Tag Archives: Bank of Canada

Roundup: Summer showboat season has begun

Posted on by

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.

Continue reading →

Roundup: CSE posts a threat bulletin about Russia

Posted on by

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

Continue reading →

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

Posted on by

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

Continue reading →

Roundup: Quieter protests, a few arrests made

Posted on by

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

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.

Continue reading →

Roundup: A lack of precognition

Posted on by

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.

Continue reading →

Roundup: The Ontario horror show

Posted on by

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

Continue reading →

Roundup: Bill Morneau has learned no lessons

Posted on by

We’re now around day ninety-nine of Russia’s invasion of Ukraine, and…there wasn’t a lot of news I could find, other than the fact that Russia continues to pound cities in the Donbas region. Germany says they will send more advanced radar and anti-aircraft systems to Ukraine, but we’ll see how timely their deliveries really are.

Closer to home, Bill Morneau delivered a speech where he says he’s worried about the economic progress of this country because he says he doesn’t see enough focus on growth (never mind that it’s the dominant focus of the last two budgets). But then he went on about how he wants some kind of “permanent commission” to focus on said economic growth, and I just cannot even. It’s called Parliament. David Reevely lays this out in the thread below, but I will add that Morneau really was never any good at being in government. He kept trying to play things like he was still in the corporate world, where it was about who you knew, and it was paired with the mindset of this government where if you mean well, then the ends justify the means, so rules got broken an awful lot. That’s why Morneau was eventually forced to resign over his role in the CatastrophWE. And he demonstrates with this speech that he has learned precisely zero lessons.

Continue reading →

Roundup: Pandering to a false narrative, Quebec edition

Posted on by

It is now on or about day ninety of Russia’s invasion of Ukraine, and we have the first war crimes conviction, as the tank commander who pleaded guilty last week to killing civilians has been handed a life sentence. President Volodymyr Zelenskyy says that Russia is waging “total war” intended to inflict as many casualties as possible, and destroy as much infrastructure as they can. Zelenskyy also addressed a gathering of the World Economic Forum in Davos, and he told assembled global and economic leaders there to apply “maximum sanctions” to Russia.

Meanwhile, Belarusians are joining the fight on Ukraine’s side, hoping that it will eventually help topple the regime in their own country. As well, the dreaded Russian hackers have not proven effective in the Ukraine invasion, and have themselves been the successful target of government cyber-operations and hactivists, so perhaps their reputation is not as deserved as it has been.

Closer to home, Quebec is close to passing Bill 96, which expands its language laws to almost absurd levels, including forbidding the use of English in nearly all circumstances, and there are concerns that the bill allows for warrantless searches in order to enforce it. (There CBC had an explainer here,  but beware the both-sidesing).This is all predicated on the notion that French is “declining” in Quebec—erm, except it’s not. Census data shows that, and the only decline was where French was the “mother tongue,” meaning that its decline may be because of immigration, most of whom learn French is fairly short order (though this is one area where Bill 96 is again overreaching—and they wonder why they have a labour shortage). Unfortunately, every federal party including the Liberals have bought into this narrative, and are not challenging it very hard. Some Liberal MPs have been to protests in opposition to the bill, which the Bloc freaked out about in Question Period last week, to some minor pushback from the Liberal Quebec lieutenant, but it’s not a good sign when any party refuses to call out a blatantly false narrative because they are afraid it will lose them needed votes. Such courage!

https://twitter.com/acoyne/status/1528807121692803072

Continue reading →

Roundup: No, the Supreme Court did not allow an extreme intoxication defence

Posted on by

We are now on or about day eighty of Russia’s invasion of Ukraine, and it looks like Russian forces took heavy losses to the tune of as many as 73 tanks in a two-day battle that saw them destroyed in a failed river crossing. So that’s something. Meanwhile, a twenty-one-year-old Russian soldier is now on trial for war crimes for killing civilians. It also looks like some six million Ukrainians are now displaced out of the country by this point, most of them in neighbouring countries, and that situation is starting to take its toll.

As for the potential expansion of NATO with Finland and Sweden about to make their applications, Turkish president Recep Tayyip Erdogan says he is not favourable to those countries joining—and applications must be approved unanimously by member countries. This may be a ploy to extract concessions by Sweden in particular, as it relates to Turkey’s domestic political interests.

Closer to home, you will have no doubt seen a bunch of headlines saying that the Supreme Court of Canada has ruled that “extreme intoxication is a valid defence in murders and sexual assaults.” That is not true, and is extremely misleading. The court in fact stated that extreme intoxication is not a defence that can be relied upon. What they did state was that the section in the Criminal Code that said that a state of automatism brought about by intoxication was not a defence was in fact unconstitutional, because it removed the principle around needing criminal intent. (There was a second, related decision that ruled on a few other related issues). There is a difference between extreme intoxication and a state of automatism, and it should behove news outlets to make a proper differentiation so that they’re not spreading misinformation—which they essentially are with these headlines designed to induce a moral panic. So please disregard them, because it is explicitly not what the court ruled. (I will have a piece delving deeper into its issues out in a day or two).

Continue reading →

Roundup: How to remove a central bank governor

Posted on by

It is now approximately day seventy-nine of Russia’s invasion of Ukraine, and war crimes trials are beginning in the country, hearing from one youth who whose father was murdered in front of him, and who was shot by Russian soldiers but who survived. Shooting at civilians—and children especially—is a war crime, and Russians will be hard-pressed to come up with justifications for them. As well, the UN is declaring a “child rights crisis” in the country, given how many children have been killed in the invasion. Meanwhile, here is a look at the “partisans” fighting on Ukraine’s behalf from behind Russian lines, which may or may not be the cause of all of those fires and explosions.

Elsewhere in Europe, Finland’s president and prime minister are urging the country’s parliament to vote in favour of making their application to join NATO, while Sweden is expected to follow suit days later. If Putin’s fig-leaf excuse for invading Ukraine was to stop NATO’s expansion, well, he’s just done the opposite, so good job there. There will be some sensitivity in managing the time between Finland applying for membership and when they are granted it, as they could be particularly vulnerable to Russian aggression during that period.

Closer to home, Pierre Poilievre’s attack on the Bank of Canada is not going unnoticed, but it helps for the rest of us to know just what he’s trying to suggest. To that end, Kevin Carmichael provides needed context to what exactly Poilievre is threatening to do to the Bank of Canada governor, and why he’s wrong on inflation. As well, this thread is a good take on the mechanism for the how governor is appointed and what it would take to remove him.

Continue reading →