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These days, when I look South of the border, I feel really lucky for having such a strong Loonie.

Do you know why?

It is one of the main reasons our inflation is not exploding compared to other G8 nations. All of the others in the developed world, except Japan, have seen higher rates of inflation compared to Canada.

This week, inflation in commodities, a deflating housing market, rising costs of …. everything, and a diminishing purchasing power maintains the eye on the spotlight. The largest steel maker in China - Baosteel just announced the largest increase, some 96.5%, in iron-ore contracts with their Australian supplier, Rio Tinto.

However, while petroleum related products increase in price, other non-petroleum products will become cheaper. Consumers will have less money and therefore less demand for those products. Many things in the G8 countries are shooting through the roof, from milk and cereal to cosmetics. The credit crisis has still yet to run its last sprint to home base and many traders are really unsure of what to do.

Many stocks that were once safe havens, such as beta-favourable stocks, and large-cap tech stocks are taking big hits. RIM took a big dive on Thursday, and many are predicting Google will do the same. Some traders I know are keeping their funds strictly cash, cold, hard, c-a-s-h. Well, for the moment, to wait out the storms, where risk and reward are not in-line. The head of the Federal Reserve is taking a similar approach to the interest rate, sticking to the sidelines. Buffett, on the other hand, believes this inflation will cause a drastic, long-painful, recession. But he has been wrong before, and the Fed. is hoping he is wrong now. I think the cash reserve plot utilized by many traders right now is human nature, because they think opportunities will be cheaper tomorrow, but this recessionistic ideology will only add fuel to the fire.

I read a funny comment to a financial video I saw this week, it was a random unrelated comment about how diversifying money would be great right now to look for investing opportunities, half the funds in the cookie jar, and the other half under the mattress. LOL

Anyways, I really hope our governments can turn our economies around, increase consumer spending, and patch up post-credit wounds. With Bernake on board the ship, we will have to wait and see. Maybe we will see the bottom of the ocean, or a new America, but Canada is definitely dependent on the latter.

Signing out

Zan Zhang

What a fast moving 2 weeks in the markets. Auto industry news, more credit scares, energy prices still rising causing everything to be volatile. Today, on City 24, there was a live video feed from the Economic Club down in Ottawa and it features Mr. McCain from the USA Now for the elections down south, I am all for Obama, and I hope I will get to meet him one day. Well, back to McCain, he said many good things about Canada and keeping NAFTA in tact. It was very clear that he did his homework on our trade and energy policies. I assume that he also talked about tax cuts to battle the recent rise of inflation and the imploding housing industry. What I was watching, was an educated man, surprisingly from the same party as Mr. Bush. A few years back, Rick Mercer made a fool out of Bush when George agreed our Prime Minister “Poutine” was smart for siding Republican.

But, a few months ago, McCain started that gas tax fad along with Clinton. The way Obama shut them down, I wonder if Obama is the only one who has taken economics. Gas tax cuts would only create shortages, and unbelievable lines at gas stations. But I read in articles, that once Obama is elected, investing will decrease because he is a Democrat. However, I believe that he would be good for the economy through spending large funds on government programs. This money would circulate through the economy and increase consumerism. The other Rupublican solution of tax cuts, and declaring war does not seem to working all that well. Although, I bet Obama will use a mix of all three, increase spending, tax cuts, and declaring war on POVERTY :D, to turn the economy around. If you really think about it, a Democratic party would benefit the public the most, but down South, religion plays a huge part, and clouds judgement. Well, I hope Obama gets in, because its about Time for CHANGE!!!!!

Now, to recent news, negative pick-up truck numbers. Canada is still brewing over the GM shut-down of pick-up truck plants in Ontario. Until this year, the number one selling car in America surprisingly was the Ford F-150 pick-up truck, but now is being replaced by the classic Honda Civic. The fact that GM shut down the plant right after signing a union contract to freeze wage increases, and then numbers revealed that the Windsor plants were some of the more efficient GM plants in North America. I would not be surprised if GM is doing this to embuzzle more financing from our fed. I know we finance them to keep jobs in Canada, but their green strategy was the last to hit the market. From an economic viewpoint, we are financing bad business, because fewer and fewer people are buying GM gas-guzzlers. If GM leaves, I am sure our skilled, and efficient labour workforce will attract other car companies.

Crude looks to be stabilizing due to positive news from China, and the Saudis. Then again, credit scares destroyed all hope. Many more billions in financing, but in crisis, there is opportunity. Look at the numbers of JP Morgan, Wells Fargo and Bank of America, awesome numbers and almost undervalued. As an intelligent investor, I will be looking at some reports, apply some number crunching and in my next post I will take you along for a closer look at some investing possibilities.

In the meantime check out this video on Mayor Bloomberg’s disguised support for Obama!

