o_d:
Welcome aboard.
See:
Say Goodbye to Economic Recovery From Maclean's June 7, 2010 Author JASON KIRBY
Canada, which came through the recession remarkably unscathed, is arguably better positioned than most countries to weather a second crisis. But that doesn't mean we're immune. If the European sovereign debt crisis mutates into something larger, Canada could slip back into recession. And there are reasons to fear it could be worse this time.
~ ~ ~
Canadians can be forgiven for feeling somewhat disconnected from the panic. The so-called Great Recession left all our banks standing. While unemployment rose to 8.7 per cent, it never matched the previous two recessions. Yet Canadians still have plenty to be concerned about. If Europe goes into the tank, and the U.S. recovery stalls, we won't escape. At the same time, officials in China have warned that exports to Europe, its second largest market, are weakening. If Chinese factories close en masse, as they did in 2008, it could crush commodity prices and threaten the resource jobs that kept so many Canadians employed through the downturn.
But above all, our own finances have deteriorated badly over the last two years. In his speech, Citigroup's Buiter singled out Canada as a country that likes to think it's in good fiscal shape, when in fact our government debt-to-GDP ratio is a staggering 82.5 per cent. The outlook for deficits in Canada is better, but the country "should not be thumping its chest too vigorously," Buiter said. "Today's best of breed would have been possible entries for the ugliest dog in the world contest a couple of years ago."
Meanwhile, Canadian households took advantage of ultra-low interest rates to pile on more mortgages, lines of credit and credit card debt than ever before. Total household debt hit $1.4 trillion last year, according to a new report from the Certified General Accountants Association of Canada. Put another way, Canadians now owe $1.44 of debt for every one dollar of income they earn, making ours the most overextended households among the top 20 developed nations. Canadian families now owe more than Americans, on that basis; even Greek households are more frugal. We're in far worse shape should the global economy slip back into recession.
It's happened before. Despite what many think, the Great Depression was not one long, unending misery. In the midst of the '30s, the U.S. economy staged a remarkable recovery that lasted four years. Along the way, markets also enjoyed several rallies, one of which saw the Dow soar more than 50 per cent. So the Great Depression was in fact two depressions that history has melded into one, and the recovery in between proved too good to be true. The question now: is history about to repeat itself?
http://thecanadianencyclopedia.com/index.cfm/index.cfm?PgNm=TCE&Params=M1ARTM0013525and see:
Buy-High-Sell-Higher.com
I am not yet willing to admit that I’m wrong by JDH on July 10, 2010
Canadian Unemployment Numbers
Now, a word to my fellow Canadians.
On Friday we got to read the good news that Canada churns out 93,000 new jobs; great! That’s over 300,000 net new jobs so far this year, so it would appear that the recession is over in Canada, which is more than you can say for the U.S., since the USA is losing jobs.
I take these numbers with a grain of salt, for two reasons:
First, average hourly earnings fell by 0.6% this month, and average hourly pay is now at it’s lowest level in nine months. So, while there are more jobs, they are lower paying jobs, which isn’t great fuel for an economic recovery.
Second, on July 1 Ontario and British Columbia, two very large provinces, combined their provincial Retail Sales Tax and the Federal Goods & Services Tax into one new combined tax, the Harmonized Sales Tax. In Ontario the 8% provincial sales tax and the 5% federal GST are now the 13% HST. This may not seem like a big deal, since on most items the combined tax remains at 13%.
However, there are many services that were previously exempt from the PST, but now include the HST. Everything from haircuts to landscaping and home renovations have increased in cost to the end consumer. As a result, to beat the HST, many residents of Ontario and British Columbia built new decks, had their driveways paved, did some landscaping, or renovated their basement in the months prior to July 1. That may be a significant contributing factor to the higher employment numbers. I suspect that now that the higher taxes are here, many of those jobs will be lost, and the employment picture will dim.
So, I plan to stay the course, stay in cash, and hold my puts.
http://www.buy-high-sell-higher.com/2010/07/10/i-am-not-yet-willing-to-admit-that-im-wrong/~ ~ ~
and see the following self-explanatory video.
~ ~ ~
IMO, if there is another downturn in global markets; I can’t see how Vancouver property prices would be able to stay afloat.
So, I will say that Vancouver property prices will decline within the next 1-3 years.
Author