David Dittman

David Dittman is managing editor of KCI Communications, overseeing a world-class team of editors and analysts who share a common goal: providing individual investors with sound advice and market intelligence across a wide range of sectors. Whether the focus is on opportunities in emerging markets or energy and utilities markets, David makes sure that all of our publications fulfill this goal and meet our readers’ high expectations.

David is also associate editor of Roger Conrad’s Canadian Edge, where his valuable contributions on economic, regulatory and legislative changes north of the border help subscribers make informed decisions about investing in high dividend-paying Canadian royalty trusts. He also serves as co-editor of Maple Leaf Memo, a free e-zine that provides regular updates on Canadian market conditions.

David earned a bachelor’s degree from the University of California, San Diego, and a juris doctor from Villanova University.

Content Posted by David Dittman

Government Intervention: Canada and "The Rise of the State"

Government intervention in the economy is a hot issue right now, but views on the role of official power in the mechanisms of commerce vary greatly by region.

Bank of Canada Hikes Again As Recovery Takes Hold

The Bank of Canada weighed a strong domestic economy against weakness abroad. The result suggests Canada is a great venue for income investing.

Income Investing: How "Low Yield" Can Equal "High Return"

Income investing is about establishing regular cash streams that will pay out over the long haul. Here are three Canada-based stalwarts with impressive records of making consistent payments to shareholders.

It's the Deflation, Stupid

Elected officials, frightened by an invisible specter and what looms in November, won’t act on the greatest threat to global growth prospects. Monetary policymakers still have the room--and the capacity, presumably--to act.

China and Canada: It's All Business

A Saudi King’s hint that Peak Oil is real is interesting. A Chinese official’s forecast of billions more in investment dollars flowing into Canada’s oil patch is actionable.

American Investor, Get Long the Canadian Dollar

Fear-inspired weakness is the perfect time to establish positions in securities leveraged to the best economic story in the developed world.

The G-20 in Canada: Europe vs. North America

The global stimulus consensus that emerged from the G-20’s first series of meetings, in 2008 and 2009, is about to unravel.

ARC's Unconventional Triumph

ARC Energy Trust (Toronto: AET-UN.TO, Other OTC: AETUF.PK) is establishing a commanding presence in one of North America’s most promising shale gas plays.

The International Energy Outlook Is Bullish for Canada

The Energy Information Administration’s annual forecast includes a drastic change in the data agency's perspective on global oil production.

The Numbers: "Canada Is North America's Growth Engine"

Statistics Canada reports the best quarterly GDP growth rate since 1999. The Bank of Canada becomes the first G-7 central bank to raise interest rates.

The ABCs of No-Cut Conversions

Atlantic Power, Bird Construction and Cineplex Galaxy all reported encouraging first-quarter results that support the long-term dividend sustainability.

China Wants Canada, Canada Wants China

Whether its oil or copper, the Middle Kingdom will swallow it up. And the Great White North is ready to provide.

 

Oil in the Gulf, Blood in the Streets

Who wouldn’t be overwhelmed by recent news of sovereign risk, rising taxes, oil spills and double-dips? Investors who focus on collecting steady dividends from solid businesses.

Offshore Drilling: An Arctic Future

BP's (NYSE: BP) mess in the Gulf of Mexico likely scuttles plans to expand US offshore drilling. The long-term picture, however, includes lots of rigs extracting fossil fuels under water.

Transports: In Thee We See Canada's Rise

Canadian National Railway (Toronto: CNR.TO, NYSE: CNI) and TransForce (Toronto: TFI.TO, Other OTC: TFIFF.PK) reported first-quarter earnings results that confirm the North American economic recovery.

The Bank of Canada: What Condition Its Condition Is In

The Bank of Canada, responding to signs of rising inflation and the Great White North's rapid rebound, is likely to raise its benchmark interest rate in June. “Emerging Canada” is all about commodities, Asia and a strong balance sheet.

China and the Oil Sands

Sinopec (Hong Kong: 386, NYSE: SNP) is buying ConocoPhilips’ (NYSE: COP) stake in the Syncrude project. Here’s the lowdown on short- and long-term implications for growth and income investors alike.

I Want My Two Dollars: The Greenback and the Loonie

The Canadian dollar hit parity with the US dollar today. Will the loonie's rise continue?

Avatar, Alice and 3D: How to Make Money from Movies

Box office records mean riches for Hollywood’s famous. Here’s how to get your own piece of that action.

Beauty, Eh?

Canada is often overlooked when it comes to global-scale stories. But data reported by Statistics Canada last week suggest the world is now paying attention to the Great White North.

