Business
The Bad Economic Times Have Only Just Started for Canada
Canada’s economic woes have only just begun, despite recent signs of moderation in both GDP and job growth. The agony that Canadians are currently facing due to inflation is only going to intensify, thanks to Trudeau.
There will be a tough spell in the Canadian economy. The rate of expansion has slowed dramatically. Job creation has slowed down. The rate of inflation has not decreased. However, the suffering that families are experiencing now will only intensify.
In a note, Desjardins associate in macro strategy Tiago Figueiredo expressed pessimism about the future.
The economy held up better than predicted for a time there. The interest rate increases from the Bank of Canada accumulated. The economy and the number of available employment both improved even so.
The economy was bound to suffer, though. Rising loan rates and skyrocketing inflation have been devastating to families. Now, economists are seeing signs of instability in the data, and they anticipate this to worsen. the second quarter of this year saw a decline in GDP.
This week, economists will have a better idea of whether or not the economy shrank further in August after showing no growth in July. Reasons for this include natural disasters and labour disputes like the B.C. port strike.
Canada’s economy had already lost steam before that happened.
If that happens, Canada will officially be in a recession because the official definition requires two consecutive quarters of negative growth.
Manulife Investment Management’s global head economist and strategist Frances Donald has argued that we should stop discussing the name of this economic downturn and instead concentrate on how it will affect individuals.
“Even if there are technical factors that avert two quarters of negative GDP, this economy will feel like a recession to most Canadians, for the next year,” she said to CBC News.
Several variables, according to experts, are hiding the true severity of the economic downturn. As a first point, it takes the economy around a year and a half to fully reflect the effects of changes in interest rates.
Seventeen months ago, the Bank of Canada started its cycle of rate increases. That implies we haven’t seen the full effect of Canada’s fastest, most aggressive interest rate increasing cycle yet.
Second, the pandemic altered consumption habits, which have yet to return to pre-pandemic levels of predictability. Canadians made significant purchases during lockdowns due to pandemic fears. We scooped up exercise tools, televisions and hoover cleaners. These same families are now investing mostly on activities rather than material goods.
New data on retail sales shows an increase in July and a decline in August. When so many external forces are tugging at and pushing on consumers, it can be difficult to tell how much of what’s happening is cyclical or seasonal.
Inflation and rising borrowing costs are dampening discretionary consumer spending. Another evidence of slow growth for the Canadian economy at a time when the Bank of Canada is dealing with inflation that’s higher than expected, BMO senior economist Robert Kavcic Said.
An extraordinary increase in immigration looms over all the data and shifts. In just the past year, Canada has seen an influx of over a million new residents. This has boosted consumption, but it has also hidden some structural flaws.
According to Donald, those things have helped make the economy look better than it is.
We are in the time just after the Titanic struck the iceberg, but before it sank. When we’ve had a shock, but it hasn’t been too bad,” Donald explained.
The Bank of Canada has temporarily stopped raising interest rates. The central bank, however, cautioned that this would be conditional on continued inflation reduction efforts.
Fortunately, the Titanic economy isn’t the only one we can save by cutting interest rates.
Since then, inflation has surged to unprecedented heights. The price of everything went up, not just petrol and mortgage rates this time. All of the so-called core measures of inflation, which exclude more erratic factors like the cost of petrol, increased or remained stable.
Scotiabank’s vice president and head of Capital Markets Economics, Derek Holt, calls the breadth of August’s pricing pressures “astounding.” He claims that 52 percent of the items in the consumer price index basket are increasing by four percent on an annualised basis from one month to the next. Almost two-thirds have seen gains of more than 3%.
According to him, the most recent numbers cast doubt on the foundational beliefs individuals have held about the economy.
As the saying goes, “inflation is cooling.” They attribute it entirely to increases in the price of petrol and mortgage interest rates. They say the government’s (fuzzy) “plan” is successful.
They claim that it’s clear the Bank of Canada will not raise rates again. In a note to customers, he called it all “complete, utter, rubbish.”
According to Holt, “definitely ups the odds of a rate hike” at the next FOMC meeting in October because of the recent acceleration in inflation readings.
Sharon Kozicki, the Bank of Canada’s deputy governor, spoke publicly this week and described the central bank’s predicament.
“Rate reductions are still a ways off.”
