To The Pointwith Boris Bozic
Commentary, Opinions, Thoughts and Discussion on Current Events, Politics and The Mortgage Industry

1 Comments My Journey to Fort McMurray

Article written by on the 31 Oct 2014 in Canada

Just lifted off for a quick trip to Fort McMurray, Alberta.  What takes me to Fort McMurray? Well, like everyone else on this plane, opportunity.  My fellow passengers are all predominately male, big lads, and there’s no doubt there off to do some heavy work.  I suspect when the beverage cart comes out no one will be ordering brie with a white wine spritzer.  I was just thinking the last time I was in Fort McMurray was, well, never.  I may have visited some 15 years ago, but it’s all blur now for me so I’ll go with never.  My knowledge of Fort McMurray is fairly limited but here’s what I know; oil and natural gas has created a boom town.  Salaries are well above average, and the work is hard, and home prices would be more suited in the Vancouver market place.  I was also surprised to find out that Air Canada has two direct flights from Toronto to Fort McMurray, daily.  That’s not to accommodate investment bankers but rather the men and women who do the real work, and a good number of them come from Eastern Canada.  It’s a long commute to work.

The natural resource sector makes a significant contribution to our economy, and not unlike the real estate industry in Canada, disruptions would adversely affect our economic growth. Bank of Canada Governor Stephen Poloz stated that plunging prices for crude oil could reduce our economic growth by a quarter percent.   Anything below $90 a barrel could cause job loss in the oil sector, and ultimately impact the real estate market.  So clearly the oil and gas sector is important to all of us.  We will always mumble and grumble when filling up.  Not unlike mortgages.  Everyone hates debt, but some debt helps to create personal wealth and is a job creator.

I really wish I understood what causes oil prices to fluctuate. I get why interests rates go up and down.  But the price of oil seems to be a market on to its own.  Setting aside the oil industries P.R. explanation of why prices are where they are, what’s the real reason?  The price for a barrel of oil today has hit a two and half year low.  Why?  Has the insatiable urge for crude by emerging markets waned? Don’t recall reading anywhere that China and India have said, “we got enough oil…we’re good”.  Have we changed our personal habits to such an extent that it would cause the price of oil to fall?  Has fracking in North America dramatically affected the price of oil in such a short period of time?  Everything I read is that there’s a glut of oil on the market today, supply outpaces demand, and logic would dictate that if oil industry slowed down the supply eventually the price would go up.  But the supply has not slowed down, so the question is why?

Today’s Oil Supply

I came across an interesting theory, and if it’s true, today’s oil supply has nothing to do with economics but rather geopolitical reasons. In short, here’s the theory.  Russia cast its wondering eye to the Ukraine, and annexed a portion of another sovereign nations land.  NATO wasn’t prepared come to Ukraine’s defense but steps had to be taken to ensure Putin thinks twice about expanding his reach elsewhere.  It’s been well documented that the price of oil helps to sustain Russia. Close to 50% of Russia’s budget depends on oil being priced at $100 a barrel.   So how does the west punish Russia for it’s illegal occupation of the Ukraine? You glut the market with oil.  Does the U.S. still have enough influence over oil producing countries to manipulate the market?  Who knows for sure – but what is known is it happened once before.  The fall of communism was credited to Ronald Reagan, the Pope, Lech Walesa and Gorbachev.  All key players, but was not widely reported was that the U.S. convinced Saudi Arabia to glut the market with oil at that time. This played a key role in almost bankrupting Russia, and forcing them to say “we surrender, communism nyet“.  What did Saudi Arabia get in return? A promise from the U.S. that they would always have their back, and they would never have reason to fear their neighbors.   

What does this all mean for us? The U.S. and Canadian Central Banks continue to say exactly what they’ve been saying for what seems like forever.  Overnight lending rate will not increase until data unequivocally supports full economic recovery.  Key data with the price of oil, and its impact to the Canadian economy. Same old-same old. Interest rates are not going up in the foreseeable future. Oh, and one more thing…we’re all pawns in a geopolitical game of chess.

