Recession? Don't hold your breath as Trade Deficit plunges.

[Keepitsimple]

The opposition are gleefully rubbing their hands as they bash Harper for plunging the country into a recession - all by himself apparently. All they need is one more month of bad economic data. Well, the latest news might dampen their enthusiasm. Harper deserves some credit...... and far less fault for the Global economic uncertainty that so affects the Canadian economy - as it does the world.....but he continues to shepherd us through these difficult times with policies that at a minimum, "do no harm".

Canada June trade deficit narrows sharply as exports soar

OTTAWA (Reuters) - Canada's long-suffering export sector snapped a five-month losing streak in June, showing the strongest surge in more than eight years and cutting the country's trade deficit significantly, Statistics Canada said on Wednesday.

The trade shortfall for the month was C$476 million ($361 million), much less than the C$2.80 billion deficit forecast by analysts and far below the C$3.37 billion seen in May.

Exports jumped by 6.3 percent, the biggest month-on-month gain since a 6.9 percent bounce in December 2006. Shipments of consumer goods, which leaped by a record 17.2 percent, led the increase. Those numbers will be of particular interest to the Bank of Canada, which cited disappointing non-energy exports as one reason it cut interest rates for a second time this year in July.

"Canada has likely skidded through the soft patch and is ready for a comeback over the next two quarters ... the non-energy sector is likely to continue to benefit from an improving U.S. economy and low Canadian dollar," said Diana Petramala of TD Economics.

https://ca.news.yahoo.com/canada-june-trade-deficit-plunges-soaring-exports-124954501--business.html

Link:

Edited August 5, 2015 by Keepitsimple

[Keepitsimple]

**Crickets**. I guess nobody cares about good news......doesn't fit the narrative for most of our posters....

[WIP]

Either that, or

**Crickets**. I guess nobody cares about good news......doesn't fit the narrative for most of our posters....

Either that, or we don't take the Silk Purse dept. of Sow's Ear Inc. attempt to turn the story into a smiley face very seriously!

Put it simply...our trade deficit is dropping because our over-valued Cdn Dollar is also dropping. No thanks to Harper of course, because the decline and shutting down of manufacturing in Ontario and Quebec wasn't on his radar screen...which only tracked potential profits of tarsands developments and how to get enough pipelines to ship enough bitumen everywhere as fast as possible.

It was because of Harper's attempts to turn Canada into the next petrostate complete with the usual over-inflated petro-dollar, that we're not going to thank him because his grand scheme to create a climate nightmare and shift the economic and political power to Alberta has blown up in his face!

Also worth noting that those of us who are closer to retirement and living more frugally, are not as badly impacted by higher gasoline prices and prices for imported goods by our falling 75c Dollar. But, a lot of younger people who have higher expectations and are part of the army of consumer drones out there trying to buy new crap, are also not going to reward the Conservatives for a return of manufacturing that pays lower wages than it did previously. So, don't expect the drop in imports and increase in Canadian exports to show up in poll numbers and sign-wavers at Conservative rallies!

[msj]

What is there to talk about?

Unless Q1 GDP gets revised up from -0.6% to a positive number it is almost guaranteed that Canada was/is in a recession.

The point is we won't know it for sure for another several months.

Given how oil is going in the past 3 weeks, I do not think Canada is going to be winning any economic awards this year.

The question will be if the slow down hits the FIRE part of the economy.

Real estate related business is now our biggest sector - bigger than manufacturing.

So if that slows down, and we see realtors and mortgage brokers and construction decline, then watch out below.

[PIK]

Real estate is still moving, so is cars sales and unemployment is holding ar 6.8. That is not a recession.

[blueblood]

What is there to talk about?

Unless Q1 GDP gets revised up from -0.6% to a positive number it is almost guaranteed that Canada was/is in a recession.

The point is we won't know it for sure for another several months.

Given how oil is going in the past 3 weeks, I do not think Canada is going to be winning any economic awards this year.

The question will be if the slow down hits the FIRE part of the economy.

Real estate related business is now our biggest sector - bigger than manufacturing.

So if that slows down, and we see realtors and mortgage brokers and construction decline, then watch out below.

I think that might happen sooner than later. The housingg market is over heated and the fundamentals that were supporting it are getting knocked back: natural resourse workers living, foreigners buying property, etc. that and with interest rates so low, people are borrowigg like crazy.

Its going to be early 1980s saskatchewan all over again. The silver lining is the regulation stating that the borrower is on the hook for the loan and cant walk away.

In the words of ned stark, winter is coming!!

[hitops]

Its going to be early 1980s saskatchewan all over again. The silver lining is the regulation stating that the borrower is on the hook for the loan and cant walk away.

In the words of ned stark, winter is coming!!

Yep pretty much. But I think probably worse, since our housing is more overvalued than the early 80's.

Those who saw this coming (such as myself) took mortgages at variable rates despite everybody saying rates would go up. As the BOC lowered it's rate, that saved us cash. However fixed rate mortgages will need to be renewed every 5 years normally, and those rates are determined by the US bond market, which means as they improve, those rates go up. Those people will be in trouble if they are at all struggling to make the payments now.

