By: Joe Chidley
Every morning, a pile of clippings from around the world arrives on my desk, courtesy of sagacious newsgatherer and Canadian Business research associate Miguel Rakiewicz. Selections from this morning’s pile:
• A good piece by Anthony Faiola on the trade implications of the “Buy American” provisions in the various versions of the stimulus bill in the US Congress right now. http://www.washingtonpost.com/wp-dyn/content/article/2009/01/28/AR2009012804002.html?nav=hcmodule
The Senate version of the bill would limit stimulus funding only to projects with US-made equipment and goods. This is the dark side of fiscal action on the economy—protectionism in the guise of stimulus. A byproduct of measuring economic success by jobs instead of productivity. Trade disputes and retaliation in the form of protectionist measures elsewhere seem to be the likely outcomes—which will only aggravate the global slowdown.
• A Moody’s Investors Service report, out yesterday, on budget deficits and Canada’s government bond ratings. Upshot: even with a three-percentage-point increase in federal debt to GDP in 2009-10, to 31.6%, will not likely affect the Aaa rating.
• An article from NRC Handelsblad that spells out how the Dutch government is backing ING, the Netherlands’ biggest bank and insurer, to the tune of 21.6 billion euros—about $34 billion Canadian. The reason: to cover ING’s exposure to U.S. mortgage-backed securities that, a year ago, the company characterized as minimal.
2 Responses to “ Protectionism, credit and another bailout ”
Americans and their protectionism!!!
It’s a lucky thing for Americans that our Canadian politicians are so meek and feeble. Or as they would see it, diplomatic and neighborly.
Canada is one of the very few countries in the world that has the resources and ability for sustained protectionist international policy.
When Americans enforce economic protectionism, our government should step in and support our industry sectors with mass purchasing and stockpiling under an economic security clause. It’s not like the rest of the world does not need or want Canadian goods and services. Subsidies are not a foreign concept to us after all.
We should equally apply the same rules of the game to the USA by raising the costs of our energy and commodity exports. Gone should be the days of trusted and good faith long-term contracts with the USA.
The USA is so completely dependant on international imports, and it could never sustain its position as economic “Bully” if the other kids in the political schoolyard stood up for justice and equallity.
This is just another sting to Canadians who are so completely loyal and generous to Americans, and it’s always a sad day when you find out just how selfish your best friend really is.
Americans have walked all over NAFTA free trade agreements, making a joke of international industry law.
Americans these days seem like the type to brag about winning a race in which the whole world watched them cheat.
And Canadians sometimes the races looser, recognizing the signs of psychotic delusion, and narcissism with a propensity for extreme violence.
Says, yup you’re the winner neighbor, your number 1. But winning is not everything, sometimes it’s how you play the game that counts most.
By John Meharg on Jan 30, 2009
While in principle I am not concerned about the government purchase of mortgages from Cdn banks to the tune of $75 billion, those mortgages being insured by CMHC in any event, so we are on the hook for them. What I am concerned about is the lack of oversight about the whole process.
Who is insuring that we buy ONLY CANADIAN mortgages, and are not helping bail the banks out for US mortgages that are NOT guaranteed by CMHC? Who is ensuring that the CDO/CMO’s being purchased are in fact ONLY mortgages, and not credit card debt, car loans, etc. After all, even Alan Greenspan says some of these SIV’s are so complex even he can’t understand them.
And what about the spending on purchases, takeovers, mergers being performed by Canadian banks. Are they really in need of this “removal of toxic assets” from their books.
It seems interesting that they on the one hand want them removed, yet TD Bank in it’s recent results, consider’s the decrease in value of $2.5 in their CMO portfolio to be “temporary”. If this is so, then I guess there is no need for the taxpayer to take them off their hands.
I think the politicians are being boondoggled by the bankers into giving them cash they really don’t need.
By Bryce on Feb 26, 2009