First step

middle-class1

Sure, I know the latest survey shows a quarter of all Canadians now fear losing their jobs. I know Nissan is chucking 20,000 people and this morning GM is ditching another 10,000. Yeah, I know about the devastating layoffs yesterday in Sudbury. And the courier business – FedEx this week with 900 pink slips – which is the canary in the corporate coal mine. Like the latest unemployment numbers, it’s all shocking.

But let me tell you why what’s happening is so profound.

In the countryside some miles from where I have a house is a large fertilizer plant, where a few seasonal employees are hired each Spring. Most years they take on three people, and normally receive eight or ten applications.

This year they were buried with over 500 resumes.

Yesterday I was in a hardware store which has been in the same urban location for half a century. “Not for much longer,” the owner told me.  I asked why they’d be closing after five decades of business. “Because half the people who come in here are unemployed, and I know them. They need credit, and I cannot deny them,” he told me. ” This has to end.”

In these small daily stories is told the saga of a nation. Also included is a chapter on the eroding middle class. And within that, pages on the threat to confidence and self-respect. This is not material CNN or BNN, the Globe or CTV are interested in. These are tales which will never make any newscast. And yet they’re at the very heart of the economy which affects all 33 million of us.

People giving up their businesses and clutching wildly at the straws of part-time employment should show our leaders two things. First, the situation is about to grow much darker. When security and income disappear, people buy little and borrow nothing. No matter if interest rates go to zero, there will be few car and house sales.

Second, capitalism is unwinding with ungodly haste. Corporations are throwing employees overboard with hardly a thought as they try to save the owners. This will not be forgiven, or forgotten. In the meantime, such actions just feed a deflationary beast which now threatens to mutilate our society for years to come. People who still have jobs are willingly accepting pay cuts, as companies are forced to slash prices in the face of plunging demand.

This is the nightmare scenario, unless arrested by government,

Against this backdrop, recent statements of public figures ring hollow or callous. The national real estate association says prices will drop this year by 8%, when that much may occur in some months alone. The Bank of Canada governor says the economy will perk up within a year, when it could take a half decade. The prime minister calls the latest jobs plunge, “occasional bad news” when guys with university degrees are desperate to work in a fertilizer plant.

The first step towards recovery must be honesty.

We’ve yet to see it taken.

163 comments ↓

#1 North Vancouver Citizen Jr. on 02.09.09 at 9:06 pm

The Coming Canadian Invasion
Joe Weisenthal | Feb 9, 09 5:23 PM
Who will buy up all those vacant McMansions in warm states?

http://clusterstock.alleyinsider.com/2009/2/the-coming-canadian-invasion

Monday, February 9, 2009

Who might buy foreclosed Sand State mcMansions?
The Canadian economy is now being dragged down by the U.S. collapse, but Canadians aren’t as burdened by debt as Americans are. The Canadian government has been running surpluses, and there wasn’t much of a housing bubble up there. There are a lot of Canadian baby boomers reaching retirement age, and the idea of buying or renting a cheap winter home in California, Nevada, Arizona, or Florida has to sound appealing.

iSteve.com

2/09/2009
1 comments: Bill said…
The HK Chinese in Canada are probably already on it, but your typical cheesehead canuck probably has a window of opportunity of about six months before their own economy tanks. Most won’t take it up because they are complacent fools, and either stoned or addled by large doses of Labatt’s or Kokanee (or, God forbid, that awful MacNaughton whiskey).

#2 suhammy on 02.09.09 at 9:12 pm

In the Globe 25% fear layoffs.

This should read 50% of private sector workers fear layoffs.

Are the public sector workers also facing the same threat with all the proposed stimulus?

Who pays the net taxes after all these layoffs?

#3 Ron Bunston on 02.09.09 at 9:17 pm

With all due respect to the experientially disadvantaged middle and upper classes..the collapse of capitalism is a natural outgrowth of an introverted cultural autism, the addiction to sillyness.The dis-ease makes them do silly things. Like worry about money instead of the folks in their village, their employ, their responsibilities to reality.
with empathy..we worry about them..but they’ll be fine.
mongrel puppy

#4 Cendrine on 02.09.09 at 9:21 pm

I was talking with an acquaintance last week regarding the declining economy and how it may likely become a broad, lengthy, deep depression. Her opinion was that it was all the media’s fault for creating panic and gloom which is feeding on itself and contributing further to economic deterioration. She is going to Florida shortly to look at possible investment real estate.

Honesty is the best policy unless it makes people nervous or interferes with profit….

#5 Canned Goods and Buckshot on 02.09.09 at 9:23 pm

Since it apppears the risk for SHTF appears to be inching upwards correlating with the need to be more self reliant I just want to offer some observations about putting together a bad day box.

I bought a second wind up radio as a back up from Crappy Tir*. It only works if you 1st charge it for 12 hours with a plug in charger (not included). Since its unlikely to hold a charge indefinitely, and therefore, unlikely to be of much use when really needed it returned it. I’ve realized that its important to check anything mechanical that you deem necessary beforehand. Just cause its new is no guarantee that it will work. Better to find out now rather than when you need it. This has been true for:

the water/fuel pump
propane tank to coleman stove adaptor
generator not putting out correct volts
firearm not firing correctly and difficulty sighting it
and some others too embarrased to relate

It may be common sense for most, but I suspect more than a few may just buy some items and store them in the basement.

I’ve invited some neighbors to see Garth in Listowel. It’s somewhat difficult to find language that won’t be interpretted as fear-mongering or overly pessimistic. In any case I’ve heard there might not be any tickets to be had. Any more Ontario dates coming up?

#6 RB on 02.09.09 at 9:25 pm

Some mills shut down in Williams Lake this week and the employees that have filed for EI payments have been told that it will take up to 3 months for them to receive benefits due to the backlog of claims.

#7 squidly77 on 02.09.09 at 9:25 pm

derrin
you should try to acknowledge the dangers of being overly optimistic..becoming unrealistic can wreck a company and/or your personal finances
http://www.stus.com/images/products/cla251v2.gif

The move will lead to the immediate layoffs of construction workers at Suncor’s Firebag 3 project in Fort McMurray, an oilsands development currently about half complete, Flint said Thursday.
https://www.getgrowingforbusiness.com/mynews/financial-news-details.asp?news_id=320952
there have been approx 1,400 layoffs so far with more expected

#8 ca on 02.09.09 at 9:40 pm

This may be worse than Garth expects:

“The minister stunned his audience at a Labour conference in Yorkshire by forecasting that times could be tougher than in the depression of the 1930s, when male unemployment in some cities reached 70 per cent. He also appeared to hint that the recession could play into the hands of the far right.”

http://www.independent.co.uk/news/uk/politics/this-is-the-worst-recession-for-over-100-years-1605367.html

#9 Da HK Kid on 02.09.09 at 9:42 pm

DEFLATION DEFLATION DEFLATION – Garth you are bang on as usual!!!

“What happens if the stimulus plan fails to stimulate enough to stop the spiral downwards?

What if we have more and more deflation, more and more job losses, more and more people who have no money to pay bills and no money to buy anything but basic necessities?

And if the stimulus doesn’t work then how will we ever stop this?

Japan had this situation and they were pulled out by the world’s demand for their exports. But now who will pull the world out?”

Firstly the stimulus can not stop the downward spiral. The reason America is in this situation is because of too much stimulus in the past. The last thing it needs is more stimulus i.e. more debt.

You can’t talk about stimulus and deflation in the same argument. Stimulus is inflation. What inflation does is it erodes purchasing power; it is essentially a hidden tax.

When you erode purchasing power, your money loses value; it therefore requires more of it to buy the same quantity of goods. Prices therefore go up.

If we keep stimulating, all our money will be able to afford will be basic necessities. Imagine paying US$1,000 for a loaf of bread.

The way we stop this downward spiral is to stop spending, pay off debts and start saving. This is the cure. The stimulus is the disease. Not many people understand this point.

Obviously by following this course of action the economy will suffer people’s living standards will fall dramatically but this is necessary to re-balance the economy. The quicker we do this the quicker we can re-build and get out of the hole.

#10 Glenn on 02.09.09 at 9:59 pm

Well, Lindsay Williams was on the Alex Jones radio show today. His predictions have been spot on for the last few years. His new 2009 predictions are in, and it looks like deflation for another 6-9 months then full blown hyperinflation and global depression. You think things are bad now, wait till the Olympics…if they hold them that is.

#11 Windsor Nan on 02.09.09 at 10:08 pm

Hey Garth:

Are you still planning on Windsor this week? Hope so cos it sure is brutal down here.

Checking the book tour page for details but no updates yet. Hoping for info re: where, when & how to get tix?

Thanks,
Windsor Nan

Tough luck – local organizers felt the Windsor economy was too brutal for a financial lecture. However, I have added Niagara Falls to my schedule, for the morning of Feb. 28, plus another SW Ontario date. Details to follow. — Garth

#12 kc on 02.09.09 at 10:11 pm

#10 Glen – Didn’t you hear? the BC gov cancelled the Olympics due to the lack of bullet proof vests for the athletes, and the gov was getting too many enquiries from the tourists asking if hunting gangsters was now a Olympic sport. Campbell answered no, hunting gangsters isn’t an olympic sport but we added a new one….. If you can walk down Granville street and dodge all the bullets you get a gold medal if you are the first to make it.

#13 Bill-Muskoka (NAM) on 02.09.09 at 10:13 pm

Garth,

That is why I listened to a real leader tonight, President Barack Obama. He held a news conference and told it straight. NO BS.

Too bad Canada doesn’t have anyone even close to his caliber. We just have BB (Brainless & Balless) caliber psuedo leaders.

#14 Bill-Muskoka (NAM) on 02.09.09 at 10:16 pm

Oh, and this article says it all.

The Commons: Abbott & Costello fix the economy

“Mr. Speaker, 129,000 jobs were lost in January. Personal bankruptcies increased by more than 50 per cent in December,” he said. “On Friday, the Prime Minister said that there will be no more help for Canadians even if the economy continues to worsen. Then, his Minister of Finance said exactly the opposite. So who is on first?”

Answer: No one!

#15 Ron Bunston on 02.09.09 at 10:46 pm

Investing in real estate? Didn’t they say in high school economics that 97% of currency is invention?
The economy is depressed because the rich and distracted empire has lost sight of the objective. It’s dysfunctional and therefore has no true value..When the slaves find out..woops!!
Is the professional class paying attention?
The autistic genius of global systems analysts have been ranting on about this for 40 years. The books are in the library. weld, salvage.rebuild.tribe. lots to do to make it all better. We won’t need exercise machines or weight loss diets. seems rather invigorating scenario. more challenging than golf..

#16 JARIBURI_SENIOR on 02.09.09 at 10:48 pm

Quoted from somewhere
========================================
Anyway, I know (in opposition to I believe), that no amount of graphics, differential equations, prospective analysis, wishful thinking, hope, fear, alcohol, sex or moral outrage from your part or from anyone’s else will contradict the First Principle of Thermodynamics, which in simple words say: “There is no way to keep your mother-in-law drunk and the bottle of whiskey full”

The “virtual money” party is over sir, can you see that?

Omygosh… we may have to work again to earn a living! Dammit!
=====================================
End of quote

It seems a pretty deep analysis. I like the booze part.

#17 Gord In Vancouver on 02.09.09 at 10:54 pm

In the countryside some miles from where I have a house is a large fertilizer plant, where a few seasonal employees are hired each Spring. Most years they take on three people, and normally receive eight or ten applications.

This year they were buried with over 500 resumes.

The good old “employers market” has returned – look for salaries, nationwide, to take a dive soon.

#18 john on 02.09.09 at 10:56 pm

#6 RB on 02.09.09 at 9:25 pm Some mills shut down in Williams Lake this week and the employees that have filed for EI payments have been told that it will take up to 3 months for them to receive benefits due to the backlog of claims.
………….That is disgusting and criminal……..betchya Harper’s 17 new (unnecessary) partisan senators are getting their enormous pay cheques.If they can’t even get their act together on a workers entitlements (UI) which they have contributed to for years……… gives a good indication of their priorities!

#19 Vancouver_Renter on 02.09.09 at 11:12 pm

My young brother-in-law (30 years old) and wife are just about peeing themselves with excitement over an “opportunity” to buy a new custom-built house in a Vancouver suburb development for “only $750K”. They think this is an amazing “discount to market value”.

When I respectfully walked him through the macro-view of what is happening globally (historically equivalent periods of asset and debt bubbles leading to deflationary contractions that severely punishes those with debt) he just smirked, shook his head, and stated, “No, no you’re wrong there…”

I maintain that one good or bad investment decision is worth ten years of hard work and savings, so you better stop and think carefully about what you are doing.

His generation has only ever seen assets increase in value. In his eyes, real-estate falling 10% is a chance to load up with even more mortgage debt and trade up to the biggest house the banks will allow him to purchase. Like many of his peers, he seems to be trapped in a consumption orgy – where success is measured by how impressive your house, furnishings, cars, and clothes are compared to your friends.

My wife and I are the only members of our family who sold our home, rent a small older house, saved our money, and live debt-free well below our means. Because our lives are simple and modest compared to the debt turbocharged lifestyles of everyone else around us, I find that there is an underlying assumption that we must be financial failures and/or not ambitious.

Attitudes are funny today compared to my elderly father’s generation, who admired and respected thrift.

