If the economy doesn’t juice you, there’s always this.
Update: Wednesday market losses continue to mount.
People without investments might give as much attention to the stock market as, says CBC news did Tuesday might. One headline, then on to the story about an osteoporosis drug affecting adversely three in 20,000 people. Or was that a promo for a show on obesity? Or a new drama exposing hockey players who screw around? Hard to keep up.
In any case, don’t let the media fool you. Stock market stories are not about stocks. They’re about the economy. Markets, you see, are harbingers. People who trade on them spend a lot of time betting heavily on what comes next. Right now, they’re worried.
Toronto’s near-400 point dive and another big loss in New York come as more proof that the US housing meltdown is marching its way north and east and west, whether you like it or not. Losses on American mortgages going into default will probably hit $100 billion. Our own Canadian banks are solidly in the middle of this, as the CIBC’s $10 billion egg clearly shows.
Citibank, Merrill Lynch, Morgan Stanley, Bear Sterns – they are all in financial woes, and have sold off equity chunks to deep-pocketed investors from the emerging centre of global power, the Far East. Bay Street is next, and the Toronto market bomb today reflected that sober reality.
The world economy, dragged down by the States, is slowing. America has never been so in debt, or so long at war, or with such a weak currency. It’s been fifty years since home sales declined this much. Prices across the land have just declined for the first time since the Depression.
And on a day when realtors in Canada were trumpeting the greatest sales volume ever for residential homes, over $100 billion in 2007, the realization was hitting that far too many buyers here could be in as much trouble as a couple of million of Americans who losing their houses. We in Canada like to categorize the subprime mess as giving loans to people who did not deserve them. But at the same time, we are busy selling $400,000 homes to young couples with between 1.5% (that’s one and a half) and 5% down, and with 40-year mortgages that turn a $300,000 debt into one of $884,000 at current rates.
This is unwise. It’s gambling. Canadian banks have been handing out mortgage loans like candy. Properties are not even appraised now in most cases, since loan approvals are based only on postal codes. A major developer of new homes in the GTA tells young buyers they can afford a 2,500-square foot beauty, all granite and stainless, by cutting back a little on gas, lunches and long-distance calls. It’s offering a zero-down option, asking them to come in with enough money only for closing costs.
No wonder Bay Street’s worried. Nobody in the world of financial securities would extend 98.5% leverage, and yet we are soothing your homebuyers into precisely that. Should the US slowdown affect our economy, which it will, buying an expensive house with no money might not look like such a great idea.
Beyond that, as I mentioned yesterday, our high dollar is hurting resource and export jobs. The auto sector is in a funk of a slump. We are heading into more difficult times with the highest-spending federal government on record, which has burned through all the surplus, and yet we’re still paying a punishing amount of income tax. The minister of finance just 8 weeks ago was telling us all the economy was solid. Just 3 weeks ago the prime minister stood in a plasma TV store and lauded a sales tax cut, suggesting we go out and ring up those credit cards.
A real Conservative government would have reigned in spending, kept some cash in the vault, worked hard to temper the rise in the currency, not attacked seniors’ savings, cut income taxes instead of consumption taxes, and governed instead of campaigning for two years straight.
But, too late now. At least you’ve got plasma. And hot hockey wives.
40 comments ↓
I have LCD.
Garth has this 0 down and 40 year amortizations coupled with the sub prime loans not been fueling our hot economy for a few years now? Housing starts bring with them so much work for Canadian construction workers, forestry workers, and on and on. What were the economists and governments doing while this was happening? Did they think that the new growth could be sustained?
Also when prices decline do municipalities not get a big sting. Seen as they collect their taxes from the value of their cities homes they must lose revenue when prices drop. It is most likely hard for them to increase taxes %s while their citizens net worth has dropped as well.
Forty-year ams just started in the last year. — Garth
Instant bad credit loans as is evident from the name itself are fabricated to cater to the urgent cash requirements of persons suffering from a poor or adverse credit history.For more information log on http://www.cheapbadcreditloans.net
It’s amazing how quickly times change. We bought our house in Milton 14 years ago, back when the population was still 30,000, there was still a grocery store on Main Street, and a 40 year mortgage wasn’t even an option.
