If you want to play the blues you got to pay your dues

And you know it don't come easy, especially if you're paying in a devalued currency.





Hat tip to Dealbreaker.com

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Loonie making a spectacle of itself?*

This just in from the Department Of Pointing Out The Obvious:

Yahoo!: Government says C$ rise may be speculative

OTTAWA (Reuters) - The Canadian dollar's recent surge may be based more on speculation than on economic fundamentals, the Canadiangovernment said on Tuesday.
"Recent increases of the dollar may reflect generalized U.S.-dollar weakness and speculative sentiment toward the Canadian dollar rather than domestic fundamentals," Finance Minister Jim Flaherty said in his fiscal and economic update.
That is the sort of language the Bank of Canada has recently used to suggest that, if the currency did not retreat somewhat, it might have to step in to cut interest rates.

A big tip of the hat to Jim, for parroting what Bank of Canada Governor David Dodge was just saying last week. Thanks for that.

In the meantime, it is what it is, so lets's make hay while the sun shines.

* I tried to come up with a pun combining "spectacle" and "speculation" and failed miserably.

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New hope for the Loonie returning to sanity

Yahoo!: Loonie sinks, world stock markets lose ground

The Canadian dollar retreated sharply in foreign currency trading Monday while global stock markets continued the hemorrhaging that started Friday.
The loonie, which closed Friday at $1.0355 US, dropped more than 1.5 cents to open at $1.0204 US on Monday.
Over the weekend, Bank of Canada governor David Dodge told a group of bankers at an International Monetary Fund meeting that the loonie's recent rise was "abnormally quick and doesn't seem to be related to the domestic factors, which would normally lead to that sort of appreciation."
The U.S. dollar was also staging a bit of a rebound after hitting a fresh record low against the euro.

All I have to say about this is that even a slide to 97-cents US would have a positive impact on both the macro (Canadian Economy) and the micro (individual currency plays). Bring it on.

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WC Varones team member writes his congresswoman about inflation

Oh, and he's pissed. So much so that his points, while great, are pretty much unexcerptable.


WC Varones: Inflation - the fighting 10th's view

If this is my representative, and she claims to be Republican, then obviously we need a new party. How about the REAL CONSERVATIVES. Mr. Paul would you be available?

Just read the whole thing!

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Today On Gadget Talk: Canadian Pricing

Marketnews - Gadget Talk: CE and the Dollar

There's two things that I like foaming at the mouth about: CE retail, and economics.

Sometimes I get to do both in one fell swoop. Is it a full moon tonight?

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Loonie Up/US$ down, everybody's freaking out!

GlobeInvestor by way of Abnormal Returns

Rising commodity prices, a strong economy and buckling U.S. dollar are the main factors behind those gains. Lately though, it's unclear how much is also being driven by sheer market speculators. While the Canadian economy remains on solid footing, some question whether the currency's 5-per-cent gain in the past month alone is really justified.
"External demand for Canadian goods and services appears to be slowing and commodity prices have weakened since mid-July [despite the rise in crude oil prices]," noted Ted Carmichael, chief economist at JP Morgan Canada. Bank of Canada
Governor David Dodge has said that speculative gains in the currency would cause "monetary policy to be more stimulative than it otherwise would have been" — in other words, lower interest rates.
"The appropriate Bank of Canada response, as laid out by Governor Dodge in his 2005 speech, would be to lower the policy rate to take some of the upward pressure off the Canadian dollar," Mr. Carmichael said.

Listening to some of the popular commentary, you would think that this was the apocalypse, and that it's time to bust out the jerry cans and the tinfoil hats. Come on, this is hardly unprecedented. I mean, look at the chart:

As far as some people are concerned, you'd think that high oil, spiralling debt and creeping inflation had never happened before.

Basic economics and physics: what goes up must come down. While I typically refrain from making public comments about personal finance (but not always) , I think that now is a great time to do two things: top up your US$ bank account, and buy yourself something nice from an U.S. online retailer.




**The content contained in this blog represents the opinions of Mr. Distad. This commentary may contain forward looking statements and definetely contains sarcasm and rude sentiments. This commentary in no way constitutes a solicitation of business or investment advice. If you're looking for stock picks from me, look somewhere else. Really, what were you thinking? If you came here because you were trolling Google looking for someone to help you get rich in only twenty minutes a month, you need to seriously re-evaluate your worldview. This blog is intended solely for the entertainment of the reader, and the author, and not neccessarily in that order.

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Bank of Canada says Loonie has ideas above its station

It's great to hear that the B of C's pet economists are in line with what every exporter, small business owner, and blogger with a liberal arts degree have been saying for months. Of course, the central bank's people use more charts and formulae to say it.

Yahoo!: Bank of Canada model points to overvalued C$

TORONTO (Reuters) - The Canadian dollar is overvalued given current commodity prices and interest rate levels, according to calculations based on a March 2006 Bank of Canada model for currency forecasting.

...

IDEAglobal said the model suggests the Canadian dollar's appropriate short-term value should be around C$1.09 to the U.S. dollar, or 91.74 U.S. cents, given oil prices of about $75 a barrel and a Canadian overnight interest rate of 4.50 percent.
The currency finished at C$1.0534 to the U.S. dollar, or 94.93 U.S. cents on Thursday, down from last week's 30-year high of C$1.0340 to the U.S. dollar, or 96.71 U.S. cents. U.S. crude futures were around $77 a barrel.
The push above 95 U.S. cents has brought a flurry of predictions that the currency could soon hit parity with the greenback.

The Bank of Canada doesn't think it's justified. The U.S. Federal Reserve doesn't think it's justified. Observers and those affected most by the exchange rate don't think it's justified.

And yet, here we are.

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