More Qs. More As.

Q: Why did stock markets lay an egg this week?
A: The Dow, the S&P, Bay Street and the tech-heavy Nasdaq all swooned Wednesday after the Fed pooped on their party. The American CB lowered its rate a quarter point (as expected) then said 2025 will bring only two more weensy cuts, and probably Trump-induced inflation. That was a sharp drop from the last forecast (Sept) and traders went into a hissyfit of protest. Mr. Market does not like high rates or rising prices which trim corporate profits. The protest lasted one day.

Q: So what about our dollar? Did Chrystia tank it?
A: See above. Sure, she didn’t help. Or the $62 billion deficit. But it’s more about interest than politics. US rates are a full 1% above ours and now we know they’ll stay elevated. Capital, like healthy boys, flows to where it gets the most stimulation, and that’s America.

Q: Will this get worse?
A: Probably. Our CB is trying to stave off recession. Lowering rates encourages borrowing, spending and growth, which is why our bank rate is down to 3.25% and going lower. Economists figure 2.5% is the bottom, meaning we have three quarter-point cuts coming in 2025 – widening the gap with the States and whacking the dollar more. Sorry, snowbirds.

Q: So what? We live in Canadian dollars.
A: The world doesn’t, and all the stuff we import is going to grow more expensive. Like food. If the dollar stays sub-70, inflation will likely bubble higher. If Tariff Man strikes next month, we may go through a time of both rising prices and a trade-induced recession. Miss Kamala yet?

Q: Does Dominic LeBlanc know how to be finance minister?
A: No. He’s a good egg, though. I enjoyed talking to the guy when I was in Ottawa. He’s a lawyer, an MP of 25 years, a former Lib leadership contender and a lifelong Justin Trudeau bud. His father was Lester Pearson’s press secretary and later Canada’s governor-general. Dominic is a political person, in every pore and fiber. But he’s not a finance dude. Dog help us. Another one.

Q: What happened to Carney:
A: The Ottawa gong show this week spooked Mark. He turned Trudeau down and won’t be the new FM. There is now no adult supervision.

Q: Why aren’t fixed mortgage rates falling?
A: Despite cuts by the Bank of Canada, the bond market ain’t buying it. The yield on a the Canada 5-year is up a third of a point in the last couple of weeks – and that helps determine home loan rates. Investors and traders see inflation ahead, and it’s all about one guy.

Q: You mean Trump?
A: Winner, winner, chicken dinner. Tariffs are inflationary because they raise producer and consumer prices. Cutting corporate and personal taxes leads to more spending, increased economic activity, more wage gains and rising costs. The Fed is worried about growth, higher prices and increased volatility. “We just don’t know really very much at all about the actual policy,” said boss Jerome Powell. “We don’t know what will be tariffed, from what countries, for how long, in what size. We don’t know whether there’ll be retaliatory tariffs. We don’t know what the transmission of any of that will be into consumer prices.” 47 means chaos.

Q: What the heck did Elon just do?
A: Trump’s shadow president, unelected, billionaire buddy Musk spearheaded an effort to trash a bill to fund the US government yesterday. He posted 150 times on X, telling lawmakers to kill it. Trump then agreed. The bipartisan compromise was withdrawn by Republicans and croaked quietly in the corner. Now there is the spectre of a shutdown tomorrow. Yes, Trump engineered a major financial crisis to mark the end of the Biden presidency. More worrisome, a guy who never stood for office – the richest man alive – says he represents mankind. “Vox Populi, Vox Dei,” he posted. The voice of the people is God. And guess who that is?

Q: Did our ex-finance ministress just get book-stroked?
A: You bet. A flattering one, too. ‘Chrystia” by Catherine Tsalikis paints the picture of a strong, intelligent, determined, principled person fighting for The Right Thing in a world full of, you know, men. Published three days after her stunt.

Q: Was it a coincidence?
A:

About the picture: “The attached photo is a recent addition to our family,” writes Chris. “He’s a 4-month old golden-doodle that is making us all feel like kids again. My wife couldn’t have dogs most of her life due to allergies, but when her son’s girlfriend adopted a cockapoo recently, she found out she was able to tolerate him. Enter Jax!! Merry Christmas & Happy Holidays!!

To be in touch or send a picture of your beast, email to ‘[email protected]’.

Source: https://www.greaterfool.ca/2024/12/19/more-qs-more-as/