Bank of Canada: The "Recession" is over!

[LargoWinch]

What a bunch of morons.

Recession is over: Bank of Canada

Challenge is to now make our economy healthy once more

BY PAUL VIEIRA AND DEREK ABMA, CANWEST NEWS SERVICEJULY 24, 2009


Canada's first recession in nearly 20 years has come to an end, according to the Bank of Canada, with the economy set to return to growth in the coming months as business and consumer confidence improves.

Canada's economic downturn, which had been ongoing for three-quarters of a year, is giving way to renewed growth in the current quarter as a result of improved credit markets and higher levels of consumer confidence, the central bank said in its monetary policy report on Thursday.

...

Full article here.

[GRG55]

Re: Bank of Canada: The "Recession" is over!

What a bunch of morons.

LOL.

From the Bank of Canada's April 2008 "Monetary Policy Report"...

"...The Bank projects that the Canadian economy will grow by 1.4 per cent this year, 2.4 per cent in 2009, and 3.3 per cent in 2010. The emergence of excess supply in the economy should keep inflation below 2 per cent through 2009...There are both upside and downside risks to the Bank's new projection for inflation; these risks appear to be balanced..."

Remember how much flack Carney took at the time? Remember the robust public defense he made of these forecasts in the face of that criticism? Remember our idiot Finance Minister's defense of the defender?

Three months later the party line had not changed much:

Canada will dodge recession, central bank says

By Jacqueline Thorpe, Financial Post
July 18, 2008

The Bank of Canada continues to expect Canada to escape a recession in the first half of 2008, and has slightly raised its projection for second quarter growth. The bank also downplayed the rise in inflation expectations among many Canadian businesses, saying they could reverse quickly if volatile energy prices stabilize.

The bank forecasts the economy to grow an annualized 0.8% in the second quarter, up from an earlier forecast of 0.3% in April. The economy contracted 0.3% in the first quarter. Two back-to-back quarters of negative growth are required to meet the widely accepted definition of a recession...

As for "...inflation below 2 per cent through 2009..." the latest from StatsCan...

Latest release from the Consumer Price Index

Friday, July 17, 2009
Released at 7:00 a.m. Eastern time

...Excluding energy, the CPI rose 2.1% in June...

All I can say is I am glad I live in Western Canada. When the inflationary poom inevitably becomes so visible even the blind can see it [and yes, it will be a "big surprise" to Carney, Flaherty, and the MSM] at least the core resource industries around here [what's left of them] will be able to pass on their price increases to consumers. Until Ottawa mandates price controls that is...

[LargoWinch]

Re: Bank of Canada: The "Recession" is over!

All I can say is I am glad I live in Western Canada. When the inflationary poom inevitably becomes so visible even the blind can see it [and yes, it will be a "big surprise" to Carney, Flaherty, and the MSM] at least the core resource industries around here [what's left of them] will be able to pass on their price increases to consumers. Until Ottawa mandates price controls that is...

You can be sure that Dalton McGuinty will find a way to tax Western Canada via the TSX [harmonized tax anyone?] and you can bet that it will be even easier for Ottawa.

Everytime I take the subway to work, I think about the brand new GM car I was forced to pay for but will never enjoy driving.

Oh and since we are at it, note that if someone's looking for a job, simply apply here. :rolleyes:

[blazespinnaker]

Re: Bank of Canada: The "Recession" is over!

Interesting, so you guys all confidently believe that the recession isn't over? Do you mind if I quote you for posterity?

I guess ECRI is a bunch of morons too?

I wish I had the crystal ball everyone else seems to have. I'd be rich!!

[LargoWinch]

Re: Bank of Canada: The "Recession" is over!

Do you mind if I quote you for posterity?

Fine with me. Are you taking the other side of that bet for posterity then blaze? Because being accountable is a two-way street... ;)

[Ghent12]

Re: Bank of Canada: The "Recession" is over!

Interesting, so you guys all confidently believe that the recession isn't over? Do you mind if I quote you for posterity?

I guess ECRI is a bunch of morons too?

I wish I had the crystal ball everyone else seems to have. I'd be rich!!

If a recession is defined as two or more consecutive quarters of negative economic growth, then technically we may be out of the recession.

That, however, only underscores the need for better definitions, in my opinion.

[D-Mack]

Re: Bank of Canada: The "Recession" is over!

If a recession is defined as two or more consecutive quarters of negative economic growth, then technically we may be out of the recession.

That, however, only underscores the need for better definitions, in my opinion.

That's what Roubini said, it may not be a recession but it would feel like one.



Starting at 9 minutes
The economy: Nouriel Roubini, New York University; Mort Zuckerman, U.S. News and World Report; author Niall Ferguson ("Ascent of Money")

[GRG55]

Re: Bank of Canada: The "Recession" is over!

Interesting, so you guys all confidently believe that the recession isn't over? Do you mind if I quote you for posterity?

I guess ECRI is a bunch of morons too?

I wish I had the crystal ball everyone else seems to have. I'd be rich!!

"The Recession" may be over...in other words trillions upon trillions of dollars of government stimulus all over the world will undoubtedly create a positive GDP result in most economies - for at least a few quarters...but this economic contraction is far from over and any self-sustaining economic growth in most of the developed economies would not appear imminent.

