Money Flooding Out of Canada at Fastest Pace in Developed World

[MikeWB]

Canada will be the first Western nation to have some serious economic issues. Their economy is mostly oil driven (like KSA, Russia etc) and now with the new Liberal party in charge, things will only get worse. A lot worse! They will be the 'canary in the coal mine' for the rest of the West.


http://www.bloomberg.com/news/articles/2015-11-02/money-flooding-out-of-canada-at-fastest-pace-in-developed-world

Money is flooding out of Canada at the fastest pace in the developed world as the nation's decade-long oil boom comes to an end and little else looks ready to take the industry's place as an economic driver.

QuickTake Canada

Canada's basic balance -- a measure of national accounts that spans everything from trade to financial-market flows -- swung from a surplus of 4.2 percent of gross domestic product to a deficit of 7.9 percent in the 12 months ending in June, according to analysis from Kamal Sharma, a foreign-exchange strategist at Bank of America Merrill Lynch. That's the fastest one-year deterioration among 10 major developed nations.
Change in the Basic Balance
Change in the Basic Balance

More recent data on where companies and mutual-fund investors are putting their money show the trend extended into the second half of the year, suggesting demand for the Canadian dollar and the country's assets is still ebbing. The currency is already down 11 percent this year, after touching an 11-year low against the U.S. dollar in September.

"This is Canadian investors that are pushing money abroad," said Alvise Marino, a foreign-exchange strategist at Credit Suisse Group AG in New York. "The policy in Canada the last 10 years has greatly favored investments in energy. Now the drop in oil prices made all that investment unprofitable."

Crude oil, among the nation's biggest exports, has collapsed to about half its 2014 peak. The slump has derailed projects this year in Canada's oil sands -- one of the world's most expensive crude-producing regions. Royal Dutch Shell Plc's decision to put its Carmon Creek drilling project on ice last week lengthened that list to 18, according to ARC Financial Corp.
Foreign Lure

Canadian companies, meanwhile, have been looking abroad for acquisitions. Royal Bank of Canada on Monday closed its $5 billion purchase of Los Angeles-based City National Corp. Monday, its biggest-ever takeover. It's part of a net outflow of C$73 billion this year for mergers and acquisitions, both completed and announced, according to Credit Suisse data.

Nine of the 10 best-performing companies on the country's benchmark stock index in the past two years have favored buying growth abroad rather than expanding at home, from Valeant Pharmaceuticals International Inc. to convenience-store operator Alimentation Couche-Tard Inc.

Individuals are following suit. While international appetite for Canadian financial securities has held steady this year, domestic mutual-fund investors have pulled money from Canada-focused funds and plowed it into global choices for six straight months, the longest streak in two years, according to Investment Funds Institute of Canada data compiled by Bank of Montreal.
Loonie Implication

What it all means is the Canadian dollar has to get cheaper still to make Canadian businesses outside of the oil industry competitive enough with foreign peers to make them worth investing in, according to Benjamin Reitzes, an economist at Bank of Montreal.

The median forecast among strategists surveyed by Bloomberg has the loonie weakening to C$1.34 per U.S. dollar by the first three months of next year from about C$1.31 now. The country's economy is expected to lag behind the U.S., its largest trading partner, for the next two years, according to the median estimate of a separate Bloomberg poll.

While manufacturing and service exports have improved thanks to the Canadian dollar's depreciation already, they remain below levels from before the financial crisis, according to Royal Bank of Canada foreign-exchange strategist Elsa Lignos. That suggests the country still hasn't won back the economic capacity it lost, she wrote in an Oct. 29 note.

The country is expected to post its 12th straight merchandise trade deficit this week, according to every economist in a Bloomberg survey.

Given that the loonie was at parity with the U.S. dollar as recently as 2013, overseas companies and investors debating whether to put money into Canada may be waiting to see that the currency stays weak before investing again, according to BMO's Reitzes.

"Maybe a year from now you don't have that conversation because it's been there for a year and you have confidence it's going to stay there, so you buy that plant or make a new plant in Canada," he said. "It takes time for that currency impact to be felt."

[Norm Sayin]

I wonder if this article would've been published had the Conservatives won.

[yankeedoodle]

I wonder if this article would've been published had the Conservatives won.

You wouldn't be suggesting that some people would want young Mr. Trudeau to be caught in the "flood" and washed out of office before he even begins, would you, Norm?   

[Norm Sayin]

It would seem so

[MikeWB]

I wonder if this article would've been published had the Conservatives won.

New Canadian PM ran on the "tax the rich", "fuck businesses" platform. What do you expect?

You can't tax the rich. Rich can just move their money elsewhere and the country that tries to tax them will lose jobs and liquidity. Those canadian commies still haven't figured that one out.

And that new Canadian PM is a total nutjob. He's also bringing in something like 1/4 of a million Syrian "refugees". Just imagine how many tеrrоrіѕtѕ will be among them... plus family reunification will bring that number closer to half a million. Thats's just fucking insane.

I hope that if Trump wins, he builds a northern wall as well. I want none of that Canadian libtard insanity.

And don't even get me started on his anti-gun stance... he wants to restrict even further legal gun ownership because there's "gun crime" in Canada. Yeah, there's gun crime perpetrated by blacks in their ghettos with ILLEGAL guns. But that won't stop this commie libtrad nutjob from taking guns away from law abiding citizens who want guns for protection from all the africans & muslims that are about to overrun that frozen commie shithole.

[yankeedoodle]

Just imagine how many tеrrоrіѕtѕ will be among them...

Hey, Mike, being a terrorist is a paid job, and they come in on visas.  Don't you remember 911, and the "19 Arab hijackers" and the "Israeli art students" and the moving-company jews, etc, etc?

[MikeWB]

Just imagine how many tеrrоrіѕtѕ will be among them...

Hey, Mike, being a terrorist is a paid job, and they come in on visas.  Don't you remember 911, and the "19 Arab hijackers" and the "Israeli art students" and the moving-company jews, etc, etc?

I guess that's why Soros is working overtime to bring them all into western countries. Heheh

I wonder where that old fart lives... isn't he afraid that one of these "refugees" will pay him a visit?

[yankeedoodle]

I wonder where that old fart lives... isn't he afraid that one of these "refugees" will pay him a visit?

Don't know, but, if Soros is in Canada, it's a good bet that he would be a very welcome guest of that former Conservative Canadian PM Stephen Harper, the jew-ass-kissing piece of shit that the Canadians finally threw out, after he got "elected" the last time, courtesy of the robo-call scandal.

 

[MikeWB]

I'm pretty sure Soros lives in the US. My guess in Hamptons or NYC or Florida... once of the places with really good hospitals. He's old & probably has health issues.