We’re still in the same house, which isn’t worth much (no granite counter tops), but is still worth more than twice what we paid for it. Plus we’ve only got about $56,000 left on the mortgage, so even when things go south we’ll still be MILES ahead of most home owners in Milton who bought homes in the past five years.
We’re hovering on the edge in terms of income, but in the grand scheme of things we’re doing ok. Still, last week I apologized to my 15 year old son for the miserable economy he’s going to find himself in in another five years when he’s on his own and trying to make his way in the world.
Good thing my parents have money. At least he’ll have College / University covered.
A real Conservative government would have….
We no longer have a real Conservative party in Canada.
Now Alberta is planning their twisted version of Reform to run against smiling Eddy. LOLOLOL
Should see a lot of Liberals elected in the province.
And they still will give the oil to the USA and not even ask for a kiss as the USA oil companies screw us all over.
Look under stupid in the dictionary and it says Alberta reform/tories.
Garth, are you making fun of the every day working people? Many of these every day working people are just trying to struggle to keep a roof over their heads and raise their children. Many of these every day people, who have hard their hold lives don’t even have enough income to pay taxes! You always seem to forget about them!
Garth: Listening and watching CNN Lou Dobbs a very interesting comment was made……if foriegn interests are buying American finnancial insitutions will they place their managers in charge? hmmm????
We need an election now… it seems like yesterday we had to bite the bullet over years of goverment waste and non accountable spending and one man has now set us back even more as you have pointed out quite clearly in plain simple language.
Have not seen that list of CPC (PMSH) acomplishments….
Also is it not strange that PMSH has shut up about Senate Reform, when all polls revieled that near 90% of Canadians just want to abolish it. And who would be the first to go the last appointed Senator….hmmm who might that be?
If the economy doesn’t juice you, there’s always this.
Martha’s got a lockout on my system. I’m forbidden from searching FORBADDEN!
We caught the last of yesterday and the REALLY foul-mouthed guy [HJ], who described himself to a ‘T.’ I say dump the sumbitch!
Caught Mercer’s rant on the underqualified thermal nuke-you-ler midget. Hasn’t he got enough problems with the environment and the payments backlog for retrofits and fuel-efficient
vehicles?
In my ’screech and reach’ search for valuable resources, I did find something for Leasa and Catherine and that crowd. They can use it to greet their FUBAR should he DEIGN to visit.
Instruction is CLEAR! Press firmly on posterior.
http://www.lip-plumper-reviews.com/
I just heard on the 6 AM news that the vindictive Harper through his incompetent proxy Lunn has fired Linda Keen. One need only read the exchange between Keen and Lunn (all 35 pages of Keen’s please) to get a feel for where this is going:
Lunn:
http://www.nuclearsafety.gc.ca/eng/newsroom/issues/corr_letter_min_cnsc.pdf
Keen:
http://www.nuclearsafety.gc.ca/eng/newsroom/issues/corr_letter_cnsc_min.pdf
By his actions, Harper has just demonstrated his contempt for anyone who challenges his authority, to the point of having a minister attempt to bypass the law and circumvent an arms-length regulator. It was only until Parliament voted in the emergency session that the regulator could legally bypass those laws. Why even have a regulator if strong arm tactics are all it takes to subvert it? There are such bodies throughout society that are there for our protection – law, medical, engineering, accounting, CSA, etc. – that should not be subject to political whim.
