Tag Archives: Bank of Canada

Roundup: Beating the GDP expectations

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The Bank of Canada increased the overnight rate another 75 basis points, to 3.25 percent, which is now about the neutral range and into territory where it is meant to dampen growth—and they say it will likely continue to go up in future decisions. This being said, we should also recognise how strong the Canadian economy is running right now, which is having an effect on things like deficit and debt, which conversely makes the Conservatives’ insistence that government spending is driving this inflation (it’s not), and what they think austerity would accomplish here (nothing good). Anyway, here’s economist Kevin Milligan to break it down:

https://twitter.com/kevinmilligan/status/1567532339496108034

https://twitter.com/kevinmilligan/status/1567536188680187908

https://twitter.com/kevinmilligan/status/1567538208971583489

Ukraine Dispatch, Day 197:

Shelling near the Zaporizhzhia nuclear power plant has damaged the last remaining backup power line to the plant, which means that the coolant systems are now fully on back-up generators, and the ongoing shelling makes doing repairs an unlikely possibility. Elsewhere, heavy fighting has been reported in the north near Kharkiv; in the east, in the Donbas region; and in the south, near Kherson, where Ukrainian soldiers are pushing Russian forces in their counter-offensive.

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Roundup: Inviting the politician’s syllogism

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As the questions about what to do around the accosting of Chrystia Freeland continued yesterday, several reporters started asking about why the government hasn’t moved ahead with their promised online harms legislation, which is kind of funny because most of these very same reporters know exactly what happened to it—the draft legislation introduced before the election was so roundly criticised from all sides that the government decided to take a more serious effort at consultation and drafting a bill that won’t be deemed too censorious, and it’s a tough task because it’s a very tiny needle to thread. Exceedingly tiny. And these same journalists know this because they’ve either covered the story, or followed the coverage. I’m not even sure if online harms would be applicable in this particular situation because it wasn’t online, and when it comes to criminal threats being directed at journalists and politicians, again, most of that is already criminal and it simply requires police to do their jobs, which Parliament can’t exactly legislate them to do beyond the Criminal Code provisions that are already in statute. Either way, this whole line of questioning is suspect, and I’m not sure why they’re going down this road other than the politician’s syllogism, which is poor form for media in general, but in this case most especially.

Ukraine Dispatch, Day 187:

The Ukrainian counter-attack around the strategic city of Kherson has begun, and claim to have broken through the Russian defences in several areas of the front-line around the city. Russians, meanwhile, have been shelling the southern city of Mykolaiv, as well as military and civilian infrastructure near the towns of Bakhmut, Shumy, Yakovlivka, Zaytsevo, and Kodema in the Donetsk region. Meanwhile, inspectors from the International Atomic Energy Agency are now on their way to the Zaporizhizhia nuclear plant, which Ukrainians say the Russians have been using as a military base.

https://twitter.com/KyivPost/status/1564190989966778368

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Roundup: Getting better at plain-language explainers

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Because this is the age of disinformation, it’s good when institutions start recognising that and offering plain-language explainers to help dispel the falsehoods that are swirling—especially when those falsehoods are being spread by sitting MPs and leadership candidates for political parties. In this case, it’s the Bank of Canada, and the notion of whether they printed money during the pandemic. They didn’t, and they had explainers on their site before, but this is much more accessible, which is really necessary right now—particularly given that the government can’t communicate their way out of a wet paper bag, which makes the job of defending institutions even harder (especially as the media is pretty much useless in this endeavour as well, too content to simply both-sides everything).

Of course, the replies to this thread are an absolute tire fire, so we’re nowhere near out of the woods yet, but it’s a good first step that needs to happen. (And listen to Captain Pike when you get tempted to read the comments).