Alberta Wants to Compete

The new royalty regime itself is an acknowledgement that front-end investment--particularly where innovative extraction techniques are absolutely critical to success, as in the long-lived Pembina field--in conventional production often demands new technology.

Canada's Real Gold Medal

Canada's prudence obscures what could be an explosive upside in coming years--particularly for US-based investors who will get the added benefit of putting greenbacks to work in loonie terms.

A Tale of Two Indicators

China is the undisputed leader of this still-toddling recovery; we’ll wait for further confirmation before we ring the double-dip alarm.

How Dirty Is Dirty?

No other industrial democracy in the world has an asset similar to Canada's oil sands. Resource constraints brought on by new demand from China, in particular, and India will be far easier to navigate if we take an open-minded approach to it.

Time to Renew

Hydroelectric power is ubiquitous in many Canadian provinces, so much so that the word “hydro” has come to stand for electricity generally; the names of the government-run companies that provide such power reflect this significant presence.

CIC Goes Public

China Investment Corp's first 13-F filing is a positive from a public relations perspective and makes for good geopolitical optics. The real significance is what it suggests China can do with its USD2.7 trillion of foreign currency reserves.

Cleaner Oil Sands, Now!

And as he exhorted the private sector to basically tell a better story Canadian Environment Minister Jim Prentice provided real help by saying Canada wouldn’t adopt its own climate change legislation until the US passes a bill.

Royalty Relief in Alberta

That Alberta oil and gas producers could be looking at more favorable royalty structures is, obviously, a positive; every little bit that helps the bottom line counts. However, at this point the folks who have to manage these companies would settle for predictability.

Rate Watch Heats Up

In addition to the statement announcing the rate decision the central bank also announced today that it will cut back certain extraordinary public market operations it put in place at the height of the global financial panic.

The Canada-China Trade

Though bilateral trade between Canada and China is only in its early stages of growth, the Great White North is already benefitting from the Middle Kingdom’s appetites.

You Heard it Here First

What we’ve learned is that an effective regulatory structure on top of deposit-focused banking, the good fortune of abundant resources, and a decade of balanced federal books puts a country in good position to outperform during this unfolding recovery.

Independence Is Just a City in Missouri

In fall 1910 six men set forth from New Jersey, bound for Georgia on what turned out to be arguably the most bountiful “hunting trip” in the history of mankind.

Canada: Ready for Its Close-Up

Two thousand ten is shaping up to be a big year for Canada. Three global events will take place in the Great White North in the first half of the year, each significant in its own right. Viewed together they highlight Canada’s potential on the world stage.

The Case for Canada's Rebound

Statistics Canada reported last week that the country’s index of leading economic indicators rose 1.3 percent in November, almost two times as fast as analysts anticipated. Nine of the index’s 10 components rose and one was unchanged, the broadest increase in more than two years.

People Are Buying Canada's Stuff

Rising exports to the US accounted for three-quarters of the increase despite the relative strength of the loonie versus the greenback.

The BoC Keeps It on the Down-Low

The Bank of Canada maintained its conditional commitment to keep its benchmark interest rate steady through the first half of 2010.

Destination Beijing

Monday’s report on third-quarter GDP from Statistics Canada underscores the importance of Prime Minister Stephen Harper’s visit to China.

The Profitable Exhibitionist

As much as Cineplex’ numbers suggest that the company is resistant to economic downturns, there’s no escaping the conclusion that it’s captive to the quality of the productions coming out of Hollywood.

The Oil Sands and the World Energy Outlook

At this point, oil sands production of 3.2 million barrels a day by 2020 seems more inevitable than a United Nations-brokered agreement on climate change.

Harper's High Road to China

Like his response to the recent domestic crisis, his handling of China illustrates Stepehn Harper’s maturation from leader of a Western Canada-focused protest party to head of one of the strongest pillars in the global financial system.

Anyone for THAI?

Estimates from experimental tests indicate that the process can recover as much as 80 percent of original oil-in-place while partially upgrading the crude oil in situ.

Random Harvest

Korean National Oil Company’s decision to buy Harvest Energy Trust is curious on many levels. But the difficulty resource-hungry SWFs and SOEs face is that most of the plum assets--productive and located in safe jurisdictions--are already under the control of global resource heavyweights.

The Bank of Canada Checks

Bank of Canada Governor Mark Carney is more concerned about the strengthening Canadian dollar right now than he is about inflation.