With proper planning and a willingness to pay a premium for a short period of time, there would be no “shortfall”. The medical reactors throughout the world, when run at full capacity, are capable of producing 250 percent of the actual needs. Below are the capacities of the various isotope reactors in the world. The last 3 columns list the average amount of isotopes supplied to the world, the maximum amount that could be supplied, and the difference which represents excess capacity. When the NRU reactor is down, almost all of the shortfall could be made up by just 1 reactor, the one in South Africa (which incidentally is the one often used by private clinics here). Add to that a reactor from either the Netherlands or Belgium, and the entire “shortfall” disappears:
======= ============ ============ === === ====
Reactor Country Distributor Ave Max Diff
======= ============ ============ === === ====
NRU Canada MDS-Nordion 40 80 40
HFR Netherlands Mallinckrodt 20 30 10
IRE 10 20 10
BR2 Belgium Mallinckrodt 5 15 10
IRE 4 20 16
OSIRIS France IRE 3 20 17
FRJ-2 Germany IRE 3 10 7
SAFARI South Africa NTP 10 45 35
OTHER --- 5 10 5
======= ============ ============ === === ====
TOTAL 100 250 150
======= ============ ============ === === ====
SOURCE: http://www.princeton.edu/~globsec/publications/pdf/Mo99_Kahn_&_vH_S&GS06.pdf
On top of that, had the reactor remained down for one more week, until December 20, the repairs would have been completed, and it would have been brought back up during what would be a slow period in terms of testing appointments (over the Christmas break) – prudent scheduling.
At a time when Sea King helicopters and Hercules aircraft of the same era are being replaced because of aging (in fact the reactor is even older), and in fact there is widespread criticism in the case of the Sea Kings for even keeping them in the air, one should not throw caution to the wind when dealing with the safety systems of old reactors. So, let’s have the Public Inquiry that Linda Keen has been asking for, I look forward to the revelations.
By Dube on 01.16.08 6:47 am
I can’t believe they fired her. She is supposed to appear in front of a parliamentary committee today, as is Lunn. Perhaps they don’t want her appearing? The timing is suspicious.
By PYOTR PETROBITCH on 01.16.08 6:29 am
Dear Pyotr, I am flattered you think about me so often, however, I feel I should not accept your gift…if I open the link I may download a virus and catch something real bad.
Garth, I’m the first person to admit I don’t know whole heck of a lot on global economy…I try, but the toothpicks I use to keep my eyes open keep breaking.
Anyway, if the media starts screaming ‘recession’ and preaching a dying economy, wouldn’t that alone effect the stock market. I’ve heard before that a ‘rumour’ can have a negative impact, I would assume the same stands for the economy in general. So, doesn’t the media have a responsibility to temper their reports? I remember, a while ago when we had the Quebec referendum and ’separation’ rumours were flying around the TSX and our dollar dropped.
However, not to worry Garth…GWB went to the Saudis and asked them to please increase the production of oil and reduce the price. I’m not sure what the response was…I thought I heard something like …uckfay ouyfay.
Smile…GWB is on the job.
Leasa
Sorry OT
BRIAN LAGHI AND GLORIA GALLOWAY
Globe and Mail Update
January 16, 2008 at 1:24 AM EST
OTTAWA — Linda Keen has been let go as the president of the Canadian Nuclear Safety Commission amid controversy involving the shutdown of AECL’s isotope-producing nuclear reactor last year.
Commission spokesman Aurele Gervais said Ms. Keen learned last night in a letter that cabinet had relieved her of her duties as president, but that she would remain a full-time member of the commission. He said that Ms. Keen intended to attend a meeting of the commission Wednesday.
Assistant deputy industry minister Michael Binder has been named as her as interim replacement.
http://www.theglobeandmail.com/servlet/story/RTGAM.20080116.wkeen0116/BNStory/National/home
And this before an enquiry.
By Leasa on 01.16.08 7:26 am
Leasa, I agree that rumours can have a negative affect. The news media can manipulate people’s thinking…an example of this is the race issue between Obama and Clinton. This issue muddies the waters and takes the focus off the real issues in the States, like the economy. I think it is intentional. If any of you viewed the movie Zeitgeist for which Greg provided a link, you get to see how the populace is deliberately being manipulated to NOT focus on what is really important.
Manipulation of this sort is attempted on this blog continually.
