I guess we should do stupid corrupt things because Trump exists.

Carney was the governor of the Bank of Canada through the financial crisis and Canada was one of the least affected developed countries. To be fair, Canada’s insular banking system also helped limit exposure, but Carney’s handling of the situation was good enough that the UK made him the first non British governor of the Bank of England, during which period he oversaw the whole Brexit saga, where again his handling of the UK economy was extremely highly regarded.

There are justifiable question about whether he will be a good PM but he is probably one of the most successful central bankers of all time.

While that's true, it does seem to be a strange thing to glamorize now, since as much as it was an engineering accomplishment, it was also arguably a genocidal pursuit, and it's doubtful the sort of projects the government has in mind now will be as "nation building" as expropriating the entirety of Western Canada and letting a single private entity have as much power as CPR does.

The parent comment just says it'll perform similar to how past similarly-shaped things performed, without saying what that past performance is. If that implies pessimism, that's not HN's fault.

Is setting expectations based on track record considered pessimism?

That says "laudable" not "laughable." They were actually complimenting the effort, even if some folks misread it

It's the default for any non USA story.

>How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?

This seems to be incorrect. Including federal, provincial and local, the debt is about 110% of the GDP.[1]

The US has 3x more debt per citizen than Canada.

[1] https://www.imf.org/external/datamapper/GG_DEBT_GDP@GDD/CAN/...

> How are you going to have a Sovereign Wealth Fund when you're in debt ~300% to GDP?

https://en.wikipedia.org/wiki/Canadian_public_debt this article says it's 57% of GDP. Where are you getting your 300% from?

> You aren't "rich" if you have $1M and you owe $4M. You're a con-man living a lie that will crush you eventually.

I'm not sure the simile lands. If that $1M is financing a lavish lifestyle, then you are for all intents and purposes rich. As for the crushing down part, the modern economy shows us one can stay solvent longer than the market is irrational (especially true the more zeros are added to the numbers above).

GDP isn't wealth. This is closer to making $1M/year and owing $4 million.

Canada has tens of trillions of dollars in natural resources it could choose to monetize at any time.

GDP isn't the only measure of wealth. Canada has vast resources that act as collateral for the debt. You wouldn't be friends with a billionaire who only owns stock and lives mostly off the debt issued against that stock?

Why does it matter if volatility is lower than the market?

Future payments in the short term are covered by inflows.

You might as well maximize the returns now so that in the future when it's not covered by inflows you've acrewed a larger return.

No lol

https://youtu.be/DQgqEFOc894?t=267

"We achieved superior risk-adjusted returns" as an excuse for sovereign fund underperformance is nonsense. PE (depending on how levered it is) inherently has lower volatility than buying public stocks.

If your fund gets consistently lower returns than if you had just stuck everything in a 60/40 portfolio, the whole endeavor has failed.

Yes, far better than how the UK runs its state pension system.

The Australians seem to have the best model overall though. Mandatory payments in to private investments has made them very wealthy.

The UK system takes the national insurance contributions of workers but doesn’t invest them in anything on behalf of the individual. So despite decades of payments you technically have nothing at the end and survive on the goodwill of the government and current taxpayers. That works right now because of the population pyramid.

Canada definitely has a better system than that.

They've underperformed their risk-adjusted benchmarks.

> But the CPP fund didn’t just underperform the indexes last year. It has done so, on average, ever since it switched to active management. That’s the admission you find buried on page 41 (it was on page 39 last year): since fiscal 2007, “the Fund generated an annualized value added of negative 0.2 per cent.” Compound that 0.2 per cent annual shortfall over 19 years, and it adds up to more than $70-billion in forgone income, on assets that now total $714-billion. [0]

[0] https://www.theglobeandmail.com/opinion/article-cppib-pensio...

Yep. Long term greedy nation taught by the best at Goldman Sachs. Thank you guys!

Yeah and like, if they want to use it for infrastructure, mining, and LNG development, isn't that at odds with retail investors who require more liquidity? Doesn't it require the fund to either hold massive cash reserves to manage redemptions or rely on government bailouts if retail sentiment sours before projects mature?

To me it sounds less like a "sovereign wealth fund" and more like a domestic infrastructure bank wrapped in populist messaging. I expect plenty of boomers to invest to "stick it to Trump", elbows up!

>But really, international economics is just mostly made up, and if enough people go along with it then it's as real as real can be.

What is not made up is that if you need to import things from other countries, then you need to export things from your country in proportional value, or else the country as a whole loses purchasing power (i.e. gets poorer). In this case, if Canada is increasing its money supply, then the purchasing power of the currency will go down unless it correspondingly increases demand for its currency (usually by increased demand for its goods and services, including land or businesses in Canada).

No.

Historically, this just ends up with Toronto and Montreal (and to a more limited extent, Vancouver) treating the rest of the country as a resource colony. The pretense that consent of the governed is equally geographically distributed is, naturally, very useful to you.

If you do that again, as you did in the '60s, Canada will only be Toronto and Montreal.

There’s a reconciliation dimension that complicates that framing, at least in BC.