Category Archives: Site news

David Bowie

Why was it different when David Bowie died?  A few artists that I enjoyed throughout my life have died. Alice in Chains was big band for me in high school and when Layne Staley died I was disappointed but I wouldn’t call it sad.  The first time I ever had a noticeable emotional response to an artist dying was Bowie and I have not quite been able to put my finger on why.  It’s not like I am a fanatical fan; I didn’t even know he was sick before he died. I would guess that I listen to a wider range of his catalogue than most but never really considered myself a die hard fan. It took me years to warm up to Thursday’s Child but I love it now.

He always did his own thing.  Whether it was Ziggy Stardust or mixing songs with Trent Reznor there was always something slightly different about the projects he worked on.  There were countless tributes written about him after his death talking about his career and all his accomplishments so I won’t do that here.

I have, however, been thinking about this site and what its purpose is. I write about current events and the small number of people that visit come to read those things.  If I wanted to write about something else would I need a new site?  Would people stay away if the subject matter became less focused?  Bowie wouldn’t care about the answers to those questions.  He would do what he wanted.  So from now on I will not limit my topics to economics and politics. This is not a “be like Bowie” revelation by any means but if I feel like writing a movie review or posting a short story, maybe I will.

In that spirit I will talk about what Bowie’s song Blackstar says to me when I listen to it.

The entire Blackstar album was recorded during a time where Bowie knew he was close to the end.  The title track is his acknowledgement of his fame, his skill and his optimistic view of the future without him.

On the day of execution
Only women kneel and smile

I am dying.  The cancer is killing me.  I choose not to kneel and accept my fate quietly.  I choose to stand up and in my final time here create as I always have.

How many times does an angel fall?
How many people lie instead of talking tall?
He trod on sacred ground, he cried loud into the crowd
(I’m a blackstar, I’m a blackstar, I’m not a gangster)

How many people sell out? Do what they are told just to make money?  I entered the music industry and stayed true to what I wanted.

I can’t answer why (I’m a blackstar)
Just go with me (I’m not a filmstar)
I’m-a take you home (I’m a blackstar)
Take your passport and shoes (I’m not a popstar)
And your sedatives, boo (I’m a blackstar)
You’re a flash in the pan (I’m not a marvel star)
I’m the great I am (I’m a blackstar)

So, do it. Come with me on the journey of creation. I am the master but I am near my end so I can teach you.

I’m a blackstar, way up, oh honey, I’ve got game
I see right so white, so open-heart it’s pain
I want eagles in my daydreams, diamonds in my eyes
(I’m a blackstar, I’m a blackstar)

I see the positive. I dream big. I am a superstar.

Something happened on the day he died
Spirit rose a metre then stepped aside
Somebody else took his place, and bravely cried
(I’m a blackstar, I’m a blackstar)

Bowie was the Blackstar and when he died a bit of what he was stayed with everyone that listened to his music.  No one will replace him but he tried to make the world a more beautiful place and he believes that when he is gone others will do that same.

2015 in Review and Look Ahead to 2016.

So this year in review is a little late but here it is.

Last year I didn’t make many predictions for 2015. First one was that I had assumed that we would see a small rise in the overnight rate. The BoC shocked everyone this year by dropping rates twice. The BoC is still trying to settle in on a solid policy. They are supposed to monitor and react to inflation but in their statements they have claimed they needed to take out “insurance” against low oil prices. Well we have low oil prices, which is bad for the Canadian dollar and we have a low interest rate, which is bad for the Canadian dollar. This would seem to indicate that the BoC does not care about the strength of the Canadian dollar. Which is fine because it is not supposed to.

Leading up to the rate announcement this month there were murmurs of negative interest rates and another rate cut, Half of all economists surveyed believed another rate cut was coming. Poloz said the BoC has certainly been watching the negative rates in Europe. The BoC kept their rates steady and then in their next statement said that a rate rise was possible because the rapid drop in the Canadian dollar could be leading to higher than expected inflation. As has been mentioned a few times on this site, the BoC needs to greatly increase its communication and clarity. Constantly surprising the market is a terrible way for a central bank to operate.

