Into the night

CORTEGE modified

On Friday at dusk I pulled onto Highway 407, from the 400.

“Cops,” said Dorothy. So I throttled back to two demerits. She was right. A black-and-white hit the shoulder, lights flashing. We sailed by. “More,” she said, and ahead were two other units, also ablaze. Then the trip turned historic.

We suddenly passed at least fifty vehicles – minivans, sedans, pickups – all parked on the side of a super toll-highway where nobody brakes unless they’re toast. In the gathering dark, all had their four-ways flashing. Yards ahead eight tow trucks were parked in formation, at a diagonal to the road, their orange strobes lit up.

Moments later, we slid beneath an overpass. Astride it were two fire trucks, in full illumination. Standing on the equipment were firefighters, in their regalia, helmets and visors. Below, shoulder-to-shoulder the entire length of the bridge – at least half a kilometre arching over eight lanes – were people. Hundreds of them. As we moved through we could see most were clutching flags they were draping down the sides of the concrete structure.

As dusk turned to dark, and over the next 68 kilometres, every bridge was the same. Local police and fire units – Mississauga, then Brampton, then Milton, Oakville and Burlington – packed the overpasses with all of their equipment, strobing in the night. Along the highway, Ministry of Transportation vehicles were lined up end-to-end, their operators in fluorescent vests, standing at attention.

CPL CIRILLO 2 modified

Near Highway 410, the first of the giant ETR 407 pixelboards appeared, hurtling a brilliant crimson Canadian flag into the night. Here the entire shoulder was taken with cars, now hundreds of them. All parked nose-to-bumper, all flashing. The bridges now three and four deep in shadowy figures. Hundreds had turned into thousands. By the time we neared Hamilton, tens of thousands.

Close to the end, eight more tow trucks, parked close with their jacks extended and laced between them a massive flag. Vehicles were positioned to shine their headlines upon it. It was black now, each bridge and the shoulder a cacophony of brilliance, against the failing light.

Close to the Hamilton cut-off, the opposite side of 407 ground to a halt. Drivers were leaving their vehicles, walking to the concrete wall separating east and westbound. I cut the engine and we waited. In a minute it was over.

With a single siren, Corporal Cirillo’s cortege pierced the night.

We’ve been discussing what drew all those people in the dark to a barren highway to watch a few cars roll by. Not just along our stretch, but the entire 600-km route from Ottawa – where this unarmed soldier was shot in the back at the base of a monument – to a funeral home in his home town. It drew crowds to the spot at which he fell, had people across the nation rummaging for last year’s poppy, and brought spontaneous anthem-singing among those who think Canada Day’s just another boozy long weekend.

NATHAN & DOG 1 modified  Dorothy said it was empathy. “So young. He could have been anyone’s son.” She also believes the dead soldier represents a loss of innocence. Despite our military record of valour and bravery, most believe Canadians are more peacekeepers than warriors. We let the Americans kill the crazies, then send aid. So seeing a jihadist shooting in Parliament, murdering a guy in a kilt – because he was symbolic – is deeply shocking. Going to the overpass and weeping was cathartic.

She’s right. There’s probably more, too. Patriotism is emotional and infectious. In a country where Toronto looks like Chicago and Red Deer looks like Rochester, where we watch US television and speak the same language, where Tim’s is foreign-owned and Stanfields are made in Asia, there are few things that draw us together. So when one comes along – a defender cut down unfairly, from the back, by a loser with a hunting rifle, devoid of respect, and trashing every rule – we rustle and rouse. We may be unable to revive this young man, but we sure as hell can honour him.

To the troubled shooter, Nathan Cirillo, in his dress uniform defending a pile of stones, said ‘Canada.’

On the bridges and the gravel Friday night, he was.

HIS DOG modified

Wheels up

BROKE modified

A GreaterFool rule oft mentioned is this: buy what appreciates, rent what depreciates. Hence, it’s okay to buy a house if at the right price, in the right place. But it’s almost always dumb to cash-buy a new car.

You’d think most people would figure this out. Instead of shoveling over thirty grand for a soul-sucking minivan, they’d be far better of stuffing that money into their TFSA and investing it, and letting the dealer or the bank give them the car. After all, in ten years the TFSA money should double to $60,000. The minivan will be worth (maybe) ten thousand.

Well, seems this is academic for most folks, anyway, since they don’t have any money. Car loans have exploded, and it’s no coincidence this has happened concurrently with a housing boom and a crappy job market. Real estate continues to skim off huge hunks of household cash flow, leaving precious little for wheels, investing, or a Plan B.

Moody’s Investor Service has just tallied this. Ugly. Seven years ago car loans totaled $16.2 billion, which is a giant pile of money. Today that pile is $64 billion – an increase of 300%, or 20% a year. But it gets worse.

As you know, these loans now have terms of eight or nine years, which exceeds most marriages and is longer than the lifespan of most Great Danes and almost all Kias. And despite a stuttering economy, the combination of cheap rates and ridiculously-long pay-back periods has created a boom in car sales. The dealers are having a banner year. Plus, says Moody’s, this also has people buying more expensive rides, so they can roll around and look like rockstar realtors.

So, record car sales. Record car debt. Oh, and record car loan delinquencies.

They jumped more than 13% last year, compared to a drop in missed payments on credit cards and lines of credit. “Credit losses have been low, but could rise quickly in an adverse scenario of unemployment increases or rapidly rising interest rates,” says the rating agency. “If the economy takes a turn for the worst, we could see these loans becoming problematic for the banks.”

Well, let’s turn to jobs for a minute. There must be a correlation between the labour market and an unprecedented demand for consumer credit. A constant run-up in debt would suggest most families are not bringing in enough income to sate their spending habits, which would support the Bank of Canada’s warning that household finances suck (a technical monetary term).

This is a thesis Randall Bartlett is proving. He’s a senior economist at TD Bank which has unveiled a new measure of the job market. Finally. The StatsCan monthly employment roller-coaster has turned into a bit of a joke among the biker-economists I hang with. The swings are so wild as to cast doubt on the validity of the data, with abysmal losses being replaced by flowery gains in a matter of weeks.

So the bank’s launched a Labour Market Indicator to try and get a truer picture on who’s working, and (as importantly) the nature of unemployment. If this is a better tool, we’re a little more screwed than we all thought. Says the bank:

  • “The Canadian labour market is currently experiencing more weakness than is implied by … the headline unemployment rate alone, and has been for nearly two years.”
  • About 20% of all the people out of work these days have been that way for at least six months – the long-term unemployed.
  • The bank says the numbers of people in this group jumped during the GFC, which is to be expected – but that levels have not come down since 2009.
  • Meanwhile the number of working-age Canadians (between 25 and 54) in the workforce is on the decline, down 2% in two years. This, says TD, “is a characteristic of a weak labour market.”
  • So while the official jobless rates is 6.8%, the bank says it’s actually about 7.2%. In the US, by the way, unemployment is now 5.9%.

And Bartlett confirms what this pathetic blog has started for a couple of years – incomes have flatlined. Wage growth of about 2% is running a little below the inflation mark, which means most families are spending more and actually making less. That’s supported by the Canadian Payroll Association, which claims over 50% of us could not last a week past one missed paycheque.

This is what you get when a country opts for a condo economy. Massive spending on housing and consumer goods, supported by an historic increase in debt because a weak jobs market and zero income growth mean Joe Frontporch is treading water. Our manufacturing base has shrunk and a quarter of the economy is now centred on real estate. Were it not for low rates that allow so many to meet their gargantuan monthlies, we’d be pooched. And none of this is coincidental.

Tell me how it works out well.