Sigh.
If you're reading this, you already know my thoughts on the direction our Economy (and Real Estate in BC) is heading.
And I take a certain amount of personal satisfaction in seeing our political and economic leaders finally taking off the BS mask and starting to acknowledge what could clearly been seen as early as late August.
But... let's examine for a moment what is now being said.
First off, what has happened this past week?
In light of last night’s decision in Washington not to bail out the automakers (at least not immediately), GM is considering bankruptcy - a development which will destroy Ontario.
Meanwhile Bank of America is cutting 35,000 jobs, the BCE takeover is pie-eyed, US retail sales have crashed five months in a row, stock markets are eviscerating and our finance minister said yesterday morning Canada “could be devastated” if we allow fear to become panic.
(Positive thoughts people, positive thoughts)
I wonder if fear would have run the risk of turning to panic if our wonderously insightful politicians had taken the time to inform us of what they knew back in the summer instead of playing the self-denial game?
I wonder if many who are now so fearful could have made correct choices, or at least better choices, before things started going to hell in a handbasket?
For most of this year, Canadians have been shielded from the truth about the economy. This should bother you. It should enrage you. It’s information you should have known.
We were told the banks were the strongest in the world... yet Ottawa found it necessary to give them a $75 billion bailout. The fact that three of the Big Six – including our largest bank, RBC – are out flogging new stock right now to raise more money, despite a terrible environment on Bay Street - is only the most public signal of the fact there is serious trouble in bankingdom.
So why, as recently as last month, did politicians and bank economists ply us with that 'strongest in the world' malarky?
We were told, in October, there’d be no deficit. But there is already. Now the prime minister calls red ink “essential,” and the Parliamentary Budget Officer says we could have a shortfall of up to $14 billion.
We were told there’d be no recession here. “This is not the United States,” Mr. Harper said pointedly during the election. But now there is, of course. The central bank made that official on Monday. Yet how many Canadians clung, blindly, to his assertion?
Everyone knew that the reason the Conservatives called the election when they did was because it was as plain as day to anyone without rose-coloured glasses that we were about to be hit... and hit hard... by the collapsing US economy. And the Conservaties were desperate to try and leverage a majority government before it did.
We were told the value of our homes would keep on rising, that the US real estate meltdown would pass us by. The Canadian Real Estate Association said this, and bank economists, Canada Mortgage and Housing and most urban real estate boards said it too.
But real estate sales have fallen as much as 70% in major cities, and average prices have plunged up to $175,000 in Vancouver, $56,000 in Calgary and $45,000 in Toronto. Buyers are staying home as sellers flood the market, ensuring more price drops.
Are you going to tell me that I, a backwards yokel on a provider review board, was the only one who could see this coming and that the captains of government and industry could not?
We were told the economy was strong and would stay in positive growth, boding well for jobs. And yet last month we lost more than 70,000 in a single four-week period. The central bank slashed interest rates to the lowest point since the 1950s in panicked reaction, and the car companies teetered on the brink of collapse.
We were told Canadians were safe, and our households were far less indebted than those to the south.
But what's this? On Thursday the Bank of Canada raised the awful spectre of widespread anguish, as more and more families face losing their homes. “With household balance sheets under pressure from weak equity markets, softening house prices, slowing income growth, and record high debt-to-income ratios, a severe economic downturn could result in a substantial increase in default rates on household debt,” the bank says. If this happens, it adds, so much for Canada’s ‘strong’ banks. “Should this scenario materialize, the banking sector would suffer significant losses from the rising vulnerability in the household sector.”
Could this be why the Royal, TD and Scotia have been selling stock in a bid to raise cash for the coming storm?
Of course it is. Those bastards know damn well what is coming in the new year.
What bothers me is that I am not some magical, prescient oracle who could see things that our Finance Minister, the Bank of Canada or the Canadian Real Estate Association/bank economists and most urban real estate boards could not.
They saw it all too. But this information was kept from Canadians for the past critical months? All in the name of protecting vital consumer confidence!
Wouldn’t a warning have helped us all give more attention to personal debt levels, to paying off mortgages or, especially, to avoid walking into new debt at absolutely the worst time?
These weasels knew damn well what was coming.
And none of them (save a few individual renegades in the real estate industry) dared speak out about it.
This economy’s in very bad shape and there’s worse to come. FINALLY these clowns are starting to acknowledge it.
Thanks for the heads up, boys!