As for predictions. Inflation is creeping up again.  At 1.6% CPI and 1.9% core we are still in the safe zone. I think with the Canadian dollar so weak there is some political pressure to raise the rates to try to get some strength back in the Loonie but that is not supposed to be the BoC’s job.

I know what you are thinking to yourself right now.  Hey, where did the articles on Free Money go? To be perfectly honest I got bored holding long term stocks so I starting the equivalent of gambling with the money. Taking extremely high risk positions and lost of some the money. At that point the experiment was kind of ruined so I stopped doing it. If something should appear for a new experiment this year the Free Money posts will resume. If you have any suggestions, please send them in.

South of the border the American election is heating up. They don’t really ever take a break down there when it comes to the political hype cycle. Last year I thought Obama should spend his time going after huge problems on a regular basis so that the Republicans wouldn’t have time to generate their false outrage properly in each case. The immigration bill was a good example. I expect to see something big on gun control before November. I also fully expect it to be blocked by Republicans who get lots and lots of money from the gun lobby. Oh, they are going to cure cancer. In general.

As for the election. The circus that is the Republican party continues. Donald Trump seems be leading the polls which is interesting. Even if he wins the nomination I don’t think he has a real chance  of winning a general election. Unfortunately that leaves Ted Cruz as the “reasonable” candidate. Last election he was considered one of the crazies.  Also, he is pretty much just a liar.  

So that means that Bush makes the most sense if you want someone less crazy than the rest of them. I am not sure what they are going to do. Americans love freedom and democracy and hate monarchies. How could they possibly justify electing three people from the same household as president? It’s funny to talk about how crazy everything is in US politics right now but it is actually more sad than anything.

On the Democratic side we have Clinton and Sanders. Clinton who is being investigated for using a personal email server while Secretary of State. A act that demonstrates a lack of good judgment because it wasn’t a gaffe at a speaking engagement or a poor decision made in the heat of the moment. It was ongoing and obviously wrong over a long period of time.

Sanders  looks like a hardcore socialist because the rest of American politics has swung so far right. He believes healthcare could be cheaper with a single payer system and that people could all get the coverage they need. He believes education should not bankrupt you and that 1% should not own 99% of the wealth.  COMMIE!

It would be interesting to see him in an election against Trump. As soon as Trump got the Republican nomination he could easily change his tactics to appear more moderate. This would sway some people away from what they see as the crazy old socialist Sanders. In a Trump vs. Sanders election, Trump could win. My vote for the Democrats would actually be John Kerry but that is not going to happen.

Canadian politics will be much less exciting this year as the Liberals are still in photo op mode. The Conservatives left Canada with a bigger budget deficit than had been previously reported which is a surprise only to the Conservative party who, in a demonstration of their total lack of self awareness, have criticized the Liberals for their deficit.

The Liberals are going to have to decide some pretty major things in the first year.  TPP, bombing ISIS, new fighter jets, Syrian refugees.

The inquiry into the missing and murdered aboriginal women will likely start and, if it wants to have any credibility at all, will instantly expand to include aboriginal men. (They are far more likely to be victims of unsolved murder). Once it is all over (not this year) we can expect the conclusions to state that poverty was a major contributor to this problem.

The F-35 will be allowed into the bidding on the contract for new jets. The issue will not be resolved this year but I think the decision to let the F-35 into the running will be made.

Alberta stimulus. People in Alberta are going through a hard time because of slumping oil prices. They are the victims of a totally incompetent government that thought that instead of saving money during the boom they would hand out stimulus cash. Stimulus during a boom! Brilliant bit of governing there. Perhaps the Liberals can use some of their planned infrastructure spending as stimulus. A new set of spending will not go over well in the rest of Canada.

Pipelines. There will be much talk of pipelines. Many protests. Then some more talking.

As for this site. You should still see about a post per month. Requests are always welcome. There were no new videos in 2015 so maybe that can be a goal for 2016. Thanks for reading for another year.

2014 in Review and a Look Ahead to 2015

Once again I am writing my final post of the year at the last minute so please forgive the inevitable grammar and punctuation mistakes. I am just typing it and posting it.

Last year’s predictions ended up being almost entirely wrong.  I had underestimated the ability of the American government to delay things so the Keystone XL pipeline was neither approved or denied.  It is still in limbo. So no predictions there this year other than I think they have to come to a decision.

