

        If the Milk Cartel can buy him how can Scheer say no to the all powerful elites and Globalist?

        1. Angel: I would rather trust Scheer than Trudope as Trudope has done more lying and knifing than Andrew Scheer has ever done. You are going to have to trust someone and Scheer should be it…you trust Trudope for another 4 years. The Canadian debt will BILLIONS more than it is now as Trudope has said he will run bigger deficits…do you want this. I surely don’t. Just remember the kids of today will be paying this debt just like we did for Pierre T.

        2. “I don’t as you all know”

          Yeah Angel, you trust the Qumbecer, Max, who worked for the CPC for 13 years before he picked up his toys and decided to create his own party.
          Remind me what’s at stake for Qumbecers if Zoolander gets in again?

  10. Rather than a crash preceding a recession, the developed nations, essentially a collection of bankrupt welfare states, are so indebted that they are all walking dead into NIRP and ZIRP and QE with slowing growth rates as everything is re-leveraged to stimulate diminishing output. Eventually the debts will be monetized and inflation will wipe out the debt along with most savings. Good times indeed!

  11. Elections matter.

    We better get it right this time in 2019.

    I’m just not sure that Andy is the guy.

    1. He isn’t. And I’m not entirely convinced Max is, either.

      In some ways I think we should re-elect The Spawn just so we hit the skids faster & maybe, just perhaps, enough people will be convinced to vote right on the next one.

      2. This kind of political thinking, cutting off one’s nose to save one’s face, always goes wrong – there is no guarantee that things won’t change before part B goes into operation.

      3. I disagree for Scheer leads the CPC aka LibCons same platforms same pandering and buying votes.

        Max and the PPC are trying to get us to vote in Platforms that are good for joe and Jill six pack Canadians against what the elites and Globalist want.

        Huge difference as President Trump would say.

        The elites and Globalist in our country messed up stealing the leadership from Max by the CPC and Scheer using the milk cartel to win on the 13th vote.

        Lucky 13 for us for if they allowed Max to lead the CPC he could of been hamstrung by the CPC party.

        That was the Globalist Elites mistake.

        The allowed Max to pursue what he has always wanted with no one holding him back.

        That’s a gift fellow citizens don’t blow it with the Leftis Elitist Media paid off by our long entrenched corrupt elitist globalist political parties.

    3. Frank Q.: Trudope has promised more deficits BILLIONS…do you have deep pockets. Vote Conservative vote Scheer.

  12. Update: Powell has ordered a cut in interest rates, the first since 2008.

    Wall Street must have decided: by Mammon, if a Squad of bimbos we wouldn’t hire to empty the bins are our plan B, best to take our chances with Trump!

  13. People arguing their central planning is better than the other guy’s central planning…

    Jeremiah 17:5-6 KJV
    (5)  Thus saith the LORD; Cursed be the man that trusteth in man, and maketh flesh his arm, and whose heart departeth from the LORD.
    (6)  For he shall be like the heath in the desert, and shall not see when good cometh; but shall inhabit the parched places in the wilderness, in a salt land and not inhabited.

    1. 1Co 2:14  But the natural (sensual) man receiveth not the things of the Spirit of God: for they are foolishness unto him: neither can he know them, because they are spiritually discerned. 

      1 Corinthians 1:18-19 KJV
      (18)  For the preaching of the cross is to them that perish foolishness; but unto us which are saved it is the power of God.
      (19)  For it is written, I will destroy the wisdom of the wise, and will bring to nothing the understanding of the prudent.

      Isaiah 29:14-15 KJV
      (14)  Therefore, behold, I will proceed to do a marvellous work among this people, even a marvellous work and a wonder: for the wisdom of their wise men shall perish, and the understanding of their prudent men shall be hid.
      (15)  Woe unto them that seek deep to hide their counsel from the LORD, and their works are in the dark, and they say, Who seeth us? and who knoweth us?

    1. 2 Things,

      Stats Canada only tracks wholesale, not retail prices.
      Their tracking doesn’t include taxes, fees, etc. that get baked into the final price.

  16. Thought of Junior when I saw this:

    “”They call him Dalmatian,” observed John. “Pretty to look at, but stupid enough to eat his own shit.”

    1. Canucked..
      Aahhh…yea, Thats a Keeper fer sure..!!

      I’ve always referred to PM DickSpank as a 2 bit trust fund punk with the intellect of a licked dry dog bowl….stupid enough to use said bowl to empty his bowel….

    2. Likening Prinz Dummkopf to a dalmation is an insult to dogs.

  18. There has been a debate in the business news about whether or not Canada is going into a recession. Not only are we seeing a decline in basic price, but Canada has “an inverted interest rate yield curve”, where long rates are lower than short rates. The latter indicator typically predicts a recession. David Rosenberg is calling for a recession, and I follow Mr. Rosenberg.