If you're reading this, you already know my thoughts on the direction our Economy (and Real Estate in BC) is heading.
And I take a certain amount of personal satisfaction in seeing our political and economic leaders finally taking off the BS mask and starting to acknowledge what could clearly been seen as early as late August.
But... let's examine for a moment what is now being said.
First off, what has happened this past week?
In light of last night’s decision in Washington not to bail out the automakers (at least not immediately), GM is considering bankruptcy - a development which will destroy Ontario.
Meanwhile Bank of America is cutting 35,000 jobs, the BCE takeover is pie-eyed, US retail sales have crashed five months in a row, stock markets are eviscerating and our finance minister said yesterday morning Canada “could be devastated” if we allow fear to become panic.
(Positive thoughts people, positive thoughts)
I wonder if fear would have run the risk of turning to panic if our wonderously insightful politicians had taken the time to inform us of what they knew back in the summer instead of playing the self-denial game?
I wonder if many who are now so fearful could have made correct choices, or at least better choices, before things started going to hell in a handbasket?
For most of this year, Canadians have been shielded from the truth about the economy. This should bother you. It should enrage you. It’s information you should have known.
We were told the banks were the strongest in the world... yet Ottawa found it necessary to give them a $75 billion bailout. The fact that three of the Big Six – including our largest bank, RBC – are out flogging new stock right now to raise more money, despite a terrible environment on Bay Street - is only the most public signal of the fact there is serious trouble in bankingdom.
So why, as recently as last month, did politicians and bank economists ply us with that 'strongest in the world' malarky?
We were told, in October, there’d be no deficit. But there is already. Now the prime minister calls red ink “essential,” and the Parliamentary Budget Officer says we could have a shortfall of up to $14 billion.
We were told there’d be no recession here. “This is not the United States,” Mr. Harper said pointedly during the election. But now there is, of course. The central bank made that official on Monday. Yet how many Canadians clung, blindly, to his assertion?
Everyone knew that the reason the Conservatives called the election when they did was because it was as plain as day to anyone without rose-coloured glasses that we were about to be hit... and hit hard... by the collapsing US economy. And the Conservaties were desperate to try and leverage a majority government before it did.
We were told the value of our homes would keep on rising, that the US real estate meltdown would pass us by. The Canadian Real Estate Association said this, and bank economists, Canada Mortgage and Housing and most urban real estate boards said it too.
But real estate sales have fallen as much as 70% in major cities, and average prices have plunged up to $175,000 in Vancouver, $56,000 in Calgary and $45,000 in Toronto. Buyers are staying home as sellers flood the market, ensuring more price drops.
Are you going to tell me that I, a backwards yokel on a provider review board, was the only one who could see this coming and that the captains of government and industry could not?
We were told the economy was strong and would stay in positive growth, boding well for jobs. And yet last month we lost more than 70,000 in a single four-week period. The central bank slashed interest rates to the lowest point since the 1950s in panicked reaction, and the car companies teetered on the brink of collapse.
We were told Canadians were safe, and our households were far less indebted than those to the south.
But what's this? On Thursday the Bank of Canada raised the awful spectre of widespread anguish, as more and more families face losing their homes. “With household balance sheets under pressure from weak equity markets, softening house prices, slowing income growth, and record high debt-to-income ratios, a severe economic downturn could result in a substantial increase in default rates on household debt,” the bank says. If this happens, it adds, so much for Canada’s ‘strong’ banks. “Should this scenario materialize, the banking sector would suffer significant losses from the rising vulnerability in the household sector.”
Could this be why the Royal, TD and Scotia have been selling stock in a bid to raise cash for the coming storm?
Of course it is. Those bastards know damn well what is coming in the new year.
What bothers me is that I am not some magical, prescient oracle who could see things that our Finance Minister, the Bank of Canada or the Canadian Real Estate Association/bank economists and most urban real estate boards could not.
They saw it all too. But this information was kept from Canadians for the past critical months? All in the name of protecting vital consumer confidence!
Wouldn’t a warning have helped us all give more attention to personal debt levels, to paying off mortgages or, especially, to avoid walking into new debt at absolutely the worst time?
These weasels knew damn well what was coming.
And none of them (save a few individual renegades in the real estate industry) dared speak out about it.
This economy’s in very bad shape and there’s worse to come. FINALLY these clowns are starting to acknowledge it.
Thanks for the heads up, boys!
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