Friday, March 30, 2012

So.. what are these sounds?

Just curious want to create some debate.. Both my g/f and my friend have heard them in the skies of Edmonton, Canada.





... Theres tons more, opinions?

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Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

#Budget2012 Analysis - Part 3 - Economic Developments and Prospects

We will now take a look at the second chapter of the budget. The highlights listed are as follows:


  • The global economic recovery remains fragile. The European sovereign debt and banking crisis continues to weigh on global growth.
  • The Canadian economy has remained resilient despite external weakness, reflecting sustained growth in the domestic economy.
  • Canada has had the strongest economic growth over the recession and recovery among Group of Seven (G-7) countries. This reflects our solid economic fundamentals and the timely support of the stimulus phase of Canada’s Economic Action Plan.
  • 610,000 more Canadians are working now than in July 2009, the strongest job growth among G-7 countries over the recovery. This continues the strong performance that has resulted in over 1.1 million new jobs created since the beginning of 2006.
  • However, the fragile global economic environment will continue to be reflected in modest growth in Canada over the near term.
  • The Department of Finance conducted a survey of private sector economists in early March 2012. On March 5, economists met with the Minister of Finance to discuss the economic forecast as well as the risks associated with the outlook.
  • Private sector economists expect real gross domestic product (GDP) growth of 2.1 per cent in 2012 and 2.4 per cent in 2013, broadly unchanged from the November 2011 Update of Economic and Fiscal Projections.
  • Economists also expect the level of nominal GDP—the broadest single measure of the tax base—to be above the level anticipated over the forecast period at the time of the November Update.
  • Private sector economists agreed that near-term risks to the outlook have slightly moderated since the November Update, but continue to see global economic uncertainty as the key downside risk—in particular the potential for wider contagion of the sovereign debt and banking crisis in Europe.
  • To reflect the downside risks surrounding the global economic outlook, the Government is adjusting the private sector forecast for nominal GDP downward by $20 billion in each year of the
    2012–2016 forecast period.


  • I've had to read Chapter 2 in the budget 3 times. Amongst all the praise, warnings, and prospects the price of commodities get only a small section near the end and their relevance isn't tied to global economic health. Perhaps one of the reasons government's are seemingly loosing the connection with their people and the true cost of living is that they will publish an entire section in a budget which it makes plenty of usage of the word "sustainable" yet doesn't consider if it's population can sustain paying the price. This builds off of part 2 and the devaluation of our currency.

    I am impressed with the amount of time analyzing Europe but it looks to me as though Canada is far too confident that the 6 degress of seperation between us and them protects us. Japan is also briefly mentioned and not given nearly enough credit to their potential impacts on the global economic outlook when you consider they are most likely in an energy death spiral. China sees it, so why can't we?

    Here is their section on Japan:
    The more moderate pace of growth in employment since mid-2011 mirrors continued modest growth in real GDP, at 2.5 per cent in 2011. However, real growth showed considerable variation over the course of the year as a result of export volatility related to the Japanese earthquake and tsunami, as well as forest fire and maintenance-related disruptions in the energy sector (Chart 2.11). Household spending and business investment, on the other hand, remained resilient through this period.

    Source
    That's it, That is the only mention Japan got in this chapter on "prospects". Look on your electronics and see where most are coming from. I think it deserves more than a mention, don't you?

    Another interesting note made by the government:
    Reflecting the intensification of the euro-area sovereign debt and banking crisis in Fall 2011 and its impact on global trade and financial markets, the International Monetary Fund (IMF) has steadily downgraded its near-term global outlook over the past year. The IMF now expects global real GDP growth of 3.3 per cent in 2012, with growth in advanced economies expected to be just 1.2 per cent. The IMF also expects modestly slower growth in emerging economies, reflecting the worsening external environment and a slowdown in domestic demand in key emerging economies (Chart 2.5).

    Source
    Note that they say "steadily downgraded". Meaning more than once.


