D.K. Foreman – Personal Blog

Financial

Get your financial house in order: Canada officially enters recession

by on Sep.01, 2015, under 2015 Year, Endtimes, Financial, World News

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Ottawa (AFP) – Reeling from low oil prices, Canada fell into a recession in the first half of the year, government data confirmed Tuesday, putting Conservative Prime Minister Stephen Harper on the defensive in the run-up to October elections.

According to Statistics Canada, the economy contracted 0.5 percent in the second quarter after retreating 0.8 percent in the previous three months.

It is Canada’s second recession in seven years and it is the only Group of Seven nation in economic retreat. The figures are the weakest since the 2008 global financial crisis.

The data reflects fears about the health of the global economy as more gloomy evidence emerged of a slowdown in China, a main engine of growth worldwide.

Harper, whose Tories are trailing their rivals in opinion polls ahead of the October 19 election, blamed the overseas turmoil for Canada’s woes, and emphasized an expansion in the economy in June.

“We are living, once again, in a time of ongoing global economic instability,” Harper said.

“Obviously there has been challenges, particularly in the energy and some commodity sectors because of falling prices. But the fact of the matter is over 80 percent of the Canadian economy has been growing.”

Canada, the world’s fifth-largest oil producer, has been hit particularly hard by the halving of world oil prices from above $100 last year.

In the second quarter, its mining, quarrying and oil and gas extraction sector posted a “notable decrease” for a second consecutive quarter, said the government statistical agency.

.. View gallery
Canada, the world's fifth-largest oil producer, …
Canada, the world’s fifth-largest oil producer, has been hit hard by the plunge in world oil pri …

Analysts said the damage however could be limited.

“Despite the weak start to the year, there is good reason to believe that the worst is over,” said TD economist Brian DePratto.

DePratto cited the sharp increase in GDP in June, “providing positive momentum to start the second half of the year.” He predicted a “sharp rebound” in the third quarter with growth reaching 2.5 percent by year’s end.

– Harper under fire –

On the campaign trail, where the economy has dominated the debate, opposition parties pounced on the grim data, urging voters to send the Tories packing.

“Under Stephen Harper, this has been Canada’s lost decade,” leftist New Democratic Party candidate Andrew Thomson told a press conference in Ottawa.

“Ten years of job losses, continued crumbling of infrastructure, tax breaks for the wealthy and a situation where the middle class continues to struggle to get ahead, 150 billion dollars in new debt and two recessions — people are telling us they have had enough.”

Thomson — whose critiques were echoed by the Liberals — said the Conservatives’ stewardship of the economy has been a failure.

“We need to bring change to Ottawa,” he said.

Harper has insisted that, oil aside, the rest of the economy is doing well, although the figures point to broad declines in a third of sectors.

At a steel plant in Hamilton, Ontario, he urged voters to support his party’s leadership, saying he had “the proven experience to keep us safe and keep our economy moving forward.”

– Business investment down –

In the second quarter, business outlays for machinery and equipment, communications and audio and video equipment, furniture, fixtures and prefabricated structures, and intellectual property products fell.

New housing construction decreased, but this was mitigated by an increase in renovations and strong resale activity, according to Statistics Canada.

Canadians also bought more cars and trucks, insurance and financial services, as well as food, beverages and accommodation services in the period.

Overall, exports edged up 0.1 percent after decreasing 0.3 percent in the first quarter. Imports declined 0.4 percent.

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Endtimes: Millions wiped off British pensions as FTSE 100 loses £60BILLION in just hours

by on Aug.26, 2015, under 2015 Year, Endtimes, Financial, Shemitah Cycle, World News

LONDON’S FTSE 100 has plunged to its lowest level in almost three years, slashing the value of British pensions, after a disastrous ‘Black Monday’ of trading in China sent shock waves through global markets.

China's Black Monday hit trading in London today

China’s Black Monday hit trading in London today

By Lana Clements
PUBLISHED: 11:46, Mon, Aug 24, 2015 | UPDATED: 22:36, Mon, Aug 24, 2015

Panic selling ripped through UK markets this morning sinking the index of Britain’s largest companies by three per cent, wiping around £60billion off its worth, as it reached as low as 5768.22.