Until next time


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2 Comments Thank You

Article written by on the 24 Oct 2014 in Uncategorized

Today Cpl. Nathan Cirillo will take his final journey.  A motorcade will leave Ottawa at 1pm, and travel along the Highway of Heroes to his hometown of Hamilton, Ontario.  Members of Cirillo’s regiment, the Argyle & Sutherland Highlanders, will escort their fallen brother in arms.  A nation thanks Cpl. Nathan Cirillo for his service and ultimate sacrifice.  We thank you for serving our country with dignity, honour and distinction.  We thank you for becoming our new symbol in our ever changing world.  We will not be made to cower…by cowards.

 God Speed  

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1 Comments Bright Lights

Article written by on the 10 Oct 2014 in Business,Canada,Current Events,Merix Financial,New York City,US Politics,World Business Forum,World Events

Just coming back from New York, and I’ll spare you the cliché.  New York – bright lights, the city that never sleeps, blah, blah.  All true, but the bright lights I’m referring to is a select group of loyal supporters of Merix Financial.  We  had the pleasure of hosting a number of mortgage brokers in New York to attend the World Business Forum.  The event is held over  two days and attendees at the conference are leaders and executives from around the world.  The lineup of speakers have diverse backgrounds and experiences.  It’s the diversity of the speakers which provoke thought and critical thinking.  The two day event allowed all of us to exit the echo chamber that we all find ourselves occupying.  That is a critical element of professional development.  Thought provocation forces you out of your comfort zone.

Our invited guests embraced the opportunity to listen and learn from speakers whose subject matter expertise may have appeared to have only a subtle correlation to their daily actives.  But, they came open minded and prepared to see where the experience takes them.  I got a big kick watching our guests as the event evolved.  Here was a small group of people who for the most part were strangers to each other or know by name only.  However, in a short period of time small micro groups were formed to talk about issues that each individual faces each and every day at work.  It’s remarkable how quickly trust was built among the group, and it was a safe environment to say “I got a work problem, and I don’t have an answer”. Assistance and suggestions from peers was immediate, and no one held back for competitive reasons.  I can’t tell you how cool it is to watch a team come together. Make no mistake, this is a team.  As of today they know they can pick up the phone and reach out to one of their peers from across the country to help them solve a problem.  Sometimes business can be overwhelming, but it doesn’t have to be lonely.

In my humble estimation, the event was a success, and here’s why.  First and foremost, our guests wanted to be there.  That was demonstrated by their support of Merix to ensure they were invited. Also, our guests are all focused on building a business, and not just a job. That’s an important distinction. Secondly, Merix set the right expectations.  It was learning first, party second.  Don’t get me wrong, there was time to have fun.  Like the night we all went to Madison Square Gardens for a Fleetwood Mac concert.  Our seats we on the floors and we were swept up by the music and the New York audience.  Even though there was bit of a “generational” gap for some of our guests, all danced, had a few libations, and allowed themselves to be swept up by the event and the masses.  But come 8:30 am the next morning, all were ready to begin a new day.

An extraordinary amount of time and effort is put into planning one of these events.  I can never really be sure if our guests will find a benefit in attending, while leaving their business for a few days.  After the wrap up dinner we hosted on the final night, one of our guests sat next to me and gave me a book.  She wanted me to have the book because she thought I would enjoy the read.  She mentioned that she wrote a note on the inside of the cover but asked me not to read it at the table.  She said she didn’t want to become emotional.  I smiled and said I would respect her wishes.  After three hours of the book being by my side, I finally made it back to my hotel and I read her note on the inside of the cover.  It was heartfelt, genuine and so sincere.  It was right then that I knew the effort in putting this event together was worth it.

So to Gerry, Tim, Scott, Shawn, Karen, Richard, Brenda, Tracey, Sandy, Paul, Sarah, and Elisseos, if you don’t mind…let’s do it again.

Until next time.


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