Why is HN so pessimistic?

I think the thesis is it's not solely about returns. Get a 7% return investing a dollar domestically, plus add a taxable dollar to economy (and some recurring benefit to tax base) beats getting a 9% one-time return investing internationally.

There are multiple types of sovereign wealth fund associated with taxes on resource extraction. The type you see in Norway is used to shelter the economic diversity, currency, and labor force from the steamrolling impact of the extractive industry. The type you see in Saudi Arabia, which has no such diversity and where basically all employment is tied to oil through few degrees of separation, is basically a slush fund for long-term infrastructure projects that would not otherwise be approved because of their size in relation to the secular economy, whether those are profit-generating enterprises like harbors or not-for-profit ones like roads.

Both aim to take today's windfall and spend it on something other than hookers and blow.

Norway still does have some totally unjustifiable passion projects, like the coastal highway it's building, but it's doing this from general funds to keep the wealth fund separately managed as a giant pile of investment money that just happens to belong to an investor called 'Norway', while in Saudi Arabia it is an instrument of policy.

That seems fine as long as they can show lower volatility than market while still being close in return?

Did they?

Over the last decade (and even prior to that) CPPIB has been the best performing fund of its kind. National pension funds have different risk tolerances and investment guidelines that someone's personal portfolio or a family office.

Thanks to CPPIB, Canada does not have have a giant unfunded pension liability (unlike our neighbors to the south). It has been an enormous success story.

Only in that it's in a private equity fund, not one-time spending.

Yea really. Feels like a bit of a communications exercise and effort to create arms length distance from the Federal government and spending on major projects.

Now it's not the Federal government and taxpayers propping up the oil industry by buying yet another oil pipeline, but rather a "sovereign wealth fund" (funded by Canadian taxpayers).

>Usually a sovereign wealth fund is funded by excess profits, like Norway for example.

If Canada ran resources like Norway does, it would have an enormous "excess profit". Norway's royalty rates and "profits" are dramatically higher than Canada where decades of American psyops fooled a bunch of very foolish people that the primary purpose of Canada is to ensure maximum profits for US orgs.

But really, international economics is just mostly made up, and if enough people go along with it then it's as real as real can be.

Agreed, we should also nationalise resource extraction and put the funds in there. Canadian resources should be for Canadians.

More importantly - revenues from the funds should be used for reducing income taxes. That's how you get broad-based public support for wealth taxes.