    It’s too early to say if the weakening of our economy will be a recession before the fall election. I think it won’t be well discussed during the election, but who can tell? I am still predicting a Libersl-Green-NDP minority govetnment, with Ms. May and Mr. Singh as deputy prime ministers.

    1. The monthly raw materials price index varies by +/- 10% per year. Thus the comment “Raw material prices do not fall at an annual rate of -9.2%” is not only wrong, it is misleading. While the June 2018 – June 2019 index was down 9.2% this is not an “annual rate fall”. To calculate an annual rate fall you would have to average the monthly values for 2018, average the year-to-date 2019 values and compare. This is bad math because of the high inter-month volatility (e.g. 107.7 in Nov to 94.9 in Dec – yikes! 12% drop in 1 month!). Selecting a partial year and comparing it to a full year is bad statistics.

      It gets worse (the error of this person’s ways). The index in Nov. 2018 was 94.9 while the index in June 2019 was 105.1. A cherry picker could easily claim the index was up over 10% “from last year’s low”. They would be technically correct but the comment would be meaningless.

      The real story is when you look at the index with crude prices removed. It hardly varies at all. The answer is that the raw materials price index in Canada is very sensitive to crude oil prices – not surprising. Look a little further and you will notice the drop in conventional crude oil prices. This is likely due to the US oil & gas industry shifting from 6 to 8 cylinders and firing on all of them. Canada relies heavily on the US for its conventional crude exports and the Americans are pumping that kind of oil out of the ground like crazy.

      The Americans have dropped their interest rates. Their economy is slowing. Canada’s will as well. Could take longer than the election before anyone really notices. The greater issue is the drop in long-term investing in Canada’s oil & gas and mining industries. This can be placed directly at the feet of the Federal Liberal Government.

      1. Crude prices have fallen because the local inventories are being held, undeliverable. Global crude prices for the last month have barely budged, yet Canada’s have fallen? You have to ask the second question, not just answer the first.

        US rate cut has little to do with a “slowing” US economy which just reported last Friday at 2.1%, but with staying ahead of deflationary pressures with in the US as well as globally, say, like with their largest trading partner.

    2. David Murrell: Heaven help us if you are right Liberal-Green-NDP they all want the demise of the oil industry and farming
      handing Canada over to CHINA. China is interested in Canada. My thoughts only.

      1. China “invests” billions into other countries they know they cannot repay. They then take ownership. Outright imperialism.
        They just took over the Port of Mombasa in Kenya because Kenya cannot make the payments on the railroad infrastruce China supplied and paid for.
        A huge loss for Kenya.
        God knows if the railroad even works.

      2. Lynn, I agree with you. I am very bitter over the Liberal elites in Ottawa and Toronto forgetting about working businesses in rural areas, including our extensive oil and gas industries. The elites do not care.

  19. I am still predicting a Libersl-Green-NDP minority govetnment, with Ms. May and Mr. Singh as deputy prime ministers.

    Anybody want to bet that’s what Prinz Dummkopf wants? A minority government means he doesn’t have to move from 24 Sussex. He’ll push all sorts of green/socialist crapola because that’s what Singh and May will want.

    If things go cockeyed, he’ll have an easy way out (“What could I do? I had to do what they thaid or ewthe there would have been a vote of no-confidenthe and I would have lotht.”) But they won’t. Those Three Stooges will get along just fine as they all basically think alike and have the same objectives.

    1. B A Deplorable Rupertslander: EXACTLY!! They basically think alike and want to destroy Canada as it is to-day!! Make sure you vote Conservative or PPC. We don’t need NO stinking LIBERALS or players!!

      1. No votes to PPC, #TRUDEAUMUSTGO.
        Direct ALL votes to CPC.
        Ignore PPC they are paid schills for the Liberals, all if them!

        1. There’s a sound of desperation in your post.

          Ignore the best platforms ever offered to Canadians by the PPC?

          The only paid shills are the LibCons, NDP and greens and all those who follow them.

          Canadians are taking back their country in October and there’s nothing that can stop us unless we all listen to all the naysayers from the leftward political parties and paid off shills in the media.

          1. “Ignore the best platforms ever offered to Canadians by the PPC?”

            It’s easy to offer when you can’t deliver. Bernier bases his one man party in Qumbec, but gets no support from Qumbecers.

