Archive - Jun 23, 2010 - Blog entry

For the past 15 months, Michael Sabia, chief executive of Caisse de depot et placement du Quebec, has had his hands full cleaning up the mess left by his predecessor Henri-Paul Rousseau. Not only was there a tarnished image to fix, but Mr. Sabia's been busy cleaning up its balance sheet following the nearly $40-billion loss the Caisse suffered in 2008.

A young friend asked me yesterday, “What on earth does negative growth mean?” and I had to laugh because it really is a ridiculous term dreamed up by political economists to put a positive spin on really bad news. I had actually never given the term any serious thought until then. “It means,” I said, “economic contraction and recession.” It really is no wonder the kids cannot figure out what is going on with all the nonsense terminology flapping about.

It’s generally understood by all that something that’s taken by force has much less value compared to the same thing given freely and willingly. Never again consider yourself powerless when it’s clear you posses something of such immense power and wealth that it’s constantly being manipulated and seduced from your hands.

He answered this question in 2002. He has already done most of those things. There are still a few arrows left in his quiver. They all have poison tips and will likely kill us.

Hmmm...

The best we can expect is an anemic H2 GDP growth rate of only 1.5%. The private sector has flipped from spending 4% of GDP to saving 7%, a massive deflationary swing. I’m sure Ben Bernanke is listening.