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Technical Recession Dogs Canada’s ETF
By Tom Lydon on November 25, 2008 | More Posts By Tom Lydon | Author's Website
You’ll excuse Canada’s exchange traded fund (ETF) for feeling a little glum these days: the finance minister say the country may be in a technical recession.
Since the economy is expected to contract in the current and next quarter, it’s technically a recession, reports Frank McGurty for Reuters. The rapid global deflationary pressure may force the country’s government to take strong action in the form of a fiscal stimulus.
Last week, Canada experienced a big financial selloff in anticipation of borrowing costs further dropping, giving iShares MSCI Canada (EWC) some action.
Canadian currency is on the drop however, to its lowest level in three years. Today, however, the currency is showing signs of a rebound and is on pace for its largest one-day gain in a month, Reuters says. This quarter alone, the Canadian loon has lost 17%, while crude oil accounts for 21% of the Bank of Canada’s Commodity Price Index.
Updated projections on the state of the country’s economy are expected on Thursday.
EWC is down 46.3% year-to-date.
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The United States of America isn’t the only nation affected by the recession, and we don’t have the only people in the world heading for the cover of payday loans. Our neighbors in the Great White North, the Canadians, are getting shaken up about it too, at the governmental level. It is easy to forget just how closely tied our economy is to theirs, since they are one of our most significant partners in international trade. The effects of the recession have thrown their government in turmoil, and it is creating a political crisis. The conservative headed government has been racked with partisan problems, with the liberal coalition refusing to cooperate with the Prime Minister. As the other party’s members in Parliament are completely unwilling to work with him, they were headed towards a vote of No Confidence. In order to stem the partisan quibbling, the Prime Minister sought, and received, a suspension of Parliament from the head of Parliament, the Governor General. This action, called prorogation, is a rare thing to see, and it has been decades since it was last called for. The Prime Minister did this in order to give him time in order to get a working plan together to weather this crisis. Bear in mind that we here in America aren’t the only ones that have been affected by recession and tougher times, but just like in Canada, we have the option of payday loans in times of sudden financial need. Click here to read more on payday loans.