#20 Mike on 02.09.09 at 11:15 pm

Garth,

You sound and seem so mild mannered and polite and reasoned when you are interviewed on radio (I heard you this weekend in Vancouver) and in your books, yet on your blog you often come off as strident and shrill and defeatist.

What gives? I beginning to be able to predict content of your entries.

If I believed all you say I would build a bomb shelter, stock it with water and beans and retreat to it with my family for a few years.

Shades of old Twilight Zone episodes except this time it is not the Russians or the Martians but bankers, real estate agents and Conservative MPs who are the demons.

Surely things are not THAT bad. Most of “Canada” is not Manila or Shenzen or Detroit.

Why not, for a change, dedicate a week’s worth of blog entries to things that are going right or to positive things we can do to prepare for the recession/depression.

Cheers,
Mike
Langley, BC

#21 TomOfMilton on 02.09.09 at 11:27 pm

RE: January job loss figues

My friend made a good point when we were discussing such a large number of job losses in January, and mentioned t
at many companies are reluctant to let people go before the holidays. And so what we see in January is pent up layoffs from December. We oth predicted that the figures would not be as bad in Feb. but I’m also wondering if the additional fear generated by such large numbers in Jan might reduce peoples spending further and causing trouble in Mar or April. Perhaps that model is too simple.

#22 josh on 02.09.09 at 11:32 pm

#7 squidly77

The scoop on Suncor is, they have stopped the voyageur upgrader for now, I know that that there are talks to retender the contracts. But Voyageur is down for a while. FYI Voyageur was going to be one of the largest upgraders in Fort Mcmurray area, 10-12 billion this includes firebag as firebag feeds voyageur. so its a huge loss

Suncor firebag 3 is stopping very fast, a couple buddies of mine are in shock as there was no warning with firebag.

I was talking to some suncor employees and they told me that they might start up small projects when oil stabilizes above the 50 dollar mark, key word here is stabilizes.

As far as people layed off its well over the 6000 mark ( if not closer to 10000) between both plants, engineering firms, mod yards in edmonton, NDE companies, trucking companies, its just a massive web of layoffs, the impact of them shutting down has really hurt fort mac,

Thank goodness for all the expansions in the past as shutdown season will employ more people now.

#23 patientbuyer on 02.09.09 at 11:32 pm

Well, I don’t know if this is the right thread to post this one, but it is the most recent one, so here goes.

For those denying that real estate in Toronto is overpriced:

Today, for the first time in a long time I saw a new 1-bedroom apartment listed on the MLS system in downtown Toronto for under $200,000 ($199-something actually). Many more to come, I am sure.

What’s more interesting is this. A certain large condo developer that’s built a couple of towers in the King West area is dropping its prices. I’ve been looking at a one bedroom plus den there online for about six months — it’s a nice layout and one I might be interested in at some point. Months ago they were asking (online) a ridiculous $334,000 or so. This then dropped, first to $329,000, then several weeks later to $299,000, where it stayed for a few months, and the building was then being advertised from the 290s. I’ve been checking it out about every other day.

Today, I noticed that they are now no longer listing the price of this unit on their website, but rather are saying to call for an appointment. However, on MLS, there’s a one bedroom plus den in the same building (empty of furniture in the photos), so presumably the same unit, now on sale for $260,000. That’s a pretty steep drop, and yet I still won’t be interested in seeing it until it’s down to at least about $220,000. Even then, that might be too high. But it’s interesting to see that the developer is now obviously getting desperate to unload units.

#24 Investx on 02.09.09 at 11:34 pm

So what should we invest in? I recall that dividend paying stocks provided steady income during the Great Depression.

Thoughts?

#25 TomOfMilton on 02.09.09 at 11:34 pm

#5 Bad day box

Thanks for the heads up and done with such humor too.
Going to test some of my stuff too…(and me software developer. SHAME!)

#26 JAM on 02.10.09 at 12:04 am

Well, here’s one way for Canada to stimulate the economy. Build more nuclear plants and lots of them. We need power to replace aging reactors. Guess what, these plants will produce hundreds of thousands of jobs.
And they’re government owned. why don’t Mr. Harper and Mr. Mcguinty just press the damn buttons and create more jobs.
Any one wants one on their backyard?

#27 Viking on 02.10.09 at 12:06 am

Garth, I love reading your stuff (and especially appreciate the humour). Nice counter balance to what we read in the press on a daily basis.

However, I must take exception with a couple of comments today:
1.) “capitalism is unwinding with ungodly haste”: yes, things will be getting much worse in Canada. And then, driven by our capitalist system, the ecomony will adjust.
2.) “Corporations are throwing employees overboard with hardly a thought as they try to save the owners.” I worked for a large corporation. Contrary to popular opinion, ‘they’ do not in management meetings close the door, lower the shades and plot how they are going to screw the working man. Also remember most pension funds and many individuals are ‘the owners’.
3.) “This is the nightmare scenario, unless arrested by government.” Yes, the government has a role to play. However, magic wands exist only in fairy tales. My read is the only thing that is going to make things truly better is time.

Keep beating the drum!

#28 Zoronqueen on 02.10.09 at 12:30 am

New Homes in Edmonton–IMO they are not worth their value in today’s market for example this new house
is 635K another similar home in the same subdivision could be had for a listing price of 489K or less…

http://readyhomes.ca/view.aspx?specID=136
http://www.realtor.ca/propertyDetails.aspx?propertyId=7759601

Do you think it is worth 150K more just because the house is new? I don’t think so. In 2003, a similar house could be had for 250K and new 275K……
At peak a house in this subdivision would be 735K do you think a newer house would have been listed at 885?

I don’t think reality is sunk in with builders yet…..

#29 Jelly on 02.10.09 at 12:44 am

Chris in England,

You previously posted,
“I am amazed that the US allows its citizens to basically choose whether to pay their debts or not. So they choose to buy property which of course they hang onto for dear life when it goes up in value, but they “walk away” when the value goes down? This is completely wrong and they should be held responsible for their debts, not indulged like spoilt children who are tired of the game. No wonder so many went merrily into home ownership without a care – if there is no downside to it, why not!”

Yes, I would have to agree with you that the system does not work if people can just give up on their agreements and do not have tough repercussions to face. Of course everyone (banks and eventually tax payers pay the bill which obviously hurts the economy)
gets effected by all of the defaults if troubled times hit.
I remember watching a program on all the defaults and the interviewer asked the woman, “But did you not sign a legal agreement that you would pay for the house?
Is it not an acknowledged risk that you are taking when you purchase a house they go up or down?”
And her answer, ” Yes, I said I would pay it back, if it went UP not down!” like it was the most obvious thing in the world!
This struck me as pathetic and selfish as it is simply a cop out for another idiot that did not research the consequences and took on too much debt.
Again, just a spoiled mentality that is far too prevalent in today’s society.

#30 Jason on 02.10.09 at 1:08 am

Lindsey Williams is a crackpot who makes up tall tales about abiotic oil and the NWO. Much more rational individuals than he have called for hyperinflation after deflation (and that is the US dollar); and none of them came from their mysterious friend Senator ‘X’ and Congressman ‘Chance.’
Quit buying conspiracy theories, and realize that this is the result of profound mismanagement and incompetence and we can take more meaningful steps to try and mitigate the worst effects of the crisis.

#31 CS on 02.10.09 at 1:10 am

When all your cash only adds up to about 3 months of living expenses, how do you decide things like 1) keeping the cash or spending 1/3 of it on a generator 2) spending more of it on emergency supplies – add it all up and it’s hundreds of dollars – or not? We want to do it all, be as prepared as possible, but can’t because we don’t have enough time to save up that much money – I know lots of people don’t have the surplus of cash to buy all this stuff and wonder what they are choosing to do – what their number one purchases are going to be or have been to be prepared for the ‘just in case it comes to this…’ I could run thousands on credit cards and a line of credit to buy everything, but our mortgage is our only debt, all the cards and the LOC is at zero and we want it to stay that way. What we do have in our favour: country living/can grow food, lakes in our backyard practically and a canoe to go fishing, a woodstove and free wood for fuel – a modest mortgage that does not exceed 3 times our income. But then we look at generators, solar panels, the bad day box, the emergency meals, etc and the need for cash…and don’t know what to do next.

#32 TheComingDepression on 02.10.09 at 1:38 am

Just left a party with some restaurant owners in Yaletown. ALL the restaurants in Yaletown are on the verge of CLOSING. Most are just about bankrupt they said. From the front lines..in VANCOUVER

#33 Declan on 02.10.09 at 1:55 am

Well said. And needed.

#34 Sam on 02.10.09 at 2:11 am

Da hk kid,

>>The way we stop this downward spiral is to stop spending<<

If we stop spending how will the economy rebound or warm up ?

#35 North Vancouver Citizen Jr. on 02.10.09 at 4:37 am

2009 CITY BUDGET

Welfare costs muddy Toronto’s economic forecast
‘Sharply rising’ cases could cost city an extra $70-million

With Toronto homeowners facing a possible 4-per-cent property tax rise in today’s budget, a new report warns of “sharply rising” welfare case loads that could cost the city an extra $65-million to $70-million this year.

http://www.theglobeandmail.com/servlet/story/LAC.20090210.BUDGET10/TPStory/National

(…California is imploding, it’s counties are broke, has 5 million Mexican illegals and The California Prison system costs $5.7 billion dollars a year and housing over 161000 inmates.)

#10 Glen

…I’m on record for Vancouver scaling back, making it “Virtual” or even Cancelling the Vancouver Olympics and placing the $100 Million – $1 Billion security costs into new infrastructure…(would help grow Vancouver into the new Financial/Trade/Leisure capital of North Amerca.)

#36 Mike (authentic) on 02.10.09 at 5:10 am

I just saw on CNBC news ticker that the US taxpayer is on the hook for $9.7 Trillion for the bailout package so far.

$9.7 TRILLION DOLLARS plus annual interest! How long does it take to pay off that? What is Canada’s bailouts up to now?

…and this next $831 Billion dollar US stimulus package they will announced at 11am (CST) is supposed to be the magic bullet to cure the world? If $9.7 Trillion didn’t do it, will $831 Billion?

Who’s getting fat and rich on this money, it’s going somewhere.

Mike

#37 Jim Tuba on 02.10.09 at 6:26 am

Ok its the US and not accurate but its telling
http://money.cnn.com/POLLSERVER/results/44896.html

#38 David Bakody on 02.10.09 at 6:42 am

The first step towards recovery must be honesty.

1 North Vancouver Citizen Jr

Sorry to rain on your parade Sir/Madame but with senior boomers comes health care and in the US millions have lost everything in one visit …. that aside as is being mentioned more and more each day Seniors or about to be seniors are now tasked with looking after family …. which may include siblings. Add to this the open fact that should things ever get out of hand in the sunny south where do you think the vultures will strike first? Perhaps cooler heads may choose cooler safe places in Canada …. Many Canadians do not know this but their is a golf course here on the South Shore that is open year around ( albeit they close for some maintenance). It appears Harper knows about honesty because he just dropped his law suit when challenged to produce truthful evidence ….. we can only hope enough Canadians challenge him to produce the truth and be honest with the state of our economy. The MSM appears not to be up to the challenge. My request to Santa was to put some backbone in our journalist stockings but it appears they put it away with the Christmas decorations for next year …. I know it was delivered because Santa’s honesty has no need for questioning.

#39 Chris in England on 02.10.09 at 7:06 am

Canned Goods and Buckshot #5

Reading your post reminded me of Trevor Baylis, who invented a clockwork radio for use in Africa. I did a search and discovered the company he sold his inventions through is now called Freeplay Energy, and sells radios, torches, lanterns, etc. They are based in London but their products are available in Canada at various outlets (Mountain Equipment Co-op is one mentioned). They also have an online N. American catalogue. See here for their website. http://www.freeplayenergy.com/products

I had changed the country preference to “Canada” but whether that comes through in the link I don’t know. If not, it can be changed (black square top right).

These radios look good as they can be charged using solar power, wind-up, or external power sources. One at least has a built in flashlight as well.

Hope everyone finds this useful.

#40 David Bakody on 02.10.09 at 7:07 am

More news that is costly, very costly ….. in Canada the price of incarceration is $80-120,000 each per year and Harper and Co have been spouting tough on crime wanting to lock more people up and may start it again to sidetrack the economy.

CNN) — Federal judges tentatively ruled on Monday that California must reduce the number of inmates in its overcrowded prison system by up to 40 percent to stop a constitutional violation of prisoners’ rights.

http://www.cnn.com/2009/CRIME/02/10/california.prisons/index.html

There have been reports here in Canada of overcrowding also and lack of prison guards. But hey he has bunches of money for more guns for border cops. Wait! could he be thinking the unemployed may have to be policed as they flow across the borders looking for work as was the case in 1929-1930″s

This may not appear related …. but hard times produces many areas of concern ….. and that is what Garth is attempting to do ” Get all the cards on the table” we just might be able to deal with the unforeseen. The modern term is “Brainstorming” letting Harper & Co go off on yet another retreat will not save one job or care for one person in their time of need ……. hello MSM, do you not have family and friends? Off to Tim`s in Fall River and a visit to a local fishing boat store to shoot the breeze and buy some spark plugs and it`s money spent in Canada not the US.

#41 pbrasseur on 02.10.09 at 7:10 am

You are right Garth, sometimes reality appears more clearly through small signs than via big headlines and government statistics, as long as you have the ability to connect the dots.

For example last spring we had a sump pump installed, something a plumber can easily do in an hour. Yet it cost us $300 (not including the pump) to have that simple work done.

