Sat, Oct 18th - 10:39AM
Recession in Canada
Is Canada joining the United States in a recession?
Time will tell.
What is happening in Canada is strange. Job growth is up and unemployment is still very low, but people are so worried about the economy that they are cutting back on spendng... especially on luxury items.
So how do we track luxury items?
Well, for starters champagne sales in Ontario are down dramatically in 2008. 24%. Don't know what the percentage is for the rest of Canada, but seeing as Ontario has one third of Canada's population and is the biggest Canadian consumer of champagne it sends a signal that people are worried and being more thrifty.
Ontario cottages are also seeing a major drop in sales.
Sales of cottages in the Muskoka area (considered the most luxurious and convenient cottage market dominated by million-dollar mansions on the water) are
down by a daunting 43 per cent in the first nine months of the year
according to figures from the Muskoka
and Haliburton Association of Realtors. Agents reported 111
transactions by the end of September, compared to 197 by the same time
While sales of all types of cottages are down, Karen
Flood, incoming president of the association, said the high end cottages are the ones most affected.So yes, Canadians are cutting back on luxury items. Are we in a recession like the United States?
No, we're just feeling the pinch and the worry over the economy is effecting us too.
In the Unites States however there isn't just worry. There's panic.
Panic induced government bailouts of the leading banks of
the U.S. and Europe, and a stock market that posted a record weekly
drop of 18 per cent last week, and a 40 per cent plunge since last
summer – the biggest failure in modern free-market economics is bound
to raise doubts about the future of capitalism as we know it.
Italian Prime Minister Silvio Berlusconi, a tycoon with a near-monopoly
on commercial broadcasting in Italy, scorns the "capitalism of
adventurers" in the USA – the anything-goes Wall Street investment
bankers who put annual bonuses ahead of integrity. Berlusconi is a brilliant businessman who started small and managed to build his business into a near monopoly and even become Italian Prime Minister, but he has a very important point.
Corruption and Greed in the Marketplace = Loss of Integrity, Honesty and Profits are soon to disappear...
Think about it. Would you invest money with a company you knew was fraudulent, syphoning funds to the private accounts or just plain greedy and untrustworthy?
No. Neither would I.
And thats what investors are saying. If American investment banks are so greedy and untrustworthy, why should we give them our money?
And furthermore, why should we bail them out either? That $700 billion Bush is giving investment banks to buy junk mortgages is a fundamental waste of money. Its like going to the shady used car salesman and saying "Hey buddy, I heard times are rough... how about I buy $[insert big number here] of your worst cars, your lemons/etc. and you can go on vacation to Hawaii with the money."
Last I checked investment bankers are pretty well off, rich to say the least. Profits are down due to the credit crisis, but they're still making profits. So why boost their profits with a bailout?
Because we're talking about America's elite, the backbone of the Republican party. They make a huge fuss if they're not making huge profits. Small profits just doesn't look good enough on paper. Because the outgoing Bush Administration is corrupt and just doesn't care if they bankrupt America and have a budget deficit.
So Canada, America... what will it be? Your pensions are riding on investment banks that use shady mortgages in an effort to boost profits. Do you really want your money being managed by someone you can't trust?