Friday, November 15, 2013

Toronto Money Show 2013

I thought I would mention some companies that were talked about. Energy infrastructure companies were mentioned by more than one talker. Companies mentioned were ones like AltaGas Ltd (TSX-ALA) and Pembina Pipeline (TSX-PPL). Several speakers mentioned Enbridge (TSX-ENB). Another stock that was mentioned by several speakers was Constellation Software (TSX-CSU).

There was a lot of speakers who were upbeat about the future and a few that were quite concern about the future. In the short term the market is going up. We do seem to be in a cyclical bull market. However, in the longer term we have problems. We have high debt levels. High debt levels tend to slow economies down. We have an aging population. Also, we are still in the secular bear market that started in 2000.

The US has just as high debt levels coming out of WWII. Inflation did help them a bit to deleverage. But what really got the job done was the US building the interstate highways. The US army saw the roads in Germany and wanted the same. This is why the interstate highway system was built. What happened because of the interstate highways was that commerce took off. Tax revenue flowed and the government deleveraged. (Deleveraging, by the way is paying down debt.)

Most people think that the banks in the US caused the 2008 recession. (This is not really quite true, but that is another subject.) If you look at what Japan did, it did not fix the banks. (People called some banks in Japan zombie banks.) They may just be recovering from the 1989/1990 stock market crash and a big part of the reason their economy was so slow for so long was that they did not fix the banks.

It is true we have some serious problems with debt and aging populations. I do think this going to cause some problems, but I also think that we will find out way through it.

On my other blog I am today writing about Northland Power Inc. (TSX-NPI, OTC-NPIFF)...continue...

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