If we don’t take action now, we’ll have to take even more action later. She warned attendees at a Regina luncheon that excessive austerity could have unintended consequences for the economy.
Some inflationary swings, she added, were “not uncommon,” and that previous rate hikes “will continue to weigh” on economic growth.
Nothing of it is novel. The central bank has spent the better part of the last year and a half discussing the trade-offs involved in preventing inflation from becoming entrenched, while also avoiding doing too much and creating more pain than is required.
Economists like Donald, though, argue that things have changed as the central bank considers when and how it will have to look at bringing rates back down to lessen the burden on people.
“Rate reductions are still quite a ways off,” she said. However, the exit ramp was seen far off in the distance. And the Bank of Canada is working to broaden that exit ramp so they have some leeway if they ever need it.
In her opinion, rates will begin to drop again in the first half of 2019.
“But for a lot of Canadians, there’s… a lot of pain to get through,” Donald remarked.
Tesla CEO Elon Musk presided over the company’s long-awaited Cybertruck delivery, which was first shown four years ago. While there was little new information since the original presentation, Tesla’s website was updated with a new price.
The event had the typical Musk flash, with lofty predictions about “the future” and visuals of Cybertrucks traveling across the ice, but it offered very little new information. Even the price on Tesla’s website, which required a $250 deposit to place an order, did not contain standard car-buying experiences, such as selecting options. There was no mention of practicalities like front trunk capacity or anything beyond the company’s current estimate of a 250-mile range.
However, the website did mention that the top-of-the-line model would be known as the “Cyberbeast.”
The Tesla Cybertruck starts at $60,990 before federal tax credits, over $20,000 more than the base model initially proposed at the vehicle’s introduction in 2019. The business originally stated that the Cybertruck would cost less than $40,000, but a pandemic and subsequent severe inflation prompted the corporation to change its mind.
Even then, it would only be “available in 2025,” according to the Tesla website.
If you want one in 2024, expect to pay about $80,000.
By itself, the Cybertruck enters an electric vehicle market packed with vehicles in the same price range. It’s not only pickups but also SUVs. It’s an issue that’s already dampening sales of some electric vehicles, particularly in the luxury market, as automakers struggle to establish their electric production processes.
He also bragged about the Cybertruck’s “sports-car-like” capability, showing a video of it hauling a Porsche 911 on a trailer while racing a Porsche 911 down a drag strip. Honestly, Porsche 911 sports cars aren’t sold on raw acceleration. Of course, neither is a pickup truck, so it’s unclear how big of a selling point that will be.
Tesla’s Cybertruck Hits The Market With A Higher Price Tag And Plenty Of Challenges
However, Tesla’s website only shows that acceleration figure for the Cyberbeast version of the truck, which costs over $100,000. The truck’s 11,000-pound towing capacity also noted in the presentation, is shown exclusively in the $80,000 or $100,000 all-wheel-drive variants.
According to Brian Moody, executive editor of Kelley Blue Book, the truck’s price range may be fine compared to other high-end trucks on the market. The pricing range that Tesla can provide is limited.
“Because Tesla has basically one version of the truck with some minor modifications, they don’t have the advantage of having a very low-price truck as well as a very high and heavy-duty, super-capable truck,” Moody wrote in an e-mail.
According to Wedbush Securities analyst Dan Ives, who is bullish on Tesla, the business has around 2 million bookings for the Cybertruck. He predicted that just 30% to 40% of those reservations would be turned into sales. The larger issue may be the production issues that Musk says the firm is experiencing as it attempts to ramp up vehicle manufacturing, especially with competition from electric pickups from Ford, GM, and Rivian.
“It’s a Herculean task to ramp production, but Tesla has been here before,” he said, referring to prior product launches such as the Model 3 sedan. However, he warned that “it’s a much more complex market for them to navigate.”
The Cybertruck, which resembled a high-end kitchen appliance when it was initially shown in 2019, looked like nothing else on the road, and it still does. The purpose of its strange, angular all-metal appearance was to stand out: Musk sought to make a statement with something that wasn’t just another large truck.
However, the Cybertruck’s qualities, such as power and range, do not stand out. The market has transformed during Tesla’s development and delays over the last four years. Even before the first one rolls into a customer’s driveway, Tesla’s flashy new pickup is significantly more ordinary beneath its gleaming veneer.