    A large section of this chapter is dedicated to U.S. economic performance. Again though it barely references the compounded effect of all of these advanced economies hurting at the same time.
    The U.S. economy continues to face significant challenges stemming from ongoing household deleveraging, necessary fiscal consolidation and spillover effects from the European sovereign debt and banking crisis. As a result, private sector economists continue to expect modest U.S. economic growth (Chart 2.4).
    The problem I find with analysis like what's presented in this budget is that it is using past economic performance to predict future "sustainability" of growth. Past economic performance doesn't tell you about Japan's energy death spiral. Well it will, when it's in the past. Captain Hindsight?


    Canada's recent economic performance has been good. There is no doubt about that, but our government's claims that it was their doing are hardly accurate. Yes they put out their own stimulus. Yes they bailed the our banks and autos. But what is more important is so did the U.S. Also as I pointed out in my post on IMF private loans, our banks are worried that the U.S. banks will stop the fraudulant practices that have caused the crisis in the first place. Why? Because corporations and governments need the market liquidity. They can not function with out the ponzi economic system the U.S. has relied on. We're tied to the U.S. at the hip. The U.S. has been bailing our economy out because we export so much to them. It was actually more important that Canada remain stable for the U.S. to not descend in to total collapse.

    Canadian financial policy isn't what saved Canada, U.S. financial policy did.
    World prices for the major commodities produced in Canada are key determinants of GDP inflation, and therefore nominal GDP. While there are both upside and downside risks to the commodity price outlook, particularly in the short term, the experience of the past decade suggests that continued strong demand from emerging economies is likely to put upward pressure on commodity prices over time. The private sector expectation for GDP inflation is consistent with largely flat commodity prices. This introduces an element of prudence into the economic-planning assumptions.

    In light of ongoing downside risks surrounding the global economic outlook, the Government has judged it appropriate to adjust downward the private sector forecast for nominal GDP by $20 billion per year over the 2012–2016 period (Table 2.2). This adjustment for risk, representing a downward adjustment of $3 billion in fiscal revenues in each year of the forecast, reflects the remaining uncertainties surrounding the global economic outlook. Relative to the November Update, this adjustment is $10 billion lower for 2012, unchanged for 2013, and $10 billion higher per year in the following three years.
    And thats the rosy outlook.

    Stay tuned for part 4.

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    Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

    Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

    Thursday, March 29, 2012

    #Budget2012 Analysis - Part 2 - The Penny

    Dropping the penny may be the most important yet most under-reported aspects of the budget. It represents a major admittance by the government wrapped in a pretty boe.

    Here's one from canada.com:
    Search the couch cushions, roll all those lucky pennies and take them to the bank, because the government has announced it will phase out the copper coins beginning this fall.
    Isn't that cute? It gets cuter:
    Due to inflation, ``the penny's burden to the economy has grown relative to its value as a means of payment,'' according to budget documents.
    ``The penny is a currency without any currency,'' said Finance Minister Jim Flaherty. ``Free your pennies from their prisons at home and donate them to charity.''
    Now, let's just assume for the sake of argument this author must be referring to the Penny's color and not it's material makeup. The modern penny is steel, not copper. Of course most know that, but that's part of the illusion of fiat currency. Pennies do not hold value, they represent value. They represent 1cent of Canadian value just as 1cent in your bank account is 1cent of Canadian value. Flaherty has just explicitly told you all our currency is devaluing due to inflation. ALL of the currency, material or not.

    By digging up mental images of your dresser at home, Flaherty has averted your eyes from the devaluing currency sitting in your bank account which doesn't acummulate enough value in interest to counter the loss in value of 1 Canadian cent.
    The mental image Flaherty had hoped to dig up
    Consider the fact that if our currency is so strong right now, how can it be worth less? It's strong as compared to the USD. The USD is simply devaluing faster than ours is. The penny is a burden because the commodity prices are now much more expensive relative to our currency's value. This isn't the first time either, the change to steel was because copper was too expensive. Copper is a precious metal, steel isn't. Coincidently the government is recalling ALL pennies. That includes the copper ones.

    This is what the very early stages of hyper-inflation look like. The minimum possible representation of value is now worth so little its worth nothing at all. Your buying power is being eroded by an excess supply of money. This is cummulative with all of the stimulus blasted our way, worldwide. Currencies everywhere are devaluing, it's not just ours. This is a tax.

