Category: Inflation

The Problem With Higher Education in the United States

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This picture really says it all

Felix Salmon uses this chart to suggest that colleges are using these prices increases to become dropout factories, since it’s cheaper to educate a freshman than a senior, but you get the same tuition.

I think that problem comes down to a number of things:

  • Federal aid for college education, particularly the guaranteed student loan program, has been subsidizing increases in tuition and fees for years.
  • The program was introduced in the Higher Education Act of 1965, at the height of the Vietnam war, so the alternative to going to college was to go to the ‘Nam and get shot.
    • When your product is competing against going to war, people will buy your product.
  • The top end schools have been colluding on tuition and fees, along with student aid awards for decades, and this monopolistic behavior is inherently inflationary.
    • In the interest, my step-mother, a former college president, has always maintained that this is not an issue, it’s just a way of “freeing” students from making the choice on anything but quality, and that colleges supply a lot more than they did in, say, 1960.
      • I have always responded that this is classic monopoly theory.  It’s not that competition ends, it’s that price competition ends, so you end up with gold plating.  It’s one of the reasons that professors’ salaries have skyrocketed: Without financial constraints, you get bidding wars.

The real solution is to implement cost growth containment measures in order to show price increases, to require with excessive endowments (Harvard, Yale, etc.), and to keep government aid flat until inflation catches up.

Of course, this won’t happen, because the Ivy league has a death grip on governance in Washington, DC, and because business likes to have its employees in debt peonage.

Economics Update

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Housing Starts, Courtesy Calculated Risk

I guess that it’s time to rejoice, because the IMF’s chief economist is saying that the global recession is over…Seeing as how they handled things like the Asian Financial Crisis of the 1990s, I’m inclined to believe that they are not a reliable source.

I would also note that he has a huge caveat in this, “we may not go back to the old growth path … potential output may be lower than it was before the crisis,” which to my mind sounds like a permanent decline in economic activity, and thus the recession might be over because normalcy is being redefined.

That being said, we are seeing signs of either a recovery, or a pause in the path downward, with credit card defaults moderating somewhat, so, for example, BoA’s charge-off rate dropped to 13.81% last month, down 0.05% from the level in June.

Basically, the numbers are still pretty horrible, but they aren’t getting any worse…yet.

We also have a stronger consumer confidence level in August, with the Investor’s Business Daily and TechnoMetrica Market Intelligence (IBD/TIPP) Economic Optimism Index rising to 50.3 in August from 46.3 last month, and this is a real positive number as 50 is the dividing line between optimism and pessimism.

In inflation, producer prices fell by -0.9% from the previous month, and the year over year price decline was -6.8%, beating the predictions of -0.3% and -5.9% respectively.

Meanwhile, in the UK, consumer inflation remained steady at 1.8%, but it had been predicted to drop to 1.5%.

Real estate is confusing, or at least the reporting of it is.

The data came out today, and the coverage is interesting, with Bloomberg noting that single-family housing starts rose for the 5th straight month, but CNN noting that housing starts and building permits declined with only single family housing starts showing an improvement, and that the year over year numbers are way down.

I’d go with CNN here, because:

  • We know that more than a third of single family home sales are distressed.
    • As an aside, we know that people are coming out of the woodwork looking for distressed sales, and prices are still falling, driven by foreclosures and short sales, as evidenced by the latest data out of California.
  • The month to month numbers are seasonally adjusted, but I think that the current market is so out of whack that the seasonal adjustments do not serve their intended purpose.
  • The drop in multi-residential buildings indicates that fewer people are moving into condos/townhouses, from which they would trade up to single family structures.

Then again, YMMV, and I always see the economic glass as half empty.

Oil was briefly back above $70/bbl before settling at $69.19, largely on a report that US crude inventories have dropped, and the dollar and Yen both fell against the Euro, largely on more optimistic business sentiment in Germany.

Economics Update

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You know, someone had better tell the ordinary people of the US that things are getting better, because they are not buying it. 63.2 in August, down from 66 in July.

What’s more, we are seeing more signs of deflation, with consumer prices falling by 2.1% year over year, the biggest drop since January, 1950.

What’s more, commercial real estate is going through the economy like a guy in a hockey mask through a road trip of teenage girls in a slasher flick, with commercial mortgage backed bonds falling, which has driven up their yields, and commercial real estate prices falling by 17% in the first ½ of the year.

