[deMolay]

Inspite of what some smug Canadians on here have claimed, the Canadian economy is finally getting hammered bad. And the engine that drives Canada and pays for all the socialist wet dreams,in the rest of Canada, Alberta is sputtering.....

Ottawa Saturday, October 18, 2008 Inside the Ottawa Citizen

Steep recession looms for North America by Eric Beauchesne, Canwest News Service Friday, Oct 17, 2008
OTTAWA - Grim evidence of a North American economic meltdown mounted Friday, though you'd never guess it from the bullish buying by Bay Street investors. Plunging consumer confidence on both sides of the border, the steepest loss in more than a decade by Canadian pension funds, and further declines in U.S. housing construction and building plans, reinforced growing forecasts that the current financial crisis is ushering in a global recession from which no country, including Canada, will escape.

Still, Canada's benchmark TSX index staged a near 300-point rally, allowing it to post its first gain in four weeks and outshine Wall Street's blue chip Dow, which posted a 127-point retreat to give up some of its hefty gains from the day before.
But markets on both sides of the border remain deeply depressed, a fact reflected here in the deteriorating health of domestic pension funds.

"Plummeting equity markets hurt pension plans in the third quarter as the ongoing financial crisis gained global intensity," according to RBC Dexia Investor Services, which put the quarterly loss at 8.6 per cent in the three months ending Sept. 30.

"Year-to-date, Canadian pensions are down 10.1 per cent," said RBC Dexia director Don McDougall. "It hasn't been pretty - and judging by the performance in October so far, the situation is not getting any better."

Not surprisingly, the mood of Canadians has also darkened this month. Consumer confidence plunged to its lowest level in more than a quarter century, the Conference Board of Canada reported. "The global credit crunch and major stock-market declines clearly had an effect on consumer confidence in October," said forecasting director Pedro Antunes in releasing the results of the survey conducted by the think-tank in the first week of October.

"In addition, consumers felt that they would be worse off in six months, indicating concerns that the financial crisis would not be resolved quickly," Antunes said.

Although consumer confidence declined significantly in early October, the board noted that there have been indications over the past couple of days that global credit markets are beginning to loosen.

However, it could take months before lending conditions return to normal, it cautioned. After three consecutive months of increases, the board's consumer-confidence index fell 11.9 points to 73.9, the lowest level since the third quarter of 1982, when the Canadian economy was mired in a recession.

All components of the index declined in October, with more Canadians saying it is not a good time to make a major purchase, and their views about their current and future financial situations also deteriorating, it noted. Consumers were also less optimistic about future employment prospects for the fifth time in six months, with the latest decline in job confidence being the steepest this year.

The drop in confidence was also widespread regionally with the index plunging in Ontario 16.6 points to 67.9 from 84.5, the largest drop on record, but also falling in all regions, including a 10.2-point decline in Quebec, 12.5 in British Columbia, 6.1 in the Prairie provinces and 4.9 in Atlantic Canada.=

The news out of the U.S. wasn't any prettier. Consumer confidence suffered its steepest one-month plunge on record this month, U.S. housing construction starts and building permits both fell last month to levels not seen in more than a quarter century, and an index of the mood of U.S. manufacturers slumped further. "The mix closes out a three-day period that has revealed a sharp collapse in consumer spending and industrial production through September, and a substantial deterioration in factory confidence in October that suggests the ugly September experience is now being repeated," said online think tank Action Economics.

The housing report was "simply awful," said TD Securities strategist Millan Mulraine. "It suggests that the U.S. housing market correction may have quickened in recent months," he said. "And with the U.S. economy appearing to have softened considerably in recent months, and the labour market remaining in a very depressing state, there is little to suggest that a turnaround in activity will occur any time soon."

"Without doubt, the U.S. economy is grinding through a recession and the severe downturn in the residential real estate sector will be felt across the economy as demand for building materials, household fixtures, furnishings and hard goods collapses," said Custom House, a Victoria-based international payments firm. "The crisis on Wall Street and in the banking sector is certainly being felt on Main Street."

And north of the border as well, it added, noting that is being reflected in the slump in the value of the Canadian dollar, which fell a third of a cent Friday to 84.25 cents US.

