Can Canada go the way of Greece?

[MrB]

Great article by George

http://www.theglobeandmail.com/globe-investor/investment-ideas/george-athanassakos/can-canada-go-the-way-of-greece/article2256354/page2/

 

What say ye, my fair brethren from Canada!

[ERICOPOLY]

I liked the piece by Michael Lewis:

 

http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010

 

I think that tells more of the story than merely the government employment and unionization figures, and commodity cycle.

[beerbaron]

Great article by George

http://www.theglobeandmail.com/globe-investor/investment-ideas/george-athanassakos/can-canada-go-the-way-of-greece/article2256354/page2/

 

What say ye, my fair brethren from Canada!

 

That is a very poor cause and effect correlation. I don't know why but some people try to find correlations in everything.

 

BeerBaron

[Packer16]

A big difference is rule of law in Canada and relationship based system in Grece.  If Canada has debt problem it will be more akin to Sweden and Scandanavian cultures than Greece as the former has rule of the law and the later relationship.  Just some observations.

 

Packer

[moore_capital54]

What a ridiculous piece of garbage... Canada debt to gdp is 84% vs Greece (120%) a strong and vibrant private sector,one of the world's largest sovereign landmasses endowed with one of the world's largest hydrocarbon reservoirs (conventional and unconventional) and a population which has room to double or even triple in the next 50 years. A disciplined and prudent central banking regime, a culture which places emphasis on humility and hard work, thrift, and investment. Canada like China does not sell itself cheap as well, like the US has done. But if push came to shove and Canada needed to raise a few trillion, I assure you it could be done in 30 days or less. I can't think of any country with the kind of natural assets that Canada has on a per capita basis, the Malarctic mine, Red Lake, KSM, Voiseys Bay Nickel, The Oil Sands, the shales in Alberta, it goes on and on and on, and you have to keep in mind Canada has 1/10th the population of the US, on a per capita basis, no nation in the world is endowed with such resource wealth.

 

The writer appears to be greek, I wonder if that has anything to do with his point of view.

[Uccmal]

What a lot of BS.  The main reason Canada is not at risk right now is because we went through the deleverage cycle in the 90s.  While the US was in the midst of the greatest economy in history Canada was in a 7-8 year recession.  I lived through it.  It was exactly like the US and Europe now.

 

Our banks were in trouble in the early 90s; government was laying off and didn't hire till  early 2000s; private sector was laying off; resources were at all time lows, oil $10 a barrel at one point.

 

I personally got laid off and didn't work full time for 5 years.  Hence the frugal living and value investing.  When I got interviews which I had many, the companies would be interviewing 30 people, they had so much choice.

 

Public sector employees in Canada have good pensions which they are generally eligible after 30

years or so of service, not 10 years. 

 

Like any other country Canada needs to watch its finances, but its noway even comparable to anywhere in Europe or Japan.  IMHO George should stick to value investing and stay out of economics.

[ubuy2wron]

What a lot of BS.  The main reason Canada is not at risk right now is because we went through the deleverage cycle in the 90s.  While the US was in the midst of the greatest economy in history Canada was in a 7-8 year recession.  I lived through it.  It was exactly like the US and Europe now.

 

Our banks were in trouble in the early 90s; government was laying off and didn't hire till  early 2000s; private sector was laying off; resources were at all time lows, oil $10 a barrel at one point.

 

I personally got laid off and didn't work full time for 5 years.  Hence the frugal living and value investing.  When I got interviews which I had many, the companies would be interviewing 30 people, they had so much choice.

 

Public sector employees in Canada have good pensions which they are generally eligible after 30

years or so of service, not 10 years. 

 

Like any other country Canada needs to watch its finances, but its noway even comparable to anywhere in Europe or Japan.  IMHO George should stick to value investing and stay out of economics.

I lived through it as well, and it was not so bad, the only thing thats different is now pretty much every one in the developed world is going to have to go through what Canada went through. The downside of that is that it will likely be worse in Canada now than then unless as a nation we decide to live slightly above our means.

[alertmeipp]

what worries me the most is given the commodities price are so high, the gov is still running deficit. And if commodities tank - what do they have? The manufacturing sector is killed without high loonie.

[Mark Jr.]

Just as a general backgrounder "the guy" or "this guy" who wrote the article is George Athanassakos who is the chair of the Ben Graham Center for Value Investing at Western's Ivey School. The position was endowed by Prem Watsa who personally selected Mr. Athanassakos.

 

What a lot of BS.  The main reason Canada is not at risk right now is because we went through the deleverage cycle in the 90s.  While the US was in the midst of the greatest economy in history Canada was in a 7-8 year recession.  I lived through it.  It was exactly like the US and Europe now.

 

This is pretty much what John Mauldin told me when I interviewed him and asked why his "Endgame: The End of the Debt Supercycle" had no chapter on Canada. His response was that "Canada has already had it's great financial meltdown".

 

His exact words were:

 

No. Your banks are in good shape, your government budgets aren’t… your deficits are not above nominal GDP.  You are not doing things that are stupid.

 

However, there has been talk lately that maybe Canadian banks are not as robust as widely believed (The ZeroHedge article, at least a few people on this board). And I have to admit that was surprised by the total government + private debt figure in the Athanassakos article.