Signing out,

ZEZ

Hello, this is your captain speaking, flight 101 appears to be having some technical difficulties, please do not panic, and SCREW everybody else over. Well, I am not really a captain, but with all the panic and fear in the markets this week, I really hope the public can keep their pants on. McDonalds salmonella scare, the sell-off of Lehman Bros, rising energy costs - rising unemployment - Maybe Buffett’s prediction is coming true ……

A long recession? At least 5 years, ughhh! Well, maybe when I graduate from university, it will be the next Golden Age, with the sun shining bright, and the birds chirping, (you get the picture). But for all the regular folks out there, why shouldn’t they worry. Well this recession, or market adjustment, provides many opportunities. I had the honor of meeting inspiring billionaire, - Mr. Micheal Lee-Chin, aka the ROM crystal man (he provided the capital for it), anyways I remember a quote he would always say, “In crisis, there is opportunity.” So don’t panic, do some math, and find some undervalued stocks. Over the next few weeks, I will be digging deep.

So do not panic, don’t go and sell everything and then hide that money under your mattress, that is not going to help. In a recession, even when prices are deflating, we need to buy! BUY! and BUY! IF our economy wants to stay afloat. So what would be an innovative way to improve our economy? In economics, I am currently learning about the money supply, aggregate demand and all that. The soaring of energy prices in the 70s and the salvation of the microprocessor. How does this all tie together to today?

Well, when energy prices go up, your aggregate supply curve shifts left, unemployment and inflation rise. To shift it outwards positively towards the holy grail of economics, you need either technological advancements, capital manipulation (interest rates), or new discoveries of resource supplies. These are the most common three. During the 70s, the microprocessor (new technology) increased efficiency, decreased labor time, and shifted aggregate supply right. In the graph, you can see that unemployment dropped, and inflation dropped as well. What we need today, is some new technology as well, because those interest rates are just not working. Maybe one day, we will have nuclear fusion. I think that will be the answer to all of today’s problems.

Well, back to the summary, the sell-off of Lehman Bros. should have been forseen. It was one of the highest shorted stocks on the markets. So down these banks tumble, unguided, and uncentralized. Good thing up here in Canada, everything is controlled. I always thought government intervention was horrible, until I learned of the numbers of bank bankruptcies, compared between USA and Canada. Quite staggering. Maybe Obama can change that. Maybe he can turn everything around. But for now, everyone can only hope, and try not to panic, and jump off the plane, because who knows…

Meanwhile, watch this quick video about some of the places where you can put your money.

Whew, this week, it seemed for a second that the crude oil bubble was finally going to drop, due to a recent falling to $125/barrel. Just last week, it was soaring above $135 a barrel, an all-time record. This drop in oil has caused a short economic bull surge. Stocks are starting to pick-up, but the question comes back, is this drop going to STAY? I heard that in these few months, the oil prices were fluctuating due to speculative investors, and now, they have all turned negative. However, Goldman Sachs thinks otherwise, they predicted prices to go above $150 due to a shortage of supplies, and rising external demands eg, China and India.

What does this all mean for the average consumer? Well, most likely, you are going to be cutting corners. Saving as much as you can here, there, everywhere. Unless, of course, you have deep pockets, like oil-well deep. Consumer spending on a whole is going to drop, and then we are all going to go into recession. And oil prices are going to go higher, and we are going to suffer even more. For the time being, oil is going to drop, and investors are all shorting, but wait until a crisis comes, and the word “cover” rings on every trading floor, then its going to bull fast, real fast.

As for the recession, many high profile investors think it is going to come hard, and stay for a very long time.

For the time being check out this great video on the ideas for the future and what fortunes or disasters it may bring.

Whew, what a week. Sorry for not being able to post last weekend. It was Victoria day holiday and I have been scrambling to meet assignment due dates since then. Some interesting finance news this week relates to Mr. Icahn shoving his way towards a yahoo microsoft merger, but the good stuff was all in the commodities sector. Oil, the blackest of gold, has been soaring high. Airlines on the other hand have been cutting costs due to declining profits. The rise in oil prices has added billions of expenses to the airline industry, and related shares are dropping fast (even faster than my marks at school :O) Lastly, but not least, General Motors cut another 1000 jobs. UGH

Well, recently, I heard that McGuinty is going to talk to some Fiat execs and try to lure a new plant to Ontario. That would create a whole new lineup of jobs and help stop Ontario economy from its continuous decline. Good luck McGuinty, we are all counting on you

So back to oil, it is at a rediculous price, and speculating investors are pushing its futures up everyday. The markets are slumping because of this. I have even read an article wondering what would happen to the world if a barrel of oil hit $300. :O *GASP Well, many believe the world would be better if that were to happen. Just think about it, things could not be that bad. Many countries already have oil prices at rediculously taxed rates. Some major differences would be increased recycling, high efficency mini-cars, a better mass transit systems, and moving closer to your workplace. The oil sands over in Alberta would most definately also become ravaged. They say, the tarsands may contain approx. 1.5 trillion barrels of oil (WOW! That is a lot of money!), but I have seen environmental videos and I question if we will lose more if we increased drilling. One single barrel of oil causes over 75 kgs of greenhouse gasses to be released, and creates so much toxic water waste, it is mind exploding. Oil sands production also takes up approx. 10% of all natural gas consumption. and uses mutiples more water than the city of Calgary.