The overnight rate of the Bank of Canada remained at 1% for the entire year so that prediction held up. We are now looking at 2.1% core inflation which is slightly above the 2% target.  This by itself does not mean that the overnight rate is going to be raised but there are a few other things the BoC will be keeping an eye on.

Oil prices are extremely low as you have probably noticed as you purchased gas 40% cheaper than you did last year.  This will drag the Canadian dollar down with it.  A weaker Canadian dollar means that all of our exports become cheaper to other countries.   Canada does sell a lot of oil but it only accounts for about 3% (in 2009) of our GDP.   Overall, then, we should see a good growth rate for the economy.  This means that companies will start to spend the billions in cash they have been sitting on for the last few years, traditionally this would lead to inflation.   With the inflation rate already over target I expect we will see an overnight rate increase this year.  Poloz (BoC Governor) has made some comments about the strength of the Canadian dollar but that is just central banker talk. It is not the policy of the BoC to try to defend the price of the Canadian dollar so they could not mention that as a factor in the raising of rates. Raising interest rates makes your local currency stronger, but since you are a reader of this blog, you knew that.

Mortgage rates are always a topic of concern in Canada.  People have been talking about the real estate bubble in Vancouver for 10 years. Mortgage rates normally follow long term bond rates rather than the overnight rate but you can expect a rise from the BoC to have a knock on effect on all Canadian lending markets if it done early in the year.

Last year I predicted that Russia would crack down severely on terrorists and that maybe this would lead to some countries boycotting the Olympics.  None of that happened. Instead, Russia annexed/invaded parts of the Ukraine and is still currently involved in fighting there.   NATO has done nothing militarily but did apply sanctions on Russia.  When oil prices dropped so did the Russian currency, by 40% or more.   Their central bank decided the best way to defend the value of the rubble was with their control of the interest rate.  The first move was to 10% and then to 17%, a massive, massive increase.  The currency seems to have stabilized for the moment.  All the Russian companies that are holding debt in Euro and Dollars are going to have a really rough time this year. Expect to hear of at least some defaults.   As a reference, the last time the interest rates in Russia were this high was in 1998, right before the government defaulted on all its debt.

For our neighbours to the south this should be an interesting year.   Democratic Obama now has to deal with both the Congress and the Senate run by the Republicans.  I think we have already got a little glimpse of this plan for the next two years.  If he was smart he would continue to push these huge issues to the Congress and Senate for the next two years.  Education reform , military spending, entitlements.  Huge issues that have been completely deadlocked.  If the Republicans try to block everything he does then they will easily lose the next election.  They will be forced to concede on at least a few issues.  Not only that, the Republicans will have so little time to properly build their feigned outraged narrative and catch phrases for each individual move they will probably have to drop back to some nonsense about King Obama and the only people believing that will always vote Republican anyway.  I really hope they do something positive down there. Their political system has looked pretty ridiculous for a number of years now.  It is time for them to gain some self awareness and fix some of their issues.

Wow, this is getting to be a long post.  Ah well.

There will be a federal election in Canada this year.  Low oil prices will drop a few billion off the revenue side of our balance sheet this year.  The Conservative government has pulled a pretty smart move with their recent income splitting changes.  This will reduce the amount of surplus, if there is even going to be one this year.  This is smart because in an election campaign there is nothing that opposition parties like to do more than to tell everyone how they will spend the extra money that is sitting in government coffers.  Low oil prices and income splitting should eliminate any extra money so any promises made during the election will have to be offset with a cut to another program.  Not that this will stop anyone from making vague statements like “this will be paid for by savings generated by making X process more efficient” but there is not much we can do about that.

That is it for me this year.  Thanks for reading for another 365 days.  Until we meet again in 2015, have a happy new year.

Closing out 2013 and looking forward to 2014

Happy New Year to everyone! Since I like to do at least one post a month and I have been slacking in December today I will take a few minutes today and quickly talk about what we can expect in 2014.