By Dube on 01.16.08 6:47 am
Those darn dashes have struck again. I repost the table again, with changes, to try to render it more legible:
======= ============ ============ === === ====
Reactor Country Distributor Ave Max Diff
======= ============ ============ === === ====
NRU Canada MDS_Nordion 40 80 40
HFR Netherlands Mallinckrodt 20 30 10
IRE 10 20 10
BR2 Belgium Mallinckrodt 5 15 10
IRE 4 20 16
OSIRIS France IRE 3 20 17
FRJ_2 Germany IRE 3 10 7
SAFARI South Africa NTP 10 45 35
OTHER *** 5 10 5
======= ============ ============ === === ====
TOTAL 100 250 150
======= ============ ============ === === ====
SOURCE: http://www.princeton.edu/~globsec/publications/pdf/Mo99_Kahn_&_vH_S&GS06.pdf
Stephen Harper practices bulldozer democracy: Conservatives fire president of nuclear safety agency
http://caiti-online.blogspot.com/2008/01/stephen-harper-practices-bulldozer.html
I remember from my reading of 45 years ago, think it was Robert Heinlein, who wrote about “A Time Of Wonderful Nonsense”, when amongst other things a legislature voted to repeal the physical laws of nuclear physics. Has this time arrived?
the vindictive Harper through his incompetent proxy Lunn has fired Linda Keen
Ms. Keen simply will hire even the most incompetant of lawyers and win a huge cash settlement, and Harpooney will install a con monkey in her place, and our occupied media will kiss however many bare con arses are puckered.
Rumours? Good grief. The economy IS IN trouble, it’s not rumours – wake up.
Catherine – what in hell are you trying to say? Not had your morning coffee yet?
I’m no economist either – but it doesn’t take rocket science to see what’s happening.
RE: AECL and CNSC fiasco,
I’ll wait for Garth to start the discussion before commenting. But Garth when is the Commons Committee Mtg. being held today at which Minister Lunn and MS. Keen will testify?
Ms Keen should have been relieved of her authority. When you screw up you pay the price. she is not bigger than government.
Let’s not forget that is the viewer/listener’s responsibility to watch/listen with critical analysis.
Children are taught in school to analyze and critique what they see/hear in the media, especially the messages on t.v. Why are adults not as discriminating in their filtering processes?
All you Cons who believe that citizens should be more responsible should not be condemning the media for what our brains perceive, you should be lecturing the viewer for failing to use their critical thinking skills.
Excerpt from Rick Mercer – and oh so true:
“Now, normally, in these situations the buck should stop with the minister in charge. That would be Gary Lunn, Minister of Natural Resources, who, as it turns out, knew that this plant didn’t have a safety back-up system four months ago and did absolutely nothing. Not a problem according to Gary because in his opinion they don’t need one. And Gary should know. After all, this is a man who spent most of his professional life teaching public education courses on home renovation contracts. So, by all means, if you wanna know if you should run your rain pipe down the left or right side of your house call Gary. But other than that, everything this man knows about nuclear power he basically learned reading a Spider-Man comic.
And then we have our Prime Minister, Stephen Harper. He blames the whole thing on the Liberals. And not because a Liberal didn’t install the back-up system, but because the woman who blew the whistle on the power plant was appointed by the Liberals. She’s also an expert on Nuclear Power and the head of the Canadian Nuclear Safety Commission. And Stephen Harper, an economist by trade, now wants her fired. ”
….was this staged because Harper wants to “privatize” the nuclear industry? Hmmm….
Garth has it ever occured to you that the cons are trying the same thing by pushing the Mulroney and nuclear scandles to the forfront to deflect the opposition from questioning the real issues that matter?
Garth,
Please keep us informed on the Committee hearing results regarding Lunn and Keen.
Political behaviour goes nuclear
If they held auditions on Parliament Hill for a hot-tempered bully and his thuggish sidekick, Prime Minister Stephen Harper and Natural Resources Minister Gary Lunn would be shoo-ins.
“….was this staged because Harper wants to “privatize” the nuclear industry? Hmmm…”
Maybe it was staged, but for another reason. How does undermining the authority of the CNSC and exposing the minister as an egomaniac help privastization?
D. Halfkenny,
if you don’t mind a personal question, did you serve in Ft York 40 years ago?
Garth when you comment on financial matters it is always thought provoking and should be considered. In the Calgary area nobody wants to wake up after New Years parties because we may realize that homes are priced 50% more than should be. The party may be almost over as our economy is levelling off and may slide. This will be painful for many and opportunity for others as it has always been out here. We survived the NEP and will survive this cycle as you will in the east.
