Loonie rises againt the Euro

[jetsniper]

My mistake...

I thought you were talking just about a oil vs dollar comparison.

Living in Ontario I would like to see both drop (Ducking as jetsniper throws an oilrig at me)

I only wish I had the strength to lift an oilrig!

[InsaneHABSfan]

I only wish I had the strength to lift an oilrig!

Ah but Joe Sakic in the winning playoff years did have the strength to lift the Stanley Cup above his head after a long marathon of playoffs, so anything is possible.....

[JMMR]

Considering that Canada is the main supplier of softwood lumber to the US, the strong CAN dollar cannot be helping the US housing situation.

Here on the island it won't make a hill of beans difference. The logs go straight to Seattle, by passing us.

seriously dude. wow.

Wow that is a Wow.

So Amaericans take Canadian lumber without NAFTA??

[InsaneHABSfan]

Here on the island it won't make a hill of beans difference. The logs go straight to Seattle, by passing us.

Do they pass by the singing garbage cans???

[Pierre the Great]

Wow that is a Wow.

So Amaericans take Canadian lumber without NAFTA??

raw log exports look it up.

[Dirty Harry]

A little education about fundamentals as many people get this wrong:

Alberta

Every one-cent increase in the loonie removes $123 million from the provincial treasury over the course of a year.

For every year-long $1 increase in oil prices there is an additional $139 million in revenue .

So to say a drop in the dollar is minor is incorrect. The Alberta Conservative government does not like the US$ dropping as it hurts its revenue.

I invest in the oil patch so I had to do my homework on this.

You've got 75% of it right, but consider the rise of oil prices that have matched the fall of the USD cent for cent. This is the world's oil suppliers compensating themselves for the losses incurred due to the USD drop by passing it onto the world's consumers (just as any manufacturer would do in the face of rising costs).

Alberta hasn't lost much money, at least nothing compared to the long term losses they will face through blowing their brains out by raising oil patch taxes.

[InsaneHABSfan]

You've got 75% of it right, but consider the rise of oil prices that have matched the fall of the USD cent for cent. This is the world's oil suppliers compensating themselves for the losses incurred due to the USD drop by passing it onto the world's consumers (just as any manufacturer would do in the face of rising costs).

Alberta hasn't lost much money, at least nothing compared to the long term losses they will face through blowing their brains out by raising oil patch taxes.

Well you have an interesting assumption in your post as nobody is blowing their brains out. Oil is bought and sold on the world market and is not governed by any one nation or corporation to recoup costs. Ever hear of Oil futures? A very interesting way to invest ones money.

The $USD plummet is a result of bad fiscal management and liberal spending by a Republican President. When banks give sub-prime loans to people that cannot afford property someone is going to get burnt. When China dumps what $1.4 Trillion dollars of US debt on the market, someone gets burnt. With Billions of debt get pumped into Iraq for the war on terror, someone gets burnt. The burned one is the US dollar.

World demand for oil is expected to increase by 54 per cent in the first 25 years of the 21st century, according to the Energy Information Agency of the U.S. government. To meet that demand, the world's oil-producing countries will have to pump out an additional 44 million barrels of oil each and every day by 2025. China's demand for oil is expected to continue to increase by five to seven per cent a year. If that happens, China will surpass the United States as the world's largest consumer of oil by 2025. Similarly, India's oil needs are expected to grow by four to seven per cent a year. In 2004, it consumed two million barrels a day.

Also, rising taxes will do nothing to stop consumption, PERIOD. Did you stop driving your car or buying groceries at a higher price when gas went up in price? I didn't.

[Pierre the Great]

Well you have an interesting assumption in your post as nobody is blowing their brains out. Oil is bought and sold on the world market and is not governed by any one nation or corporation to recoup costs. Ever hear of Oil futures? A very interesting way to invest ones money.

The $USD plummet is a result of bad fiscal management and liberal spending by a Republican President. When banks give sub-prime loans to people that cannot afford property someone is going to get burnt. When China dumps what $1.4 Trillion dollars of US debt on the market, someone gets burnt. With Billions of debt get pumped into Iraq for the war on terror, someone gets burnt. The burned one is the US dollar.

World demand for oil is expected to increase by 54 per cent in the first 25 years of the 21st century, according to the Energy Information Agency of the U.S. government. To meet that demand, the world's oil-producing countries will have to pump out an additional 44 million barrels of oil each and every day by 2025. China's demand for oil is expected to continue to increase by five to seven per cent a year. If that happens, China will surpass the United States as the world's largest consumer of oil by 2025. Similarly, India's oil needs are expected to grow by four to seven per cent a year. In 2004, it consumed two million barrels a day.