We do have some good news in industrial production, where output rose by ½%, beating expectations, largely on “cash for clunkers”.

The confidence figures had currency traders moving to the Yen, and it also pummeled both crude oil and wholesale gasoline futures.

Economics Update

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Trade Deficit Graphs Courtesy of Calculated Risk

The lede today is that the Federal Reserve Open Market Committee (FOMC) med and has issued its report.

Rates are staying where they are, but they are winding down their bond purchase program, and they seem to be seeing a light at the end of the recession tunnel.

You can read their full statement here.

Unsurprisingly, their upbeat attitude pushed the prices down, and hence the yields up, on 10 year US treasuries.

Me, I’m not the optimistic type, and with home prices declining 15.6% year over year, as foreclosures push down prices, and there is also tremendous amount of Shadow inventory out there, where banks are not listing houses on the MLS in order to support prices.

In any case, mortgage rates are on the rise again, which has depressed mortgage applications, particularly those for ReFis.

In addition, further indicators of what is going on in the real economy, specifically back to school sales and pay raises are both trending in the direction of awful.

On the trade deficit, there has been an increase in the US trade deficit, (see graphs) but this is not an artifact of increased demand for goods and services, but of rising oil prices, which, by the way, were up today.

We are also seeing a deflationary spiral in Japan, where wholesale prices fell by 8½% year over year in July.

Still, it appears that the Fed’s optimism has driven the dollar up today.

Economics Update

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It appears that Ben Bernanke has a mentioned a secret plan to win the war in Vietnam protect the US dollar from inflation,* which will prevent inflation when the economy recovers, and this has driven Treasuries higher, and their yields lower:

Fed officials said in a report submitted as part of Bernanke’s testimony that policy will be “tightened” when the labor market improves, an economic recovery takes hold and pressures holding down inflation “diminish.” The comments follow a rally in stocks and a rebound in corporate earnings that have stoked speculation the worst recession in half a century is ending.

I’m not an economist, but I still think that one way to get out of this mess is to inflate our way out of this, which will have the effect of devaluing the debt which is holding back our economy.

I understand that it can (*cough* Zimbabwe *cough*) get out of hand, but it seems to me that too many people are under water for any recovery now.

Considering the fact that Americans are paying down their debt at the fastest rate since 1952, I do not see an alternative.

IMHO, We are in a deflationary trap, and creating inflation is the way out of it.

In any case, Bernanke’s statements about inflation boosted the US dollar, and his statements about recovery boosted crude oil prices.

*It’s a “Tricky Dick” Nixon reference, OK?

Economics Update

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Well, in the real economy, we have the Federal Reserve releasing yet more down numbers on industrial production and capacity utilization.

The most of the rest of today’s (and yesterday’s, I was not blogging yesterday) news today basically has to do with inflation, with increasing energy prices being responsible for increased retail and wholesale sales, producer prices rising 1.8% in June, and Consumer price rising 0.7% in June, though for the CPI, it was only 0.2% when the more volatile food and energy segments were taken out, and the CPI was down 1.4% year over year, the biggest drop since 1950.

We also have the yield curve slope hitting highs.

The yield curve slope is the difference in interest rates between 2-year and 10 year treasury bills, and is an indicator of market concerns about inflation, so it means that the bond market is seeing inflation out there in the medium term.

I’m not sure where this inflation would come from though, because this year’s back to school sales season is looking as anemic as the 2008 Christmas shopping season.

In any case, good corporate returns for Intel, and obscene returns for Goldman Sachs have left people optimistic, and so the US dollar fell, and, with the help of an anemic inventories report, oil rose above $61/bbl.

Zimbabwe Update

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First off, we have a row between Mugabe and Tsvangerai over the Bank of Zimbabwe Governor, Gideon Gono.

This is a non-trivial row, because the spectacularly corrupt Gono was the architect of Zimbabwe’s hyperinflation, and he did so in order to pay off the various ZANU-PF constituencies to support Mugabe.

It’s gotten heated enough that the (ZANU-PF member) military and security chiefs have said that his removal would be unacceptable.

Members of the MDC have approached the Southern African Development Community asking for an intervention, but non seems forthcoming.

The regional association of governments is sticking with precedent, and being generally useless, so the MDC is moving toward changing the law chartering the Zimbabwean central bank so as to reduce Gono’s authority.

