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20 January

No Games Today

This morning the Bank of Canada announced it was lowering the overnight target rate by 50 basis points (0.5%) to 1.0%, a level not seen since the summer of 1958 (as a side note it may be interesting to take a look at what happened in the economy and markets in the 10-15 years after that to get some insight into what we may be looking at now). For the first time in months the Canadian banks lowered their prime rate by the same 50 basis points within minutes of the Bank of Canada's announcement. The banks still haven't passed on all the interest rate cuts since December 2007 to consumers (they are still 0.25% behind) but at least this time they didn't hold anything back.

The Bank of Canada made some interesting comments in their statement and they have Monetary Policy Statement due out on January 22 that could be even more interesting. I don't know how often this happens but they actually used the word recession in their statement saying that "Major advanced economies, including Canada's, are now in recession". They also say they are expecting the Canadian economy to shrink in 2009 by 1.2% "Canada's economy is projected to contract through mid-2009, with real GDP dropping by 1.2 per cent this year on an annual average basis.". For 2010 they are looking for real GDP growth of 3.8%. The Bank isn't concerned about inflation right now and in fact expects some deflation in the next 6 months or so because energy prices have come down so far from a year ago (remember $1.30/litre gas last summer compared to the 78-80 cent/litre we are seeing right now?).

So my question is, does anyone know of a good resource (book, website, whatever) that goes through historic economic conditions? I would really like to look into what happened in the 1955-1985 (or maybe 1987) time period in terms of the economy and the markets to see if there can be any lessons learned for what we may be seeing over the next 10-20 years.

posted at 12:39:40 on 01/20/09 by 0xCC - Category: Personal Finance

Comments

ka wrote:

Hi,

A couple of book recommendations that may be helpful for economic history:

-A Fool and His Money, John Rothchild (market in the 1980's)
-Where are the Customer' Yachts?, Fred Schwed (market in 1930's)
-Devil Take the Hindmost, Edward Chancellor (history of mania and crashes over the centuries)
-several titles by James Grant (Bernard Baruch, Money of the Mind, Minding Mister Market, The Trouble with Prosperity)

Hope this helps!

ka
03/24/09 23:52:47

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