[blueblood]

Yep pretty much. But I think probably worse, since our housing is more overvalued than the early 80's.

Those who saw this coming (such as myself) took mortgages at variable rates despite everybody saying rates would go up. As the BOC lowered it's rate, that saved us cash. However fixed rate mortgages will need to be renewed every 5 years normally, and those rates are determined by the US bond market, which means as they improve, those rates go up. Those people will be in trouble if they are at all struggling to make the payments now.

In sk it was farmland obscenely overcalued and it took a good 25 years to get that nightmare dealt with. And it was a huge nightmare.

[August1991]

**Crickets**. I guess nobody cares about good news......doesn't fit the narrative for most of our posters....

So, a Trade Deficit is bad news?

KIS, are you a mercantilist?

[August1991]

Real estate related business is now our biggest sector - bigger than manufacturing.

So if that slows down, and we see realtors and mortgage brokers and construction decline, then watch out below.

So, msj, you still have not bought a condo/property in Vancouver and regret waiting? Edited August 7, 2015 by August1991

[hitops]

So, a Trade Deficit is bad news?

KIS, are you a mercantilist?

Don't ask hard questions like that here. Complication is scary.

[August1991]

It was because of Harper's attempts to turn Canada into the next petrostate complete with the usual over-inflated petro-dollar, that we're not going to thank him because his grand scheme to create a climate nightmare and shift the economic and political power to Alberta has blown up in his face!

Oil, energy, glaciers, hydro, north. Whether Quebec or Alberta, BC or Ontario, the world wants what we have. 20,000 years ago (a nothing in history) Canada was covered in about 1000 metres of ice. It is impossible to understand Montreal without understanding glaciers. When the glaciers melted, receded, Sweden, Norway, Canada and Russia became potentially rich countries. (As well as having some very neat fresh water lakes and rivers.)

Also worth noting that those of us who are closer to retirement and living more frugally, are not as badly impacted by higher gasoline prices and prices for imported goods by our falling 75c Dollar. But, a lot of younger people who have higher expectations and are part of the army of consumer drones out there trying to buy new crap, are also not going to reward the Conservatives for a return of manufacturing that pays lower wages than it did previously. So, don't expect the drop in imports and increase in Canadian exports to show up in poll numbers and sign-wavers at Conservative rallies!

A lower Canadian dollar makes the Mediterranean cruise more expensive. Edited August 7, 2015 by August1991

[msj]

So, msj, you still have not bought a condo/property in Vancouver and regret waiting?

Don't live in YVR so nope.

Still rent. Live next door to a judge who is also renting.

The condo he is renting has been on the market for many years now. Asking was $600k then but has dropped to under $550k now.

He is like me: wants to enjoy life without having to shell out $4 to 5 k per month on mortgage, strata, property taxes etc...

We both pay a fraction of the cash cost for these ocean front units which suits our lifestyle just fine. We really are being subsidized to live here.

Had I not had cancer recently I may have bought a place by now.

It also helps sets the priorities: I want to see the world rather than tend to the upkeep of a house.

So as much as the wife would like a place the rules are this: we choose between owning a house, saving for retirement, her not working, and travel.

We can only choose 3 and my preference is saving, travel, and her not working (we don't have kids but it is surprisingly nice having a wife who does not work - she makes bread every other day, cooks gourmet dinners from the cookbooks we have bought from our travels through Europe and SE Asia, etc.....

So far she agrees with me so the marriage is still happy.

We also travel very well together which helps.

[msj]

A lower Canadian dollar makes the Mediterranean cruise more expensive.

That would be against the Euro.

I note that it took $1.47CAD to buy 1 € One year ago.

Earlier this year it was $1.31 and now it is $1.43.

So a change during the year but whatever....

[Vancouver King]

The opposition are gleefully rubbing their hands as they bash Harper for plunging the country into a recession - all by himself apparently. All they need is one more month of bad economic data. Well, the latest news might dampen their enthusiasm. Harper deserves some credit...... and far less fault for the Global economic uncertainty that so affects the Canadian economy - as it does the world.....but he continues to shepherd us through these difficult times with policies that at a minimum, "do no harm".

https://ca.news.yahoo.com/canada-june-trade-deficit-plunges-soaring-exports-124954501--business.html

Link:

Since Harper admitted in tonight's debate that Canada is in recession, can the forum look forward to your apology for starting this thread?

[Keepitsimple]

Since Harper admitted in tonight's debate that Canada is in recession, can the forum look forward to your apology for starting this thread?

Can't remember the exact words but think they were something like "if we're headed to a recession, it's a technical one". But to answer your question, yes I would apologize and you can remind me I said that when the time comes. But keep this prescient definition and forecast in mind - which was made before the trade numbers came out (July 28th) - those exceptional trade numbers blew all forecasts away - and seem to clearly validate the following:

Whether or not Canada met the technical definition of a recession in the first half of this year won’t be known until Sept. 1, when Statistics Canada releases its GDP numbers for June.