In Canada inflation rates are at very low levels. The surge in inflation that many loose-money critics have predicted has not appeared. This is good because it means that the Bank of Canada does not have to decide if we are going to increase interest rates right away. It would be hard to argue that rates need to increase when we are only at 1.1% core inflation and 0.9% CPI. In fact, if the rates start dropping further then the BoC will start worrying about deflation. Despite their constantly optimistic DSGE model, it is possible that they will actually need to decrease rates in the next year, although this is extremely unlikely. The most likely outcome is that the target overnight rate will be unchanged throughout the year. The only thing that could cause an increase is if the US economy really starts to take off. If they start seeing growth over 3% then we could see a small increase of 0.25 – 0.5% by the end of the year.

All of you cross-border holiday shoppers probably noticed that the Canadian dollar is lower than we are used to in the recent past. It is currently sitting at about 93 cents US. Although we have been sitting at near par levels for some time this change is likely caused more by a stronger American dollar than a weak Canadian dollar. We have briefly discussed the CERI in the past; it is the exchange rate index that the BoC uses. Instead of just measuring our exchange rate vs. the US it includes our six largest trading partners and uses the magnitudes of our trades with them as the weights to come up with an index number. This number uses 1992 as a baseline (100 level). The most recent CERI index is 115. For reference, since the beginning of 2010 the CERI has been as low as 113 in February 2010 and as high as 124 in June 2011. So we are currently on the low side of the last three years but it isn’t a disaster.

The good news is that Canada has maintained growth while our currency has been in slight decline. This is a good thing because a cheaper Canadian dollar means that our goods/services/commodities become cheaper for the rest of the world to purchase. With the US buying about 75% of our exports a weaker currency will actually work out quite well for Canada if the US can manage strong growth this year.

With the derailment and explosion of a train carrying crude oil yesterday in North Dakota I think we can expect the Keystone XL to be approved.

The Olympics will take place in Sochi, Russia. Canada will be attempting to defend its “most gold medals” title. With two suicide bombers in the last week in Russia we can expect some major security changes from Russia. Not known for their delicate handling of terrorists, Russia will likely crack down brutally in the months leading up to the opening ceremonies. As a result, it is possible that we will see a few countries drop out in protest of their methods.

As for, it lives on for another year. 2014 should see lots of new posts and videos with a focus on videos covering more advanced economic topics.

This is a type-it-and-post-it kind of day. Please forgive any errors, and I will see you all in the New Year.

Economics, Now in HD

Today launches a new feature. Videos!  Yes, that is correct. I am going to be posting HD videos of me in front of a whiteboard explaining economic topics.  This is all part of the social media upgrade that I have in progress.  Twitter, Google+, YouTube and this site will now all be linked together.  I am sure you are very excited.

The goal of the videos is to present economic topics quickly and clearly so you don’t have to spend an hour watching a lecture if you just want a single concept.

I started with the Prisoner’s Dilemma because it is fairly easy to explain and lends itself well to being demonstrated on my awesome new whiteboard.

As always, I take requests.  If you have a question about economics, send it in.  I will either make a video reply, do a short write up on this site, or both.

Here is the video. Enjoy.

Introducing… Free Money

This is the first post in a new series called Free Money. The plan is to start with $50 Canadian and see how fast it can be grown, or lost, online.  Any online site is fair game but there will be no buying and selling on sites like eBay. The experiment will be limited to prediction contracts, equities, forex, bets, whatever can generate a return without actually producing a physical good.

With such a small amount of starting capital it is hard to really get into any serious trading online and so we will start in the minor leagues.  Prediction markets have popped up in the mainstream news over the last few years and are perfect for our needs. The contracts are cheap and have defined payoff dates so they make a good place to begin. The merits of various prediction markets such as inTrade (not currently operational), iPredict, Betfair, etc. are discussed in many places online so we will not cover the benefits and shortcomings of each here.  If a particular service is used then it will be mentioned but no single service is going to be endorsed. A new post will be made after every transaction is performed. Let’s get started.

On Thursday there were rumours that Cypress was going to sell about 500 million euros worth of gold to help with their financial problems.  The goal is to find some way to benefit from a drop in the price of gold.