Ukraine Dispatch, Day 183:

The Zaporizhzhia nuclear plant was knocked off of the Ukrainian power grid after a fire damaged a transmission line, raising fears that we could be headed toward another Chernobyl-like disaster. (Incoming power is needed for the reactors’ cooling systems, but there are some back-up power supplies). It was later re-connected, but this remains a problem, and radiation from such a meltdown could spread across Europe under the right conditions. Meanwhile, Putin is ordering a major troop replenishment after suffering heavy losses in the fighting in Ukraine.

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Roundup: Jockeying for first-place ballot support

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We’re in day one-hundred-and-forty-eight of Russia’s invasion of Ukraine, and Ukrainian forces damaged a bridge that is critical to supplying Russian troops in southern Ukraine, where Russia is trying to consolidates its territorial gains, making it clear that their supposed aim of “liberating” the predominantly-speaking Donbas region was always a lie. Russians, meanwhile, bombarded the north-eastern city of Kharkiv, and killed more civilians there. On that note, here is a look at Ukrainian refugees being forcibly relocated into Russia.

Meanwhile, Russia has started up a sham tribunal to document “war crimes” from Ukrainians to justify the invasion, and they are using Westerners living in Russia, who are often promoters of conspiracy theories or who are known for being purveyors of disinformation, as their star witnesses. The whole thing is a thinly-veiled propaganda exercise to bolster support for the invasion in Russia, and to provide a counter narrative to the International Criminal Court proceedings against Russians who are involved in actual war crimes in Ukraine, but

Closer to home, the Conservative leadership race is reaching a critical juncture as ballots are being mailed out and candidates are asking for top billing on their ranked ballot. Jean Charest wants another debate, particularly now that Patrick Brown is out of the race, while Roman Baber is trying to make a plea for people to give him a second look and not simply rank him further down-ballot (though the policies he outlined simply remind everyone that yes, this guy is a moron). Speaking of, the National Post has compiled the various policy positions of the leaders, at which point I am force do once again remind everyone that this remains an abomination in our system—leaders are not supposed to be deciding policy and putting it forward in a leadership contest. That is supposed to be the job of the grassroots membership, who have biennial conventions to do just that, but we have so bastardised our system in order to create a faux-presidential primary that we’ve reached this debased state.

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Roundup: Summer showboat season has begun

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It’s day one-hundred-and-forty-three of Russia’s invasion of Ukraine, and a missile strike in the more central city of Vinnystia killed a four-year-old disabled girl, which was used by president Volodymyr Zelenskyy and others to demand that Russia be declared a state sponsor of terrorism as a result. There have been other strikes in Dnipro, near the centre of the country, and in Mykolaiv, which is closer to the front lines in the south. CBC has a video of the week in the war here.

Ukraine, meanwhile, is preparing a counteroffensive in the south, particularly to reclaim Kherson, which is a strategic objective that could give them control of the region, including of giving them the ability to strike Russian positions in Crimea. The fact that the Ukrainians have now accepted delivery of the American HIMARS rocket system is giving them a new advantage over the Russians, and could turn the campaign, which is in a “grinding” phase of attrition currently. There have been no Russian advances in the east part of the country for over a week now, so the supposition that Russia needs time to regroup seems to be proving true.

Closer to home, summer showboat—err, committee season has begun, with two emergency meetings yesterday, being the foreign affairs committee, and the industry committee. In the former, they have committee agreed to meet over the summer to discuss the return of those gas turbines to Germany, and will call ministers to testify. The latter used the day to plan meetings on the Rogers outage, where they plan to call ministers, Rogers executives, and the CRTC, and you can bet that MPs from all parties are planning who their best performers on camera will be in order to give some outrage and sanctimony clips that they can then use for shitposts and fundraisers. Because that’s what our Parliament has devolved to.