Unless the index recovers today is set to be the largest one day fall of the FTSE since 2008, over the last two weeks more than £160billion has been torn off the value of UK stock markets.

And the Dow Jones finished down 3.6 per cent after earlier dropping more than 1,000 points – or almost 7 per cent of its value.

The drop in the FTSE affects the worth of pension pots, and British savers and investors have been told to brace themselves for further losses.

Today’s mayhem followed China’s worst day of trading since 2007, where the country’s main indexes dropped by a staggering eight per cent.

Sell offs in China are related to fears over the country’s slowing economy and the Chinese government’s reaction, but have been compounded in the last couple of weeks by falling oil prices and political instability in other parts of the world.

The re-emergence of a crisis in Greece has spooked investors, with the troubled country now promising fresh volatility as it heads for early elections in September.

Elections in Spain and Portugal are also weighing on the mind’s of investors.

Michael Hewson, chief market analyst at CMC Markets UK, said: “We have a recipe for a big cocktail of uncertainty.

“As we embark on the final full week of August the prospect of further large scale volatility seems almost inevitable as investors look towards Chinese markets in particular for further clues to market direction…

“Against this backdrop it would take an investor with nerves of steel to contemplate dipping back into the market at this point.”

Today's FTSE 100 fall has been the largest since 2008.

Today’s FTSE 100 fall has been the largest since 2008.

However, other critics urged households and investors not to panic and said that now could even be a good buying opportunity.

Laith Khalaf, senior analyst, Hargreaves Lansdown, said: “The Footsie has been decimated in ten trading days, as fears over global growth have gripped international markets.

“China and commodities are still dominating proceedings, with mining companies once again bearing the brunt of poor sentiment.

“Pension funds and private investors alike will be licking their wounds, and wondering when the sell-off is going to come to an end.

“This is undoubtedly an uncomfortable period for investors, but it’s at times like these that it pays to keep your head.

“However bleak things may seem today there are reasons to be positive.

“A lower oil price will boost household budgets in the UK, Europe and the US, which should feed through into spending.

“And as long as lower petrol prices are keeping inflation down, central banks are unlikely to raise interest rates, so mortgage payments are likely to remain low for some time yet.

“Stock market corrections, like the one we are witnessing, present investors with an opportunity to put new money to work in the market at lower prices. No-one knows when this bout of angst will end, and stock prices may yet have further to fall.

“But when the market as a whole is fearful, it’s usually a good time to top up your holdings.”

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Endtimes: Oil’s latest casualty: Mexico

by on Aug.24, 2015, under 2015 Year, Endtimes, Financial, Hispanic Community, Revival In America, Shemitah Cycle

“Another disappointing year” looms for Mexico, with growth hit by the rout in the oil price and falling crude production, amid concerns as to the impact of the upcoming U.S. Federal Reserve interest rate hike.

The country will post its second quarter gross domestic product (GDP) figure later on Thursday and will be closely watched especially after the Mexican central bank lowered its growth forecast for 2015 for a fourth time last week, to between 1.7 percent and 2.5 percent.

Susana Gonzalez | Bloomberg via Getty Images

Susana Gonzalez | Bloomberg via Getty Images

The oil rout has hurt Mexico, whose top export is crude petroleum. Light crude hit a six-and-a-half-year-low on Thursday of $40.21 and a dip below $40 seems possible for the first time since 2009.

“This suggests the economy is on course for another disappointing year as crude production continues to fall and the currency remains under pressure,” Wolfango Piccoli, managing director at Teneo Intelligence, said in a research note this week.

Barclays Research forecasts Mexico’s economy expanded by a seasonally adjusted 0.9 percent quarter-on-quarter between April and June, with solid growth in the services sector helping offset weaker industrial production.

This would be up from 0.4 percent in the first quarter of 2015 and 0.7 percent in the last three months of 2014, but means Mexico is unlikely to return to the 4 percent-plus annual growth posted between 2010 and 2012.