Now that’s easy money for someone who probably don’t even have his 10th grade (now wonder so many kids quit school…). And this is not a rarity, all these construction guys charge a fortune, otherwise how would they pay for these huge and shiny pickup trucks. Easy money from easy credit.

To me it’s clear, this is bubble money and it can’t last. This is what this crisis is about, bringing reality back in people’s live, sometimes painfully. And that goes for governments too…

#42 Chris in England on 02.10.09 at 7:22 am

ca #8:

““The minister stunned his audience at a Labour conference in Yorkshire by forecasting that times could be tougher than in the depression of the 1930s, when male unemployment in some cities reached 70 per cent. He also appeared to hint that the recession could play into the hands of the far right.”

Considering he is a total idiot, this is very surprising news!

As for hinting the recession could play into the hands of the far right, the translation of that is “We have totally ruined this country and now EVERYONE will realise it. Beware the far right, beware the far right … (please).

Gordon Brown (described by a TV presenter this week as a “one-eyed Scottish idiot”) was the Chancellor for the whole time Tony Bliar was PM. Ed Balls was his economic adviser. Together they sold off the UK’s gold reserve at rock bottom prices, encouraged the migration of call centres to third world countries, sold off our regional power and utility companies to foreign countries (who now hold us to ransom with inflated household utility bills) and generally presided over the escalating “feelgood” fiasco of spiralling house prices while turning the UK into a giant services provider that didn’t actually provide anything concrete or useful. Now they shake their heads in statesmanlike sorrow and pretend they didn’t see it coming – but for our own good we continue to stick with them and Keep Away from the Far Right!

NB: the TV presenter swiftly apologised for the “one-eyed” insult but did not withdraw the idiot comment.

#43 sail1 on 02.10.09 at 7:23 am

The West always leads the way.

Western Canada hit hardest by decline
B.C. and Alberta see swifter, sharper downturn than other provinces as housing slumps and bankruptcies soar

http://www.theglobeandmail.com/servlet/story/RTGAM.20090210.reconomy10/BNStory/crashandrecovery/home

#44 Chris in England on 02.10.09 at 8:16 am

Jelly #28:

“I remember watching a program on all the defaults and the interviewer asked the woman, “But did you not sign a legal agreement that you would pay for the house? Is it not an acknowledged risk that you are taking when you purchase a house they go up or down?” And her answer, ” Yes, I said I would pay it back, if it went UP not down!”

Haaa!! That is something to remember next time I sign a contract (pencil in that particular detail first).

#45 David on 02.10.09 at 8:23 am

The biggest financial bubble in Canadian history and the best Klump can posit is that there will be an overall price decline of 8% followed by stabilised house prices in 2010. How that magical 8% solution was derived is anyone’s guess and it is doubtful that any fundamental considerations were evaluated. Klump won’t face any serious repercussions for his bum advice. Watching BNN throw soft lobs at this housing bubblista was a waste of time.

#46 CJ on 02.10.09 at 8:33 am

hey everyone…i’m as concerned as the next guy but this blog is getting a little too dark. Lets put things into perspective, for the US, this recession is the 5th worse one in terms of job losses since WW2. So far job losses account for 2.2% of the total workforce, thats not even as bad as the 1981 recession. What is of particular interest is that job losses are advancing well infront of actual declines in output. Are employers putting the cart before the horse? How much responsibility does Bush/Obama have in this…using scare tactics to get thru huge stimulus packages? Prepare for the worst and hope for the best, but in the mean time put things into perspective.

I agree with you. We need perspective. Never before in US (or global) history have so many people been laid off so quickly, while 10 million others were in negative equity on their homes, or while foreclosures had hit historic highs, immediately after the failure of almost all major US invetsment banks, the loss of $6 trillion on the stock market, or a wave of toxic assets which forced countries as diverse as Britain, Iceland or China to rescue banks and pump unprecedented amounts of money into preventing an all-out economic collapse and a ruthless deflationary spiral. Yes, we need perspective. Get some. — Garth

#47 Calgary37 on 02.10.09 at 8:49 am

How to start up a Survivalist Community

This is for the benefit of “Chris in England” and any others who may be considering buying or selling a home and moving out into the country.

I assume that some of you still remember what an Urban Renewal Project is.

Well, about 4 years ago, I submitted a variety of proposals to Ralph Klein and Stephen Harper for consideration. One of these proposals could be called a Rural Renewal Project. A proposal that could breathe new life into a variety of Rural Communities across Canada.

What I am now going to lay out is a Modified Version of this Proposal that is geared to the needs of the Survivalist Community. This is just a rough outline with a minimum of details.

First, you have to start up a Country Club (Commune) and begin recruiting members for this private club. This means that there is list of rules and restrictions that prospective members must be willing and able to meet before they are accepted into this private club. Everyone has to be able to get along in this type of environment. Members then pay an initial fee and monthly dues until such time as the Club is up and running in it’s chosen site.

Second, you have to start up a business entity that would operate as a holding company. Members could also invest in this business entity. Persons who are not members of the Club could also invest in this business entity. This entity would start up some businesses from scratch and would invest in existing businesses that could meet the Club’s requirements.

To begin with, this entity would assist the start up and operation of the Commune. Later on, if time allows, it will expand its scope to a broader region.

Third, you look for some suitable sites that are far away from large urban communities, i.e. 200-300km away or one tank of gasoline. You could then try and find a farmer who would be willing to lease some of his land to use for growing a variety of vegetables and to provide a location for a large group of people to set up a modified camp ground facility. Alternatively, you might find a farmer who is willing to sell his farm in order to retire. A stable source of water is very important. This Commune would begin with a variety of temporary and mobile shelters since you may not have the time to build more permanent structures.

Alternatively, you could find a small village or town that would be willing to cooperate with you in setting up a Survivalist Community in cooperation with the villagers and farmers living in the region.

The initial project will be to grow and process as many vegetables as possible and to process industrial hemp. To that end, you will approach other farmers in the region to see who would be willing to grow industrial hemp and to cooperate in some of your other endeavors.

You will also attempt to find the most feasible method for making alcohol/ethanol at this location to use as fuel for your vehicles. If processing hemp is not initially feasible, then you may have to use corn or grain.

Prior to moving out to this Country Club location, members of the Club could meet in their urban setting to learn survival techniques and to learn how to use a variety of firearms.

Some members might be able to move out to the location immediately and spend most of their time helping to build up the site. Meanwhile, most of you would be hanging on to your city jobs until it becomes necessary to relocate out to the site.

Anyone who has $50,000 or more in the bank should be able to handle the cost of this project. Anyone who has some good business ideas or skills might be inclined to invest a large amount into the business entity. The business entity would share some of its profits with the Country Club, while the investors would share the rest, if time and circumstances allow.

It is possible to have one Country Club with one or more sites in a region. It is also possible to have Country Clubs spread across Canada. However, for the sake of efficiency, I would recommend only one business entity (holding company) with branch offices where necessary. However, you would have to plan for a time when communication becomes difficult or impossible.

This is just a bare outline with many more details to be filled in when a serious proposal begins to be formulated. As I said before, this is about one year too late for what we are expecting. However, if there are any activist Survivalists out there who are ready and willing to be very aggressive in pursuing this type of project, then you might be able to get something off the ground so that you can at least plant and harvest a large crop of vegetables this year.

However, you will have to get the necessary legal procedures done so that you can begin raising funds from potential members and investors. That also means setting the Rules of Engagement that you will be operating under.

If Garth were so inclined, he might be in a position to begin recruiting members for his version of the Halton Country Club.

Think it over. What does the future really hold for us?

My personal time line markers points are January 1, 2013, January 1, 2010 and July 1, 2009. Until then, all that I can see is uncertainty.

Power to the People. Let the Revolution Begin.

#48 JamesT on 02.10.09 at 8:50 am

@Mike #19
“Surely things are not THAT bad. Most of “Canada” is not Manila or Shenzen or Detroit.”

I’ll bet the people of Detroit, during the 1960’s, made a similar claim when comparing most of Detroit to New York City in the 1930’s. Surely things could never be THAT bad.

#49 Ron on 02.10.09 at 8:57 am

I have been wondering:

Can the origin of this bubble be traced back to one specific moment in time and space?

Is it possible to follow the paper trail back to the precise moment that the seed was planted, to the place where credit was loosened?

What I really want to pin point is; who (individual or group) is responsible? Where do they reside? and Why are they not being held accountable? I never really hear this discussed. Maybe it’s not possible at all. I suppose that thieves of the highest caliber are often adept at leaving no trace.

From what I have read I understand that the expansion/contraction of credit and the manipulation of interest rates are the means by which populations are essentially enriched or enslaved, but I am not entirely certain of who exactly was complicit in starting this mess.

Was it the Fed? The Fed in cahoots with the US government? or All central banks and Western governments? Someone else altogether?
It seems that all governments are in the same mess and are all opting for the same deranged solutions.

Who started the ball rolling?

Any suggestions would be very helpful and much appreciated.

The most immediate catalyst was September 11, 2001. The path from there is documented in my book, ‘After the Crash.’ — Garth

#50 Rhino on 02.10.09 at 9:02 am

Garth…

A little puzzled by the tone of your argument,but I do agree on the general concept of government involvement.

Your comments about wages and prices made me wonder if you support a return to the “wage and price controls” of the ’80 Liberals. While they were pointed at inflation, would not this work for companies preying on workers also?

I wonder…

No controls for this boy. You can’t dictate wages to stay high without destroying jobs. — Garth

#51 PTDBD on 02.10.09 at 9:06 am

Politicians and economic clerics should be in the backrooms and offices formulating rational, honest policies to achieve a smooth, steady, economy.

Instead, we see a constant Bozo parade of them piling out of the TV into our living rooms. They blare their horns and flash their theories as they try to convince the taxpayer rubes that dollars are not being jammed into bulging, elite pockets.

Fed fantasy money buys Treasury created debt in an amazing pocket pool, slight-of-hand, everlasting unproductive stimulation confidence game.

Every week we get market intervention. The trillions are going somewhere, but it is evident that it certainly isn’t going to the people.

#52 Reg on 02.10.09 at 9:12 am

CS…

If you have neighbors nearby, maybe form some type of agreement. You grow and supply food, and they supply a generated power etc. Might not be feasible where you are, but was just a thought.

#53 North Vancouver Citizen Jr. on 02.10.09 at 9:17 am

“”Last week’s deep job loss numbers will not change the Bank of Canada’s forecast for a robust recovery next year, Governor Mark Carney says.

The bank expects the Canadian economy to grow by 3.8 per cent in 2010 – a forecast that seems incredibly optimistic compared to projections from the private sector and International Monetary Fund, but one that Mr. Carney defended.

Though seemingly impressive when viewed from the depths of a recession, such a recovery is actually more muted than usual,” he said.””

http://www.theglobeandmail.com/servlet/story/RTGAM.20090210.wboc0210/BNStory/Business

#54 Rhino on 02.10.09 at 9:21 am

The Globe and Mail published a very logical article here:

Western Canada hit hardest by decline
B.C. and Alberta see swifter, sharper downturn than other provinces as housing slumps and bankruptcies soar

http://www.theglobeandmail.com/servlet/story/RTGAM.20090210.reconomy10/BNStory/crashandrecovery/home

HOWEVER, what is most disturbing, is reading the comments.

For the past couple of years, the blogsphere has been populated by apparent Westerners – largely Albertans – telling Easterners “It is now our turn”, in a closed minded argument. Many advocating separation to get rid of the “eastern whiners and welfare socialist bums”. Many really dumping on Quebec, and support of the French culture. Very divisive.

Now, it looks like easterners, seemingly Ontario folks in particular, are attacking westerners, Albertans in particular, almost gloating at the destruction the boom collapse is bringing about.

Stir in a little promotion of Quebec separatism by the subPrime Minister, alienation of Newfoundland with subsequent retaliation, and we are living in dangerous times as a nation.

From my seat, much has been caused by an obsession with POWER – both financial and political. The concept of pulling together seems to have dissolved into “I want more toys than you”.

Add to that, comments here advocating the frontier mentality of “git me a gun”, and go hide in the wilderness, has me truly wondering if Canadians have returned to the tree tops. Ooops! I forgot, even chimps have a mutually supportive society!!!

I have long been a supporter of socialism. This posting implies that a socialist approach is what is needed to pull us out of this disaster – and I agree. However… will we return to the “I’m o.k. – too bad you are not”? Will the majority of Canadians wake up and realize that Canada is not a region, it is an amalgam of people pulling toward a common vision of freedom, equality, and fairness? A place where we understand that pulling together, combining resources, and helping our neighbours makes us all stronger?

I begin to have serious doubts.

#55 Skeptic on 02.10.09 at 9:21 am

#39 David Bakody wrote:
More news that is costly, very costly ….. in Canada the price of incarceration is $80-120,000 each per year and Harper and Co have been spouting tough on crime wanting to lock more people up and may start it again to sidetrack the economy.

What kind of a liberal idiot must one be to write such nonsense? Harper wanting to “sidetrack” the economy by “locking” people up? Sure, let’s stimulate the economy by releasing all the criminals at large. I already feel safer and richer. Moron!

#56 RimmyJ on 02.10.09 at 9:30 am

Garth: I agree with everything you have to say except for your comment that ” This is the nightmare scenario, unless arrested by government”. Unfortunately, government meddling usually makes a bad situation worse. No amount of government money (our money) will solve this problem. The excesses of the past twenty or more years have to be unwound.

