Juggling Dynamite

A great perk of early morning work is seeing the sunrise from our window. You would almost think all was well in Canada this morning.

Unfortunately, Canada’s susceptibility to economic pain and debt crisis are surely higher today than at any point in the past couple of decades.  We have credit abuse and short-sighted, destructive financial planning, along with aging demographics to thank for our woes.

On the upside,  the population is coming to a generational epiphany on what not to do with money and how to diversify an economy away from dependence on fossil fuels and real estate bubbles.   Several countries will be going through this learning process of necessity with us, but there will not be much comfort in the company.  For individuals and small businesses, moving ahead of the pack to lower financial leverage (debt and risky-assets) and raise liquidity, sooner than later, will be key to outcomes through this period.

As Canadian crude fathoms a record low this week (chart below), we have news today that Canadian home sales fell further in October.

Heavily indebted and unprepared, the global downturn is coming at a particularly vulnerable time for Canada.  Even worse, what savings and pensions households do own have been funnelled into over-valued corporate securities and funds that are also falling in value.  This is a very destructive way to manage a business cycle.

The segment below covers many of the factors working against Canada today but also makes the classic error of blaming Trump (rather than self-destructive behaviours and policies adopted in Canada), as well as suggesting Canadian banks may somehow be protected from downside as global markets drop.

Canadian financial shares lost 50% in the last two bear markets, and they are more risk-exposed today than either of those cycles.  Beware the usual false narratives from mainstream commentators, defensive they are not.  Here is a direct video link.

As I have mentioned several times over the past couple of years, insistence on the Rule of Law and adherence to due process through independent judiciary and law enforcement are the last lines of defence between civil society and total anarchy.

Corporatocracy and self-enriching political leaders are the enemies within.  After two years of increasingly self-serving, autocratic behaviours from the Trump administration, finally conservative legal groups are speaking out publically.  This is an essential development.  See Conservative Lawyers say Trump has undermined The Rule of Law:

“…a dozen prominent conservative lawyers have joined together to sound a note of caution. They are urging their fellow conservatives to speak up about what they say are the Trump administration’s betrayals of bedrock legal norms.

‘Conservative lawyers are not doing enough to protect constitutional principles that are being undermined by the statements and actions of this president,’ said John B. Bellinger III, a top State Department and White House lawyer under President George W. Bush.’

…’We believe in the rule of law, the power of truth, the independence of the criminal justice system, the imperative of individual rights and the necessity of civil discourse.  We believe these principles apply regardless of the party or persons in power.’

…’There’s a perception out there that conservative lawyers have essentially sold their souls for judges and regulatory reform,” [George T. Conway III] said. ‘We just want to be a voice speaking out, and to encourage others to speak out’.

…’It’s important that people from across the political spectrum speak out about the country’s commitment to the rule of law and the core values underlying it — that the criminal justice system should be nonpartisan and independent, that a free press and public criticism should be encouraged and not attacked,” [Peter D. Keisler, a former acting attorney general in the Bush administration] said. “These are values that might once have been thought so basic and universally accepted that they didn’t need defending, but that’s no longer clearly the case.’