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‘Unusual disconnect’ between US, Mexico

The U.S. remains by far Mexico’s biggest export destination. But despite the close ties, Mexico’s economy is lagging its northern neighbor’s recovery.

This could prove problematic when the U.S. Fed eventually moves to hike interest rates, as Mexico’s central bank has signaled its readiness to move in sync. However, the jury’s out on whether the Mexican economy is ready for monetary tightening.

Analysts at Barclays highlight an “unusual disconnect between the U.S. and Mexico’s economic cycle,” pointing to the waning importance of trade links in recent years.

“While the U.S. continues to import about 80 percent of Mexico’s total exports, the relative importance of other economies, such as China, has increased during the past years,” said Barclays’ Andres Jaime Martinez and Marco Oviedo in a note on Tuesday.

Energy reforms to add 1.5% to GDP?

Energy reforms long-touted by President Enrique Pena Nieto, including the sale of state-owned oil fields, could add up to 1.5 percent to GDP growth in the years ahead, say Barclays analysts.

However, progress has been delayed by the rout in oil prices, disappointing reception of earlier field auctions and corruption allegations that has engulfed the Mexican president.

“The weak performance of the economy adds to the pressures facing President Enrique Pena Nieto, who must now push through an austerity budget for 2016 while attempting to kick-start the energy reform implementation process,” said Piccoli.

—By CNBC’s Katy Barnato. Follow her @KatyBarnato.

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Breaking News – Monday August 24, 2015

by on Aug.24, 2015, under 2015 Year, Endtimes, Financial, Revival In America, Shemitah Cycle, World News

World markets plunge as China stocks crash

World markets plunge as China stocks crash

World markets plunge as China stocks crash

World stocks and oil prices plunged Monday as a global sell off accelerated on worries about the health of China’s huge economy.

China stocks crashed and all Asian markets suffered major losses. Europe’s markets were bleeding heavily by midday — down about 5%. And Wall Street was poised for another sharp drop.

Fears of slowing growth in the world’s second biggest economy trashed commodity markets. Oil slumped more than 4% to a new six-year low below $39 a barrel.
China’s benchmark Shanghai Composite index declined 8.5%, wiping out all gains made this year. Many companies, including some large state-owned firms, fell by the maximum daily limit of 10%. The index is now down 38% since its June peak.
The smaller Shenzhen Composite lost 7.7%.

In Japan, the Nikkei closed down 4.6%. Stocks in India suffered their biggest fall in more than seven years.
Germany’s DAX shed 4.6%, and the FTSE 100 in London fared little better.

The losses went beyond stocks and commodities. Asian currencies were trading lower against the U.S. dollar, and Russia’s ruble fell by nearly 3%.
Three factors have investors on the run:

1. Concerns that China’s economy is slowing faster than analysts had anticipated.
2. Uncertainty over when the U.S. Federal Reserve will raise interest rates for the first time in nearly a decade.
3. The effect of exceedingly cheap oil, which slams exporting countries as well as drilling companies.

The Dow plummeted by more than 1,000 points last week — its worst five-day run since 2011. The Shanghai Composite fell 11.5% over the same period.

Analysts at UBS said that central banks stand ready to provide support if sentiment worsens.
“Investors should brace for further volatility,” they wrote in a research note. “But we expect this bout of risk aversion to pass, with equities in developed markets resuming their upward trend.”

Concerns mounted after a key gauge of China’s manufacturing activity tumbled to its lowest level in 77 months. This week, investors will get a closer look at Chinese imports, vital for many countries that rely on China as a trade partner.

Many investors and economists had bet on a Fed rate hike in September, something it hasn’t done since 2006. But in the Fed’s minutes published last week, committee members sent the market mixed messages.

A rate hike would increase borrowing costs — interest on loans — for companies in emerging markets. It would also make American debt more attractive to investors, which means they could dump emerging market debt.

And then there’s oil. A year ago, a barrel of oil cost about $100 — now it’s trading near $40.

Oil is a lifeline of economic growth for many developing countries, which are also seeing their currencies lose value because of their economic exposure to China.

CNNMoney

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