Irrational Optimism is not confined to the RE sector. A survey shows exporter optimism based on little more than the hope that things will improve, a rather circular argument. 80% of these exporters expect the Canadian dollar to strengthen, yet they are optimistic that their business will improve. This flies in the face of logic. But optimism has gotta be good, right? -vreaa
“Canadian exporters have grown dramatically bullish on sales prospects over the next six months -– due more to a belief that conditions can’t get any worse rather than expectations for runaway global economic growth, Export Development Canada said Tuesday in its semi-annual trade confidence index.”
“Sales abroad plunged 20% in 2009 – or six times worse than any annual decline in recent memory. “We are at the bottom of a chasm right now, and the only way you can really look is up,” Peter Hall, chief economist for EDC said. “Exporters were hit between the eyes with something that is very unusual. Obviously every thing is going to look positive after a year like this.”
“The survey, which sought opinions from over 800 businesses, was conducted between late October and early November.”… “The index moved to 77.4 in the fall of 2009, a jump from 68.5 in the previous reading of exporter confidence released last spring. The surge represents the largest rebound in confidence since the Sept. 11, 2001 attacks”
“The upswing in exporter sentiment emerged even though the Canadian dollar traded in the mid-US90¢ range for much of the past few months, and a number of currency watchers believe the loonie will hit parity with its U.S. counterpart some time in 2010. Over 80% of survey respondents believe the dollar will either increase in value or remain at the same level in the near term.”
‘Canada posts surprise trade deficit’, 12 Jan 2010, Financial Post -
“Millan Mulraine, economics strategist at TD Securities, said the strong Canadian dollar will “continuing to wreak havoc on the export-based Canadian economy.”… “We expect net trade to be relatively unsupportive to overall economic activity,” he said.”