Things are improving a bit though at least in economy, with inflation moderating, though the persecution of civil rights activists continues.

In mining, which will necessarily be a source of much needed foreign currency, you have the good and the bad

On the good side, you have Zimbabwe Zimbabwe moving to ban raw chromium ore exports, and insisting that it be smelted first, which will greatly increase the benefit to society, as there is 10x the profit post smelter. (as an aside, the US and EU have filed a case against against China for doing this at the WTO, because under neocolonialist WTO rules, poor countries are not supposed to develop industries based on their resources)

We also have some gold mines reopening.

On the down side, mines minister is still one of Mugabe’s cronies, which means that he is still on the EU’s sanction list, and was denied a visa to enter the UK, and all indications are that this was well justified, as civil rights violations at the mines seem to be pretty horrific.

Specifically it appears that the Zimbabwe army is using slave labor to operate diamond mines in the east of the country, as a way for Mugabe to continue to pay off the military for its support. (See also here)

We are starting to see some aid resuming to Zimbabwe, with Norway being among the first western nations to do so, though most nations are taking steps to ensure that the aid does not pass through government agencies, which are still compromised.

Economics Update

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Well, I’ve missed a point on jobless claim numbers, which came out today, and showed increasing initial jobless claims, from 605,000 to 608,000, still into what Atrios calls “holy crap” territory, but that continuing claims fell from 6.74 million to 6.69 million.

I generally find continuing claims to be a better metric, but, as Susie Madrak notes, continuing claims do not count people whose benefits have been exhausted.

I’m not sure how to account for this in the data, but it is a factor.

On the other hand, we do have some unequivocally good news in the April vehicle miles driven statistics from the DOT for the first time in 20 months, which could be an indicator of a recovery, though gas prices nationally are about a buck cheaper, which may also be goosing the driving numbers.

We also have the index of leading economic indicators rising, a good sign, though the Philadelphia Fed’s Business Outlook Survey improved significantly, though it still shows contraction, so it’s an positive 2nd derivative.

It also looks like yesterday’s report of declining mortgage bond yields did predict today’s report of falling mortgage rates, with the 30 year fixed rate dropping 21 basis points (0.21%) to 5.38%, which should relieve some of the pressure on housing.

Still, with Midtown Manhattan office rents falling, down 28% year over year (!), the other show in real estate, the commercial side, is clearly dropping.

A note on the recent rise in interest rates, the real yield (interest -inflation) on 10 year treasuries is at a 15 year high, over 5%, which indicates that that inflation fears might be overblown.

The energy and currency markets have viewed today’s news as generally positive though, with oil rising, though Nigerian unrest contributed to this, and the dollar falling.

Economics Update

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So, we have the inflation numbers for May, and the CPI was up 0.1% over April, and down 1.3% year over year, the biggest price decline since April, 1950.

The deflation would have been worse, but for the ramp up in retail gasoline prices, which continues on its tear, with prices having risen for 50 straight days.

In the mean time, banking is getting interesting, with S&P cutting ratings on 18 major banks, including Wells Fargo, Capital One, BB&T.

Additionally, you have credit default swaps (CDS) have shown their largest 3 day in over 3 months, which indicates that there is a belief that the risks of default on corporate bonds is getting worse.

The fact that treasuries have staged a mini-rally, with prices up and yields down, is either a measure of concern about corporate bonds, or relief about the low inflation numbers, I’m not sure which.

Real estate is full of mixed signals. Mortgage applications fell to a 7 month low, largely on the relatively high interest rates, but mortgage bond yields have been falling for a week, which would point toward lower rates in the future.

The low inflation is perceived, to be a good marker for recovery, which pushed the dollar down, because of less demand for the $US safe haven.

Oil is getting just plain flaky. It finished the day up, to $71.03/bbl, though it dropped like a stone earlier in the day following news that gasoline stockpiles rose by 3.4 million bbl this week.

I’m not certain where oil is going, but the recent volatility seems to indicate that it is going somewhere in the near term, probably up.

Economics Update

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It’s a day for mixed economic news, with credit card defaults rise hitting a record in May, which obviously bodes ill for consumer spending

On less personal metrics, Los Angeles and Long Beach port traffic was up over April, though it was still down year over year, and housing starts and housing permits jumped though much of this activity may simply be builders trying to beat the $8000 first time home buyer tax credit before it expires at the end of November.