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Roundup: CSE posts a threat bulletin about Russia

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We’re on day one-hundred-and-forty-two of Russia’s invasion of Ukraine, and Russians fired missiles at the central city of Vinnytsia, hitting civilian locations including a medical clinic. Ukrainian president Volodymyr Zelenskyy reiterated his statement that the Russian regime is a terrorist threat. Meanwhile, the leadership at the International Criminal Court in the Hauge is calling for an “overarching strategy” to bring perpetrators of war crimes in Ukraine to justice, so that other countries contributing to the investigations can cooperate with their efforts.

Closer to home, CSE released a threat bulletin on Russia’s cyber-activities in Ukraine, and it was a doozy, saying that the scope and severity has almost certainly been more sophisticated and widespread than has been previously reported, and yes, that has repercussions for Canada as well. Stephanie Carvin has more in this thread:

https://twitter.com/StephanieCarvin/status/1547663710700728320

https://twitter.com/StephanieCarvin/status/1547664718721994753

https://twitter.com/StephanieCarvin/status/1547666383428718594

https://twitter.com/StephanieCarvin/status/1547666393423757315

https://twitter.com/StephanieCarvin/status/1547669128076374017

https://twitter.com/StephanieCarvin/status/1547669143700131840

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Roundup: 100 basis points, because the Bank of Canada is serious

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It’s day one-hundred-and-forty-one of Russia’s invasion of Ukraine, and with Russian forces trying to turn the entire Donbas region to ashes with continued shelling, Ukrainian forces have been trying to reclaim some ground in the south, hitting another ammunition depot in Nova Kakhovka. Russian missiles struck the southern cities of Mykolaiv and Zaporizhzhia, as a show of their determination to hang onto their gains in the south.

Closer to home, the Bank of Canada raised their key overnight rate by 100 basis points, so that interest rates are now sitting at 2.5 percent, which is in the middle of their estimated “neutral” range of two and three percent. This means that the rate is not supposed to be either stimulative or contractionary. The hike was so high in large part because of the shock value—the Bank wants to break any psychological expectation that can lead to an inflationary spiral, where people keep expecting inflation to keep rising, and behave in ways that reinforce it. This goes for wages as well, and the Bank is trying hard to send signals that will hopefully keep a wage spiral from happening, where wages rise to meet inflation, which just increases demand and stokes inflation, and the cycle becomes self-reinforcing. The Monetary Policy Report also included an interesting section where the Bank examined why their previous estimates went wrong, and while they didn’t conclude that it’s because they don’t have a division of precognitive psychics guiding policy, they did find that a lot of the global shocks didn’t factor into their calculations. One such example was oil prices—their modelling used oil prices as being stable, but when they jumped, that threw off their modelling. And the invasion of Ukraine really did a number on everyone’s models, so the Bank of Canada wasn’t unique there.

When it comes to political reaction, both the Conservatives and the NDP sent out press releases freaking out. The Conservatives blame government spending for inflation, instead of its actual causes, and freak out that the cure is high interest rates, as though one can have it both ways in perpetuity. (This is the alleged “party of sound economic management,” who continually prove they are fiscally illiterate). The NDP think the cause of inflation is price gouging, instead of the actual causes (which isn’t to say that there hasn’t been some, but it’s not the cause), and therefore interest rates going up punishes people. Which is also missing the point. And it would be nice if we had opposition parties that were economically literate and capable of challenging the government on its bullshit rather than on largely imaginary problems.

https://twitter.com/mattgurney/status/1547403312378650627

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Roundup: Quieter protests, a few arrests made

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It’s day one-hundred-and-thirty-two of Russia’s invasion of Ukraine, and Russia is claiming victory in the Luhansk region after pounding Lysychansk to the point where Ukrainian troops finally withdrew. President Volodymyr Zelenskyy says that Ukrainian forces will be back with more modern weapons and will reclaim the territory. It looks like Slovyansk in the Donbas Region will be Russia’s next target, while Ukrainians fighting in the region describe it in apocalyptic terms. Meanwhile, Russia has attacked two cities in the western part of Ukraine, as well as near the port city of Odessa, but Ukrainian forces are also reclaiming territory as well, in some cases using the very tanks that they captured from the Russians. Ukraine’s prime minister is spending his time drawing up a $750 billion “Marshall Plan” to help the country recover, once they force out the invaders.