"The bottom line for the Canadian dollar right now is that the Canadian economy is tied very closely to the U.S. economy, especially the U.S. auto sector and building supplies, and the slowdown in the U.S. is going to be felt just as hard, if not worse, in Canada," Custom House said in its daily market analysis. "Add in the dramatic collapse in commodity prices, and what that means for Canada's trade balance, and you have a recipe for a weak Canadian dollar."

[Niagara]

Yes, I read this morning real estate prices in the Toronto area have plummeted year-over-year, down 15%.

In the west, Alberta's economy will crater if oil prices stay this low. I remember a few years back people were paying $500,000 for a tiny little matchbox of a house in Edmonton. Insane.

[Daniel_Plainview]

Rather than list the numerous countries that are being killed by the credit crisis (countries in North America; Europe; Asia; Australia; South America), it would be easier to list those that are likely to weather the crisis unscathed. The list is pretty short, and includes mostly countries in the Middle East and Africa.

[WildRose]

In the west, Alberta's economy will crater if oil prices stay this low. I remember a few years back people were paying $500,000 for a tiny little matchbox of a house in Edmonton. Insane.

Yep, in the last couple of years a lot of people here, especially young couples starting out, have purchased homes in the 300K range (starter homes) or condos and would really be hurt by job losses, or by reduction in pay from current wages of $40/hour to who knows what.

[jasonraymondson]

Anyone who spends $500,000 for a house deserves all of the pain and suffering they get.

[RdSnt]

Some Albertans are sounding more like Americans all the time. It's always someone else's fault when things go wrong. But when things are going real well, then it's, "We've got ours, the rest of you can freeze."

Of course they forget that it's only been very recently that Alberta has been a "have" province and the before then it was the rest of Canada that propped them up. Indeed, it was Canadian tax payer money that opened up the tar sands. Those great Albertan mavericks of commerce didn't move in till there was no risk, and as soon as things turn sour, they are the first to have their hands out.

Most Albertans are sensible and recognize that universal health care is simple a better business model. They recognize that government assistance in frontier businesses is required.
Most Albertans also see the theft that is going on on Wallstreet for what it is and are equally against elite bailouts as most sensible Americans are.

[Snowrunner]

Inspite of what some smug Canadians on here have claimed, the Canadian economy is finally getting hammered bad. And the engine that drives Canada and pays for all the socialist wet dreams,in the rest of Canada, Alberta is sputtering.....

Okay, first of all Alberta wasn't the engine that drove the "socialist wetdream" until very recently, maybe the last five years or so.

Secondly, the biggest cheerleader (until two days after the election) was one Stephen Harper, you may have seen him on such shows: Americas next Prime Minister.

I think quite a few Canadians had clued in to that fact for a while, I also think that's one of the reasons why Dion got pummeled so badly, even though he had a way better idea what to do (or at least told us) than Harpo ever did.

[deMolay]

Rdsnt the Canadian taxpayer did not contribute to the oil sands with tax dollars. The oil sand companies did buy billions of dollars worth of equipment and steel from eastern Canada, and on that they were granted an accelerated write off regime. Get your facts straight. That is not using Canadian Tax dollars for support. Using tax dollars for support would be the Billions given to Ontario and Quebec Mfg. to keep building cars planes etc that nobody buys. Alberta's oil patch was build by American Investment alone. TROC would not invest at all.

[Newfie]

My cousins daughter is a really bright and attractive young lady. She is a Naval Architect who has been working the Grand Banks oil rigs. She got sick of that drill. With her boyfriend she bought a house in Fort MacMurry over the summer. $650,000.

They each had a first house had sense enough to keep them and rent them out. God bless them.

[Blacksmith]

Telling me what the people of Alberta want, is like a politician pushing onerous legislation with the words, "the people are asking for this."

[Concerned]

Inspite of what some smug Canadians on here have claimed, the Canadian economy is finally getting hammered bad. And the engine that drives Canada and pays for all the socialist wet dreams,

Unlike the rock solid Capitalist dreams. CDO's, CDS LOTS of bad loans.

At least with Canadian socialism the general population got a piece of the action maybe some x-ray or dental check up, or some money to buy a decent meal and catch a movie.