Additionally, it looks like the financial markets are moving toward some instability, as the VIX, an index of market volatility, has moved above 30, which indicates a bumpy ride, and possibly a correction, in the markets.

Inflation is muted on both sides of the Atlantic, with last with wholesale prices inflation hitting only 0.2% in May, and inflation in the Euro Zone posting a 0% rate.

Meanwhile, continued comments by Russia about moving to an alternative reserve currency to the dollar pushed the dollar down, and that, along with the housing numbers, drove crude oil up for most of the day, though it settled down $0.15/bbl, basically treading water.

[late update]

US industrial output fell 1.1% in May, and the capacity utilization rate fell to 68.3%, the lowest number since records started being kept in 1967.

Economics Update

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Well, if you are looking for “green shoots”, the New York Fed Empire State Manufacturing Survey is not one of them, they got worse (see picture).

Additionally, the NAHB Builder Confidence fell a bit in June, from 16 to 15, with 50 being neutral, so that remains awful.

When one considers that delinquencies on commercial mortgage backed securities broke 2%, this is a state of mind that accurately reflects the reality out there.

Still, another measure of consumer confidence, this one from the University of Michigan, , which is marginally better, but still well below the 10 year average of 88.2.

We also have two relatively well known business have filed for bankruptcy reorganization, Six Flags amusement parks and the Extended Stay hotel chain.

Meanwhile, in Ireland, deflation has hit an annual rate of -4.7%, which is not surprising. There are a lot fewer dollars (Euros) chasing goods there, now that their bubble has popped.

Still, it appears that foreign investors are more confident about the future on a global level, as they have cut back on purchases of long term US securities, as the flight to safety slowed/reversed.

Meanwhile, we are starting to see some inflation from the recovery in oil prices, with import prices rising 1.3%, largely on oil, though they are down by 17.6% (!) year over year.

This has driven the price of retail gasoline up again, and are now up 63% for the year, though crude oil fell today.

The dollar was up, largely on statements by Russia that it should remain the world’s reserve currency.

Economics Update

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The OECD has released its GDP figures for the 1st quarter, and they are not good, down 2.1% for the quarter, and down 4.2%year over year.

Also, consumers in the US are continuing to explore the paradox of thrift, with consumption down and savings up, even though there was a bump in income.

Of course, the financial press is optimistic on the fact that the ISM manufacturing index is the highest it has been in 9 months, only the number, 42.8, still signals further contraction, but for the financial press, the fact that the 2nd derivative is up means that prosperity is just around the corner.

The Wall Street Journal is selling the fact that corporate profits rose for the 1st time in two years in the same way.

Personally, I’m more concerned about signs of increasing interest rates and inflation, like the recent surge in 10-year treasuries, and the fact that retail gasoline broke $2.50/gal nationally this weekend.

With oil breaking $68/bbl, even a long time in the doldrums is going to have energy prices rising.

Still the traders are optimistic, which is why the dollar fell to its lowest level this year, there is less demand for a safe haven.

More People Come Out in Support of Inflation

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I have been saying for some time that this is the way out of the housing crisis, because it will devalue the mortgage loans to match real-estate prices returning to sanity.

Well, there are now some noted economic voices saying the same thing:

So say economists including Gregory Mankiw, former White House adviser, and Kenneth Rogoff, who was chief economist at the International Monetary Fund. They argue that a looser rein on inflation would make it easier for debt-strapped consumers and governments to meet their obligations. It might also help the economy by encouraging Americans to spend now rather than later when prices go up.

“I’m advocating 6 percent inflation for at least a couple of years,” says Rogoff, 56, who’s now a professor at Harvard University. “It would ameliorate the debt bomb and help us work through the deleveraging process.”

6% is a 12 year doubling time, and 3 years at 6% would get you an increase in prices of about 19%.

I think that the reason that he’s talking about those numbers is because much above 6%, you start having real concerns about it getting away from you.

Meanwhile, Paul Krugman, while not coming out in defense of some inflation, says that he does not see it as a big deal.

He feels that the levels of debt under these circumstances are justified, and backs it up with historical examples.

