Confused yet?

Japan emerges from recession, and Asian markets tank.

Reader’s Digest declares itself bankrupt. Winnipeg’s New Flyer bus-building plant goes bust.

A quarter of Canadians skip the dentist and 14% leave their prescriptions unfilled – for lack of money.

The three houses listed near my bunker ($600K range, commutable to Bay Street), have sat unsold since there was snow on the driveway.

And not a day flies by (this one included), when mainstream economists – most bank-employed – repeat the mantra. “The important thing for Canadians to remember,” RBC’s Patricia Croft told a TV reporter as world markets crumbled on Monday, “is that the recession is over.”

Huh? (And I even like Patty.)

I noticed Seeking Alpha referenced one of my books this week (Greater Fool), then reached a few key conclusions, consistent with what I wrote 18 months ago, to wit: House price advances outstripped incomes for the past few years. House valuations are not supported by economic fundamentals. Canada has a bubble.

Despite that obvious fact, the Canadian economic and political establishment (like the Obama pump gang) is doing everything it can to convince consumers to borrow and spend. As this blog has referenced over past weeks, a goodly number of suckers have swallowed it, hl&s. Enough, in fact, to get the financially-stressed MSM on the bandwagon.

As we all know, when something’s on the front page of a newspaper, well, it’s suddenly true.

But everyday there’s anecdotal evidence in my life (and I suspect yours) that this recovery may already have passed its best-before date. For example, there’s American Express – purveyor of the fine life, employer of Beyonce.

A neighbour came over with a letter from Amex, and a question. He owes about $13,000 on his card, and can’t pay it after losing a job (and his restaurant)  in downtown Toronto. The form letter said American Express would make a “one-time and final” offer to settle his account for a payment of just over six thousand dollars – half off.

Should he try to borrow money, he asked? And where’s the logic in that, I asked?

This week he brought another letter. “We recently sent you a settlement offer which represents 50% of your outstanding balance,” it said. “That offer has expired but we would still like to work with you to resolve the outstanding balance on this account. At this time, we are extending our previous settlement offer and allowing you to take advantage of this savings opportunity to resolve your balance,”

Credit card debt, half off. Can you imagine getting a letter like that a year ago?

So I’d say there are two economies right now. Patty’s and the real one.

In Croft’s Canada, GDP has started to expand, the retail sales numbers are trending upward , commodity price levels have moderated, the exchange rate has improved, manufacturing shipment orders are showing some positive momentum and the pace of decline in the composite leading indicators has stabilized.

In the real economy, guys I know who lost their jobs five months ago are not a millimetre closing to finding a new one. Severance packages have run out, EI is depleting and self-worth is at zero. Worse, whole industries have moved to Guangzhou. There’s a sinking feeling among 40-year-old unemployed professionals that it might be a year or more before they see another paycheque. For fiftysomething Boomers it’s just friggin’ over.

So, were it not for the Home Renovation Tax credit, the lowest-ever mortgage rates, the car rebates and incentives, a $50 billion annual deficit in Canada and a trillion dollar shortfall in the States, the bailout billions for the car companies and the hundreds of millions for Air Canada, the mortgage giveaway to the banks, pension top-ups and premium holidays and more government spending than it took to win a world war, well, God help us.

It may work, stretching this bubble for another few months, a year, even two. But, it ain’t over.

And I don’t take Amex.

Garth's latest podcast is here.