For anyone , like myself, who was willing to study the history of financial bubbles, this is absolutely unfolding as I expected. I have tried to warn family, friends and even strangers over the past fifteen years but only a handful would even bother to listen. Most just thought I was nuts. People are going to be shocked by what lies ahead. I would say that in ten to fifteen years we may be able to start to put the pieces back together again. I know, I’ve been called a nut before. And as Garth says,” capitalism is unwinding”.

#57 Rhino on 02.10.09 at 9:34 am

Garth said re: wage and price controls:

“No controls for this boy. You can’t dictate wages to stay high without destroying jobs. — Garth”

(smile)

I do agree, which is why I was puzzled by your tone.

However, it seems the “new American demi-god”, is beginning to put caps on salaries of Wall Street execs in return for $$$$$.

Think about the amount of jobs saved, if CEO’s had to give up their multi-million (billion?) salaries. Heck, just $1m could support 20 jobs at $50k. Yet, the ones dropping off workers are the ones who do not really “produce anything”, and they keep their jobs, while production gets dumped. A similar argument could be made as to the impact on pricing again.

I work with small companies since leaving the corporate world. In EVERY case, owners actually take significant pay cuts to keep their people. They recognise, that if you only have 3-10 really productive people, you cannot afford to let them go. The direct opposite to the way corporate management work.

Ah… but I forget… Corporations have no feeling. Decisions makers are insulated from their people, and are not forced to see the faces of those let go. That job, personally experienced, goes to middle or even lower management. Meanwhile, the execs go home in their limos and private jets, and forget their problems.

Gawd, I am tired of the corporate cliche “Our people are our strength”, and similar.

#58 Paul Fist In Your Face on 02.10.09 at 9:37 am

China monthly auto sales overtake U.S. for 1st time

http://www.cbc.ca/money/story/2009/02/10/china-autos.html

Headline from CBC.ca this morning.

If you havent been paying attention, now would be a good time.

#59 Rhino on 02.10.09 at 9:43 am

#53 North Vancouver Citizen Jr. on 02.10.09 at 9:17 am

One thing to consider about economy growth prediction of 3.8%…

What is the BASELINE? After all, if our economy shrinks drastically like it is now, the baseline drops, so a bad year followed by a limited growth year could show impressive numbers year-over-year, but still leave us well behind “last year”.

This is the game our political leaders have been playing almost forever. Unemployment stats look better once the “discouraged workers” drop off the EI rolls, and head for welfare. “Job growth” of 10,000 pales in comparison with 100,000 lost the previous year, but our political reps conveniently forget that when boasting about job creation.

The list goes on. Cynical? Somewhat. Realist? Definitely.

#60 Mike B formerly just Mike on 02.10.09 at 9:56 am

As one local radio station has their “tool of the day” award we Canadians should have our “fool of the day”
My vote is for Mark Carney. Surely he is on some sort of illegal suppository … Now he is defending his optimistic bent. Really other than his Harvard degree and years spent making millions for himself and Goldman what does he bring to the table. One moment he says we should be aware that it will be a difficult year .. the next he claims that we should see a recovery soon.
What is he in his position for? To change our banking system here … so that it can be exposed to his buds down at Goldman ?? Who knows why these theoretical folks ever take a public service job even if he make almost 500K per year.

#61 Another Albertan on 02.10.09 at 10:03 am

@22,

Josh, I am sorry that your friends didn’t get the news, but Firebag’s “closure” isn’t “sudden”. There has been information on the street for over 3 months about radical scaling back of #3. For at least 6 of those 12 weeks, just about every constructor and fabrication shop knew about Suncor’s proposed shutdown schedule. The only more recent development was the acceleration of the timeline from April to about March 1.
If they didn’t get this through the grapevine, I am not sure what to tell you.

As for re-tendering, I would expect something along the following timeline to occur with all projects… so at best:

Owners re-evaluate economics and issue bid packages – June
Summer lull and responses – finished by mid-September
Evaluation and contract award – mid-November
Preparation – over the winter
Work to Re-start – Spring 2010

It will make for a long 14 months for some people…

#62 Ron on 02.10.09 at 10:07 am

Thank you for your response Garth. I will definitely read your book as I have a great deal of respect for your opinions and ideas.

I am astonished by the level of need and greed prevalent in the world today. A life based on self indulgence is disgusting.

Note to the people:
Do me a favor, once you’ve gathered enough loot and bobbles to live out several lifetimes in supreme luxury give it a rest.

#63 kc on 02.10.09 at 10:12 am

In case anyone wanted to read Obama’s speech from last night.

Transcript of Obama’s Speech in Elkhart Indian
http://www.marketoracle.co.uk/Article8783.html

#64 Straw Bale Guy on 02.10.09 at 10:23 am

#47 Calgary37

It sounds like you are describing an intentional community.

http://www.ic.org/

Small communities of self reliant people working TOGETHER will be part of the solution to surviving the next depression.

#65 Tevan on 02.10.09 at 10:30 am

#57 Rhino, I agree.

Perhaps abolishing Payroll taxes would ‘stimulate’ employment.

What say??

#66 Colin on 02.10.09 at 10:35 am

As a Maritimer who relocated to Calgary close to three years go, I have observed a couple of highly prevalent traits in the citizens of my adopted home…

Arrogance and greed. You said it best Garth, people want STUFF and lots of it.

The degree to which many Calgarians, from all economic backgrounds, charge forward into the house buying abyss has shocked me since I got off the plane.

Part of growing up in Nova Scotia, for better or worse, is knowing that hard times may be just around the corner.

Not so here, denial reigns supreme, still.

#67 CalgaryRocks on 02.10.09 at 10:47 am

#47 Calgary37

I have a problem with authority so living in a small community where your life is constantly directed by ‘wise old men’ is not for me. I can’t even live in a condo because I can’t stand the people on the condo association.

I’d rather live free and associate myself to like minded people as needed rather than willingly surrender to the will of others.

#68 Sail1 on 02.10.09 at 10:56 am

#62 Ron

Note to the people:
Do me a favor, once you’ve gathered enough loot and bobbles to live out several lifetimes in supreme luxury give it a rest.

Ron, you must be very religious, or have not excepted the nature of most of mankind. Reflect on history, it is the only mirror.

#69 Ruhh on 02.10.09 at 11:04 am

Garth,

The following article is unrelated besides the very last line.
http://www.cbc.ca/world/story/2009/02/10/china-canada.html

You should send him a book! Maybe he should stick to smuggling. Tell him to send more Solar PVCs.

#70 HalifaxFamily on 02.10.09 at 11:04 am

Russia is on the verge of defaulting on their debt. I have no idea how this is going to affect things. Long Term Capital Management, here we go again.

#71 pbrasseur on 02.10.09 at 11:05 am

@ CJ (#46)

Well done, as you can see you have struck a nerve there ;) justifiably so!

Indeed many numbers used by the medias (and Garth)are absolute numbers wich are statistically meaningless. They make for great headlines though.

So far, relatively speaking, this recession is bad but not as bad as 1982 (not to mention we are starting from higher up). I suspect in the end it will be comparable to 1982, which is bad enough.

Tell that to the people without jobs. Stop being callous. This is not the time. — Garth

#72 Popeye the sailor man on 02.10.09 at 11:19 am

“SUB-PRIME MINISTER”

LOVE it hope this term catches on, and I voted for him, but what choice did I have? Lesser Evil.

#73 Dana M on 02.10.09 at 11:20 am

Chris in England and Jelly

I disagree with your opinion regarding the moral responsibilities of people who sign a mortgage contract. It takes two parties to sign that contract, and the banks know that a person (in the majority of the states, and a few Canadian provinces) can walk away from a negative equity position. That, in the past, has been a primary reason for requiring a significant down payment, good credit history, and low debt load. Something that the banks stopped requiring because they got greedy and thought there was no risk or they could make someone else bear the risk.

Businesses and corporations sign non recourse loan agreements frequently, and if things don’t work out as planned by one party they stop making payments and hand over the asset. The counterparty is expected to have understood the risk and consequences when they agree to it.

So if we have no moral compunction against corporations walking away from a bad agreement (or filing bankruptcy) why do we need to claim that a home owner (who may have poor education, inadequate representation when signing the contract, or just greedy themselves) has a moral responsiblity to damage their, and their families, financial health by continuing to make payments on a bad investment when the law gives them the option of mailing back the keys.

#74 David Bakody on 02.10.09 at 11:23 am

As mentioned many things will change …. word from the local barber shops is less kids in for haircuts …. many may not remember the ode soup bowl Saturday mornings at the kitchen table ….. somethings never change. Another one of those jobs that will never appear on the front pages.

#75 Dave99 on 02.10.09 at 11:30 am

http://network.nationalpost.com/np/blogs/fpposted/archive/2009/02/10/household-debt-much-better-than-u-s-scotia.aspx

I am fascinated when I read this sort of report, and see how they present a misleading snapshot of statistics to prove a point.

They refer to the debt-to-asset ratio of US & Canada at 27% and 19% respectably, and conclude that the Canadian consumer is far less indebted than an American counterpart.

However, they don’t discuss the effect that the “2 year lag” in the real estate correction could have upon the Canadian consumer’s asset base.

Consider that residential real estate represent 40-50% of the average Canadian’s assets.

And consider the disproportionate effect on the net of mortgage value of that asset of a 20% drop in the gross price…

From some back of napkin calculations, it looks like a 20% drop, would raise our ratio from 19% right up to side by side with the American’s.

Further, the report talks about the differences in the present debt-to-asset ratios, but doesn’t talk about the similarity in the debt-to-annual disposable income (both in the 120-130% range).

Anyway, an entertaining read.

#76 K on 02.10.09 at 11:34 am

#10 Glenn…According to G. Campbell the Olympics are a go. He seems to think that showcasing B.C. to the world on T.V. means everyone will come here and invest. He is also talking that this will be prepare us for the NEW economy in 2010. I believe he is spending to much time with M.Carney. They both need to go and have a psychiatric evaluation.

#77 North Vancouver Citizen Jr. on 02.10.09 at 11:39 am

…Important repost from last blog…

(Denninger may have figured it out.

…Pundits now arguing about it on CNBC can’t see it.
This angle by Bernanke is protecting the U.S. banking system while foreign financial systems keep falling into the dumper)

-The Real Issue With “Bad Assets”-(Fed Part II)-

http://market-ticker.denninger.net/

“”Ever wonder why everyone is so hellbent and determined to find a way to do a “Bad Bank”?

It is about recognition of losses and who takes them.

Under the law The Fed’s profits and losses are Treasury’s…and The Fed wants it on Treasury’s book.

…take the cash flow for as long as you possibly can.

Bernanke has relied on his “exigent circumstance” clause to be able to lend not only to his member banks under ordinary monetary operations but also to damn near anyone and anything else so long as “unusual and exigent circumstances” exist.

If that clause ever becomes inoperative he will be forced to disgorge those “assets” back into the market.””

#78 kc on 02.10.09 at 11:51 am

The Obama honeymoon must be over on the markets today… or the Obama bounce has hit troubles… I know it is only half way through the day, however, it is interesting how 1 speech can effect the markets. The great ponzi decline ’09 has begun (save for a miracle)

any thougths garth?

#79 North Vancouver Citizen Jr. on 02.10.09 at 12:26 pm

70 HalifaxFamily

“”Russia is on the verge of defaulting on their debt. I have no idea how this is going to affect things.””

Yesterday, a British Minister admitted Britain is already in a 1930’s Depression.

…Post #78 Kenninger suggests that in order to protect the US financial system with his delay tactics, Bernanke keeps bankrupting the rest of the world first… (and if that doesn’t work…. look for Armed Conflicts will be the next answer.)

Of course, certain Armed Conflicts may be inevitable, regardless.

“”Barak: More Iranian ships bound for Gaza””

http://www.debka.com/index1.php

#80 CM on 02.10.09 at 12:32 pm

Whatever Obama said (sorry, Bill in Muskoka (NAM)), the U.S. doesn’t seem to want to prosecute the crooks or wind down its expensive wars. They’re putting the foxes in charge of the hen house.

Joe Biden was poking Iran in the eye with sticks the other day at the European security conference.

Neither does Canada. McKay asked for even more money the other day for the debacle in Afghanistan.

This is OUR money. We need it.

We need to build local networks for food, fuel and other basic needs, like emergency medical and nursing care. No more dumping on municipalities. No more wasteful entertainment projects. Secure the necessities. Help each other. Don’t gut schools and hospitals.

Apart from that, I don’t have a clue how (or if) we’ll get through this. The Harper budget was too little, too late. And he’s still a “stay the course” guy, even a cliff awaits at the end.

Here’s an excellent article on the bailout state. It’s about the U.S., but it’ll be about us to.

http://www.tomdispatch.com/post/175032/steve_fraser_locked_into_the_bailout_state

Times like this remind me of Stevie Smith’s poem:

“Nobody heard him, the dead man,
But still he lay moaning:
I was much further out than you thought
And not waving but drowning….”

#81 Calgary37 on 02.10.09 at 12:41 pm

#64 Straw Bale Guy on 02.10.09 at 10:23 am said:

“It sounds like you are describing an intentional community.”
***********

Thanks for the link. I was not aware of this Organisation, but by definition my Modified Version would fall into one of their categories.

My original version was meant be implemented by a Government Agency. It would have attracted a wider range of people, but with a minimal number of restrictions.

