The collapse of Lehman Brothers ushered in what’s widely acknowledged to be the worst global credit crisis since the 1930s. It’s axiomatic that credit is the lifeblood of a capitalist economy. Signs that credit is circulating are therefore good. According to Statistics Canada, Canadian household and corporate borrowing rebounded in the second quarter.

The Middle Kingdom, its leaders focused on maintaining social order through managed economic growth, is deploying its vast excess currency reserves through SOEs such as PetroChina and sovereign wealth funds (SWF) such as China Investment Corp (CIC) to buy overseas commodity assets.

Overall net foreign purchases of Canadian stocks minus Canadian purchases of foreign securities worked out to 3 percent of GDP, the highest it’s been since the days when the Toronto Blue Jays won World Series.

Moves by central banks to create liquidity must eventually filter through the financial system into the real economy in the form of loans to households and non-financial corporations if this nascent recovery is to become self-sustaining.

Finance Minister Jim Flaherty wants Canada to receive as much of the SWF’s largesse as possible. To this end, Flaherty is meeting today with CIC Chairman Lou Jiwei.

The Canadian dollar's recent performance is an indication of two critical economic developments. Its rise coincides with increases in investor confidence and risk appetite. Also, however, and somewhat paradoxically, it's being used as a hedge against inflation in the US--in other words, a type of safe haven.

“We believe” affirmed Governor Mark Carney during a press conference last week to discuss the Bank of Canada’s (BoC) quarterly Monetary Policy Report, “the economy will grow this quarter.”

Today, the BoC sees the Canadian economy shrinking by 2.3 percent in 2009 and growing by 3 percent in 2010. Though clearly an upgrade from where Mark Carney and company were before, and they’re now well above private economists’ consensus expectation, this optimism isn’t unbridled.

The results of the Bank of Canada’s (BoC) Summer 2009 Business Outlook Survey and Second Quarter 2009 Senior Loan Officer Survey, coupled with Statistics Canada’s June 2009 Labour Force Survey and the results of the BoC’s term purchase and resale agreement (PRA) auction on Monday, suggest a durable foundation for stable consumer demand is being laid.

Upon closing of the transaction, Great Lakes Hydro will become Brookfield Renewable Power Fund. The fund will convert to a corporation “by January 2011” and maintain its CAD1.25 per unit annual distribution via estimated cash flow of CAD100 million. A lower payout ratio will also allow the fund to grow.