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News Roundup for July 16, 2024
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PM Justin Trudeau's Canada

I think that article sums up what every world leader is going through in the face of interest rates and inflation.
 
Brands said:
I think that article sums up what every world leader is going through in the face of interest rates and inflation.
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Agree, though every country has differences and the 'quality' of the main opposition party varies but overall the disenchantment with current leaders is widespread. In some countries there are much more acceptable alternatives than others. Here we have the ghastly Poilievre and the US has the Trump menace.
 
Brands said:
I think that article sums up what every world leader is going through in the face of interest rates and inflation.
Click to expand...

While these are certainly recent/immediate issues; there has been widespread disenchantment with 'establishment' leaders in larger countries in 'The West' for some time now.

This has seen extremists elected to government in Italy and Hungary, and other places; it fostered the UK's Brexit and saw the election of Trump back in 2016.

***

Lets be frank, political leadership in many western nations for the last 2-4 decades have had similar issues.

1) The leaders tend to read as being from and supportive of 'The Elite'. I don't mean this in some conspiratorial way, but in the way of a trendline of decades of more free trade and lower corporate taxes
with those moves resulting in lower wages, particularly for Blue Collar and entry level workers, and higher rates of personal income tax or VAT (sales tax) often with tax shelters sprinkled in that only those with significant funds can properly access.

2) A period of high change; society rarely stands still, change is a constant, but there has been a sense from many that its been a bit relentless and much of it has not been kind to middle and lower income voters. This is the Eurozone, NAFTA/USMCA; its high immigration, legal, and illegal and in the U.S. is also mass shootings and the like and a sense that government seems incapable of tackling crises or slowing change in the least.

3) A sense that leadership isn't entirely honest. (it never was, but I digress); the point is more one of 'on top of everything else'; governments are slow to honestly explain plans, policies and tough choices; and when they do so, reluctantly and poorly, anger only grows.

Too many leaders give off the vibe of representing Goldman Sachs rather than the electorate.

****

The above is Macron to be sure, its Sunak to a degree. (The former was associated with Rothschild while the latter literally worked at Goldman from 2001 - 2004)

The ties between official Washington and Goldman are legendary and cross party lines:

www.nytimes.com

The People From ‘Government Sachs’ (Published 2017)

Sidney Weinberg, “Mr. Wall Street,” began a tradition of Goldman executives taking on public service that is continuing under President Trump.
www.nytimes.com www.nytimes.com

Former PMs in Italy and Australia had linkages too.

That said, the point is not to skewer Goldman per se; its simply to suggest that where 'middle' workers generally saw gains in the 50's and 60s in terms of standard of living, those have largely been reversed since the 1980s.

This is not some insurmountable issue, nor particularly complex at the Macro level, its this question:

Are you and your family better off now, or then?

Rose coloured glasses often taint these things, with people forgetting past recessions, racial injustice, misogyny, homophobia etc.

Still, its a problem when The West is wealthier than ever, but that gain has shown up almost entirely for the top quintile of the population.
 
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Interest rates is the reason. I will put this is context for you. Joe Biden could lose the next election to a guy who has 4 criminal indictments against him. Think about that for a second.
 
Brands said:
Interest rates is the reason. I will put this is context for you. Joe Biden could lose the next election to a guy who has 4 criminal indictments against him. Think about that for a second.
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I get that interest rates are a factor; I disagree that they are the only, or even primary factor.

If you read my post, I clearly identified this voter discontent going back well before the current interest rate hikes.

In respect of Trudeau in particular, the party hasn't polled above the mid low 30s or gotten a majority in the last several years, again predating interest rate hikes.

To be clear, those are biting, but its one more factor in a long list.
 
Ottawa may........look at capping the number of non-permanent residents.

Minister Miller doing the rounds of assorted news shows over the weekend, openly musing at some limitations being put in place, but no clear sense of a timeline or the extent of any effort.


From the above, referencing/quoting Miller:

1705266195994.png


In other words "We're thinking about making less of a mess on a go forward basis, but hadn't decided how much less, yet......."
 
Northern Light said:
Ottawa may........look at capping the number of non-permanent residents.

Minister Miller doing the rounds of assorted news shows over the weekend, openly musing at some limitations being put in place, but no clear sense of a timeline or the extent of any effort.


From the above, referencing/quoting Miller:

View attachment 533226

In other words "We're thinking about making less of a mess on a go forward basis, but hadn't decided how much less, yet......."
Click to expand...

Can't wait to hear nothing for months and then to hear them make a big deal when even cap it at 800k annually or something else equally ridiculous. If they were serious, the cap would be in place to avoid chaos this summer with hundreds of thousands of foreign students arriving for the Fall term.