Economics Update

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Grim news out of Europe, with Euro zone GDP collapsing by 2.5% in the first quarter…That’s a quarterly decline, not a year over year decline, and largest decline for the Euro zone in at least 13 years. Before that there were no Euro zone statistics. (It should be noted that the YoY number is 4.6%, which is merely scary, as opposed to a terrifying double digit annual decline)

Not surprisingly, this pushed the dollar up relative to the Euro.

As bad as this was, it was even worse in Eastern Europe, because their recent growth was driven by exports and foreign investments looking for high returns, which are both gone.

Again using the quarterly numbers, Hungary -6.4%, Slovakia -5.4%, the Czech Republic -3.4, and Romania -6.4%.

A lot of this was driven by Germany’s contraction, which was among the largest in Western Europe, because they have a Hooverite as Chancellor, which was -3.8%, the biggest decline in Germany since the end of WWII.

Seriously we are talking end of the world numbers, he said, citing experts:

Dr Ray Stantz: What he means is Old Testament, Mr. Mayor, real wrath of God type stuff.
Dr. Peter Venkman: Exactly.
Dr Ray Stantz: Fire and brimstone coming down from the skies! Rivers and seas boiling!
Dr. Egon Spengler: Forty years of darkness! Earthquakes, volcanoes…
Winston Zeddemore: The dead rising from the grave!
Dr. Peter Venkman: Human sacrifice, dogs and cats living together… mass hysteria!

Of course you have to go to Russia for a really scary number, -9.5% in the first quarter….Annualize that.

The news from the US was relatively mild, with the Empire State Manufacturing Survey showing only a modest decline. The index was up, but still below zero, so it still indicates contraction, and the Fed’s report on capacity utilization showed a marked decline.

We are still seeing the largest year over year decline in consumer prices since June 1955, but month to month indicates that there was no change, which eases deflationary concerns…A bit.

In banking, we are seeing further signs of easing with both the LIBOR and TED spread falling.

The easing of credit may be why the FDIC is walking away from its plan to guarantee 10 year bank bonds, though there are also indications of push-back from Treasury.

Meanwhile, the horrible GDP numbers from Europe, and the stronger dollar drove oil down, though retail gasoline is moving in the opposite direction, up 12% over the past 17 days.

Economics Update

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So, initial jobless claims rose 32,000 637,000 (seasonally adjusted) worse than expected, the four-week moving average rose by 6,000 to 630,500, and continuing claims rose by 202,000 to a record 6.56 million.

Meanwhile producer prices rose unexpectedly by 0.3%, indicating that, perhaps, the inflation genie is not as firmly in the bottle as one would hope.

Meanwhile, in real estate, office rents in London have fallen to 1991 levels, as a combination of overbuilding and the implosion of “The City”, the UK Wall Street have driven down rents.

We are seeing the same thing in retail space, with rents falling and concessions increasing, at such high profile locations as Rodeo Drive, 5th Avenue, Bond Street, and the Champs Elysees.

It’s no wonder then, that commercial and multi-residential mortgage loan originations have fallen sharply. (top pic)

Also, the HousingWire has a good picture on the surge in foreclosures that I noted yesterday. (bottom pic)

Neanwhile, energy and the dollar seem to be at odds with each other, with oil up today, it appears on the belief of a recovery, and the dollar also up, on economic insecurity.

Go figure.

Economics Update

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I think that we have some promising news here, though, eternal bear that I am, believe it to be a pause rather than the start of a turn around.

That being said, first time jobless claims fell, as did the less noisy 4 week moving average (see pic), which makes 4 weeks for the 4 week moving average, though continuing claims rose 56K to 6.351 million, indicating that this might more that businesses are running out of people to lay off than people are being rehired.

That being said, the fact that the April retail sales numbers beat expectations is just generally good news.

I’m not sure, however, how they managed to beat expectations, what with consumer credit dropping a record $11.1 billion in March, which indicates that the consumer is retrenching.

My guess is that this is an artifact of tax refunds.

In Europe, we have the Bank of England holding rates steady and the ECB cutting rates by 250 basis points (¼%), and both have expanded their programs of “quantitative easing” (printing money).

These actions were not particularly aggressive, which meant that the dollar Euro, because they are simply less likely to debase the currency as much as Uncle Ben (Bernanke).

The concerns about the US money supply are also finding their way into the US Treasuries market, with interest rates on the latest bond sales exceeding expectations, because investors are worried about monetarily driven inflation.