Let's Stay in and Order Canadian

For the US-based investor, buying Canada right now means accessing a relatively stable, low-beta play on a global economic recovery. It means benefitting from fundamental factors that support a strong and rising Canadian dollar. It means owning solid businesses that pay sustainable distributions.

Australia Takes a Hike

The Australian dollar has rallied over the last several months on speculation its central bank would act before its global monetary peers, but only one analyst of 20 surveyed by Bloomberg predicted a rate hike this soon.

After the Stimulus

While Canada enters this period of change with enviable strengths, Canadian businesses “will need to develop new markets as the traditional advantage of relatively open access to US markets becomes less valuable.”

Great Scott, It's the Libyans!

The recently announced “agreement” between the Libyan Investment Authority (LIA) and Verenex Energy (TSX: VNX, OTC: VRNXF) is bound to attract significant attention: LIA, a sovereign wealth fund (SWF), has become the instrument by which its sponsoring state authority has impeded market processes and damaged shareholders.

Takin' It to (or from?) the Street

The Obama administration, the Federal Reserve and governments and central banks around the world have difficult needles to thread on several levels: scaling back fiscal spending programs to restore budgets to balance; unwinding extraordinary liquidity provisions; crafting a regulatory framework that prevents a similar situation from happening in the future.

Lehman Brothers 52 Weeks After

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.

Spreading the Sovereign Wealth

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.

Wanted: Canada

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.

The Credit Conundrum

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.

Canada Courts China

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.

More Loonie Tunes

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.

The Recession Is Over

“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.”

Get with the Program

Global trading volume makes milliseconds worth something, and connected firms spend millions developing sophisticated computer programs that buy and sell stock at incredible rates.

The BoC's Bright-Side Adjustments

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 Roots of Conviction

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.

Same As It Ever Was

The Linn Energy story is based on stable cash flow supported by the long-life nature of its reserves and its aggressive three-year hedging program. Production rates are predictable, and much of it is already contracted for sale.

Another No-Cut Conversion

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.

Tips on Trusts

Three Canadian trusts cut distributions last month. Unlike last month’s cutters, however, their moves did have a hugely negative impact on share prices, as they indicated much greater business weakness than investors had expected.

Canada's New Government

From a long-term perspective, Harper is good for Canadian business and good for investors in Canada. He's the top guy right now in a country that maintained active oversight of its financial system, didn’t succumb to the short-term allure of cheap and easy credit for homebuyers, and is cutting taxes.

GDP, China and Dividends

Our basic guidance is to focus on solid businesses with healthy balance sheets that have withstood historic stress since this recession got going in late 2007. We’re interested in companies that generate sustainable dividends.

Fertilize Your Portfolio

Growing populations, rising demand, declining fertilizer use: The fall harvest could be a difficult one. But this means opportunity in the agriculture sector.

Economic Recovery: Not Fully Worked Out or Developed

There are in fact signs that the worst is over. But the worst was unlike anything most of us have ever seen. Bank of Canada Governor Mark Carney, in a public speech last week, advised his audience, “Just as you don’t count your chickens before they are hatched, we shouldn't presume that green shoots today guarantee a bumper crop tomorrow. It is a long, anxious time between the appearance of seedlings and the harvest.”

The Pace of Decline Is Slowing

Canada’s official data agency reported Wednesday that the pace of decline in its broad measure of economic activity slowed in May to 0.1 percent, the smallest in a series of nine consecutive declines. And the shift from a 0.9 percent drop in April is the largest month-to-month change in either direction since December 1965.

What's in a Downgrade?

There will be consequences if the US or UK suffers a downgrade, albeit not the ones you think. And some could be positive, if you play your cards right.

Emerging Canada

Since the S&P 500, the S&P/TSX Composite Index and the S&P/TSX Income Trust Index bottomed on March 9, the two Canadian indexes have correlated more with the MSCI Asia All Country ex-Japan Index. In other words, Canada’s stocks have become more and more levered to the global economy, including areas in Asia where signs of economic recovery are easier to see.

It's Official: Canada's Recession

Canada is still among the strongest, if not the strongest, of the world’s developed economies. The government hasn’t had to bail out its banks, it has a strong balance sheet, and the country is blessed with significant resources to export once the global economy returns to more normal growth. These factors make “The Canada Trade” highly attractive from a US investor’s perspective.

Tips on Trusts

Two Canadian trusts cut distributions last month. Neither move caused much reaction in the market. Both now trade at significantly higher prices. That’s a major sea-change from the action of last fall and winter, when a record 77 reductions ripped through the Canadian Edge universe, many by repeat offenders.