https://twitter.com/Rob_Oliphant/status/1543983733488992256

https://twitter.com/Rob_Oliphant/status/1544047876187234305

Canada Day wound up being fairly uneventful, as the protests on the Hill didn’t amount to much, though there was a heavy police presence and they weren’t playing around this time. 121 vehicles were towed, and there were a few arrests made, though in one case, it was after someone attacked a police officer. While some voices are saying that this time around there wasn’t a “perfect storm,” the fact that police did their jobs rather than being complicit was the biggest difference. For his part, prime minister Justin Trudeau was essentially trying to reclaim the flag from the protesters and the occupation earlier in the year, talking about representing our accomplishments and desire to improve, and that it stands for compassion, hope, and justice.

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Roundup: A lack of precognition

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We’re now on day one-hundred-and-seven of Russia’s invasion of Ukriane, and I couldn’t find any stories to link to on Canadian sites, as everything was about the January 6th committee in the US, because priorities. Meanwhile, Ukraine’s agriculture minister told the Canadian House of Commons agriculture committee that Russia has been raiding Ukraine’s grain stores, and then selling it on the world market using falsified documentation. As well, the RCMP say that they have cracked down on $400 million in Russian assets and transactions from sanctioned individuals.

https://twitter.com/Ukraine/status/1534832733637287936

https://twitter.com/EuromaidanPR/status/1534808012962947072

Closer to home, the Bank of Canada released their Financial Systems Review yesterday, and made remarks about some of the vulnerabilities in the economy, such as high consumer debt levels and variable rate mortgages rising precipitously in the next few months as interest rates continue to rise in order to get inflation under control. They are confident the economy and households can handle the higher rates because the economy needs them.

This being said, I have to take some exception to the commentary happening on Power & Politics last night, and from the host in particular, who was expounding upon how central bankers got it “wrong” about inflation. Apparently they are supposed to have the power of precognitition and could accurately predict the fact that global supply chains would take longer to untangle than previously thought because China went into some serious lockdowns under a COVID-zero policy, that fuel shortages would drive up world oil prices before the Russia invaded Ukraine, and they were supposed to have properly foreseen said invasion and could adjust their inflation expectations accordingly. There have been an increasing number of unlikely scenarios that all pretty much happened across the world over the past two or three years, and you’re ragging on central bankers for not having properly tried to head it off? You can argue that they were too late to ease off on stimulative measures, even though their actions were largely in line with the advice and the data they had at the time, but going after them because they didn’t accurately predict a pandemic and a war? Sit down.

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Roundup: The Ontario horror show

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It is now day one hundred of Russia’s invasion of Ukraine, and President Volodymyr Zelenskyy suspects that Russian forces now hold some twenty percent of the country’s territory, and asks for more Western weapons. Russians hold most of Severodonetsk, and they are moving onto its twin of Lysychansk, which will help them secure control over the Luhansk province. Meanwhile, Ukrainians who return to their homes often find them to be destroyed, with all of their possessions.

Closer to home, the Ontario election was, well, a disaster for everyone involved. Ford gets a larger seat count on a hollow platform he won’t know what to do with, while most of his experienced performers have left politics. The NDP lost nine seats and still think they’re the “strongest” they’ve ever been, but Andrea Horwath did say it was time to step down, as well she should have. Steven Del Duca also stepped down after he lost his own seat, as well he should have. Voter turnout was extremely low, which tells you that people had nothing to vote for, but this breakdown of how each party lost votes is pretty instructive about the level of disillusionment with each, for what that’s worth as the opposition parties start to rebuild. (My full column on the election will be out later today).

https://twitter.com/mattgurney/status/1532558713948708887

https://twitter.com/mattgurney/status/1532535636485455872

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