{"id":10099,"date":"2015-07-16T06:45:57","date_gmt":"2015-07-16T11:45:57","guid":{"rendered":"http:\/\/olduvai.ca\/?p=10099"},"modified":"2015-07-16T06:45:57","modified_gmt":"2015-07-16T11:45:57","slug":"bank-of-canada-sees-global-economy-freaks-out-cuts-rate-warns-of-financial-stability-risks-loonie-plunges","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=10099","title":{"rendered":"Bank of Canada Sees Global Economy, Freaks Out, Cuts Rate, Warns of Financial Stability Risks, Loonie Plunges"},"content":{"rendered":"<h3 class=\"entry-title\"><a href=\"http:\/\/wolfstreet.com\/2015\/07\/15\/bank-of-canada-looks-at-global-economy-freaks-out-cuts-rate-warns-of-financial-stability-risks-loonie-plunges\/\" target=\"_blank\">Bank of Canada Sees Global Economy, Freaks Out, Cuts Rate, Warns of Financial Stability Risks, Loonie Plunges<\/a><\/h3>\n<p>The Bank of Canada took a good look at the Canadian economy, saw it was sinking into the mire, glanced at the collapsed prices of commodities, particularly oil, saw how they were wreaking havoc in Canada, and then looked at the global economy, particularly at China and the US, and it freaked out.<\/p>\n<p>It cut its overnight rate 25 basis points to 0.5%, the second rate cut this year, and attached a gloomy view about the Canadian economy with as it said a \u201csignificant downgrade\u201d from its last estimate issued only in April. Things are heading south fast.<\/p>\n<p>In his opening\u00a0<a href=\"http:\/\/www.bankofcanada.ca\/2015\/07\/opening-statement-150715\/\"><u>statement<\/u><\/a>, Governor Stephen Poloz blamed oil, China, and dropping exports, particularly to the US which is \u201cstill a puzzle that merits further study,\u201d he said, as the swooning Canadian dollar should have\u00a0<em>pushed up<\/em>\u00a0exports. The three culprits:<\/p>\n<blockquote><p>First, Canadian oil producers have lowered their long-term outlook for global oil prices, and have cut their plans for investment spending significantly more than previously announced.<\/p>\n<p>Second, China\u2019s economy is undergoing a structural transition to slower, domestic-driven growth, which is reducing Canadian exports of a range of other commodities.<\/p>\n<p>Third, Canada\u2019s non-resource exports have also faltered in recent months. While this is partly due to the first-quarter setback in the U.S. economy, it\u2019s still a puzzle that merits further study.<\/p><\/blockquote>\n<p>This splits the economy in two, with the \u201cresource economy\u201d falling off a cliff, and with the \u201cnon-resource economy\u201d motoring forward. Alas, they\u2019re \u201cnot independent \u2013 the cancellation of an investment in the oil patch will often lead to a hit in the manufacturing sector, for example.\u201d<\/p>\n<p>Ah yes, and the ballyhooed positive effects of lower oil prices? They\u00a0\u201chave been slow to emerge.\u201d<\/p>\n<p>&#8230;click on the above link to read the rest of the article&#8230;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bank of Canada Sees Global Economy, Freaks Out, Cuts Rate, Warns of Financial Stability Risks, Loonie Plunges The Bank of Canada took a good look at the Canadian economy, saw it was sinking into the mire, glanced at the collapsed prices of commodities, particularly oil, saw how they were wreaking havoc in Canada, and then [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[942,103,130,151,1400,1154,588,7315,943,834,4254,4255],"class_list":["post-10099","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bank-of-canada","tag-canada","tag-china","tag-commodities","tag-interest-rate-cut","tag-interest-rate-policy","tag-oil","tag-resource-economy","tag-stephen-poloz","tag-us","tag-wolf-richter","tag-wolfstreet"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10099","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10099"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10099\/revisions"}],"predecessor-version":[{"id":10100,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/10099\/revisions\/10100"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10099"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10099"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10099"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}