[nofkayalk]

Energy?

Ontario is certainly still coupled. The West, not so much.

[iodigmaFemZem]

Originally posted by KrazyHorse
Energy would imply even more coupling because energy prices are so strongly tied to the US economy (even now). Recently they were more tied to speculators and overseas growth.

US oil demand isn't why the price surged.

[Creelaleps]

Originally posted by Asher
Energy?

Ontario is certainly still coupled. The West, not so much. It's not just energy but instead high raw materials prices (mostly due to Asian demand) seems to be powering the west.

[CoiI8XIj]

Not entirely. Energy's important, but so are other commodities.

[Narus63]

I like the black chana beans the best.

[DoctoBuntonTen]

It's just a lag.

[yharmon6614]

Originally posted by Kidicious
It's just a lag. You can't read a chart, can you...look at the 2001 cycle. We never underwent a contraction at all. You guys underwent a classic peak then contraction.

[HonestSean]

Originally posted by KrazyHorse


You can't read a chart, can you...look at the 2001 cycle. We never underwent a contraction at all. You guys underwent a classic peak then contraction. You will this time.

[Info-phone]

That is part of the answer.

But the federal gov't has gotten its house in order running surpluses since the early nineties. Also the banks and insurance companies are regulated somewhat differently than in the US and have suffered less as a result. And most Canadian companies balance sheets are in better shape heading into this recession than in previous ones. And the behemoth economies of China and India will mean commodities can't fall as far and as fast as was the case when the US dominated the world economy to a greater extent...

I don't like the small black daal though. Oh, the taste is fine. But each one is the same size as small pebbles which somehow get mixed up in them, so you have to sort very carefully.

[BorBitExatini]

It may be that energy extraction involves higher fixed costs and lower operating costs than other types of commodity production. This would tend to mediate volatility in the labour market expecially, because as long as the contraction is significantly shorter than the lifetime of these projects low prices don't persist long enough to cause a contraction in our energy sector (in terms of labour at least; dollar value of output drops immediately with a changed price).

[ImapFidaarram]

Originally posted by The Mad Monk
There could be several reasons.

Canada certainly has been recieving windfalls from the oil industry, has it been using those funds to develop infrastructure? No. Alberta gets most of the direct profits from extraction (the federal government, AFAIK receives 0 royalties).

[Eviftilia]

The only way the price of oil can not fall during a recession is if there is a significant reductions in availability. That happened in 74', 79' and 91'. I doubt if oil production is going to decrease, because producers will likely try to get profit while they can. IMO, it would be stupid to let others get your profit and cut back.

[Mimsykzr]

Originally posted by Kidicious
The only way the price of oil can not fall during a recession is if there is a significant reductions in availability. That happened in 74', 79' and 91'. I doubt if oil production is going to decrease, because producers will likely try to get profit while they can. IMO, it would be stupid to let others get your profit and cut back. Thankfully, OPEC is stupid (though technically they have sufficient pricing power to actually benefit themselves by doing this)

[BritneySpearsFun@@@]

Originally posted by KrazyHorse


Thankfully, OPEC is stupid (though technically they have sufficient pricing power to actually benefit themselves by doing this)

Actually causing oil shocks is stupid. The Saudi's take a long run approach now. They've been hoping for lower prices during the current boom because price spikes only hurt them in the long run.

VE is the one really pushing for cut backs and I doubt anyone thinks they will hold up their part of the bargain anyway.

[bushomeworkk]

Originally posted by Victor Galis


Of course they will. Underinvestment in their oil industry will push their output down whether they'd really like to cheat or not. It was probably better not to invest in their oil industry. The extra oil wouldn't have been cheaply produced.

[juliannamed]

Originally posted by RedFred
Still sleepy this morning? Several rebuttals: 1 is that oil is far from the entire commodity market, 2 is that the hedge funds were betting heavily on higher oil prices and they accerated the price movement both on the way up and on the way down, and 3 is that I said the price fall would have been larger if not for other economies, not that it was not large. Your rebuttal fails.

1) Natural gas has fallen by 55% over the last 3 months. Copper 56%. Soybean 44%. Lumber 28%. Corn 52%.

2) Has no bearing on what you said.

3) No, you said that commodities "can't fall as far and as fast as was the case when the US dominated the world economy to a greater extent." Still patently ridiculous. It's falling just about as far and as fast as possible.

[snislarne]

Over the last year or so the Canadian economy has basically plateaued (both on output as well as on labour measures) near its highest ever point (between 64 and 65% employment rate among 16+) while the US economy has undergone the classic labour market contraction (while on output measures it has not dropped significantly yet, but that is doubtless going to change in the coming quarter or two).

This seems to imply, for whatever reason, that Canadian and American labour are no longer close substitutes for each other. Yet the labour force characteristics have not changed (though I might note that American productivity has increased significantly faster than Canadian productivity over the last 10 years). All while economic integration has increased.

[CoiI8XIj]

If anything, the rise of the Chinese and Indian economies will make the commodities markets more volatile because the demand from these countries is more volatile.

[PebydataFeents]

Originally posted by DanS
If anything, the rise of the Chinese and Indian economies will make the commodities markets more volatile because the demand from these countries is more volatile. Only if their demand is correlated with US demand. Which it appears to be, at least this time around.

[orbidewa]

Off the top of my head, the answer would probably lie in interest rates. Admittedly, this is something of a cop-out, because interest rates are where all of the strands in the economy are tied together.