*********************
#67 CalgaryRocks on 02.10.09 at 10:47 am said:

“I’d rather live free and associate myself to like minded people as needed rather than willingly surrender to the will of others.”
*****************

Don’t give up hope yet.

No doubt these Communes would require someone who would be willing to function as a “Lone Scout”. This would allow you and your trusted companion to spend most of the time outside the stockade. Then when TSHTF, you will have a safe place to hole up in. Start working on your resume. Perhaps, you have some skills and experience that could also be used in the start up phase. Nothing ventured, nothing gained. Be prepared.

This could turn out to be your best investment so far.

***************

Power to the People. Let the Revolution Begin.

#82 Keith in Calgary on 02.10.09 at 12:42 pm

For those of you talking about the “bad bank” proposal remember than in the late 80’s the US had the RTC (Resolution Trust Corp)…..basically a bad bank.

#83 Bill-Muskoka (NAM) on 02.10.09 at 12:43 pm

#67 CalgaryRocks on 02.10.09 at 10:47 am

Tell that BS to the Emerg Team, or better yet, do not even bother them. You obviously don’t need anyone. So I won’t bother trying to hand you any clues about reality.

#84 Bill-Muskoka (NAM) on 02.10.09 at 12:54 pm

#83 CM on 02.10.09 at 12:32 pm

I understand why you would say that, but I listened to President Obama’s news conference myself last night. What he said was, in effect, ‘We have more urgent matters than chasing after the criminals. However, they are being pursued, but not as our top priority. The economy is.’

I think that is wise. Right now the focus must be on the economic recovery, and that will require bi-partisanship cooperation. Actually, he gave the former administration and the Congress Hell for their failure to act.

Were I the President I would take the same course and not do a Canuckf–k like our Bozos have been doing for the past three long years. Talk about Nero fiddling while Rome burns? Sheesh! Oddawahaha is so engrossed in annihilation of the other political parties that anything even akin to progress for Canadians is a mere error on their part.

No, President Obama knows what is crucial and also knows the potential criminal charges will not evapourate. Besides, I like the idea of watching the former morons sweat. While they need the Axe, I would not give it to them…not yet. ;-)

Have a good day.

#85 Soylent Green is People on 02.10.09 at 1:00 pm

My fav. line from GT’s book:

“What terrorists could not do to America, Americans did to the world.”

I was thinking as I read the line: “Americans did to themselves”.

Just finished “After the Crash”. I found it very valuable resource, easy to read, one of those you can’t put down even though it’s time for bed. All the questions I had while I went through this blog have now been answered satisfactorily. I will not be selling my stocks.

Actually I was very worried since last fall about the state of the US empire and it’s fall and effect on Canada. Funny though, now I feel better after reading the Crash book, I realize I’m in the best place I can be in right now.

I have been living on cash since 1999, mostly debt. free since 2004. I have been telling people about the housing market crash for a long time. I felt no one wanted to listen to me. I was always wondering, what on earth is taking so long for this crash to happen. I had no idea of the level of fraud going on.

It took me years to find blogs where I could learn the truth, could never understand why is it so hard to figure out if it’s a good or bad time to buy real estate by reading the newspaper, confused me more and I never knew why, I just thought I was stupid. Was blessed to discover housing doom blog (there’s a Canadian named John who posts there) after a long fruitless search before finding this blog last fall.

And what a relief it was. Wish I had found it earlier, I might have gotten out of the stock market last spring. A little voice in my head last April 2008 said, sell your stocks, I went online to research the subject, couldn’t find any definitive answers, I’m no financial wizard, if my broker and his crack ace team didn’t think there’s a problem when that’s all they do all day, what’s a little unemployed, uneducated divorced mother like me to think?

It is nice to come here and feel that I’m not alone in all this. My family and b/f think of me as a very negative person ;) All I do is predict doom and gloom and tell people to buy bottled water. Nobody wants to hear any of this. My b/f’s eyes just glaze over when I tried to get him to go to CT yesterday to pick up some k. lamps, but I did nag him into buying some extra canned goods at grocery time. These people really have no ‘effing idea what’s coming down the pike.

I moved my bit of cash out of online banking, thanks to the book, I’m starting today to withdraw more cash, I’ve always taken money out just once a month because I refuse to pay for extra banking transactions, but I would like to have more than one month’s supply. I never let my gas tank drop below half full. I have loads of canned and dry goods and paper products on hand. I have towers of Cashmere toilet paper in a closet, all bought on sale at No Frills over the last five years. There’s nothing like getting the skunk eye from a teenaged boy as you walk around with 3 double packages of t.p. under your arm :) Being frugal means being brave, going against the sheep, and having a thick skin ;)

I agree with an earlier poster who was prepared up to a point but worried re not having the funds to stock up on generators and expensive solar equipment. Don’t worry about it too much, you can only do what you can do right now. I would not go into debt. to buy a generator, too risky for someone like me. Just being out of debt. puts you far ahead of the pack.

I feel like all those years of scraping by in frugality have not been for naught. Here lies the queen of Value Village and craigslist. My family looked askance at my refusal to buy real estate (the high temple of success in our family), why are you throwing your money away on rent, ha ha, not losing my shirt in real estate, thanks ANYWAY
– my g/f’s husband, why don’t you get a new car, you’re driving a piece of crap, HA HA, paid off crap my friend ;)
– my mother’s horror at my wearing the same winter coat for five years, ha ha, I got it on sale ;)

I have been snubbed at my son’s school by a couple of rich living mothers probably b/c I have long hair (I refuse to pay money to get it cut), my car is not shiny new and sexy, my lifestyle is low-key, let the kids play in the backyard in the snow versus go to the local Cineplex and blow a hundred bucks (I get all our movies from the library). I can see it in their eyes this is a real turn off for an SUV swerving, bored out of her skull, lets all go out for dinner, cell phone talking, mofo’s lololo. Though to be honest, if I had a husband with money, and he bought me an SUV, I might drive it… NO, I would have demanded a hybrid. I would rather throw myself in front of an SUV than drive one.

I nagged my b/f until he sold his giant house in the Annex in Toronto last year. He sold it exactly 7 months after I wanted him to sell it, nobody tells him what to do God damn it, Mr. Stubborn lost probably over 100 or 200 k by not selling Nov07 when I was bugging him non-stop to sell. Thank God, he did finally sell just as things were falling over the cliff, June 2008. Then I emotionally manipulated him into buying a small 2br crappy (needs work) house in/on the fringe of a wealthy Toronto neighbourhood near a bus. The backyard gets scads of sunshine ;) It’s not that far from the lake which according to the Long Emergency will soon be Ontario’s new water-based Hwy. 400.

Thank you for all the great advice. I’m worried about what the future will bring but I know I’m better prepared than most.

Btw, I’m impressed and inspired with GT’s work output: moderating the blogs, writing books, marketing, tours, infrequent titillation; I’m completely overwhelmed just doing laundry and dinner and homework and my nails. Wha? Your wife and ten dogs must be writing some of this for you.

Going out to look for a phone booth in my neighbourhood, is there such things anymore?

#86 Bill-Muskoka (NAM) on 02.10.09 at 1:02 pm

#81 kc on 02.10.09 at 11:51 am

The markets are not smart enough to grasp that their heyday is OVER. They do not respond to the President’s speech because they discount him, and anyone associated with changing their game plan. It is a somewhat silent battle that few recognize.

The changes will come regardless because President Obama and the Congress are going to cut them off, especially the overpaid execs.

Ever try to rehab an addict? The BS goes on and on, until they hit rock bottom and then wish they had a Clapper because ‘Help! I can’t get up!’ No clapper for these miscreants. Just the Tolling of the Bell, and I do not mean the one rung at the end of the day in the NYSE.

The Grand Casino is closing DOWN for major remodeling!

#87 Rasputin on 02.10.09 at 1:05 pm

The Sub Prime Minister is a good tag but not for Harper. More like for Great Britain’s Prime Minister. The IMF is already quietly dotting the “i”s and crossing the “T”s for when GB declares bankruptcy. My little bird tells me it’s a done deal by the end of March. Do with this what you will…

#88 CalgaryRocks on 02.10.09 at 1:09 pm

#84 bill,

Isolationism in a commune is not a long term solution. Plus it limits the gene pool and makes for funny looking kids.

#89 rory on 02.10.09 at 1:14 pm

Hey all… just got this in my email … it fits as to where we are and were we need to go…

This was sent to me this morning. Listen to the end as you will lose the impact of the words. If you want the words in hard copy they are below.

http://www.youtube.com/watch?v=42E2fAWM6rA

Lost Generation by Jonathan Reed
I am part of a lost generation
and I refuse to believe that
I can change the world
I realize this may be a shock but
“Happiness comes from within.”
is a lie, and
“Money will make me happy.”
So in 30 years I will tell my children
they are not the most important thing in my life
My employer will know that
I have my priorities straight because
work
is more important than
family
I tell you this
Once upon a time
Families stayed together
but this will not be true in my era
This is a quick fix society
Experts tell me
30 years from now, I will be celebrating the 10th anniversary of my divorce
I do not concede that
I will live in a country of my own making
In the future
Environmental destruction will be the norm
No longer can it be said that
My peers and I care about this earth
It will be evident that
My generation is apathetic and lethargic
It is foolish to presume that
There is hope.
And all of this will come true unless we choose to reverse it .
Read the message, then read it again in reverse.
Which generation do you belong in?

#90 David Bakody on 02.10.09 at 1:15 pm

#77 K on 02.10.09 at 11:34 am

The 2010 Olympics is going to be the largest recorded loss in it’s history ….. what we are paying for the RCMP to live the good life would feed and house an army for starters!

#91 kc on 02.10.09 at 1:20 pm

#89 Bill,

no kidding…. how quick we forget thou, think back 2 years, all canadian banks reported record breaking profits. how much you want to bet that all those “profits” and bonuses were just the great “debt” paper shuffle that we are watching unfold infront of our eyes today?

I suspect a major bank run sometime this year (guessing) summer, in canada.

#92 go green on 02.10.09 at 1:23 pm

Chis in England – from yesterday’s post.

“Just because fat cat bankers try and throw money at us doesn’t mean we are obliged to take it. Every week I receive credit cards, pre-approved cheques and invitations to take out loans in the post (they stopped for a while at the end of last year, but the loan invitations and cards have started coming again), but guess what? I just throw them away. I don’t say “Look! I can buy XYZ now” and rush off to do it without thinking of the conseqences.

Just think – if all those who said “yes please” to ridiculous mortgage debt in the first place had instead said “no thank you”, we might not be discussing this on here at all!

So, while I sympathise with the undoubted fact that the bankers will win and win (winning still with their bail-outs and here in the UK they are back to paying themselves bonuses with our money!) it doesn’t mean I condone people walking away from debts they willingly assumed in the first place in order to emulate the results of those bankers.”

Agree wholeheartedly. For many years we were inundated with weekly invitations from every bank offering credit cards. Last year I started filling their ‘postage paid’ return envelopes with as much junk mail as I could fill their envelopes so that they’ have to pay extra postage. I know many others who’ve done the same. I’ve noticed in recent months the decrease in their invites. Now, we’re receiving an increase in RE fliers.

We bought our current home in ’91 & paid it off in 7 years. Used an old DOS program to calculate our savings. No mtg burning party. Just a night out at a good restaurant to celebrate.

BTW, used to watch all those British/US/Cdn. programmes on our HGTV channel & was flabbergasted what prices people were willing to pay for a ‘roof over their heads’.

#93 Gregg on 02.10.09 at 1:28 pm

Garth,

As an expat Canadian living in the US (with US citizenship and US wife), where do you think is the best place to live to prosper in the unfolding economic storm, Canada or the US? I ask this assuming Schiff and Ron Paul is right and we’ll see hyperinflation and all the rest of it (in the US at least) with the expected passage of the Obama stimulus bill.

If things really do go south, I do expect Martial law and other nastiness.. but in your opinion, will Canada make similar same choices?

I’m almost surprised the idea of the US selling off territory to pay off debt hasn’t come up.. after all, historically, it’s been done many times by many nations.

#94 WakeUp on 02.10.09 at 1:31 pm

My house has gone up 100% in value from when I bought it.

Tell me something, why should I care if it drops 50% in value?

Now it’s 50% more valuable, on its way to no gain, perhaps? I think I’d care. — Garth

#95 Rhino on 02.10.09 at 1:34 pm

#65 Tevan on 02.10.09 at 10:30 am

(smile)…

About payroll taxes, remember, I am a declared socialist. That means tax the rich greater than the poor. Put the tax to work creating a utopian society, where everyone is well enough to live without poverty, and those who excel are rewarded.

Consider the real sources of crime: poverty, greed, ambition for power.

Anyhoo, thanks for the chuckle!

#96 PTDBD on 02.10.09 at 1:41 pm

@Bill-M, may I must humbly suggest that you are hearing what you want to hear and disregarding the rest.

There has been no change. No overpaid execs have been cut off. Yet another Trillion has been announced today. They want private bettors to make the banks whole, and they will finance their limited risk with leveraged taxpayer money.