Also, rising taxes will do nothing to stop consumption, PERIOD. Did you stop driving your car or buying groceries at a higher price when gas went up in price? I didn't.

Bush isn't a liberal spender. He was just born with a silver spoon in his mouth and has an obession with national defence. That's an official neo-conservative view point. Look at what Harper is doing. Neo Conservatism is to forget about spending at home, spend spend spend on military and defence. Sounds too much like the axis powers view point in the second world war for me.

Then the other problem for the u.s. is its trade defecet this has always been a problem, due to classical liberalism policies (republican and democrats) remember they're all the same, and being scared of the labour movement. So how do you stop the labour movement? Move all the labour intensive jobs out of your country. duh, through this idea of "free trade".

Free trade policies and its affect of one world capitalism, globalism which is the same as one world communism of the stalinist era if you ask me. And its not a shock that the far-right wing and left wing of the two only political parties are in agreement over this. Colonialism is back, in the form of globalization. We're too lazy to make it ourselves so we pass it on to another country with "cheap labour and capital".

Its all going to collapse, just like totalitarian communism did.

[zumpano21]

It would seem that certain members of this forum are INFLEXIBLE when it comes to certain matters regarding morality, ethics and values.

I would also submit that these same members of the forum are likely to have a difficult time discarding worthless objects and harbour tendencies for perfectionism and an excessive devotion to work.

[Dirty Harry]

Well you have an interesting assumption in your post as nobody is blowing their brains out. Oil is bought and sold on the world market and is not governed by any one nation or corporation to recoup costs. Ever hear of Oil futures? A very interesting way to invest ones money.

Alberta's policy is based on envy and class warfare, what they stand to reap (2 billion, estimated) in no way compensates for the billions they will lose in invetsment, but that's another topic.

Like I said, oil works like any other business. When the costs of production rise, in this case, major oil producers' costs being in their own countries' currencies, but their sales being in USD, a falling USD will take a major bite out of their profits. They pass this loss onto the consumer just as any other industry would, this is how prices work.

And yes, I work in the securities industry, although if I'm speculating on oil I'd rather do it via Suncor options (basically a pure oil play, but far more volatile) than oil futures

The $USD plummet is a result of bad fiscal management and liberal spending by a Republican President. When banks give sub-prime loans to people that cannot afford property someone is going to get burnt. When China dumps what $1.4 Trillion dollars of US debt on the market, someone gets burnt. With Billions of debt get pumped into Iraq for the war on terror, someone gets burnt. The burned one is the US dollar.

You are emotional sir, Iraq war spending represents a drop in the bucket that is the US GDP, and China has not yet dumped any USD (although speculation that it will has already entered the market's calculations). It is the federal treasury reserve atm that has mainly affected the dollar. By concentrating on alleviating the worries of a general recession caused by the housing slowdown and credit crunch (due too the subprime mortgage meltdown putting the squeeze on the flow of commercial debt flow), and subsequentlly cutting the fed's interest rate so quickly, this has severly weakened the USD as the lower interest rate makes the USD both unattractive as a place to invest in bonds, and causes worries of future inflation rises (which would further undermine the USD). Personally I believe Mr. Bernake is doing the right thing, the drop of the USD is exagerrated, and he is right to be more worried about easing the credit situation because in the short term it will be causing major losses in the financial system as banks, brokerages, insurers and other major financial instutions get burned by the general chaos of the market. Things like inflation and China's currency reserves are longer term issues that can wait until the current issues are resolved. Though I do admit it is a very dangerous situation and Mr. Bernake is walking a tightrope.

[Zowpeb]

Alberta's policy is based on envy and class warfare, what they stand to reap (2 billion, estimated) in no way compensates for the billions they will lose in invetsment, but that's another topic.

Like I said, oil works like any other business. When the costs of production rise, in this case, major oil producers' costs being in their own countries' currencies, but their sales being in USD, a falling USD will take a major bite out of their profits. They pass this loss onto the consumer just as any other industry would, this is how prices work.

And yes, I work in the securities industry, although if I'm speculating on oil I'd rather do it via Suncor options (basically a pure oil play, but far more volatile) than oil futures

You are emotional sir, Iraq war spending represents a drop in the bucket that is the US GDP, and China has not yet dumped any USD (although speculation that it will has already entered the market's calculations). It is the federal treasury reserve atm that has mainly affected the dollar. By concentrating on alleviating the worries of a general recession caused by the housing slowdown and credit crunch (due too the subprime mortgage meltdown putting the squeeze on the flow of commercial debt flow), and subsequentlly cutting the fed's interest rate so quickly, this has severly weakened the USD as the lower interest rate makes the USD both unattractive as a place to invest in bonds, and causes worries of future inflation rises (which would further undermine the USD). Personally I believe Mr. Bernake is doing the right thing, the drop of the USD is exagerrated, and he is right to be more worried about easing the credit situation because in the short term it will be causing major losses in the financial system as banks, brokerages, insurers and other major financial instutions get burned by the general chaos of the market. Things like inflation and China's currency reserves are longer term issues that can wait until the current issues are resolved. Though I do admit it is a very dangerous situation and Mr. Bernake is walking a tightrope.