    2. BA

      I think the whole thing would blow up in less than a year. Jagginghismeat and drunkardliz would want to be number one. They don’t want “green” , they want power, and se3conding themselves to the Turd would be hard for them. Three am”egos” in the same position will not work. And as to the Turd, he would try to dictate to the other two. It would be beer and popcorn time:-)))

  20. Noticeably, the US has just announced increased agricultural sales to China. Did Trudeau not know that reaching out to Trump regarding trade issues with China that Canada has been having, just gave our southern neighbor a heads-up that there may be an opportunity to increase their exports?

    https://bit.ly/3366NOj

    1. Hobbes,

      Chairman Xi promised he was going to buy more US commodities and resume trade talks in exchange for President Trump NOT adding 25% Tariffs on more Chinese Imports. He promised this two months ago.

      Xi finally came through, probably because Lighthizer was going to tell PDT that China is still stonewalling, and add the tariffs.

      Related, if Xi marches into Hong Kong, expect PDT To pull his trade negotiators and if there is bloodshed, he will happily and with bipartisan support slap on lots of new tariffs.

  21. Agenda 21 being implemented.
    Not one Canadian voted for this!
    There needs to be a purge of public sector employees at all levels of government colluding with the UN to implement a lower standard of living in Canada, carbon taxes that leave the country, urban development that has to comply with Agenda 21 protocols and the denial of any input from Canadian taxpayers.
    “Sustainable development ” is a big lie. It’s poverty & control.
    This needs to stop!

    1. Exactly and that’s why the LibCons have to go they had their chances and they thought they could control Canadians forever with their paid and bought off media.

      They thought wrong.

      1. Angel

        I was in the camp of fear of vote splitting, and as such holding my nose and voting for Andy 2%.

        But I took a good look at the PPC platforms, and frankly they almost completely reflect my views. This will likely never happen again.

        The problem with Andy 2% and the current CPC is that it now resembles the old Mulroney PCs – it took the laurentian elite a while to get their party back, but they did get it.

        I have no wish to support that which I know will be a dissappointment to me.

        Andy showed his true colors when he chased out Max, Kelly and Trost, the 2, 3, and 4 finishers in the leadership race.

        Max would have been Finance critic, Kelly immigration, and Trost Family children and social development. Good representation for all party members who voted. But he knifed them instead.

        The trouble I see with Andy is that 1) hes in the pocket of eastern interests, and 2) he is afraid of the media party – as such he will never take a strong position of leadership on key issues, he will defer to the media party critics.

        Max is in the position of not giving a shlt what the media thinks, and as such can actually articulate and fight for conservatism.

        I hope in the runup to the election he takes a page out of the Conservative ’06 election and releases a new policy position every single day. Attack Attack Attack.

        So if my choice is to see Canada burn quickly with Trudeau or less quickly with Andy, or have a chance of extracting ourselves from the globalist vision for Canada, I’ll take door Three.

        So I joined the party and will vote for Max.

        1. “2) he is afraid of the media party ”

          The 4th estate (MSM) is one of the pillars of our democracy. I came over to SDA (after 10 yr hiatus) a over a year ago to vent at CBC bias. Trump has taken on MSM and is winning. Watching Scheer the steer, lacking gonads, kowtow to MSM.ca is sickening. Conservatives are being sidelined and the progressive elites of MSM.ca get to frame the debate & move the country further and further left & the sock puppet is happy to oblige. I’m beyond cheering for Blue or Red when the edifice is being rotted out.

        2. “Andy showed his true colors when he chased out Max,”

          Chased out Max? Sure, Buckwheat. Please explain how Max was “chased out”. The way I see it: Max is a paid Liberal shill.

      2. “that’s why the LibCons have to go they had their chances and they thought they could control Canadians forever”

        And that’s why Max Bernier worked as a CPC MP for 13 years. Yes he did. Go ahead and explain why he did it.

        1. Gee Oz.
          Maybe for the same reasons I financially supported Reform.
          “Working with the system to effect orderly change.
          Great Illusion until you realize how badly misinformed you were on the nature of the system.
          30 years flushed to find out a Kleptocracy cannot be “Reformed” using Roberts Rules of Committees.
          See Max is smarter,it only took him 13 years to realize he was being used.
          Con or Liberal they are two sides of a crap sandwhich.
          Both intent on “managing” us to their benefit.Power without principle?
          Produces Confederated Canada

          1. “Great Illusion until John Robertson realizes how badly misinformed John Robertson was on the nature of the system.”FIFY
            “See Max is smarter, it only took him 13 years to realize he was being used.”

            Not at all. Max didn’t get to be CPC leader so he balled his widdle fists and stamped his widdle feet, and just happened to quit the CPC and start his own one-man party just in time for the leadup to the election. It’s clear to me Max was the User.
            Smart is a Qumbecer taking Liberal baksheesh to split the right vote. Get goodly informed John Robertson.

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