Bill, it goes on. Just as it always was. But now the velocity is exponential. :-( going forward :-(

#97 TheComingDepression on 02.10.09 at 1:43 pm

This economist was once the highest paid in the US during the 80-90’s. He has predicted with precision all the crashes since the 80’s including 911. He is stating that will will be in a depression for 23-26 YEARS. The Government cannot stop it. He is stating that the DOW will drop in the 4000’s. He is NOT a psychic! He uses a system that the government has taken from him, he is imprisoned and told to keep quiet. Read it yourself and research him:
http://thecomingdepression.blogspot.com/2009/02/this-depression-will-last-23-26-years.html

#98 Rhino on 02.10.09 at 1:45 pm

#74 David Bakody on 02.10.09 at 11:23 am

“(snip)word from the local barber shops is less kids in for haircuts …. many may not remember the ode soup bowl Saturday mornings at the kitchen table …..(snip)”

Got a good laugh from that one sir! One real advantage of losing your hair, and the new shorter styles, is you can get away with a “sheep shearing kit” and almost anyone can create an acceptable cut. My wife has saved me hundreds; no, thousands over the past 10 years or so.

So, families with short incomes are probably slapping down the $45-80 for a kit, which repays in 6-8 months – or less – of haircuts. Now… if our economy was PROSPERING….

Bang on about these poor people feeling the hurt, and probably never to be listed as “unemployed”, since they are independent.

I wonder if the Canadian Barber Association (if there is one), paid $$$$$ to Nissan for their latest advertising, where the guy says “… and you cut your own hair. THAT is CHEAP!”

Is is just me, or Montreal, or are most barbers Italian? Almost all of mine were…….. ;-)

#99 go green on 02.10.09 at 1:47 pm

#74 David Bakody on 02.10.09 at 11:23 am ” As mentioned many things will change …. word from the local barber shops is less kids in for haircuts …. many may not remember the ode soup bowl Saturday mornings at the kitchen table ….. somethings never change. Another one of those jobs that will never appear on the front pages.”

David – agree – we don’t hear about all those little changes. My husband’s father cut his hair – not with a bowel (though many did) but with clippers, IIRC. I’ve been cutting my DH’s hair for about 24 years (actually first mo. I met him.) He must have had a lot of confidence in me – LOL. Not a hairdresser BTW. Finally bought one of those clipper sets at Costco several years back. Wow – takes me 10 minutes as opposed to 30 mins with scissors. He likes his hair short!. I’m 61 & have only been to a hairdresser about 5X in my life – prefer the way I cut & manage it. Used to do many of my friends’ & family ‘s hair for years – gratis.

#100 go green on 02.10.09 at 1:58 pm

89 Bill-Muskoka (NAM) on 02.10.09 at 1:02 pm

Bill – While I’m very pleased with the outcome of the US election, I personally believe, based on your many posts, that you are being overly optimistic about Obama’s stimulus/recovery plan. I do appreciate his honesty about how bad their economic situation is, as opposed to our delusional govt.’s stance over these past months, especially Flaherty, Stevie & Carney.

#101 PTDBD on 02.10.09 at 2:02 pm

Accountability

A trillion here, a trillion there….so how much exactly is a trillion? Senator Mitch McConnell says: “If you started the day Jesus Christ was born and spent $1 million every day since then, you still wouldn’t have a trillion.”

So, any math mavens out there? How long will it take to pay off the 10 Trillion thrown at this problem? No wonder they want interest rates at 0%.

#102 North Vancouver Citizen Jr. on 02.10.09 at 2:07 pm

1/
“”GM cuts 10,000 salaried jobs, trims employees’ pay.

No Buyout Or Early Retirement Packages

GM salaried employees who had a buyout offer but did not take it are out of luck. Such offers have been removed.””

…What happens to Canadian GM’ers?

2/

#85 Keith in Calgary

“”in the late 80’s the US had the RTC (Resolution Trust Corp)…..basically a bad bank.””

…Bernanke is hoping/figuring only after the other world economies hit rock bottom, he makes his next move…resets the toxic assets.

#103 Mark on 02.10.09 at 2:10 pm

Lots of engineers who graduated in 2000 and beyond, especially in Electrical Engineering, who previously would have worked with firms such as Nortel, haven’t been able to find jobs since, and are amongst the chronically unemployed or underemployed. Our best and brightest minds have been in a state of atropy fo the past decade, merely because the people who have been at the helm of the economy have felt that real estate price ‘growth’ is more important than building a sustainable economy.

Garth is absolutely right, this nonsense must end, and the sooner, the better.

#104 Bill-Muskoka (NAM) on 02.10.09 at 2:16 pm

#88 Soylent Green is People on 02.10.09 at 1:00 pm

Unless you have a BIG RED ‘S’ on your chest I suggest a cell phone. Besides, the newer phone booths are really hard to climb up into. LOL

#105 Canned Goods and Buckshot on 02.10.09 at 2:32 pm

CS

Making priorities is very specific to your circumstances. Base them on food, water, shelter and fuel. If you have a wood burning stove, it may be likely you don’t need a generator. I bought a generator mainly for my fridge, freezer and the fan for my gas furnace (in case of brownout or blackout during the dead of a cold snap – I don’t have a wood burning stove or gas insert). Since you have a back up heat source, I would focus on other things beside the big item generator.

Other posters have already suggested building up a pantry. You can do it over the course of a few weeks. Its best to re-stock your pantry as you use things rather than store a supply of food in a corner of your basement that will eventually expire or go off.

Water is pretty cheap. I keep 2 x 2 L bottles of unscented bleach just in case we consume the water I’ve stored and need to treat an untrustworthy source.

Make sure you have matches, candles, a crank radio, an extra can opener and a stash of personal hygeine products. The lists of things can get pretty large, but many households have a lot of these items scattered somewhere in their home. Do a personal inventory of what your needs are in your part of the country.

Chris in England

Thanks for the link!

#106 Greg W., Oakville on 02.10.09 at 2:50 pm

Hi #79 Derrin on 02.10.09 at 11:44 am

Garth here is one for you that shows the obvious difference between the USA banks and the Canadian banks.
We don’t need 1.5 Trillion dollars do we now?
http://news.bbc.co.uk/2/hi/business/7880969.stm

The Canadian government has already extended the equivalent of $750 billion to our banks. — Garth

FYI:
I just thought it would be interesting to see the amounts per-person for each.
(I think I did the math correctly? Feel free to correct if not.)

($750billion, I assume in Canadian dollars)
$750,000,000,000
current estimate 2009 canadian population
33,549,000 persons (33.5million)
That’s ~$22,355 for each Canadian.

($1.5 Trillion dollars, I assume in USA dallars)
$1,500,000,000,000
Current estimate 2009 USA population
305,782,000 persons (305.7million)
That’s ~$4,905 for each person in USA.

$22,355/$4,905=~4.55 times more per-person.

And then the amounts above get added to all the debt, (Gross external debt) borrowed credit, each country has already, at all government levels, and personal, private company debt. I’m sure it’s a BIG number.

And we keep being feed that we have the strongest banking system of the G20 countries???

Just keep the printing presses going and all will be fine!?

#107 Alberta Thrasher on 02.10.09 at 2:53 pm

Would anyone care to comment on the state of Alberta?
I walked through an Edmonton mall the other day and counted 8-10 new stores opening. Yuppie steak house-chains are still packed on weekday nights and 18 year old kids continue to power through the streets in enormous brand-new trucks.
Houses have come down a bit, but a glorified dog house is still being listed for $350,000. Real estate mouthpieces are still trying to shovel the public the idea that ‘the housing market is bound to go up, January is always the slow month, blah blah BS’
There is still plenty of arrogance in oil town, with people believing the west will survive the storm.
Are we playing the fiddle as Canada burns?

#108 Kettle...Pot Calling on 02.10.09 at 3:04 pm

Greg W – not that I agree with the notion that Canadian banks have been bailed out, but the amount of the asset swaps with the BoC was $75 billion. Garth was saying that if you scaled it up by a factor of 10 to make it “US equivalent” terms, it would be 750. So, based on your population numbers, the ratio would be 0.455x, not 4.55x.

#109 Got A Watch on 02.10.09 at 3:12 pm

Garth, well said…but I agree with #56 Rimmy J above.

The Government cannot fix the problem, they ARE the problem.

It takes Government intervention to turn a normal recession (just the business cycle turning) into a full blown Depression.

This is what all Governments manufacture on a competitive basis – disasters.

More debt cannot bail out the overly indebted.

Transparency needs to be enforced, full mark to market every night – just like my trading portfolio. I don’t get to use the miracle of Level 2 and Level 3 Accounting.

If Banks are insolvent, the Swedish Model should be applied. Shareholders lose, bondholders lose, management gets fired – Government guarantees retail deposits. New Banks are formed, and the toxic assets of the old ones are sold off over time.

The USA may get to this solution, one day, after all other alternatives have been exhausted, of course.

#110 Loki on 02.10.09 at 3:17 pm

@#110

The Canadian bailout was ‘only’ $75 billion (see Garth’s note above). You’ll need to rework those figures a little :)

It’s more around $2,200 per person in Canada – half the amount of the US.

The Canadian bank bailout was $75 billion. The US bank bailout (TARP) was $700 billion. They have 304 million people. We have 33 million. That’s $2,300 per American and $2,272 per Canadian. — Garth

#111 Bill-Muskoka (NAM) on 02.10.09 at 3:19 pm

#104 go green on 02.10.09 at 1:58 pm

It is not President Obama’s stimulus plan I am excited about. Rather, it is President Obama’s straight forward talk, integrity, and the wisdom and willingness to change Washington and get Congress working for the good of the people in cooperation with the Executive Branch.

BTW, he does not have a plan unto himself. THE plan is based on working together to solve the problem within the proper means of respect, bi-partisanship, and integrity with Congress. He merely set the priorities and Congress wrote the plan. The President, unlike our self-annointed Caesar Disgustus, does not have the Constitutional power to dictate the law. That is Congress’ job. President Obama is leading, not playing petty dictator by providing incentives and guidance to resolve the problem he inherited. Canada should try it some day. It is called LEADERSHIP!

Unlike the in-fighting morons we keep sending to Oddawahaha who only achievments are wasting OUR money on childish attack ads, and unfulfilled promises about how OUR money will be spent.

This, while painful, is the best thing that has happened to the U.S. since FDR. The reality check was decades overdue, and was allowed to go on and on because of spineless warmongering morons who refused to grasp reality for their own people.

#112 go green on 02.10.09 at 3:36 pm

#88 Soylent Green is People on 02.10.09 at 1:00 pm My fav. line from GT’s book:

“What terrorists could not do to America, Americans did to the world.”

I was thinking as I read the line: “Americans did to themselves”.

Just finished “After the Crash”. I found it very valuable resource, easy to read, one of those you can’t put down even though it’s time for bed. All the questions I had while I went through this blog have now been answered satisfactorily. I will not be selling my stocks.

…………….

We got into the market in 98 in MF. Put in a set amount & then monthly. When I retired 7 yrs ago I rec’d a ‘long term service award’ which, to avoid taxes, dumped into MF’s. Last fall, too late, we went into ‘very conservative’ funds. I estimate we’ve lost at least 40% of our initial investments. I know others who’ve cashed in. We didn’t. At least for the next 10 yrs., or more, we don’t need these investments to live. I’ve an indexed pension & my DH (IT) has a pretty secure job with our municipality. But, today he popped in for a bite to eat at noon. Hi ‘big’ boss had sent 5 questions to all the Supervisors asking if their techs were busy, did he let his immediate boss know where he was at all times during the day, etc. Can’t recall the other 3 questions. My DH responded honestly but was apprenhensive about ‘why’ the questionnaire. My first thought was ‘ they are looking to downsize’ & said so. Was more thinking about some of the techs who have not performed but are almost impossible to get rid of. My DH’s job is not in jeopardy as his ‘big’ boss said he did much more than his job requirements. I know ’cause he’s been spending nights & weekends developing software pgms. which will save many $K for his school board & potentially other boards in our prov. He was not asked to do this. It was mostly a personal challenge, learning new software, for efficiency sake, & migrating data from one platform to another. He won’t earn extra, but has stipulated that his board cannot offer it to other boards without crediting him. He’s looking to the future when he’s eligible to retire in 7 or 8 yrs.

Sorry for my long post. I’m not really qualified to comment on whether the stimulus program will succeed or not. I’m just a ‘middle class’ person who is trying to remain one.

#113 Bill-Muskoka (NAM) on 02.10.09 at 3:37 pm

#105 PTDBD on 02.10.09 at 2:02 pm

So, any math mavens out there? How long will it take to pay off the 10 Trillion thrown at this problem? No wonder they want interest rates at 0%.

They have gotten so used to talking about such huge sums that they, like the drug addict that intended to only ‘try’ a little coke’ can no longer relate to the figures.

I saw the Senator’s comparisons and he was right on the money (all puns intended). No one can even begin to emotionally comprehend a million, much less a billion, and that puts a trillion into the realm of String Theory.

The human mind simply cannot emotionally grasp such figures. they are math used to define numbers by powers of ten. The math works, but there is no way people can comprehend the scale.

Here is an example. The exposure level for lead (if I recall correctly) is 30 ug/M3 (micro grams (millionths of a gram) per cubic metre). I once actually weighed that out on a very precise lab scale. It is the equivalent of a sharp pencil point on a piece of paper made with a light touch.

We have been brainwashed into accepting such figures without any relevant scale for decades. Same goes with using percentages. People talk the talk, but are clueless what the terms really mean.

Here is one last example most can relate to. You think you understand what a million of something is? Okay you all know about how long a kilometre is as you drive them all the time, but now comprehend that it is 1 million millimetres. That is 1 thousand metres which each contain 1,000 millimetres.