I also think it will be interesting to watch how much the US can lower it's trade deficit with a weaker dollar relative to the rest of the world currencies. Especially on product that has raw material produced internal to the US where they can eek out SOME competitive advantage simply due to the economic geography of shipping raw materials.

I'd also disagree that the war in Iraq is a drop in the bucket...that's taken a HUGE toll on their spending relative to GDP.

I too think Bernake is making the right move to get this credit issue under control but you really have to wonder if he's simply pro-longing the inevitable...sometimes you have to wonder if it's better to rip the band-aid off quickly or slowly. A little bit of a quick hurt for the financial institutions might allow them to correct themselves quickly and let the poorly managed businesses get fed to the sharks...the real concern would be managing the losses and runs on any banks...but isn't that just capitalism at work, the strong survive. Bad mojo either way really...if he wanted to make moves on this issue quickly he should have done this over a year ago when people were widely warning of the issue...

I'm not sure if you realise that the oil business in Alberta has made HUGE gains in efficiency on the cost of refining a barrel of oil from the oil sands..to the point that they can actually produce a barrel of oil cheaper now then they could 10 years ago. I've heard they were only breaking even at around $26 per barrel...and that currently the break even point sits at below $18 per barrel. Much cheaper. The rising CDN dollar has off-set SOME of the gains due to the price per barrel but a barrel went from $28 to $94...the dollar went from .63 cents to the USD up to 1.05 to the USD. Clearly they're making a lot more profit.

Not sure if everyone has heard the news about Saskatchewan apparently having found more in oil reserves, then in Alberta...

[Dirty Harry]

I also think it will be interesting to watch how much the US can lower it's trade deficit with a weaker dollar relative to the rest of the world currencies. Especially on product that has raw material produced internal to the US where they can eek out SOME competitive advantage simply due to the economic geography of shipping raw materials.

It's definitely going to be a boost on US manufacturing in the short term. The trade deficit was never a huge deal though, importing a lot is the sign of a healthy economy and wealthy consumers, plus the whole calculations behind it are very suspect, stuck in the 1970s era economics and haven't quite caught up to the realities of globalization in the information age.

I'd also disagree that the war in Iraq is a drop in the bucket...that's taken a HUGE toll on their spending relative to GDP.

Ive seen a common ballback number at 400 billion, spread over 5 years, in a 13 trillion dollar economy, is not much.

I too think Bernake is making the right move to get this credit issue under control but you really have to wonder if he's simply pro-longing the inevitable...sometimes you have to wonder if it's better to rip the band-aid off quickly or slowly. A little bit of a quick hurt for the financial institutions might allow them to correct themselves quickly and let the poorly managed businesses get fed to the sharks...the real concern would be managing the losses and runs on any banks...but isn't that just capitalism at work, the strong survive. Bad mojo either way really...if he wanted to make moves on this issue quickly he should have done this over a year ago when people were widely warning of the issue...

I get your arguement, but at this point the dangers of companies failing are not just the by products of standard capitalist competition, we are entering panic land now, and the mob is running wild, this is not rational minds, but a stampede. 70 BILLION dollars has been knocked off the market capitalization of citigroup in the last month, over a 9 billion dollar loss (and potential for some more losses, true, but not THAT much). The sharks are indeed circulating, but they aren't competitors, but instead market manipulators smelling blood and looking to blow out some wounded guys some more by encouraging the panic. It doesn't help that those BONEHEADS at the SEC got rid of the no-uptick rule back in July (right before the first AUgust blowout). I work with guys who've been trading 30 years who've never seen anything like it, thanks to the lack of that rule, the shorts are running wild on bear runs now. Goldman Sachs showed everyone the way back in August, now theyre all using it to pound away on stocks like citigroup and merill. This kind of insanity has gotten out of control on the market, companies who fall victim to it is not through the course of normal capitalism, but through mob lynchings and shrewd manipulations by both the media and big time market players.

Not sure if everyone has heard the news about Saskatchewan apparently having found more in oil reserves, then in Alberta...

There's tons of oil in North America, in the far north, and off the coast. Most of it is off limits though due to lobbying by NIMBY types. So because of various lobbyists who won't let anyone drill for oil off the california coasts or near caribou land in the arctic, we must continue to payoff all manner of asshole tyrants in the mid-east and africa.