[perdition79]

Unlike the rock solid Capitalist dreams. CDO's, CDS LOTS of bad loans.

Hey now, those forms of debt were only bad because of America's attempts at Socialist laws back in 1994. It's not that Capitalism is bad, it's that America sucks at Socialism.

[cube]

Rather than list the numerous countries that are being killed by the credit crisis (countries in North America; Europe; Asia; Australia; South America), it would be easier to list those that are likely to weather the crisis unscathed. The list is pretty short, and includes mostly countries in the Middle East and Africa.

How about those small island nations that act as tax havens?
Saint Kitts and Nevis for example has only a 10% income tax.
How can a government operate with such little taxes?

You'll be surprised how cheap it is to run a government when you don't have to pay for:
1) war in the Middle East
2) bailing out Wall Street
3) trying to fund the baby boomer's retirement

The Tax burden can only get worse in the EU and the USA.
The more it does, the more desirable these tiny island nations will become.

[Maddog78]

With her boyfriend she bought a house in Fort MacMurry over the summer. $650,000.

House prices seem to be dropping pretty fast in most of the west, hopes this works out for them but I'd be nervous. I guess Ft. Mac will have it's own economy seperate from the rest of Canada.

[topfuel]

economy has never been good in canada,were not building much manufacturing plants ,it's base on resoures,and bubble speculators in housing,we are tax to the max. but the government does not spend that's sums it up.

[Snowrunner]

House prices seem to be dropping pretty fast in most of the west, hopes this works out for them but I'd be nervous. I guess Ft. Mac will have it's own economy seperate from the rest of Canada.

I wouldn't count on that, there was a 'bridge to nowhere' build there before.

It really depends on what will happen with the oil price on one hand, and with the planned projects in the Edmonton area on the other, they could find themselves very quickly back in 1984.

[canuckinczech]

Rather than list the numerous countries that are being killed by the credit crisis (countries in North America; Europe; Asia; Australia; South America), it would be easier to list those that are likely to weather the crisis unscathed. The list is pretty short, and includes mostly countries in the Middle East and Africa.

The Czech Republic is doing remarkably well...Ironically the same banking system that kept it so long for early EU entry, turns out, in the end, saves the countries butt. Not to mention years of an ineffectual coalition gov't...perhaps its true, no gov't is the best gov't.
Of Course, the countries current situation is more complex than it seems. A reassuring note, of late there has been a lot of faith being placed in the Czech Krown. Both the EU and the feds have considered the Krown a reserve currency. Nice consideration for a country of 10 million!

[pedalling_faster]

Canada has so much water & natural resources. they're in good position compared to the US - their government is running a surplus. they will survive Peak so much better than the US.

not to say it's a picnic, there's still an odd amount of violence news coming out of Canada. some guy that cut someone's head off on a public bus in some Canadian city, that was one one of the vignettes to come from Canada this last year. choice of instrument, a large hunting knife. or maybe they were just filming Silence of the Lambs Part 4 ?

[Snowrunner]

Canada has so much water & natural resources. they're in good position compared to the US - their government is running a surplus. they will survive Peak so much better than the US.

Not so far. The Water thing is a myth, most of the water runs north, not where the population is. Most of the "riches" are there too and now take a look where most of the people are living.

Secondly, the "surplus" is gone, it has been, they play some tricks on the books, the spectrum license this years padded the coffers quite a bit without them it would have already been clear.

Also, the Harper's merry little band of politians has spent quite a bit of money on things that were, well, let's call them pet projects, the "bank bailout" here hasn't started yet but it will and I am not sure where the money for that is going to come from.

not to say it's a picnic, there's still an odd amount of violence news coming out of Canada. some guy that cut someone's head off on a public bus in some Canadian city, that was one one of the vignettes to come from Canada this last year. choice of instrument, a large hunting knife. or maybe they were just filming Silence of the Lambs Part 4 ?

Saw V actually and it wasn't in a city it was on a Greyhound in the middle of nowhere (almost).

Of course the cynic in me would now point out that the bus left Edmonton and was heading East. (Okay, only Canadians will probably get that one).

[Blacksmith]

Prehaps from the ad scam.