Stephen Harper

Age has never stopped me from trying something new. I quit my relatively secure job with one of Canada's largest pension fund managers in my 40s to start up INK Research, an internet based independent research firm. The odds were against my business partner and me, but we did it. After more than 10 years of ups and downs associated with that decision, I am still not afraid to do something new when a business case is strong. Next Monday, I will be doing just that. For the first time in my life I will be voting for the Liberal Party of Canada.

Some commentators have argued Ottawa's reported return to surplus is good news. I respectfully disagree. It is not. The Harper conservatives' road to surplus has been shifty, pushing us into recession along the way and leaving taxpayers vulnerable to rising interest rates. Meanwhile, as Ottawa banks on housing to boost the economy, the long-term ability of our economy to compete and create viable jobs becomes less certain.

Boxed in. That is the key theme we are working on for Monday's INK market report. In his weekly technical commentary, a separate report which we will publish here also on Monday morning, Nicholas Winton characterizes the INK Canadian Insider Index as being in a consolidation box. That seems to be a pretty good characterization of the current state of affairs for not only the Index but also policy makers and markets in general.

Stephen Poloz, the Harper-appointed chief of our central bank, was in Calgary Monday to talk about resources and "policy lessons." I am not going to quote from the speech as I prefer to focus on what was missing from his remarks. The contents of the speech were the usual mix of Bank of Canada rhetoric such as "the Bank has built up credibility" and confidence in the institution's ability to assess the workings of the economy.

Almost immediately after starting the job as Bank of Canada Governor, Mr. Poloz began talking down the currency in an attempt to remake the industrial landscape, but if he has learned any lessons about his policy's role in what ensued, his speech failed to acknowledge it. Specifically, the refusal of the central bank governor to acknowledge the role his institution played in exacerbating the downturn in the oil patch via the premature loosening of monetary conditions was a telling omission.

We are working on two themes for Monday's Market INK report in wake of the Thursday's double-header for the markets. First up was Janet Yellen and her band of monetary policy makers. After months of preparing investors for a rate hike, she not only delayed, but also backtracked. For months we have been flagging the losing battle that the Fed has waged to get inflation back to their target (not our target I might add). Now, finally they are being up front with investors that they do not see hitting their target until sometime after Obama is long gone from the White House.

One of the most important decisions a government makes is the appointment of the CEO in charge of the cost of living, the governor of the Bank of Canada. The Harper conservatives abandoned the principles of sound monetary policy in the home stretch of the last mandate with the appointment of Stephen Poloz to that role on May 2, 2013. It was a decision that likely helped tip Canada into recession. Worryingly, the Bank of Canada and Harper conservative policy mix has also resulted in shifting the relative debt burden away from the Federal government's official balance sheet and dramatically onto Canadian families and CMHC.