The Logic of Oil Sands Cooperation

The 170 billion barrels of recoverable reserves can help mitigate North American concerns about global security without causing extreme planetary degradation. The key is for US and Canadian policymakers to coordinate climate policy, combining efforts to regulate greenhouse gas emissions, for example, by at least linking their respective cap-and-trade proposals that are almost sure to be enacted within the next 12 months.

Canada's Deficit Politics

Needless to say, opposition leaders are crowing about Mr. Flaherty’s lack of facility for numbers, and it’s rumored that at least one critic will ask for his resignation as early as this afternoon. At the same time, however, Liberal Party and New Democratic Party leaders are calling for increased aid to unemployed workers, what’s known in Canada as Employment Insurance (EI), and further steps to increase Canada’s stimulus package.

Harper Goes to China

Trade Minister Stockwell Day spent seven days in China in April, and Foreign Affairs Minister Lawrence Cannon last week concluded a five-day visit. Mr. Cannon met with his counterpart, Chinese Foreign Minister Yang Jiechi, and also spent nearly an hour with Vice-President Xi Jinping. The Canadian foreign minister returned to Ottawa with a formal invitation from Chinese officials for Mr. Harper to come to China.

Harper Goes to China

Trade Minister Stockwell Day spent seven days in China in April, and Foreign Affairs Minister Lawrence Cannon last week concluded a five-day visit. Mr. Cannon met with his counterpart, Chinese Foreign Minister Yang Jiechi, and also spent nearly an hour with Vice-President Xi Jinping. The Canadian foreign minister returned to Ottawa with a formal invitation from Chinese officials for Mr. Harper to come to China.

Harper Goes to China

It hasn’t happened yet, but Prime Minister Stephen Harper’s lieutenants are laying the foundation for a fall 2009 visit by Canada’s top elected official to the country that looms as the most significant X-factor in the global economy.

Don't Blame Canada

There’s life after the Tax Fairness Act, and there’s more to the Great White North than income trusts.

More Heat in the High Arctic

Global warming continues to melt the ice in the Northwest Passage and the competition for northern resources is heating up. Canada, the authors warn, may be forced to defend this area from a position of grave weakness.

Canadian National Reinvents Oil Sands Transport

Canadian National Railway's (TSX: CNR, NYSE: CNI) holds promise, as far as potentially moving oil sands product more economically than can be done via pipeline and to the extent that product can then be moved to Asian markets.

Tips on Trusts

One: That’s the very welcome number of distribution cuts in the Canadian Edge universe last month.

Second Derivatives, Green Shoots and...Caution

That conditions seem to be stabilizing in the critical US housing market and that domestic activity in China is picking up--which means rising demand for Canada’s commodities--are encouraging signs that February’s GDP improvement has legs.

Long the Loonie

Part of the loonie’s winning streak can be traced to the BoC’s stance on quantitative easing--that it won’t immediately create money out of thin air reduced the threat of an inflationary spiral.

High-Quality Farm Prospects

Converting now will allow Ag Growth greater access to capital as it pursues an aggressive growth strategy, much of which is focused on expanding its international presence. About two-thirds of the company’s 2008 sales were to US-based customers, a market supported by federal legislation mandating the use of corn-based ethanol in gasoline. But developing countries are also investing more in grain infrastructure.

Intangibles Count

A single sentence in President Obama’s proposed fiscal year 2010 budget could have significant short-term implications for domestic oil and gas production and may hold the key to understanding the new administration’s long-term energy goals.

'Better' Doesn't Mean 'Good'

The incremental progress we see in the BOS and the SLOS seems at odds with the 25 percent rallies we’ve seen in the S&P/Toronto Stock Exchange Income Trust Index, the S&P/TSX Composite as well as the S&P 500. But it’s important to note that the market is often disconnected from on-the-ground economic conditions. Financial markets are forward-looking mechanisms, and the fact that deterioration has slowed--not even reversing, in the case of many indicators--is good enough to let slip at least some of the animal spirits.

The Sun'll Come Out

The recent trend has been away from spending big dollars on exploration and production or mergers and acquisitions in the oil and gas space, but we’ve seen several deals in recent weeks that confirm that companies are indeed looking to the future.

Tips on Trusts

Round up the usual suspects. That memorable line from the final scene of Casablanca just as easily applies to the Dividend Watch List. Of the 11 distribution cuts we saw last month, eight were by repeat offenders, i.e. companies that had already cut payouts at least once since September.