Still, reading the tea leaves on real estate, things are not going well, with delinquencies on dues to homeowners associations, which tend to foreshadow mortgage defaults, growing rapidly from 2.8% last June to 5.3% today.

Additionally, you have condo and apartment sales in Manhattan declining precipitously, with sales falling 48% year over year. (!)

The fact that mortgage rates are trending higher is not a help here.

In the world outside of real estate, the transportation based indicators are not showing any sign of recovery either, with Suez Canal April revenues falling 22.7% YoY.

Still, oil traders are betting on increased demand for oil, which translates into increased economic activity, and so crude rose today.

Economic Scene – The Bottom for Housing Is Probably Not Near – NYTimes.com

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Dave Leonhardt looks at various metrics for home prices and concludes that foreclosure auctions may be the pest metric, because many people are deferring putting their house on the market, hoping for prices to increase.

Auctions indicate that house prices still have a way to fall, as I agree, and Dean Baker has the graph shown to indicate that prices are still above historical norms.

I actually expect a measure of overshoot. so if you assume that prices will head down to about 80 before rebounding, and the the path is a straight line, you are looking at a real estate turn around somewhere in 2011-2012, based on my imprecise eye.

Economics Update

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We have a bumpy road ahead on the economy, with
retail sales falling 1.1% and the Producer Price Index (PPI) falling 1.2%, both of which indicating that there are still deflationary and recessionary pressures out there.

In regulation, there is finally an Obama choice to run the TARP, Fannie Mae CEO Herb Allison, replacing Bush holdover Neel “Cash and Carry” Kashkari, who along with Hank Paulson, should be in jail for the fraud perpetrated on the US taxpayers.

We also have some news from the moniliner insurers, after a long break, with Moody’s downgrading Ambac to junk status.

Dead man walking.

That being said, there are more signs that credit is thawing, with the LIBOR, the rate big banks charge each other for loans, falling at the fastest rate in 3 months.

In currency, we have news from Asia, where Singapore has devalued its currency by lowering interest rates in an attempt to stem its recession, the idea being that its export based economy would be boosted by a falling currency.

This is a fairly limited option for most nations, as many nations that need the help are debtor nations, while Singapore is a creditor nation.

Meanwhile, the US dollar is up vs. the Euro and down vs the Yen.

Oil fell below $50/bbl today.

Economics Update

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Well, we are seeing more signs that China is slowly walking back from its massive investment in the US Dollar, with the world’s most populous nation decreasing its holdings in US securities in January and February of this year.

Of note is the rather Panglossian panic in the tone of this article, which appears to make some fairly epic leaps in order to suggest that this is all really good news for the United States and the US dollar.

If there is really a Chinese pullout of US assets for any extended period, the dollar will fall significantly, and inflation will increase, as the cost of imports, including will increase markedly.

This may not be a rush to the exits, but if it’s a major player in the currency markets tiptoeing towards the door, it’s a much bigger deal than the authors let on.

In any case, it appears that Goldman Sachs will sell about $5 billion in new shares, it’s current market cap is around $60 billion, in order to evade the executive pay limits.

I would argue that this is managers not acting in the best interests of the shareholders, particularly since Warren Buffet’s deal with Goldman is more costly, as they are theoretically required to, but the idea that shareholders actually own a financial firm, and that management works for the shareholders, is apparently for suckers.

In energy, oil fell on projections from the IEA that demand would continue to fall, though this has had little effect on retail gasoline, which is up 10¢ over the past few weeks.

In currency, the dollar is down, in light trading.

Economics Update

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Scary Economic Pic of the Day Courtesy of Brad Delong
And, yes, the really bad line is right now

The first bit of news is kind of “inside Baseball,” with
the central banks of the US, UK, EU, and Switzerland agreeing to currency swaps totaling $285 billion with each other.

Basically this means the banks can borrow that amount from each other in various currencies and then use it to stabilize their currencies.

Truth be told, I have no clue as to what it means, except that there have been rumblings that the Swiss are near a deflationary spiral, and might want to depress the CHF to forestall that.

Since it looks like commodities prices are down significantly, most notably copper and oil over the past 6 months or so, the worries about deflation are not just an abstract concept here.

It also looks like Canada is moving toward quantitative easing (printing money) which is pushing the Loonie down, and the dollar rose against other currencies as well, as people moved into a perceived safe haven.