It's the economy stupid

[JBen]

The company also said it had reduced its workforce by 12 per cent, eliminating nearly 1,800 jobs last year, as shipments dropped three per cent. The railway said the job losses take into account changes to labour agreements in the United States that alter scheduling rules, allowing for fewer railroad workers.

Sounds like Labor, just axed a bunch of jobs

http://www.msn.com/en-ca/news/canada...gNb9&ocid=iehp

[Wahoo]

What I don't understand is: Given that, why is our economy (using the dollar and markets as an indicator) so strongly tied to the price of oil?

It's a good question and I recently went looking as to why myself. This is a simple explanation but more detail and good graphs are at the link.

The high positive correlation between the Canadian/US dollar exchange rate and oil prices is due, in large part, to the large portion of the nation’s total foreign exchange earnings that is garnered through crude oil sales. Crude oil is the largest single contributor of foreign exchange to Canada, and its share has been increasing with the growth of oil sands. (See: Understanding The Economics Of Canadian Oil Sands.) Presently crude oil constitutes over ten percent of Canada's total current account receipts -- which represents all foreign exchange earned from the sale of goods and services, from financial and employment income,and from grants, and there is no other single service or single income source that generates as much foreign exchange as crude oil.

http://www.investopedia.com/articles...dollar-cad.asp

[line052]

I clearly see it differently than everyone else… High oil prices gave the Big Oil companies the funds needed for exploration and opening new fields of supply.

Keystone was fought buy Obama to protect the Saudis oil flowing to US friendly Gov.

As soon as Canada was ready to enter the Market with giant oil reserves from oil sands, it became necessary to devalue cost of a barrel of oil to keep the Saudi flow going (US Policy)

Saudis are flooding the market to make our oil too costly to refine…thus keep Saudi oil coming (US Policy)

With weak oil prices, big oil (western Canada) can lay off oil workforce now that they have a 20 yr supply open and have steady cash flow (all though less profit…possible???)

Low dollar means Ontario will reemerge as a manufacturing base (to be seen with high electrical overhead).

Wynne will take credit for “improving jobs” and get another majority

Lastly, those who are old enough will remember that, that is cyclic with Ontario/Alberta boom and bust…jobs and no jobs, oil collapse, as well as jobs losses in Alberta. Second time in my 52 years I have seen this.

The ironic part is..each it collapsed…Liberals were in Power…lol

[JBen]

The Suadis are flooding the market to put Russian and US oil producers out of business. Rarely are the oil sands mentioned. We are caught in it, but we aren't the target. Most producers are operating at losses and have been, for sometime. If they scale back production, they give up cash flows (even when selling at losses, cash is still needed) and the creditors don't like that. Keep in mind, there are very very few Cdn owned producers there. But many Cdn workers, families.

While we've seen similar in the past with respect to cycles. Have the same global dynamics/forces been present? Not sure using the past as an indicator for the future applies.

While the loonie will help with respect to exports, our trade balance will mean it hurts (buying power) more than it helps (sales).
A few economists I've read are making the case that the optimum level should be around .75 to .80.

Wages, taxation, hydro.
Very few are betting on manufacturing returning to levels akin to yesteryear. That's not to say we can't produce goods and services, but rather what those are will need to be different.
And perhaps to a small degree even the Loonie. Many industries import parts and raw materials. So.......

In essence, we (loose term) have priced ourselves out of business

[werner.reiche]

The Suadis are flooding the market to put Russian and US oil producers out of business. Rarely are the oil sands mentioned.

While we've seen similar in the past with respect to cycles. Have the same global dynamics/forces been present? Not sure using the past as an indicator for the future applies.

While the loonie will help with respect to exports, our trade balance will mean it hurts (buying power) more than it helps (sales).
A few economists I've read are making the case that the optimum level should be around .75 to .80.

Wages, taxation, hydro.
Very few are betting on manufacturing returning to levels akin to yesteryear. That's not to say we can't produce goods and services, but rather what those are will need to be different.

In essence, we (loose term) have priced ourselves out of business

During the 08-09 crunch, oil producers (including opec and Russia) agreed to cut production to prop up the price of crude. Then Russia reneged on that agreement, opened the taps and stole a huge chunk of the Saudi's market share. The Saudi's are trying to get that market share back and view the current low prices as the cost of regaining that market share. The US wasn't a major producer in 08-09, but they are on the cusp of becoming one now. The Saudis want to nip that in the bud as well.

[JBen]

Came across a decent article from
1 year ago
http://www.theglobeandmail.com/repor...ticle22073819/