How bad is the commodity downturn? Depends who you ask – by Ian McGugan (Globe and Mail – January 21, 2016)

Here is Wall Street’s view of the great oil-and-mining slump: Run for the hills! This is ugly and going to get uglier! Here’s the Bank of Canada perspective: Oh, calm down. By 2020, you’ll hardly remember this kerfuffle.

These are, granted, rather liberal translations, but they do capture the essence of a striking and important contrast in attitudes.

To a large degree, the contrast is about the difference between short-term and long-term thinking. However, the surprise to many people may be just how small the current agony in the oil patch and the mining sector looms when viewed from the perspective of an adaptable national economy.

Those who are tempted to predict imminent doom for Canada should keep the big picture in mind when reading the torrent of negative reports on resource industries.

Wall Street’s bearishness was on full display this week with two new reports from leading investment banks that took a hammer to already microscopic expectations for the commodity sector.

Citigroup Inc., the author of one report, had previously ratcheted down its hopes for natural gas and iron ore.

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