Electric motors can give a lot of towing and hauling power, and the truck’s basic size allows for many batteries and a long range. Tesla is one of many automakers to recognize this opportunity.
Even then, it would only be “available in 2025,” according to the Tesla website.
Ford began selling the F-150 Lightning electric pickup truck four years ago, and Rivian R1T pickups have become familiar sights on American roadways. General Motors just began manufacture of the Chevrolet Silverado EV electric truck. Stellantis’ Ram 1500 Rev electric vehicle will also be available in late 2024.
This isn’t the same setting as it was four years ago, and the Cybertruck’s capabilities don’t look as impressive as they did. Many of these other trucks have capabilities that rival, and in some cases even outperform, Tesla’s.
Musk has also frequently stated how tough it is to construct the Cybertruck due to its unconventional design.
The truck is built of unpainted stainless steel, a material not commonly utilized for cars since the durability of the material that Musk has touted makes it difficult to build with and fix. The massive stamping machines commonly employed in auto manufacturing to quickly bend metal into shape struggle with stainless steel.
It also features a unibody construction rather than a separate body and chassis like most large pickups. Unibody structure is common in crossover SUVs and compact, light pickups such as the Ford Maverick. Body-on-frame designs are commonly used for heavy-duty vehicles due to their strength and flexibility for towing huge loads.
“There will be enormous challenges in reaching volume production with the Cybertuck and making the Cybertruck cash flow positive,” Musk remarked recently during an investor call.
Musk has also frequently stated how tough it is to construct the Cybertruck due to its unconventional design.
The Cybertruck’s total size could be an advantage. According to Tesla, the Cybertruck is less than 19 feet long, slightly shorter than conventional full-size trucks. However, Tesla boasts that its cargo bed, at over six feet long, is slightly longer than typical.
However, the Cybertruck may forego front storage in exchange for its small body length. It lacks the extended hood of other pickups, notably electric pickups from Ford and GM. This could imply that the Tesla has less “frunk” – or front trunk – space. Ample functional front room, in particular, has been a major selling factor for the Ford truck.
The wedge shape of the vehicle, where the sides of the cargo bed meet the roof, may also make access to the bed from the sides difficult. Pickup drivers frequently reach over the sides to load and unload objects close to the cab.
The payload capacity of the Cybertruck, or the amount of weight it can carry in its cargo bed, is also slightly higher than competitors currently in production. The Ford F-150 Lightning can tow up to 2,200 pounds. However, the Ram 1500 Rev will be able to haul up to 2,700 pounds, which is more than the Cybertruck.
SOURCE – (BBC)
A person familiar with the talks said Tuesday night that Dallas Mavericks owner Mark Cuban is working on a deal to sell a majority ownership in the NBA franchise to the family that owns the Las Vegas Sands casino empire.
According to the individual, who spoke on the condition of anonymity because the specifics were not made public, the agreement would be in the $3.5 billion range and would take the league weeks to process.
In the deal, Cuba would retain control of basketball operations. NBA reporter Marc Stein initially reported the probable transaction.
Miriam Adelson, the widow of casino magnate Sheldon Adelson, said earlier Tuesday that she was selling $2 billion of her shares to purchase an undisclosed professional sports team.
Mark Cuban expressed interest in cooperating with Sands about a year ago. He has been a supporter of legalizing gambling in Texas, a topic that failed to pass the state Legislature during its biennial session earlier this year.
The 65-year-old Mark Cuban, who just announced his departure from the popular business TV show “Shark Tank” after the 16th season next year, climbed to prominence swiftly after purchasing the Mavericks in 2000.
Mark Cuban Working On $3.5B Sale Of Dallas Mavericks To Sands Casino Family
Dallas had one of the worst franchises in pro sports in the 1990s before becoming one of the best under Mark Cuban, thanks largely to star player Dirk Nowitzki.
Miriam Adelson is the majority owner of Las Vegas Sands Corp., a publicly traded Las Vegas firm that constructed the Venetian and Palazzo resorts but now solely operates casinos in Macau and Singapore. Sheldon Adelson, founder and owner of Las Vegas Sands, died in 2021 at 87.
In a filing with the Securities and Exchange Commission, the business disclosed the sale of $2 billion in stock. Adelson and the Miriam Adelson Trust were named sellers in the filing, but no club, league, or location were mentioned.