But many economists say a “technical recession” is all Canada will have, and they expect strengthening exports, thanks to a low loonie, to pick up the slack from a slumping energy industry.

"A recession is a sustained, broad-based decline in economic activity. Canada simply does not meet that test," wrote Bank of Montreal chief economist Doug Porter, who sits on the C.D. Howe council.

Link: http://www.huffingtonpost.ca/2015/07/28/recession-canada-cd-howe_n_7889118.html

Edited August 7, 2015 by Keepitsimple

[WIP]

Real estate is still moving, so is cars sales and unemployment is holding ar 6.8. That is not a recession.

Real estate in a lot of cities is overinflated because of foreign buyers. Once the bubble breaks, a lot of investors and speculators will head for the exits. Now is a good time to stay put...pay off your mortgage if you got one, and don't buy a newer, more expensive house because you think real estate can only go up. A lot of Americans thought that 10 years ago, and are underwater on their mortgages, if they haven't already been evicted.

[August1991]

That would be against the Euro.

I note that it took $1.47CAD to buy 1 € One year ago.

Earlier this year it was $1.31 and now it is $1.43.

So a change during the year but whatever....

Good point, and you're dead right (and I'm wrong).

I reckon that the US dollar has gained value while every other currency has lost value. The Cdn $ hasn't gone down, the US $ has gone up. And travel/wine/cheese in Europe is still cheap...

[August1991]

He is like me: wants to enjoy life without having to shell out $4 to 5 k per month on mortgage, strata, property taxes etc...

Condo fees are the killer, and open-ended since they can rise. As the right would say, "Other people's money". But since you're a leftist, you believe in sharing the wealth... Edited August 9, 2015 by August1991

[August1991]

Real estate in a lot of cities is overinflated because of foreign buyers.

Overinflated? More likely, Canadian property-owners benefit directly from Canada's success as a country.

[msj]

Condo fees are the killer, and open-ended since they can rise. As the right would say, "Other people's money". But since you're a leftist, you believe in sharing the wealth...

The funny thing is that when I was in Laos and Vietnam last year, both communist countries, I was having a grand time while my investment in Glentel rocketed up by 150% thanks to BCE buying it out.

All within my TFSA for which I will not be sharing - well, I suppose there will come a time when I spend it and pay some GST/PST on whatever I buy.....

As for condo fees - yes they can be brutal. Property taxes are also brutal and often only go in one direction.

But at 50% the cost of our rent?

We have not had a rent increase in 4 years now (and even that was less than 1%).

Clearly even the most illiterate at math should understand the handout I am receiving.

My landlord is subsidizing me to hold his place for when he retires in 10 ish years. By that time the building will be wrapped in scaffolding to fix all of the accumulated problems.

It's funny because this happens time after time after time with condos yet people still buy these pieces of junk.

But, you know, OPM and whatever....

[msj]

Good point, and you're dead right (and I'm wrong).I reckon that the US dollar has gained value while every other currency has lost value. The Cdn $ hasn't gone down, the US $ has gone up. And travel/wine/cheese in Europe is still cheap...

No, travel, wine, cheese in Euroland is still expensive.

It went down a bit and then came back up to be effectively unchanged from a year ago.

Fortunately though, the exchange did not go from $1.47 to $1.82 to the €. That would then make euro land really expensive.

[WIP]

Overinflated? More likely, Canadian property-owners benefit directly from Canada's success as a country.

The problem is too many people in hot markets (like even where I am in Hamilton) start thinking prices can only go up, so they better buy in before it's too late...even if they barely qualify for the mortgage at today's low interest rates; or even worse, the people buying up...selling their homes and mortgaging a bigger, more expensive house. The last time real estate dropped, it was the people who bought into the high end of the market who were in the worst shape(like some of my in-laws who built an expensive lakefront home they realized they couldn't hardly afford, but were underwater on the mortgage a year after they moved in!). At least the new buyers with the starter homes can get most of their money out if they have to sell, since those entry level houses hold their value better in a downturn.

This speculating and big profits/big losses never used to happen in residential real estate years ago, because nobody would consider the house they needed to live in to be a short term investment vehicle!

[jacee]

The opposition are gleefully rubbing their hands as they bash Harper for plunging the country into a recession - all by himself apparently. All they need is one more month of bad economic data. Well, the latest news might dampen their enthusiasm. Harper deserves some credit...... and far less fault for the Global economic uncertainty that so affects the Canadian economy - as it does the world.....but he continues to shepherd us through these difficult times with policies that at a minimum, "do no harm".

https://ca.news.yahoo.com/canada-june-trade-deficit-plunges-soaring-exports-124954501--business.html

Link:

I am glad if things are looking up, especially if it's coming from the non energy sector. We need to be able to sustain ourselves without destroying the earth that sustains us all.

But are you suggesting that Harper et al never blamed the Liberals for recessions when they were in power?

.

[Shady]

**Crickets**. I guess nobody cares about good news......doesn't fit the narrative for most of our posters....

NDP supports actually hope for bad economic news. They actively route against Canada in hopes for political power.