The Chase: Monday

Plenty of politics this week: Jim "no-more-questions-from-Andy-Bell" Flaherty will meet with his counterparts from the provinces and territories this morning in a bid to come to some sort of consensus on several fronts...

Assignment editor Noah Zivitz summed it up well in note sent yesterday: "In other words Flaherty will meet to set some of the framework for next week's summit between the PM and the premiers. But, even higher up on the agenda will be the future of the $13.6-billion equalization program.  The feds have said the current rate of growth in payments is unsustainable, so Flaherty will lay out how he wants to change the formula.  It can be really arcane trying to get into the nitty gritty of how the formula works. 

"What’s important is to remember that only B.C., Ontario, Alberta and Saskatchewan aren't getting any payments right now.  Ontario is really worried that the rejigging of the formula will leave it on the outside looking in at the worst possible time.  Flaherty says the province will be pleasantly surprised. 

"So what will the government do at a time when it's trying to pinch some pennies as it tries to keep the books balanced?  This will be an important story for us.  There will be a scrum at noon, which we'll either have live or on tape turn.  Looks like we might also get Flaherty."

Paul Bagnell will set up the meetings and lay out the stakes this morning as his Top Story starting at 8:05.

- The EU said today that the economy probably entered a recession this year. TD said last week that Canada will do the same. Flaherty may spend much of this meeting sending the same message to the provinces. There will be plenty of discussion about deficit spending and deficit plans. The deficit story is ours so let's keep it front and centre.

- I saw a news story over the weekend about an election in the U.S. Can we talk to some people today and tomorrow that can say – definitively – whether financial markets and the U.S. economy do better under a Democratic or Republican administration? The prevailing wisdom is that the U.S. economy is better off with Republicans smoking their cigars in the White House but I recall a recent book quoted by the NY Times that shows that stocks rise further, incomes rise more and the economy does better with Democrats. Ring any bells? Can we chase this down today please?

- Commodities stay at the top of our priority list. The record plunge last month is seen by some analysts as signalling a longer, deeper recession than some other asset classes (stocks) may not yet reflect. Are Canada's resource-stocks accurately reflecting the downturn in commodities? Outpacing the declines, maybe?

- And what about gold? Where's the safe-haven bid? Why is gold being treated like just another commodity? Sure, fundamental demand for the stuff ought to pick up with the Indian wedding season, but what happened to the investors? Let's zero in on the people who trade bullion, the middlemen who talk to both sides. The thing to remember about gold bugs is that their story never changes, ever: when gold is declining, a global conspiracy (involving central banks, governments, the Vatican, the mob, NASA and others) is manipulating the price. When gold is rising, the conspiracy is being exposed. Let's leave that nonsense for the bullion blogs, please.

- Global auto sales will trickle out through the trading day and will no doubt underscore the urgency of a GM/Chrysler merger and a U.S. auto industry bailout. We'll break the numbers as they roll in, and will analyze the bigger picture just as soon as it materializes.

- Few big earnings today (MasterCard after the bell), but they will pick up during the week ahead of Canadian and U.S. jobs data on Friday. Let's get Friday morning locked down ASAP, please.

Happy November, everyone.

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