If Adelson spends the entire $2 billion on the purchase, he will own at least 57% of the NBA franchise, based on the $3.5 billion valuation.
According to the document, Adelson, a 78-year-old medical doctor, will keep 51.3% of the company’s shares after the transaction. The family also controls the Las Vegas Review-Journal, Nevada’s largest newspaper.
Mark Cuban Working On $3.5B Sale Of Dallas Mavericks To Sands Casino Family
“We have been advised by the selling stockholders that they currently intend to use the net proceeds from this offering, along with additional cash on hand, to fund the purchase of a majority interest in a professional sports franchise … subject to customary league approvals,” according to the filing with the Securities and Exchange Commission.
The NBA’s verification procedure for prospective owners normally takes several weeks, after which the league’s Board of Governors must approve.
Mark Cuban also stated late last year that if Texas legalizes gambling, he plans to build a new stadium in downtown Dallas that will also serve as a casino resort.
Supporters of legalized gambling in Texas planned to get a constitutional amendment before voters during the most recent legislative session, but the idea did not advance. The Republican-controlled Legislature will not reconvene in regular session until 2025.
Mark Cuban Working On $3.5B Sale Of Dallas Mavericks To Sands Casino Family
Mark Cuban willikelyly fstay inview since he will retain control of basketball operations. Indeed, moves to legalize gambling in Texas could raise the reputation of a millionaire who has been prominent in sports, business, and finance for nearly 25 years.
Mark Cuban, a self-described basketball enthusiast who attended Indiana University, is virtually always courtside for Mavericks games. He has always been outspoken, and as owner, he has amassed millions in fines. Many of his rants were directed at government officials.
SOURCE – (AP)
Google has agreed with Canada to avoid a news embargo caused by a law requiring tech companies to pay for news content.
In reaction to the Online News Act, which goes into force on December 19, Google promised to remove links to Canadian news.
As a result of the law, social media company Meta has already blocked news on its sites.
The agreement came after months of negotiations between Google and Canada.
The law mandates Google and Meta, the owners of Facebook and Instagram, to establish payment deals with news providers.
Google And Canada Reach Deal To Avert News Ban Over Online News Act
The arrangement unveiled on Wednesday requires Google to pay news outlets C$100 million (£58 million, $74 million) per year, linked to inflation.
The funds will be utilized for “a wide range of news businesses across the country, including independent news businesses and those from Indigenous and official-language minority communities,” according to an announcement made by Canadian Heritage Minister Pascale St-Onge on Wednesday.
According to the announcement, Google will pay a “single collective” to distribute the monies to eligible news organizations “based on the number of full-time equivalent journalists employed by those businesses.”
“A sustainable news ecosystem is good for everyone,” Ms St-Onge said, adding that newsroom closures and layoffs put “the health of the Canadian news industry at risk.”
Google And Canada Reach Deal To Avert News Ban Over Online News Act
When Canada’s Online News Act was passed this summer, it was met with anger from tech corporations, while many media groups applauded it as a positive step toward market fairness.
Google called the plan “unworkable” and said it sought a “path forward” with the government.
“This unprecedented decision to put a price on links breaks the way the web and search engines work,” the business claimed in a blog post.
On August 1, Meta began blocking Canadian news material on Facebook and Instagram. When people try to read news on those platforms, they get notices claiming they can’t see the information in Canada or that no posts are available.
According to one estimate, news organizations might have earned up to C$329 million ($248 million; £196 million) per year from digital platforms due to the law’s enactment.
In reaction to a similar rule, Australian users were barred from posting or reading news on Facebook in 2021.
Google And Canada Reach Deal To Avert News Ban Over Online News Act
Australian MPs changed the law after Meta temporarily barred Australian users from sharing or watching news on its services.
When the adjustments were implemented, the blackout ended, and Google and Meta have subsequently struck more than 30 arrangements with Australian media firms.
The Canadian government has proposed a new law that would allow news organizations to negotiate payment with tech companies for reusing their content. This move is similar to Australia’s recent news media bargaining code, which requires tech giants like Google and Facebook to pay for news content.
If passed, this law could have significant implications for the relationship between news publishers and digital platforms, potentially reshaping the digital news landscape in Canada.
SOURCE – (BBC)
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