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Trevor Tombe lays out the story in Macleans, Jack Mintz discusses options in FP.
Edit: Here is commentary on the actual budget. Another commentary in Alberta considering removing the balanced budget law.
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The Globe and Mail
Bank of Canada Governor Stephen Poloz is warning that the oil price shock could weigh on Canada’s economy for at least another two years. The central bank kept its key overnight lending rate unchanged at 0.5 per cent Wednesday, after cutting it twice this year. But the bank downgraded its economic outlook for next year and 2017, citing a “complex” transition away from the once-booming resource sector. After flirting with a recession earlier this year, the Canadian economy will grow just 2 per cent in 2016 and 2.5 per cent in 2017, the bank said in its latest monetary policy report. That’s down from previous forecasts of 2.3 and 2.6 per cent, respectively. Low oil prices are continuing to sap business investment and put a dent in the value of Canadian exports, overwhelming some of the improvements elsewhere in the economy. The bank now expects spending in the energy sector to drop another 20 per cent in 2016, after a 40-per-cent drop this year. Mr. Poloz said it will take up to two years for the recent rate cuts to work their way through the economy. “We need to be patient and let monetary policy do its work,” Mr. Poloz told reporters in Ottawa. And he pointed out that the non-energy side of the Canadian economy is gaining steam, buoyed by those lower interest rates and the cheaper Canadian dollar. Vast swaths of non-energy exports are in full recovery mode, according to a separate analysis of more than 4,000 exports, also released Wednesday by the bank. Exports of hundreds of items, including building products, aerospace and fabricated metal, have grown by at least 10 per cent a year since the recession. More worryingly, the Bank of Canada warned that the potential growth rate of the economy may be weaker than expected because of “capacity destruction,” some of which may never come back. The result is that the potential growth of the economy is “likely to be in the lower part of estimates” this year and next. Quartz
Creative thinking requires our brains to make connections between seemingly unrelated ideas. Is this a skill that we are born with or one that we develop through practice? Let’s look at the research to uncover an answer. In the 1960s, a creative performance researcher named George Land conducted a study of 1,600 five-year-olds. Ninety-eight percent of the children scored in the “highly creative” range. Dr. Land re-tested each subject at five year increments. When the same children were 10 years old, only 30% scored in the highly creative range. This number dropped to 12% by age 15 and just 2% by age 25. As the children grew into adults they effectively had the creativity trained out of them. In the words of Dr. Land, “non-creative behavior is learned.” Similar trends have been discovered by other researchers. For example, one study of 272,599 students found that although IQ scores have risen since 1990, creative thinking scores have decreased. This is not to say that creativity is 100% learned. Genetics do play a role. According to psychology professor Barbara Kerr, “approximately 22% of the variance [in creativity] is due to the influence of genes.” This discovery was made by studying the differences in creative thinking between sets of twins. Quartz (Brent I am thinking of our conversation in the back on the way to WroldCom)
We’re in an era of the cult of the entrepreneur. We analyze the Tory Burches and Evan Spiegels of the world looking for a magic formula orset of personality traits that lead to success. Entrepreneurship is on the rise, and more students coming out of business schools are choosing startup life over Wall Street. But what often gets lost in these conversations is that the most common shared trait among entrepreneurs is access to financial capital—family money, an inheritance, or a pedigree and connections that allow for access to financial stability. While it seems that entrepreneurs tend to have an admirable penchant for risk, it’s usually that access to money which allows them to take risks. And this is a key advantage: When basic needs are met, it’s easier to be creative; when you know you have a safety net, you are more willing to take risks. “Many other researchers have replicated the finding that entrepreneurship is more about cash than dash,” University of Warwick professor Andrew Oswald tells Quartz. “Genes probably matter, as in most things in life, but not much.” University of California, Berkeley economists Ross Levine and Rona Rubenstein analyzed the shared traits of entrepreneurs in a 2013 paper, and found that most were white, male, and highly educated. “If one does not have money in the form of a family with money, the chances of becoming an entrepreneur drop quite a bit,” Levine tells Quartz. Quartz
For example, when one competition asked teams to predict whether a student would drop out during the next ten days, based on student interactions with resources on an online course, there were many possible factors to consider. Teams might have looked at how late students turned in their problem sets, or whether they spent any time looking at lecture notes. But instead, MIT News reports, the two most important indicators turned out to be how far ahead of a deadline the student began working on their problem set, and how much time the student spent on the course website. These statistics weren’t directly collected by MIT’s online learning platform, but they could be inferred from data available. The Telegraph
Russia has abandoned hopes for a lasting recovery in oil prices, bracing for a new era of abundant crude as US shale production transforms the global energy market. The Kremlin has launched a radical shift in strategy, rationing funds for the once-sacrosanct oil and gas industry and relying instead on a revival of manufacturing and farming, driven by a much more competitive rouble. "We have to have prudent forecasts. Our budget is based very conservative assumptions of oil at around $50 a barrel," said Vladimir Putin, the Russian president. The new $50 benchmark for oil is even lower than the Russian central bank's "extreme scenario" of $60 first prepared last year. Japan’s government lowered its assessment of the economy on Wednesday as output sags, in a worrying sign that recovery is stalling as overseas demand weakens.
Mounting inventories have Japanese manufacturers losing their willingness to spend on new facilities and equipment. And an increasingly uncertain future is only making them more cautious. |
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