I actually have a lot of respect for Lakshman Achuthan [who is the son-in-law of the late Wall Street legend Leon Levy] but you may want to recall that the ECRI repeatedly and actively argued against the calls by others that the USA was already in recession in early 2008, until it belatedly changed its mind on March 20, 2008.

The ECRI was watching the usual indicators such as the low business inventories in late 2007 [one of the same indicators that fooled Don Coxe] and completely missed the debt deflation aspect of this downturn.

I too wish I had a crystal ball, for in that event I also would be rich. But as EJ has shown the really big turning points can be seen with clarity well before the fact if one has ones eyes and ears open.

The Bank of Canada's expensive econometric models failed it miserably last year. I don't have any reason to believe that there's been any great makeover in their methods in the intervening months, so I don't have any confidence there is any durable recovery underway in Canada...yet.

[metalman]

Re: Bank of Canada: The "Recession" is over!

"The Recession" may be over...in other words trillions upon trillions of dollars of government stimulus all over the world will undoubtedly create a positive GDP result in most economies - for at least a few quarters...but this economic contraction is far from over and any self-sustaining economic growth in most of the developed economies would not appear imminent.

I actually have a lot of respect for Lakshman Achuthan [who is the son-in-law of the late Wall Street legend Leon Levy] but you may want to recall that the ECRI repeatedly and actively argued against the calls by others that the USA was already in recession in early 2008, until it belatedly changed its mind on March 20, 2008.

The ECRI was watching the usual indicators such as the low business inventories in late 2007 [one of the same indicators that fooled Don Coxe] and completely missed the debt deflation aspect of this downturn.

I too wish I had a crystal ball, for in that event I also would be rich. But as EJ has shown the really big turning points can be seen with clarity well before the fact if one has ones eyes and ears open.

The Bank of Canada's expensive econometric models failed it miserably last year. I don't have any reason to believe that there's been any great makeover in their methods in the intervening months, so I don't have any confidence there is any durable recovery underway in Canada...yet.

in march ej started saying the 'recession' will 'end' in q3 this year in the peak quarter for the stimulus impact... put up the goldman chart...



but i don't understand... how does the contribution of the stimulus turn negative in Q3 and q4 2010? :eek: does ej explain?

[GRG55]

Re: Bank of Canada: The "Recession" is over!

in march ej started saying the 'recession' will 'end' in q3 this year in the peak quarter for the stimulus impact... put up the goldman chart...



but i don't understand... how does the contribution of the stimulus turn negative in Q3 and q4 2010? :eek: does ej explain?

There's no free lunch.

There is a cost to borrowing such a gargantuan sum of money from foreigners to fund all manner of Democrat pork [remember how this "stimulus" package was formulated and who the key players were]. Goldman probably thinks that the costs of the package will start to act as a drag on the economy by the time the '10 mid-terms roll around.

StimPAC II anyone???? :cool:

[GRG55]

Re: Bank of Canada: The "Recession" is over!

BTW blazespinnaker, if you are a fan of the ECRI work you may want to also check out The Levy Economics Institute of Bard College publications. In this most political of political economies its "public policy oriented" work may be of interest.

The ECRI's Lakshman Achuthan is a director of the Levy Institute.

[metalman]

Re: Bank of Canada: The "Recession" is over!

BTW blazespinnaker, if you are a fan of the ECRI work you may want to also check out The Levy Economics Institute of Bard College publications. In this most political of political economies its "public policy oriented" work may be of interest.

The ECRI's Lakshman Achuthan is a director of the Levy Institute.

levy was listed as one of the 'gang of 11' who got it right.

[GRG55]

Re: Bank of Canada: The "Recession" is over!

levy was listed as one of the 'gang of 11' who got it right.

Some years ago I read his biography "The Mind of Wall Street". In it he wrote about the post-Nasdaq bubble contraction in consumption, the potential for a rise in the USA savings rate, and concluded that the USA was headed for a depression [that's the word he used]. However, just like EJ he never anticipated the Fed would re-flate using residential housing as the new "object of desire". He thought the depression started with the 2001 recession.

I have often wondered what did people, like you, who discovered iTulip in the 1990's do when EJ decided that his work was done and the site went dark early this decade? I have no idea what I would do if this site went dark today...

[blazespinnaker]

Re: Bank of Canada: The "Recession" is over!

Fine with me. Are you taking the other side of that bet for posterity then blaze? Because being accountable is a two-way street... ;)

I think we'll have a slight double dip. Hopefully only slight. I really don't relish the idea of another deep recession. I'm more hopeful than optimistic though.

[blazespinnaker]

Re: Bank of Canada: The "Recession" is over!

The Bank of Canada's expensive econometric models failed it miserably last year. I don't have any reason to believe that there's been any great makeover in their methods in the intervening months, so I don't have any confidence there is any durable recovery underway in Canada...yet.

We have a resource based economy. We're going to do fine. BRIC / etc is growing like a weed again and is plowing money into commodities. The fundamentals of the Canadian economy are sound .. 30M people in the 2nd largest nation on the planet sharing a border with the richest nation on the planet. Seriously, how it is that we ever went into a recession I do not know.

I think our biggest problem is we get lazy because we are so damn lucky.