Harper's Globetrotting

On his way to London for a summit of G20 leaders, Canadian Prime Minister Stephen Harper made stops in Washington, DC and New York to tout his ideas to fix broken banks and maintain free trade.

Canada in the Evolving Global Economy

Canada’s relationship with China has certainly flowered during the 2000s. China is now Canada’s second-largest trading partner, trailing only to the US. In the first Canada China Business Forum, held in 2005 during a visit by President Hu Jintao to Canada, the two governments set a target to increase bilateral trade to USD30 billion by 2010. That goal was met in 2007, when trade between the two countries climbed to USD30.38 billion.

Canada in the Evolving Global Economy

Canada’s relationship with China has certainly flowered during the 2000s. China is now Canada’s second-largest trading partner, trailing only to the US. In the first Canada China Business Forum, held in 2005 during a visit by President Hu Jintao to Canada, the two governments set a target to increase bilateral trade to USD30 billion by 2010. That goal was met in 2007, when trade between the two countries climbed to USD30.38 billion.

Start the Presses: Quantitative Easing

What we have now is essentially the Fed creating currency out of thin air with which to purchase assets. This is clearly a mission reserved for the worst of circumstances, and we’ll deal with the unintended consequences later. But easing access to credit and stimulating growth are the objectives right now.

Canada in the Evolving Global Economy

What does the rise of the BRIC countries mean for Canada over the long term? Canada’s trade relationship with the four major emerging markets has certainly evolved during the past decade, and the future promises more of the same: Brazil, Russia, India and China are projected to grow significantly in coming decades, resulting in higher incomes and more purchasing power for their respective nascent middle classes.

The Biggest "If," Ever

US Federal Reserve Chairman Ben Bernanke, in remarks prepared for an address to the Council on Foreign Relations in Washington, reiterated his view that the recession could end in 2009 if the financial system stabilizes.

Tax Implications of Trust Conversions

At the most general level, the law on both sides of the US-Canada border recognizes that income trust conversions will be tax-free events for unitholders. The intent, colored by a reasonable bias in favor of the free flow of capital across borders, is to avoid tax consequences for investors.

Tips on Trusts

Dividend-cut casualties tallied 18 last month: eight oil and gas producers, three oil service trusts, three producers/processors of other commodities, one diversified manufacturer, a financial services company and two closed-end funds. Roughly half were repeat offenders, having already cut their distributions at least once during this down cycle.

Q4 G7 GDP: U-G-L-Y

The details of Korea’s February trade data offer a small bit of hope that the decline in global trade is slowing, or at least stabilizing. South Korea’s trade numbers are widely watched because they’re the first foreign figures released and usually provide a good indication of foreign trade and manufacturing activity in other Asian economies.

The Market-Friendly Solution

The first quarter numbers from the Big Five will likely reveal continuing profitability, but that won’t persist unless the root cause of the global meltdown is addressed. First comes the rescue of the US banking system, then we can talk about stabilization and recovery for Canada’s and the world’s economy.

Canada's Big Five Banks: Compared to What?

The current economic situation will challenge all financial institutions. Canadian banks have handled the first wave--the financial crisis--relatively well. The second wave--a serious economic downturn--will hit both capital and profits, but the Canadian banking system is probably better positioned than most others to ride it out.

The Oil Sands: Energy Security v. Climate Change

While there will be no public address or state dinner, that Mr. Obama is making his first trip abroad to Ottawa illustrates the importance of the US-Canada relationship. It is, after all, the most significant bilateral trade arrangement in the world; two-way trade in goods and services amounted to more than CAD700 billion in 2006, an average of about CAD1.3 million in trade per minute across the border. The combined Canada-US market represents more than 425 million consumers with a combined GDP of more than USD11.4 trillion.

Pitchers, Catchers...and Taxes

Major League Baseball clubs are packing the vans for trips to Arizona and Florida to begin preparations for the season ahead. That’s an auspicious sign of spring. A less inspiring sign of winter’s wane is that Canadian income and royalty trusts are beginning to issue guidance on the US treatment of their respective distributions to US-based unitholders--tax season is upon us, too.

How Harper Rates

At the end of the day, the goal of any stimulus plan is to excite economic activity--to boost aggregate demand. Although the direct impact of Canada’s budget on any particular sector is limited from an investor’s perspective, there are important implications for the trusts included in the Canadian Edge How They Rate coverage universe. Here’s a section-by-section take on the budget’s impact and the current outlook; bear in mind, some segments and companies will feel the stimulus more than others.

Investment News and Alerts

Top 5 Free Reports

Follow Us On...

Investing Topics

Investing Experts

Email Updates