    Further consider how tax brackets work. The more numbers you have in your account, the more taxes you pay. I am talking personal income here. However more numbers is not equal to more value. As the numbers and prices increase, so does your tax rate even though you can only purchase an equal amount of value.

    Everyone is making penny jokes, but the jokes on you.

    Stay tuned for Part 3.

    Click here to recommend this post on progressivebloggers.ca and help other people find this information.

    Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

    Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

    #Budget2012 Analysis - Part 1 - Overview and Personal Thoughts

    So it's finally here: the budget and the 0day reaction to go with it. Or should we say reactions as they are all over the map? In any case, I've had to spend all day trying to figure out where to begin and analyze this thing. I've been reading the commentary from all sources, it's provided some valuable insight going in.

    Yesterday I wrote a post about how our debt is privatized so that we can play in the IMF's game. I've pretty well said everything I think I need to about it there and so please keep this post in mind as this analysis will not reiterate the points. We will return to the IMF in a future post when we cover Annex 3.

    This will be the first in a series of posts covering the budget contents. There are many layers to this budget to peel back and a lot of ground to cover.

    If I had to sum up this budget, I'd call it "a strategy" more than a budget. The most notable portion for me (believe it or not) is that we are dropping the penny. I will be dedicating a post to that subject. The second most notable are the changes to OAS.

    The one that threw me most for a loop were cuts to defense. I will be looking at those cuts closely, with Harper's recent Iran war mongering and the (until recently) absolute commitment to the F-35 there seems to be a rapid departure from military buildup on the part of Canada. I have some theories about this I need to flesh out, but to get your own critically thinking minds rolling why don't you consider this, this, this and then finally this (especially notes about China). To say the least Canada may be caught in a growing conflict of interest and for now I'll leave it at that.

    This budget wasn't the austerity shocker many were expecting, outside of the cuts to OAS. Baby boomer's are now playing down these cuts. A recurring theme has been that the extra 2 years is ok because our generation lives longer. Whatever makes you sleep better at night I guess.

    I'm 27. If OAS has already become a problem, I wonder how many more "resets" it will be getting in the 40 years it will take me to get to 67? The so-called gradual approach is pointless. Every one telling you that these cuts are needed coincidently doesn't have the cuts happen to them. Can anyone explain to me why if the cuts are needed the current generation to receive OAS can't handle them? They were the primary beneficiaries of the debt we'll have to pay back. What exactly is the difference between a baby boomer at 67 and a person from my generation at 67? The baby boomer generation loves to talk up how much they have given us. Keep talkin', it sure seems easier than leading by example.

    Speaking of leading by example, MP pension reforms are delayed.

    Which brings me back to the lack of harsh austerity in the so-called austerity budget. You'll notice in yesterday's post the "Austerity is here" link was about provincial politics yet my post was mostly federal in nature. This is because monetary policy is federal in nature and negative effects from federal monetary policy causes austerity locally first. The larger government will always defer excess costs to smaller governments first to protect itself.

    If you look at the debt situation in the U.S. since even before 2008, you'll notice it was small municiples crying for debt relief first. It's now affecting their states as U.S. federal monetary policy externalizes extra costs at local levels. The difference between the way the U.S. debt crisis has worked out and the way ours will work out is that the U.S. can print the global currency, and we can't. We can not monetize our debt as the U.S. is doing to externalize cost, again refer to yesterday's post on Canadian austerity in regards to our private bank loan method.

    At the moment I am pleased with investment in research for small/medium business. I have not looked at the details closely yet but I am hopeful it is in line with what I see as being required for local smaller scope economies to flourish and for truly innovative and localized energy solutions to be created.

    Energy brings us to our final point in part 1 of this analysis. The title of this budget is "JOBS, GROWTH AND LONG-TERM PROSPERITY". I am saddened that this title is a commitment to a dying form of an economy. Growth and long-term prosperity at this point in time are at odds. The rules around economic growth have changed. We need to change with them.

    Click here to recommend this post on progressivebloggers.ca and help other people find this information.

    Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

    Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

    All that matters is the math - but don't forget about the mathematicians

    Boy and girls, one and all, austerity is here! Tighten your belts and head to the clearing house, because there just isn't enough money for that. No seriously, there isn't. For the last year I have been writing about it at my other blog Hellberta. Before that, it was in groups on Facebook.