I used to teach my VoTec students this economics lesson. ‘You want to possess something. Calculate the cost by dividing it by your hourly rate of pay after taxes preferably. Then ask yourself this question Am I willing to permanently sacrifice that many hours from my life to actually possess a thing that I will either get tired of or will become obsolete?’ Probably the greatest lesson I could have given them.

#114 Chris in NL on 02.10.09 at 3:39 pm

#42 Chris in England

Jeremy Clarkson is my hero for that comment….

#115 ALAN on 02.10.09 at 3:53 pm

3% OF US DOLLARS are printed and circulated. The
remaining 97% is starting to vanish in insolvent
Banks . The Rat Race for the 3% has started.

GOT CASH…

#116 Mel Eager on 02.10.09 at 3:53 pm

So, more BOC rate cuts on the horizon:

http://www.thestar.com/business/article/585160

Mortgage renewal question:

Most banks now are offering Prime + 0.80 VIRM’s

That means 3.80% to me.

If we follow Garth’s advice and go variable, do you folks think the banks will offer a different rate than Prime + 0.80?

Or will they decrease or increase the 0.80 if the bank’s prime goes down even further?

Thanks,

Mel.

#117 MikeB on 02.10.09 at 3:53 pm

Again Dudes do not worry about Canada .. keep your eye on the big dog THE USA.. The plan gets passed and the stock market tanks big time. WHY?? Because even those monkeys know that if you keep picking at a scab you eventually get blood. Disaster in the making .
Garth is right on re our bailout in relation to our population makes it HUGE. Useless and Huge..
Watch how the US is reacting to this package as they are the big dog and we are the fleas on that big dog.
Big Dog sick.,.. fleas …soon to be dead

read the fine print on this US stimulus ala bailout.
The private sector will get a shot at sopping up the bad debt with no downside as the govt will backstop them.
If there is an upside the hedge fund guys… yes the a-holes that make billions of dollars every year… will get all of this profit..

http://finance.yahoo.com/tech-ticker/article/172617/Geithner-Unveils-New-Bank-Bailout-Devil's-in-the-Details-(Really)?tickers=%5Edji,%5Egspc,XLF,FAZ,SKF,C,BAC

#118 Mark on 02.10.09 at 3:55 pm

To Derrin.

It seems you have a fairly poor grasp of high school math. Quote:

“That would mean that we are throwing half of what the Americans are throwing at their problem and none of our banks have collapsed. I think there is a difference.”

Now this might be a bit hard for you to grasp.. but America has 10 times our population..

We’ve spent just as much per person as the Americans.. But unlike them, we’ve had no news coverage, no media at all on it.. We didnt even have a vote on it!

(mainly because the government were hiding for 2 months to avoid being ousted)

#119 Darryl on 02.10.09 at 3:56 pm

# 110 . Greg
It’s 75 billion in Canada as per Garths statement bellow.

“I said the $75 billion in Canada for our banks was equivalent to $750 billion for the US financials. And the last budget increased that. This is the biggest bailout – by far – in Canadian history. If our banks are the most stable in the world, why? — Garth”

That would leave Canadians at about $2500.00 each by your calculations. Any one want my wife and kids so that I can free up $7500.00 :)

#120 Matt Stiles on 02.10.09 at 3:56 pm

“This is the nightmare scenario, unless arrested by government”

Garth, you should know better. There is nothing government can do to “arrest” the economy. All government can do is provide assurance that the rule of law will be followed and that the general security of citizens will be protected. Anything else attempted will only be a failure of price fixing – which will prolong the depression.

Prices need to fall to levels where those with savings can buy the assets with the prospect of turning them into profitable enterprises. The sooner that happens, the larger the pool of savings will be and therefore the higher the price. If it is prolonged, savings will be wasted, and prices will have to fall further to reflect them.

Let it happen. It will be terrible; but shorter. Like ripping off a band-aid.

futronomics.blogspot.com

#121 North Vancouver Citizen Jr. on 02.10.09 at 4:21 pm

#122 MikeB

“”keep your eye on the big dog THE USA.. The plan gets passed and the stock market tanks big time. WHY??””

…Many stock investors are selling and putting that cash in US currency.

Our Loonie dropped near 2 cents today.

…Compared to the rest of the world, the U.S. Dollar continues to be the place to park investment dollars….for now.

#122 Carole AB on 02.10.09 at 4:30 pm

http://www.silverbearcafe.com:80/private/01.09/unsoldcars.html

Here are some visuals of all the unsold cars piling up around the world.

#123 go green on 02.10.09 at 4:48 pm

88 Soylent Green is People on 02.10.09 at 1:00 pm

“It took me years to find blogs where I could learn the truth, could never understand why is it so problem when that’s all they do all day, what’s a little unemployed, uneducated divorced mother like me to think?”
………..

Well, based on what you’ve said I don’t think you’re uneducated. Rather, I think you, and perhaps the majority of Canadians, have just struggled to get by. And, I don’t recall having been offered a basic course in Money 101 or Civics 101.

……….

“but I did nag him into buying some extra canned goods at grocery time. These people really have no ‘effing idea what’s coming down the pike.”
……..

While I’m not as pessimistic as some on this blog, I have refrained from discussing the economic situation with most as they don’t want to hear about it.
…….

We’ve had a home safe for several years & have taken other actions. We went without electrcity, etc. for 7 days & made preparations thereafter but should do more. BTW, haven’t paid banking fees for 30+ years.

“I have loads of canned and dry goods and paper products on hand. I have towers of Cashmere toilet paper in a closet, all bought on sale at No Frills over the last five years.”

I too buy in bulk when things are on sale. Easier to do when one has no debts & sees a bargain.
….

“I feel like all those years of scraping by in frugality have not been for naught. Here lies the queen of Value Village and craigslist.”

I haven’t always been what what one could call frugal. I loved shopping in boutiques years ago – paying high prices for ‘quality’ clothes. But, they were classics, I wore them for many years & always felt good in them. No regrets.

I buy few clothes today as I’m retired & wear Value Village & Frenchie’s (around the house and for gardening). Heck, my DH doesn’t even notice what I look like. But, when I go out, even to a grocery store, you won’t catch me wearing a jogging suit.

And, I don’t have a cell phone!

#124 Dave on 02.10.09 at 4:53 pm

The Canadian bank bailout was $75 billion. The US bank bailout (TARP) was $700 billion. They have 304 million people. We have 33 million. That’s $2,300 per American and $2,272 per Canadian. — Garth
———————————————————

how many times does this guy have to state this? 10X the population along with 10X the bailout money means equal distribution. Whay are people questioning/misunderstanding this?

#125 TheComingDepression on 02.10.09 at 4:59 pm

#128 I have had that info including the video for over a month on my blog. I also have the photos of the workers from Dubai leaving their cars at the airport and leaving the country. Thousands of immigrants have left and stopped making payments on everything. You people may not know this but Dubai was built on an 80 BILLION dollar credit card supplied by the DRUG CARTEL. Everything built on Drug Money, including the bailouts of MANY countries.

#126 Future Expatriate on 02.10.09 at 5:03 pm

I hate to say it but:

There will be no recovery; there will be no honesty; there will be greater and more overt fascism; different faces; same failed policies; same drugged-by-primetime and sports mindless populace.

Luckily, the combined land area of Canada and the US is too large for complete total control.

Keep your nose clean, don’t break laws, don’t stockpile an arsenal or hang with people who do, and you won’t invite the flamethrowing bulldozers out to prove a point.

#127 Bill-Muskoka (NAM) on 02.10.09 at 5:05 pm

#129 go green on 02.10.09 at 4:48 pm

Maybe this will help DH notice you? LOL

The Black Bra

I had lunch with 2 of my unmarried friends.

One is engaged, one is a mistress, and of course I have been married for 20+ years.
We were chatting about our relationships and decided to amaze our men by wearing a black leather bra, stiletto heels and a mask over our eyes. We agreed to meet in a few days to exchange notes. Here’s how it all went.

My engaged friend:
The other night my boyfriend came over and found me with a black leather bodice, tall stilettos and a mask.

He saw me and said, you are the woman of my dreams. I love you.’
Then we made love all night long.

The mistress:
Me too! The other night I met my lover at his office and I was wearing the leather bodice, heels and mask over my eyes and a raincoat. When I opened the raincoat he didn’t say a word, but we had wild sex all night.

Then I had to share my story:
When my husband came home I was wearing the leather bodice, black stockings, stilettos and a mask over my eyes.

As soon as he came in the door and saw me he said, “What’s for dinner, Batman?”

#128 if you don't like it on 02.10.09 at 5:12 pm

41 pbrasseur
Most plumbers I know are smarter than most office workers and probably make more than you do

#129 Another Albertan on 02.10.09 at 5:16 pm

The following economists and prognosticators have all used the 10x correction factors between the economic per-capita size of Canada and the US in their publications and transcripts within the past 3 months:

Gary Shilling (publisher of the Insight newsletter and who has essentially been wholly correct in his predictions for nearly the past 3 years, and who has called just about every recession back to the early 70’s)

Donald Coxe (ex-BMO Harris Bank strategist)

Dennis Gartman (publisher of the Gartman Letter and pundit often found on CNBC)

All three live in and publish out of the United States. Shilling and Gartman are Americans. Coxe is a Canadian and worked for the American subsidiary of a Canadian bank (he is now on his own).

Everyone else’s mileage may vary on how they want to compare unemployment rates, bank bailout rates, etc, etc.

#130 Jeff Smith on 02.10.09 at 5:23 pm

That’s right. Canada does not have debt problems like our neighbours to the south. No sireee!

http://www.thestar.com/Business/article/585024

#131 if you don't like it on 02.10.09 at 5:24 pm

I feel that we did bring this upon ourselves, now we have to live with it. As someone from Calgary I can say there is a lot of greed in this city.

I work for a small business and noticed an increase of middle aged men that come into the shop whining about how slow it is, while in the parking lot there sits their 7 series BMW. No wonder they are worried about it getting slower, their lease payment on their car is probably more than I pay for my mortgage! I have no sympathy for these kinds of people. Most of the time they are underworked and overpaid.

Some of the smaller businesses that we deal with have gone under but it was mostly because they shouldn’t have been in business and made many dumb moves. For example buying a new shiny truck for their construction company before they even got a business number.

We bought our townhouse while everyone was buying big houses. They all said something how we could have afforded more and should have got a bigger place. I am quite comfy in my 1400 sq. ft townhouse where my mortgage is $800 a month and their mortgages are $1800 plus.

Congrats to all those that are looking at all their options and relizing that the next while will be tough, but most of us will make it.

#132 HalifaxFamily on 02.10.09 at 5:50 pm

http://www.theglobeandmail.com/servlet/story/LAC.20090210.YANISA10/TPStory/National

This was very sad.

#133 David on 02.10.09 at 5:51 pm

The Canadian bankers bailout was a nice furtive operation carried out by Harper & Co. to avoid facing voter opprobrium. I am positive that the level of public disapproval for these kinds of policy bailout measures are very high and would not pass the smell test with voters had there been any level of public discourse on the subject. Pretty amazing that there was $75 billion plus in government coffers to clean up the banks balance sheets buying assets of dubious value at best.
Undoubtedly, the banks will make more trips to the public well in the not so distant future rest assured. Maybe Mr. Harper and Mr. Flaherty can find it in their kind hearts to also bail out the credit card and insurance industry in the near future. Tough love measures will only apply to the thousands of Canadians losing their full time jobs every week. The bailout ensures that 100% of the Canadian population can now live the dream of home ownership through mortgage indebtedness.

#134 Bill-Muskoka (NAM) on 02.10.09 at 5:53 pm

#83 CM on 02.10.09 at 12:32 pm

FYI. Here is an interesting article I googled using ‘Where is Dick Cheney?’ on what may well happen to the former Bush administration.

The People vs. Dick Cheney

I find Rumsfeld’s failure to be able to define the word ‘accountability’ almost as pathetic as Harper’s.

#135 john on 02.10.09 at 5:58 pm

What a sad situation our country is in and getting worse daily.The Harper government doesn’t seem to have any plan at all…just following every move the US makes and driving our country into huge debt …all the money Harper and Obama can borrow will not change anything (money gone in the wind) nothing for the future just pumping money into old business practices that got us in this mess in the first place. Nothing sustainable,a population facing poverty and a Government driving us so deep in debt nothing will be left when we start losing our necessary services and we will.Recovery will come eventually to some wise enough to invest in future energy and technology that is there but not exploited on a large scale.We will be a country in poverty facing huge taxes a debt ridden government…we will be sitting back at the bottom of the heap watching other countries start to prosper taking whatever scraps they throw us.As the foreclosed houses continue to multiply and jobs keep disappearing the houses will end up vandalized shacks going to the highest bidder to try and raise enough capital to carry on. Imagine if out government took that bailout money and invested it in something people want and need worldwide how different our future would look and the jobs it would create….and a future. They have only one shot at it and they are blowing it big time……..