The economy is in a tailspin in central Canada, and the US continues to worsen. For those of you who can ride this out with secure employment there is an opportunity of sorts…. wait until the TSX hits the 10,000 range later this summer. It will be a good time to buy since the US will probably start to come out of recession in mid 2009…you need to be ahead of the curve on this one.
Keen’s firing will probably result in the Federal government losing a soon-to-be-launch wrongful dismissal case.
Glenn Hubbers,
You ask how attacking the CNSC helps privatisation of the nuclear industry. In my view it is simple, if the government wants to sell AECL’s assets to private industry (rumour I heard was to SNC-Lavalin or a consortium led by them) then they want to get the best price possible, or at least to make sure that the deal goes through. Now, if there is a problem somewhere in AECL or the CNSC or both and you want to sell AECL who do you blame and call incompetent. Do you want to say that you’re trying to sell an incompetent poorly run organization (AECL) or do you want to say that AECL is great and all of the problems are because of the CNSC.
If my opinion is close to true, they are actually interested in what happened or how to prevent it in the future, they just want to try and preserve AECL’s reputation so they can get rid of it.
David McGuinty raised a point that has been troubling me throughout: what bestirred the Government to act – MDS Nordion complaining about lost sales? I hope it is not so, but would not be surprised.
Disclosure: as a resident of Ottawa, I had a low opinion of David McGuinty as a partisan political animal. But his questions to Lunn are worth reviewing as a demonstration of how to nail a man.
With oil prices topping $100.00 a barrel, here is another hugh problem to worry about which boils down to more hardships for average Canadians.
Forget oil,the new global crisis
http://www.nationalpost.com/most_popular/story.html?id=213343
Scary…
TO HERB
Yes I did serve in Fort York Germany from 1965 to 1969. It been so long ago that people have forgotten the “Cold War”
David
If the Conservative government is actually considering selling AECL then they are as stupid as the Harris Conservatives were when they privatized part of Hydro.
Part of the problem with Canada is that the Federal and Provincial governments do not do a good job recognizing, and managing key strategic assets.
Privatization of energy resources and energy generation is just plain stupid…that’s why most countries other than the US do not allow this to happen. These are strategic assets that can be leveraged as part of an overall, integrated industrial strategy.
D. Halfkenny,
I was wondering if you were the great little sergeant carrying a big cane I remember with pleasure. In case you haven’t made the connection, I was the Adj. Great to run across you again, Dave.
If they held auditions on Parliament Hill for a hot-tempered bully and his thuggish sidekick, Prime Minister Stephen Harper and Natural Resources Minister Gary Lunn would be shoo-ins.
By Bill-Muskoka on 01.16.08 9:04 am
That loud mouth arrogant Liberal Committee member from Ontario make Harper and Company look like puppy dogs. His rant this morning was outrageous and nothing more than pure partisan politics. Why the hell does the Liberal Party lets this idiot on Committees in the first place. He doesn’t ask questions but rather takes up all his allotted time ranting and raving like a lunatic and has done so on other comittees that he has been a part of. I am surprised Lunn kept his cool.
If the Conservative government is actually considering selling AECL then they are as stupid as the Harris Conservatives were when they privatized part of Hydro.
Where did this rumour start from. May, the Green Party leader was yapping about it but like most of her rhetoric she doesn’t support her allegations with any evidence what so ever.Pure speculation on her part.
There have been rumors that the government has been considering selling AECL to General Electric. If AECL has the corner on the isotope market that the government is claiming, any corporation that gains ownership could drive the price up and made a considerable profit.
Under those circumstances the controversy over safety and the government’s ability to control the regulatory agency takes on a different
perspective.
http://www.energyquest4nanticoke.ca/nukegiant.htm
TO HERB
It is great to make contact again. Your were a great Adjt and one hell of a good Company Commander. You and CSM Bill ran an excellent company.
Dave
Dave Halfkenny,
thanks. I consider that to be the best PER I ever got.
By Van on 01.16.08 4:30 pm
Try to learn something beyond ‘Blame the Liberals’. You are nauseating, just like your flunky leader and his entourage. No Liberal fired Ms. Keen.
That is the issue, no matter how you trolls try to evade it. The day is coming that your evasions will no longer be tolerated and hardball is heading right at you. It has already arrived with me quite a while back.