Thursday, May 5, 2011

So Goldman Sachs Was Right as Oil Takes a Tumble

Several weeks ago Goldman Sachs was warning their clients not to invest in Canada.
A Goldman Sachs strategist has told investors that it is time to dump their Canadian stocks, so they can avoid suffering losses in the short term as oil prices decline.

Noah Weisberger told investors Tuesday that Canadian stocks "made new highs last week, even as growth jitters and higher energy prices were constraining equity markets elsewhere." But he advised Goldman Sachs clients to drop their Canadian holdings as "risks to the forward view of economic growth are more balanced as are the risks to oil prices."
The story was buried in election news, but John Peters, professor of political science at Laurentian University, also raised the alarm in the Toronto Star: Harper and the illusion of economic management
The Conservatives cannot claim much credit for Canada’s economic success of the past decade. The surge in our natural exports has been due largely to the spike in commodity prices driven by rising natural resource demand and dwindling supplies.

Even before the latest round of corporate tax cuts, Canada’s oil, gas and natural resource exports nearly had doubled in value in recent years, and now more than 25 per cent of Canada’s economy is directly or indirectly tied to the mining and oil and gas industries, even more so in Alberta and Newfoundland and Labrador, where oil and gas account for nearly 40 per cent of provincial GDP.
And it would appear that Goldman Sachs may have been right on the money, when they warned that Canada was a high risk investment, as commodities are taking a tumble.
A record plunge in oil prices led the sharpest sell-off in commodities in two years on Thursday as investors fled the market amid mounting concern over the strength of the global recovery.

Brent crude, the oil benchmark, tumbled more than $12 a barrel – its biggest fall in absolute terms – as investors bet that recent sharp gains in raw material prices would sap demand and compel emerging countries’ central banks to raise interest rates to head off runaway inflation.
Metals are also on the decline.


  1. You can be sure we won't see that tumble reflected at the pumps, however. The oil and gas companies have to watch their profit margins first, and to heck with the little guy filling his tank.
    Look at me, I've turned into a cynic. Gee, I wonder how that happened! Too many Harpie years, do you think?

  2. Ive written 2 or 3 comments i nt he past few days but they werent published.Ive no prob u not publishing them i just wondered if a technological screw up they were t o long irrelevant or to pro NDP as relatively elderly newbie to the PC world
    I often post things in wrong place off subject poorly written etc I just would like to know if u got them

  3. Sorry Vanguard. For some reason they ened up in my spam. I'll make sure I check it from now on.

  4. hehe ok emily thanx still love your work even when you kick Layton around

  5. Sorry Vanguard. After I posted the piece 'Will the Real Jack layton Please Stand Up', I heard from so many former NDPers who told me that Layton has done more for Harper's career than anyone. In his quest for power he has set the progressive movement back decades.

    I still like most NDPers and am just getting familiar with the newbies.

    We'll have to start from scratch now, but I think a progressive revolution is still possible. It'll now just take a lot longer now.

  6. if there was a merger Id like to get rid of that damm orange colour !!! RED seems more appropriate
    How about Old Democratic liberal progressives ? or maybe
    Old liberal democrats? lol
    I find anything with the word democratic in it..... usually isnt!!
    In 63 and ive nothing better to do than try and make life as uncomfortable as I can for neo cons.......
    The joy is in the struggle!