But hey, we all want to drive so who cares?

-Ahh! WHO CARES?

We should care, people are dying and developing cancer from all that oil contamination.

-HUMM, What about our DYING economy?…..

*What do you guys think?

Hello fellow readers,

I’d like to begin this first post by introducing myself. My name is Zan Zhang and I am a student headed towards post-secondary education, with hopes of a career in finance. I have won several investment competitions in the past, and continue to pursue more of such endevours for the future. A friend and I decided to start this website in order to provide all of north america’s business news under one roof, as well as a few feeds from Europe and Asia. This blog exists to recap all current events from each week, whether it is more credit foreclosures down in Wall Street, Silicon advances on the West coast, or other newsworthy events from across the continent. Now, it is our goal to continue developing and adding more to the site, so please be patient and forgiving during these testing sessions.

Over the past week (or weeks) we have seen Olympic boycotts, JP Morgan on the headlines, new multiple earnings reports, some shattered careers, and a new official king of Wall Street. Speaking of TheStreet, recently they have been constantly sending out annoying emails - or the more commonly used term, "spam". I wonder if it has anything to do with Jim Cramer’s comment to buy BearStearns right before it crashed, and his following attempts to rebuild trust from the public. Well, just as his career took a hit, I recently read that a hedge fund manager, John Paulson, took one heck of a climb. In fact, his gains this year set a record high in history- $3.5 billion - and he did it simply by betting against the housing industry. I won an investing competition the same way by shorting subprime companies last year. If only I was so fortunate to gain $3.5 billion…

Last Wednesday, JP Morgan posted above expectations and regained confidence from some investors. IBM and Intel also managed to surge ahead, while Mannie Mae lost big. So, I wonder how long it will take for all this financial mess to clear up. Some banks predict that in late 2008 the US economy will pick up, and judging by some good news, it most likely can. However, if Bear Stearns messed up so bad, what about all those other financial players? What are they hiding? It begs one to question the validity of all of Wall Street.

Also, a hilarious article I read the other day touched base as to why Warren Buffet would buy Google stocks. I think it was by someone at an affiliate like Motley Fool. The article was quite old, but I was in disbelief; it seems everyone is up on the tech hype, yet again. I agree that Google is a very good company, but I doubt their stock is as good as their service. Last year, their stock was highly overpriced at $800+ per share, their P/E was somewhere in the 60s and they had a declining ad revenue due to economic turmoils. Now their P/E is in the 30s, and around $400 per share, but the tech boom this week seemed to hype up things once again (including companies such as IBM, Intel, and Ebay). Ebay rose a good 22% on profit expectations, but still has P/E’s of 130+! I have never seen P/E’s like that since Yahoo, before it plummeted at the beginning of this century. Well, I did not literally see it drop, but many families still feel the pains from the bursting of the Tech bubble. One astounding thing I saw this week on b2logs , in the finance section, was out of all those stocks, only Toyota stood its ground. Good dividend stocks pay off - end of story. Maybe if Google created a dividend, they could be considered for purchase (probably not). I have a gut feeling that Ebay is seriously overvalued right now, unless their profit boost increases earnings about 10 times, but otherwise, the tech sector should be dropping soon. Well, by the books and basic investing indicators, it should be.

Anyways, finally I want to mention the Olympics. The opening ceremony boycott, and the international human rights watch looming over China. This is certainly creating economic instability. Although I am not a firm supporter of their government, I somewhat agree with the idea that the media is refusing to show both sides of the conflict. I have also seen some crazy pro-Tibet peace movements going on. Although I support peace very much, I think some people are going too far. I have even heard teachers recommend students boycott Chinese goods. Well, I don’t know about you guys, but most kids up here in Toronto can’t even afford breakfast, and some teachers are saying to buy more expensive stuff. A hilarious saying I heard this week was "people follow the law of demand". The public is definitely going to keep buying Chinese goods, and if a recession hits, it will be inevitable. Looking at history, this has never really worked, and it could be unfair for many athletes. Western media self-consciously always points at others, but really, we really cause the problems. Carbon dioxide emission of the world is like a fraction compared to the US and up here in Canada, we have some of the largest ecological footprints. Our corporations violate human rights all the time, all day, all week, but nothing is said. You guys should all watch an old school Micheal Moore classic, "The corporation" - very insightful. Anyways, I am going to stop ranting now, and say that hopefully the conflicts will be resolved peacefully, so that travel, tourism, and all that other greatstuff from an Olympics can maybe create some more economic bulls to tug us out of our misery.

To end off, make sure you keep reading our blog for an update of the latest in financial news every week, Fridays and Sundays. To make things a bit easier, why don’t you sign up for our weekly financial newsletter, visit the bottom of our financial section .

To peace, and a rising economy,

logging out.