They have absolutely lost the plot. And when they lose in 2025, they will have nobody but themselves to blame.
 
kEiThZ said:
Can't wait to hear nothing for months and then to hear them make a big deal when even cap it at 800k annually or something else equally ridiculous. If they were serious, the cap would be in place to avoid chaos this summer with hundreds of thousands of foreign students arriving for the Fall term.

They have absolutely lost the plot. And when they lose in 2025, they will have nobody but themselves to blame.
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They were got caught with their pants down with the news breaking that they were forewarned about immigration overloading services and infrastructure.

Now they’re trying to figure out how to get out of the bathroom stall now that their pants have disappeared.
 
Northern Light said:
I get that interest rates are a factor; I disagree that they are the only, or even primary factor.

If you read my post, I clearly identified this voter discontent going back well before the current interest rate hikes.

In respect of Trudeau in particular, the party hasn't polled above the mid low 30s or gotten a majority in the last several years, again predating interest rate hikes.

To be clear, those are biting, but its one more factor in a long list.
Click to expand...
Before the Bank of Canada started raising interest rates in June, the Liberals were leading in polls and seat counts. You have to understand, interest rates hikes, hurts everyone, including Liberal voters.
 

Ontario's reliance on international students causing rent hikes: economists​

The government's decision to cut back post-secondary funds is showing up in rent inflation, said one chief economist

https://www.newmarkettoday.ca/local...tudents-causing-rent-hikes-economists-8103882

There was a broad consensus that shelter costs, both mortgage and rent, are among the strongest remaining contributors to inflation.

"Rents are rising at about seven per cent, year over year. If you look at the three-month trend, it's accelerated to 11 per cent annually — it's not gonna go away," said Beata Caranci, chief economist at TD Bank Group, citing structural problems in the housing market, in part caused by the influx of temporary foreign workers and students.
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CIBC chief economist Avery Shenfeld specifically pointed the finger at the province: "The provinces have cut back funding to universities and post-secondary institutions, and said, 'Just charge those immigrant students more," he said.
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"This isn't just like the University of Toronto bringing future doctors and so on," Shenfeld continued, characterizing the problematic schools as "branch plants" of Ontario colleges hosted in office buildings in Toronto, "where they're just basically all foreign students, and it's just really a tuition-making machine."

"Many of these people are not going to end up being able to stay in Canada, but while they're here, they need housing. So, I think there's some urgency here, if they want to get progress on bringing rent inflation down, I do think we have to dial this down."
Click to expand...
There's a federal component as well: the federal government approves student visas, and it has warned it is preparing to limit the number of visas it approves. It issued more than 500,000 student visas in 2023.

In 2023, as of Oct. 1, the country brought in 455,000 new permanent residents and gained more than 650,000 net new non-permanent residents, according to Statistics Canada, which also shows the country's population increased by 3.2 per cent from the fourth quarter of 2022 to the fourth quarter of 2023.

Those numbers include temporary foreign workers, and Caranci said there's a lesson there for the federal government to learn: it should be careful about complaints from some corporations about having trouble finding workers and needing to use the temporary foreign worker program.

Jean-Francois Perrault, Scotiabank's chief economist, said the policy has harmed the country's productivity because it incentivizes companies to invest in labour rather than capital stock.

Stéfane Marion, chief economist at the National Bank of Canada and National Bank Financial, put it bluntly: Canada has "fallen into a population trap" for the first time. That occurs, he said, when population growth means labour growth outpaces capital investment, so an increase in living standards is no longer possible.

Marion and Caranci both warned that the mismatch between immigration and the country's ability to absorb it risks undermining the consensus for immigration in the country, and that Canada still needs strong immigration.


"We need to continue to keep immigration strong but at the same time we need to do a better job of integrating immigrants into the economy, to get them paid for what their education and skill levels are," said RBC chief economist Craig Wright said. "Going forward, I think we can do both. We can have strong immigration flows — and we need it, given our labour force dynamics — but we need to do a better job of tying them into the economy and getting the lift to productivity."

Caranci warned about the consequences of mishandling the balance between immigration and housing: if the shelter costs hold at an inflation rate of 6 per cent, it would mean that everything else would have to remain at zero, which would mean a recession.

“Frankly, I’m a little surprised we screwed it up because we sit in such a privileged position in Canada,” she said. Unlikely many countries, Canada does not have a high level of illegal immigration or refugees fleeing over its borders and has been in a position to design its own system, which worked well until recently.

"We put it in place, we implemented it, and we still screwed it up."
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Watch, there’s going to be an announcement soon (again) now that banking chiefs are breaking silence.
 
This interview all but shows that this "cap" is being slow walked. Certainly won't happen in time to stop the surge of students arriving this summer.

 
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