Canada is already in a recession, says Bank of America

Canada is already in a recession, says Bank of America, and the loonie is set to get hammered

By John ShmuelMore from John Shmuel | @jshmuel

Bank of America Merrill Lynch has become the first bank to call for a Canadian recession this year.

Economist Emanuella Enenajor and her team now say that Canada’s economy will shrink by 0.6 per cent in the second quarter, following a 0.6 per cent contraction in the first. The definition of a recession is two consecutive quarters of contraction.

A recession sets up the Bank of Canada for another rate cut this year, said Enenajor, and she expects that the downturn will hammer the Canadian dollar — knocking it down to just under 77 cents U.S. by early 2016, the lowest level in more than a decade.

“The economy has surprised to the downside this year, and appears to have entered a recession in 1H 2015, even after policy easing in January,” she said in a note to clients.

Economists have been making a lot of bearish calls on the Canadian economy recently, following data showing that gross domestic product has shrunk for four-straight months — the first time that has happened since the 2008-09 recession.

The Bank of Canada’s rate announcement will be on July 15, and many economists have changed their forecasts to call for another 0.25 per cent cut to be announced then. Others have said the bank will wait till later this year, given the criticism it faced following a surprise cut from 1 per cent to 0.75 per cent in January.

In a closed-door speech over the weekend, bank governor Stephen Poloz compared that rate cut to life saving surgery, saying it was necessary to protect Canada from the damage done by a collapse in oil prices earlier this year. He compared any negative effects lower rates would have on household debt, already near a record level in Canada, to post-surgery side effects.

Enenajor said a rate cut to 0.50 per cent this year, combined with a recession, will have the biggest impact on Canada’s dollar. The loonie has already fallen 8 per cent year-to-date against the greenback.

“A BoC cut in October, lower oil prices in Q3 and underpriced risks of a September Fed hike are all positive USD/CAD,” she said. “We see USD/CAD rising to 1.30 in early 2016, and upside risks in 2015 given price action and the BoC’s explicit mention of C$ in May.”

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India Fails Its Own Constitution in Kashmir: Amnesty International

By KRISHNA POKHAREL

 India has neglected international obligations and its own constitution by ignoring human rights violations allegedly carried out in the name of  national security in Jammu and Kashmir state, an Amnesty International report released Wednesday says.

The damning report titled “Denied: Failures in accountability for human rights violations by security force personnel in Jammu and Kashmir,” by the London-based rights group is based on the examination of nearly 100 cases of alleged human rights abuses by security forces between 1990 and 2012 and interviews with 58 family members of the victims in 2013.

The report says that no member of the security forces deployed in the northern-most state over the past 25 years of militancy in the region has been tried for human rights violations in a civilian court.

“An absence of accountability has ensured that security force personnel continue to operate in a manner that facilitates serious human rights violations,” the group says in the report.

All of the families interviewed by Amnesty International India said that “they had little or no faith that those responsible for human rights violations will be brought to justice.”

Spokesmen for India’s defense ministry and ministry of home affairs, under which military and paramilitary forces function, said they weren’t able to comment on the report immediately.

The disputed region of Kashmir has been a site of conflict between India and Pakistan since the Partition in 1947. The two countries each control parts of the territory but claim it in full and have fought three wars over it. An armed insurgency that erupted in the late 1980s claimed the lives of thousands of people, many of them civilians.

India has deployed tens of thousands of army, paramilitary and police forces to squash militancy in the region. Many local civilians and activists have alleged that the security forces are responsible for crimes including murder, kidnap and rape.

The Amnesty report castigates both India’s state security forces and non-state armed groups for human rights abuses. “In general, victims of human rights abuses in the state have been unable to secure justice, regardless of whether the perpetrator is a state or non-state actor,” the group says.

Continue reading India Fails Its Own Constitution in Kashmir: Amnesty International

“DENIED” Failures in accountability for human rights violations by security force personnel in Jammu and Kashmir – AMNESTY INTERNATIONAL

This report documents obstacles to justice for victims of human rights violations existing in both law and practice in Jammu and Kashmir, and shows how the government’s response to reports of human rights violations has failed to deliver justice for several victims and families. In writing this report, Amnesty International India analyzed government and legal documents related to over 100 cases of human rights violations committed between 1990 and 2013, and interviewed families of victims, their lawyers, journalists, academics, civil society activists, and state and central authorities.

Read more » AMNESTY INTERNATIONAL
See more » http://www.amnesty.ca/sites/default/files/indiareport1july15.pdf