I decided on iPredict for this first transaction. For anyone not familiar with iPredict the contracts have hard deadlines.  The contracts pay $1 if the event occurs and $0 if it does not. The price is always between 0 and 1 dollar and is meant to indicate the chance of the event occurring.  So a contract selling for 45 cents means the event has a 45% chance of occurring. If you disagree with the number then you enter the market and make your money. You can either buy or sell contracts and yes you can sell short. Because of the small size of the prediction markets you normally cannot just decide a price is appealing and then buy/sell as much as you like. There are only so many contracts available and their values can vary quite a bit if you buy more than 5 at a time. This means that in some cases you need to spread your prediction around to a few different contracts.

The London PM price of gold on Thursday April 11th was US$1,565.00. There were two predictions of intrerest and after a few quick calculations and trades the current position is:

London Fix AM Gold price to be LESS THAN US$1,570 on 1   May 2013

+48 (long) Avg.Cost: $0.5134.
Total Cost: $24.6432

Gold price to be greater than   or equal to US$1,570 and less than US$1,600 on 1 May 2013

-50 (Short) Avg.Cost:$0.3018.
Total Refundable Cost(to cover largest possible loss): $34.91

After trading fees, 10 cents cash remained.  Total Cost: NZ$59.6432

The original plan was to trade $50 Canadian dollars but iPredict is in New Zealand. NZ$60 was deposited and there was a NZ$1.05 deposit fee. So in the end the total investment was about CDN$53.14.  To make all future posts easier our starting amount will be considered CDN$55.

The contracts are complete on May 1st 2013 but since this is a prediction market they can be traded at any time.  The plan is to keep them until the contract date but if there are any changes you can be sure that you will see them here on If all goes according to plan the free money should be flowing in no time.


Recent WordPress Brute-Force Attacks

Over the last few weeks this site has been subjected to a brute force attack. I took it as a complement since it is the second hack attempt this year, the first being successful. My site must be in high demand.  The botnet is using the login name “admin” and then trying to guess the password.  So essentially this an attack targeted at people that install the WordPress system and leave everything on the default settings (my login is admin1, of course).  It seemed fairly harmless as I was only getting about 5 attempts an hour in short bursts.  Even if I had a user with the name admin, at that rate the password would never be guessed.

Earlier this week the login attempts started accelerating and I decided to look into this a little more.  Turns out this is a actually a massive attack on all WordPress sites across the internet.  You can get the details from Ars here. Not being targetted specifically is a bit of a relief but kind of a let down as well; I guess the site is not in that high demand after all.

So if you are running a site/blog using the WordPress system then you need to login and make sure that you do not have an account named admin.  For now it seems that unless you are in control of your hosting server then the best bet is to wait.  Not the most reassuring advice. Installing an IP logger on your login page will give you an idea of the size of the attack but installing any of the more server hungry PHP-based login security plug-ins is probably not a good idea at moment unless you know what you are doing.  And really, if you have your admin account set to “admin” then you really do not know what you are doing.  If configured incorrectly, some login security plug-ins will cause your server to crash under such a larger number of requests.  If you do insist on using admin as your login name then at least follow XKCD’s advice on passwords.


Back in Action.

Well it is not quite April 1st but the joke is on you, is back.  I have made a few small changes to the site, most of which you will not notice.  The hacker was nice enough not to inflict any major damage.  I guess if you are going to get hacked, it is nice to get a semi-friendly hacker. You can expect regular posts to resume starting right now.


Website Updates

Recently, I was reading an article and I found myself thinking Is this person in any way qualified to be writing about this topic? As I was about to click on the author’s bio I realized that my site had no information about me at all.  If I were to read a post on my own site and then looked at the About page, I would find nothing relevant and conclude that maybe I did not know what I was talking about.  I would like to think that all ideas posted stand on their own merit but I realize some background cannot hurt. The About page has therefore been altered to include a bit more detail. There is still not enough there for you to fully stalk me but it is better than before.

A search feature has been added over in the right hand column. After two years it was about time.  Now you can search through the old posts for all the fun stuff that you missed.

I would like to extend an invitation to anyone that wants to post something on  There is no money to be made, only internet glory (a.k.a. e-cred). More content means more people reading which means more discussions.  You should be able to tell by my past posts what is appropriate as far as subject matter. If you are interested, just send me an email or tweet and we can arrange something.  If you would rather just submit a topic for me to work on, I am open to that too.

Finally, I am going to commit here and now to provide more frequent content updates.   At the rate I am currently posting, I do not think it will difficult to follow through.