Fakeconomics . . . .

[errolanderson]

David Rosenberg is kind of a doomer but he makes a couple valid points in these articles.
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It may be true that the federal government went into this mess with a seemingly well contained debt-to-GDP ratio of 31 per cent, but for the entire economy, at all public and private sector levels, that ratio is an unprecedented 350 per cent. Canada in aggregate doesn’t have a AAA-rated balance sheet to begin with and now Ottawa has to somehow shoulder a good chunk of these liabilities.

Italy’s debt ratio is 360 per cent and its credit rating is BBB. Greece is 340 per cent and it is rated BB-. Spain’s debt ratio is 360 per cent and it has a BBB ranking. And China is at 290 per cent and has an A+ rating by S&P. So Canada, even as it stands, deserves a AAA sovereign rating based exactly on what criteria?

“It will be interesting to see how a central bank which does not govern the world reserve currency and a country with a massive balance of payments deficit can ensure that all these generosity are reflected in the balance sheet of the BoC” without compromising the trusted by global investors, he said.
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The Canadian dollar will fall and this time it will stay there. Our debt, low productivity and demographics make us very similar to some of the PIIGS in Europe. Had we grabbed the bull by the horns and went after our resources and supported bedrock sectors this could have been avoided.

Unless the U.S. can get control of COVID, the American economy is at serious risk heading into 2021 . . . including further fallout in the USD. Alternate currencies could gain further strength (IMO). Our projected range for the spot loonie heading into the fall market is a range of 73 cents to 76 cents U.S.

[errolanderson]

Fed buying junk bonds, now rumblings on Wall Street . . . Fed may start buying stocks. Fed actively buying companies with horrible balance sheets. President metric is focused on just one number . . . stock market index, no matter how falsified.

Meanwhile in reality land . . . .

[TASFarms]

Fed buying junk bonds, now rumblings on Wall Street . . . Fed may start buying stocks. Fed actively buying companies with horrible balance sheets. President metric is focused on just one number . . . stock market index, no matter how falsified.

Meanwhile in reality land . . . .

If the fed starts buying these over inflated stocks. It will be a blood bath. What has Tesla done to get where it is from March?

[Austrian Economics]

The Quebec government pension plan is actively seeking to buy stock in bankrupt companies like Aldo and others. I always thought pension plans should strive to get value for retirees instead of destroying their capital. But I guess this is the new normal. Sigh.

[bucket]

The Quebec government pension plan is actively seeking to buy stock in bankrupt companies like Aldo and others. I always thought pension plans should strive to get value for retirees instead of destroying their capital. But I guess this is the new normal. Sigh.

Look at Sears...investor groups raided them instead of making them more competitive against Amazon ....then the retirees got shit on....and recently they sold some logistics to Costco for a billion ,,,,doubt they are funding the retirees.

[Austrian Economics]

Look at Sears...investor groups raided them instead of making them more competitive against Amazon ....then the retirees got shit on....and recently they sold some logistics to Costco for a billion ,,,,doubt they are funding the retirees.

Sears got into trouble to a large extent due to their defined benefit pension plans. These work in a stable and sustainable interest rate environment. We haven't had that since 1971. In an environment where interest rates are going to zero and beyond defined benefit pensions will simply collapse.

[AlbertaFarmer5]

Sears got into trouble to a large extent due to their defined benefit pension plans. These work in a stable and sustainable interest rate environment. We haven't had that since 1971. In an environment where interest rates are going to zero and beyond defined benefit pensions will simply collapse.

But only after the unions bankrupt the taxpayers and the companies who they forced into funding them.

[farmaholic]

Was FCL employees on a defined benefit plan and fully funded by Federated?

I know who was funding it was an issue but unsure of what type of plan it was

[errolanderson]

WHEN DESPERATION MEETS GREED . . . .

JP Morgan stated this past week . . . The world is drowning in so-much debt that there is 'no chance' of the stock market going down. Now, this is actually a major U.S. bank making this statement . . . .

The U.S. Federal Reserve has now totally erased all signals to the market. The Fed rules everything, at the cost of everything (IMO). Nothing matters economically. Stocks will simply continue to go up widening the income gap, because the Fed is only focused on liquidity, not jobs or actual economic growth. Stock market indexes now appear to be the key metric of success for the White House.

Meanwhile, the USD is at-risk of losing its reserve status. Some commodities may no longer be priced in USD. And Powell caved despite unavoidable incoming consequences of 'desperation now meeting greed' (IMO) . . . .

These changes are now coming-in-strong. Meanwhile, the NASDAQ is again at record highs . . . .

[jazz]

JP Morgan stated this past week . . . The world is drowning in so-much debt that there is 'no chance' of the stock market going down. Now, this is actually a major U.S. bank making this statement . . . .
. .

Go at that from a different angle Errol, the major pension plans are all invested in the markets including our own CPP.

I would say asking for a reality check in the markets would be a disaster of biblical proportions at this stage.