    I've been telling you the G20 was preparation for austerity because some day we will look like Greece. It's already started over multiple issues and it will spread. It's one thing talking about it, it's another living it.

    Here's a riddle for you, what is both an island and not an island, sovereign but not sovereign, and indebted to private banks? Canada. Of course we need to pay down our deficit, but guess what? All of the interest on our debt isn't going to the government, or services. It's going to private banks. If you want to understand how that came about, watch this video.

    If that doesn't blow your mind, try this.
    The source of concern is a new U.S. regulation meant to deter deposit-taking institutions that receive backstopping from Washington from engaging in speculative trading for their own—not their clients’—profit, a practice known as proprietary trading. Risky trades by global banking giants were central to the banking crisis that compelled former U.S. president George W. Bush to launch a $700-billion bailout of Wall Street in 2008.
    “I think the impact could be very, very negative,” said Canadian Bankers Association President Terry Campbell. “If you interfere with the ability of governments and corporations to fund themselves, if you interfere with liquidity in the marketplace, which is necessary for funding, then you could have a very severe impact on our economy.”
    There you have it folks, our banks are not more stable. Right from the horses mouth. Yes, you've been lied to. (Update 30/04/2012: Canadian banks got $114B bailout during recession: report)

    There is always this too.

    Lets move on.

    From the austerity is here "article":
    None of this is a surprise. Everyone knew cuts were coming, and they would’ve happened no matter who was in office. 
    When did they know? Last week? Two weeks ago? A month ago? A year ago no one knew. Everything was rosy, remember? "stable course" and all that jazz.
    When it’s time to face the music, ideology doesn’t matter. All that matters is the math.
    Yes, but whose math are we talking about? The IMFs? Structural changes are needed, but they must empower people freely and locally. Austerity and central control, police presence galore isn't to serve you and me. This is to serve those in power. The rich know exactly what's going on, and they are preparing for it while drivel like this austerity article is just meant to convince you its the only choice. That if we just give up enough of our public services someday they will all come back, better than ever.

    It's time to face the music, but your math is outdated dear, and you forgot that all of that math was created by mathmaticians to service them. We're going to have to change the rules of economic growth to adapt to a world of $100+ / barrel oil but those currently winning the game are not particularly fond of that idea. So police control grid, internet surveillence, and prisons for you peasants. Don't like it? tough shit. That's austerity.
    with full pensions – around 50. In Ontario, where doctors’ salaries rose 70 per cent in the past decade, the average family physician now makes upward of $300,000 a year
    So, you're complaining that a family doctor can afford a decent home on a year's wage. Yea, wow.. this guy is just milking the system for all it's worth isn't he? You see the middle class? Yea, that's bad. This family doctor should be poorer but of course if we only privatized all of these problems would go away right Mr. Harper? I mean that is the next step in the IMF's blueprint isn't it? That's the blueprint you're following, like the rest of the indebted world.
    Government bureaucracies are rigid, hierarchical, costly, rule-bound and unresponsive. The rest of the world is increasingly flexible, mobile, responsive, results-oriented, accountable and flat. The delivery of public services must change.
    But I thought Canada was the shining model the world should follow? But now we have to follow the world? These people think you are idiots. These are the same people who have rigged the economy to self destruct in the first place. I'm not talking about the conservatives. Liberals or Conservatives have both been working towards the same thing.

    The people are the most important thing, the economy needs to serve the people. If it doesn't, it needs to be changed.

    Conclusion

    With austerity will come unrest and with unrest comes major economic problems. The people in power have known this and have been planning for it while convincing you those numbers you see on the equity markets actually mean something regarding economic health. The only real solution to this problem is to liberate the people to solve their own problems. You have to decide to get a solar system for your house, no white knight will get it for you. You have to store food and water should long term power outages occur. "Austerity" is just a cover for the rich taking what little wealth you have left through private loans. It does nothing to address the problems we actually face.

    Click here to recommend this post on progressivebloggers.ca and help other people find this information.

    Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

    Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

    Tuesday, March 27, 2012

    Trade Diversification: It's Not What You Think

    For my first post on Canadian Trends it seems only fitting I talk about trade diversification in light of Stephen Harper's recent free trade meetings.

    It is (or should be) well known by Canadians that in general our trade deals work like this: We produce raw materials, sell them, then buy back finished product from the countries we export them too. As well it is important to note that all of our transactions are done in USD as that is the world reserve currency.

    People tend to over-simplify the mechanics and meaning of trade diversification. For instance, it is a common assumption that trading with other countries will decrease our dependency on U.S. economic health. It is overlooked however that U.S. economic health affects all countries tied to the USD.

    From my research I've concluded that trade diversification efforts underway here in Canada are to follow U.S. trade, rather than diversify from it. Let me explain.

    Over the last 10 years the U.S. has steadily outsourced it's industry to third world countries. Apple (AAPL) has recently been in the news taking criticism for having it's manufacturing process in China. This was an anticipated result of NAFTA and other 'free trade' deals. Since most manufacturing now occurs in the third world it is reasonable to assume that demand for raw materials is also highest in the third world. Current growth trends and predictions support this assertion.

    In essence, this is now how our trade process will work should these deals be successful: Canada will produce materials and ship them to China for instance. China will make use of the materials and ship the final products to the U.S. We will then receive the goods from the NAFTA super highway. In this sense we are not diversifying from U.S. trade at all, we are simply following it to where the manufacturing process currently exists.

    However, Canada is too late as manufacturing has now started moving back to the U.S. probably due to oil & gas prices. At $100+/barrel it is no longer economically viable to pay the cost of shipping across oceans. The glory days of high-paying manufacturing jobs will not be back though. Margins will be slim no matter where production occurs, and in the era of globalization our standards and expectations have been significantly lowered. I expect that instead of exporting the jobs, we will begin importing the workers.

    Conclusion

    In the short & medium term I am positive towards Canadian exports however in the long term I believe current free trade negotiations will increase rather than decrease our dependency on U.S. economic health. The price of oil along with tensions in Iran are likely to make any growth the U.S. experiences short term at best. Should the U.S.'s momentum falter however (and I anticipate it will), their imports will dry up and those countries already hit by high-shipping costs will have a significantly lower raw material demand.

    Click here to recommend this post on progressivebloggers.ca and help other people find this information.

    Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

    Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.

    First Post: An Introduction

    Hello and welcome to my new blog: Canadian Trends. My goal with this blog will be to identify global trends in several categories (the list of categories is not yet finalized, when it is it will be published) and analyze the most likely ways Canada will be affected.

    This blog will be non-partisan in nature, it is simply to describe "what-is". This is not to say I will not be criticizing or complimenting policy, but is to say no politician or party has my blind faith. However, aside from policy that has a direct result on trends this blog will not be politically oriented.

    First though, a little disclosure of myself. I'm an independent and self-taught programmer currently employed by Westpoint Capital and Collapse Network. The only investments I hold are precious metals and/or currencies and I hold them in physical form.

    I became interested in global trends while working for Titan Trading Analytics Inc. in which I applied my skills in pattern recognition to the development of automated trading systems. Specifically I designed a stateless scripting language for traders to model incredibly complex patterns that the trading system could understand.

    I don't aim to be a writer, journalist or anything of the sort. My writing isn't perfect, and I'm perfectly fine with that. This blog exists simply for me to share my thoughts on current events and what I believe and foresee happening as a result.

    I hope to maintain a weekly frequency for posting. If the blog gains traction I may move to podcasts and quarterly reports. The look & feel will be updated gradually.
    If you would like to know more about me please feel free to ask. You can also follow me on twitter. I hope you enjoy reading about Canadian Trends.

    Click here to recommend this post on progressivebloggers.ca and help other people find this information.

    Richard Fantin is a self-taught software developer who has mostly throughout his career focused on financial applications and high frequency trading. He currently works for eQube gaming systems.

    Nazayh Zanidean is a Project Coordinator for a mid-sized construction contractor in Calgary, Alberta. He enjoys writing as a hobby on topics that include foreign policy, international human rights, security and systemic media bias.