Over the past couple of years I have noted a lot of people espousing hope that Canada will be able to avoid much of the global downturn and/or rebound faster than other western countries from the global recession. This weekend John Mauldin (a commentator who I respect and often agree with) reminded me of this theme when he wrote:

"...this is a global problem and primarily one in the "developed world". I think we will find that much of Europe will be in a worse state of affairs than the U.S. If there are bright spots in the developed world, I tend to think they will be Canada and Australia/New Zealand." See This Time It's Different.

Most often this type of optimism rests on a few key ideas such as Canada has a resource-based economy, Canada has a sound banking system, and Canada has been more fiscally conservative. While I generally agree with these ideas in the abstract, in reality I am concerned that decoupling hopes are still as wishful now as they were last Spring, when many were opining that the Canadian stock market would be able to hold up in the midst of a global bear market. As the past 12 months wore on, investors learned the hard way again that Canada lags; we don't decouple. Our stock market peaked (a year ago) in May 2008, 7 months after the US markets, but then fell a similar 50% to March 2009...   more »