#136 Jelly on 02.10.09 at 6:06 pm

Has anyone noticed a shockingly low intelligence when calling and dealing with people at credit card companies and businesses? Have they let go of all the competent people to save on wages? WTH?
I called to get a credit card sent out for my husband yesterday and the woman needed me to repeat 8 TIMES how to spell the name,…. wait for it….
STEPHEN. She was NOT a person that was English as a Second Language, she was born in the US and had extreme difficulties with the spelling of any common names. I felt like I was in the Twilight Zone since it is so sad to think that people out there know so little about Grade 5 level things. I spoke with 3 different people from the same company and it was if I were speaking a different language, they did not get the most simple of requests. They really had no common sense to speak of.
It reminded me of the woman on the show, Are you Smarter than a Fifth Grader and she thought that EUROPE was a COUNTRY! She had NO sense of shame at all about being so thick, she tried to come across like it was really cute or something.
It boggles my mind because I just think about how much Americans (and I am sure a lot of Canadians too?) do not know or care about the World, Politics, Geography, simple Math, etc. etc. and it just makes me scared that we are supposed to compete with Chinese and Indian students that work all day on their studies and have exceptional knowledge about so many subject areas.
How the hell are we (US especially) supposed to compete in technological jobs when we have these silly boys and girls that are lazy- frankly and just care about celebrity junk instead of getting an education?
It makes me freaked out about the future,
when an adult does not know a triangle has 3 sides (you come across these people sometimes) and they are not disabled but just do not care, this is such a shame.
I blame the US school system because they are obviously failing their children since they want them to be ignorant so they do not cause any trouble for them.
I realise that I am generalizing a bit, I am aware that there are many intelligent Americans out there but I challenge anyone to tell me the US test scores and education are excellent as a whole when compared to the rest of the world. The US is capable of so much more! Their government have really let them down.

#137 Anonymous on 02.10.09 at 6:10 pm

http://www.dailykos.com/storyonly/2009/2/9/234340/6189/142/695504

#138 hmm.. on 02.10.09 at 6:24 pm

Believe what you want. The fact is we have just spent, per capita, an identical amount as the United States to prop up our banks. — Garth

does this mean that canadian banks are in such deep kaka as the american banks,with a year or two lag.??

#139 go green on 02.10.09 at 6:25 pm

#134 Bill-Muskoka (NAM) on 02.10.09 at 5:05 pm

As soon as he came in the door and saw me he said, “What’s for dinner, Batman?”

LOL – Just about sums it up..

For a laugh see the following re the stimulis program.

http://www.youtube.com/v/dEDIyztZGBA

#140 Flounder Digest on 02.10.09 at 6:26 pm

Thank you Rhino (#54) for your defense of the importance of respectful discussion of the eastern section of “Detroit North”: i. e., Quebec. You voiced something that has bugged me for a few weeks in my daily read of this site. (But I figured “Don’t sweat the small stuff.”) If there exists a Canada today, a significant factor has been, and continues to be, the necessities attendant upon compromise for the accommodation of Quebec. Perhaps, among other things, these necessities have created, on the whole, a more cautious form of expression of opinion than among our American counterparts, eh? Quite conceivably, if the English speaking power holders, through their control of railroad ticket prices, had not systematically insured that 8 million Quebecois, immigrated to the US North East and subsequently intregrated to the anglo-American culture (e.g., Jack Kerouac, On the Road) rather than to the prairies, the “two solitudes” could have been averted and a more uniformly distinctive Canadian character would have emerged.

Furthermore your courage to use the s-word (i. e., “socialism”) is refreshingly politically incorrect. The assumption that socialism is necessarily unproductive is refuted most obviously by the industrial output of Sweden. Post-Vietnam, my generation observed a shocking brainwashing of our children into a neo-con world-view via the US media. When was this? During the presidency of the B-movie actor who fingered so many Hollywood actors and directors when he was president of the screen actor’s guild in the late forties: Ronnie Reagan (see Recasting America). Oh he new the power of the media! Stallone and Schwarzneger movies, I believe, lead the way, with Dallas and Dynasty on the boob tube. This I would suggest may have been a significant conditioning factor in the emergence of the mentality a previous commentator characterized as follows: “Like many of his peers, he seems to be trapped in a consumption orgy – where success is measured by how impressive your house, furnishings, cars, and clothes are compared to your friends (#19)”

Thanks to #63 for providing a link to Obama’s recent speech in Indiana. It provided an illuminating alternative to the (downright excessive) TV nightly news coverage of Republican senators’ crying boondoggle.

#141 North Vancouver Citizen Jr. on 02.10.09 at 6:27 pm

#134 Bill-Muskoka (NAM)

…””leather bodice, black stockings, stilettos and a mask over my eyes”””

My Dad laughed but he thinks your joke might be racist.

#142 john on 02.10.09 at 6:29 pm

143 Jelly on 02.10.09 at 6:06 pm Has anyone noticed a shockingly low intelligence when calling and dealing with people at credit card companies and businesses?
<<<<<<<< wow isn’t that the truth! Our educational system is a joke,a large percentage of people with university degrees couldn’t do the most basic of arithmetic without their calculator.

#143 ThumbsUp on 02.10.09 at 6:52 pm

#143 Jelly on 02.10.09 at 6:06 pm

Good point

Lead by the government’s promotion of ‘home ownership’, lots of people believe they can make a fortune just by taking out a mortgage and retire on rental property cash flow, who would care about education and test score.

The US has shown us what hapens when people believe RE is the ‘best’ investment of all.

All the investment are in RE, nobody invest in long term productive sector, and that’s exactly why we’re losing jobs to the rest of the world, it’s structural damage and it’ll be very hard and take decades to recover.

Business & job competition will be fierce, the cities/regions/counties with the deepest and fastest crash will attract new investment first and recover first, those slow ones may never recover – simply because they are too late.

I think that’s why some believe all these bailout will not work and in fact do the opposite

#144 john on 02.10.09 at 6:58 pm

What caused the problems we are facing??….a simple answer..stupidity….the banks thought it would go on forever (with no reason in their wildest imagination to come to that conclusion)…….the oil companies thought they could more than double the cost of their product make enormous profits and it would go on forever (while manufacturing and every homeowner scrambled to survive the high energy costs)……The auto plants built huge expensive gas guzzling boats …(thinking the average canadian could somehow? afford them and even operate them)……….and last but not least we have a Government in power who never even seen it coming and denied it when it was in their face, ……and they are going to now make it all better? (oh yeah..thanks but no thanks). Why they even put several of our countries corporate billionaires on the tab to advise them………( no conflict of interest there now is there :-) )…..Well that pretty much sums up the future in my opinion……..anybody got any squirrel recipes?…………i hear its 3 months before a pokey cheque :-)

#145 Medic on 02.10.09 at 7:02 pm

Any thoughts on the following idea? I am going to begin plotting the number of comments for each of Garth’s columns and use this as some sort of contrarian indicator. Once the number of comments starts to consistently trend lower, I will take this as a sign that things are starting to improve (I haven’t worked out the specifics of any of this yet). Right now, the idea is just general. Or would such an indicator be a lagging indicator? Hell, I don’t know.

Actually less than a fraction fo 1% of the people coming here post comments. — Garth

#146 kc on 02.10.09 at 7:03 pm

Jelly, It isn’t just you that meets these feelings head on. We all do. You need to remember thou that our society has been dumby-downed for the last 20 years it is the way it is. Students know that as long as they show up for at least half the classes they pass. when homer simpson is man of the year you know we have major problems is society. It is called being sheep. the Government wants it this way. if they cared they would spend more on schools than on football stars. Rome fell when the people were more interested in popcorn and circuses than real life. get used to it it is the way the world is going.

and I will bet you were actually talking to a person over seas.

#147 Bottoms_Up on 02.10.09 at 7:48 pm

There is no conspiracy. Governments around the world are doing the best they can. Let’s try and make this world a better place by volunteering solutions rather than damning decisions and actions made by our politicians.

By the way, Garth in ‘After the Crash’ you discuss killing off debt. Do you include car leases in this? (i.e. would you accelerate payments in order to get out of the lease sooner, or to buy it outright sooner?) Thanks.

Rent depreciating assets. Buy appreciating ones. — Garth

#148 Bottoms_Up on 02.10.09 at 7:57 pm

I found this interesting. Federal judges pissed they won’t be making $300,000 by 2012:

http://www.ottawacitizen.com/Hefty+raises+unlikely+Canada+federal+judges/1274994/story.html

“Justice Pierre Dalphond, president of the Canadian Superior Court Judges Association, told Canwest News Service three months ago that denying them the recommended increase not only would be an affront to judicial independence, but that including judges in public-sector restraint “would be coming very close to politicization” of the judicial remuneration process.”

#149 Rhino on 02.10.09 at 8:02 pm

108 Mark on 02.10.09 at 2:10 pm

“Lots of engineers who graduated in 2000 and beyond, especially in Electrical Engineering, who previously would have worked with firms such as Nortel, haven’t been able to find jobs since, and are amongst the chronically unemployed or underemployed. Our best and brightest minds have been in a state of atropy fo the past decade, merely because the people who have been at the helm of the economy have felt that real estate price ‘growth’ is more important than building a sustainable economy.”

Mark, you have hit on something that folks pushing a commodity economy completely forget. As you may imply, we believed the political pundits who said all Canada had to do was become a “knowledge society”, and globalisation, the switch to a service economy, and movement away from, manufacturing would be painless.

NOT!

Canada desperately needs to rebuild manufacturing to find employment of our well educated grads, and to prosper in the new world tech.

As an ex-Nortel manager, I can tell you there are many skilled and talented engineers who worked on leading edge technology, who are now starting new careers as this “Canadian (?)” company moves the R&D to India and China. One friend with 15+ years in fiber optics is working a call center for Telus. My Bro’-in-law watched the IT department at Kraft move to India. The list goes on and on.

In the 90’s, I worked growing a Cont Ed industrial department for a local community college. The government put MILLIONS into re-training people in new tech. Things like internet tech, networking, programming, biotech, etc., etc. A couple of weeks ago, I met a graduate who has to do piece work in tech support and is lucky to make $25k per year.

So, instead of preparing our workers for the new economy, we trained them for jobs that were the next in line to go overseas. After all, modern telecom makes remote working a snap!

This whole thing of job retraining is grossly misrepresented and overstated. Many people CANNOT make the adjustment. Many others just use these programs to extend EI benefits. The rate of success is extremely poor, even though we placed about 90%+ in internship jobs. Problem there? Simple – the government gave company subsidy for hiring an intern, and once the full job was supposed to materialize, the positions would just disappear! Heck, we had companies where we sent interns year after year, and they almost NEVER kept any on full time – which reduced their labour costs with taxpayer dollars!

Retraining is a tool, and should be used, but when I hear politicians touting retraining as a key component to solve the problems, I gag.

If you do not provide the economy that provides the jobs, every dollar spent on retraining does NOTHING except provide financing for our already underfunded educational institutions. Believe it! I lived the inside story.

So, Canada now has the best educated welfare “bums” – no slight intended – in the world! Quite an accomplishment.

#150 dekethegeek on 02.10.09 at 8:26 pm

#135 If You Dont Like It;
Good point about #42 pbrasseur’s comment on Tradespeople not having a University education are the idiots that buy everything on credit(big trucks, etc.)
…Well sir, the next time your sump pump goes, and you want to save the $300.00 labour.
a) Drive to the hardware store and buy a new pump or the replacement parts.
b)Get all your tools ready for the repair.
c) Pull the old pump out of the sump if you can, or rent a pump to pump out the pit while your fixing it.
d) Climb into the pit and get dirty. Get on your hands and knees in the muck and clean the sediment out of the bottom of the pit.
e) Wire up the new pump and make sure you don’t electrocute yourself(the plumber has to pay WCB insurance and E.I. payments and CPP so that he’s covered in case of injury) since you probably dont have home insurance that will cover you in this situation.
f) Dump the mud out somewhere in your yard thats safe.
g)Take the rental pump back to Rona Revy.
h) Pretend your a plumber and do all the related paperwork invoicing, receipts, GST calculations, etc. Because you never know when Revenue Canuckda may come calling.
See how easy it is? All that in 1 hour ! Damn your good!
And you saved yourself $300.00. Sweet !
Good for you, didnt have to give any money to that grubby, grade 10 educated bumpkin.

#151 ThumbsUp on 02.10.09 at 8:36 pm

#156 Rhino on 02.10.09 at 8:02 pm
“So, Canada now has the best educated welfare “bums” – no slight intended – in the world! Quite an accomplishment.”

Good observation.

Why? the market says the “bums’ are asking for too much to pay for their sky high mortgage, while the same resource in China & India as good as ours are asking 1/10.

#152 Rural Rick on 02.10.09 at 9:47 pm

A man I know makes maple syrup. He is very good at it. He does every thing he can think of to add value to his product. Fancy containers, souvenir styles, custom designs, maple sugar, candies, cakes, cookies.
Canada must do the same thing. Why do we export logs and ores? We should be refining, processioning and adding value to our products while providing employment for our citizens.
Nafta agreements just seem to empower multinational companies to continue to exploit the inequities between countries.
Oh yeah and making our own refrigerators would be a good place to start.

#153 Chris in England on 02.10.09 at 9:50 pm

Straw Bale Guy #65 writes:
#47 Calgary37

It sounds like you are describing an intentional community. http://www.ic.org/

Small communities of self reliant people working TOGETHER will be part of the solution to surviving the next depression.

Calgary37, thanks for the detailed advice, though I confess I’d be pretty hesitant about splashing money about into holding companies and other businesses if I didn’t know where my next cent was coming from. Also (hanging my head) rules to me are like a red rag to a bull, and when I read a list of them I start breathing fire and butting down gates. Living in Prison Camp UK where I am monitored, spied on, and expecting any day to be microchipped for the government’s convenience, the kind of community I envisage would be a more loosely run affair.

Many years ago I worked on a Greek island for the summer. This was before we all jumped head first into the EU, and English people then had to have a work permit to work in Greece. Obviously I did not, and nor did I look like I might be Greek, so whenever the police were about I had to rush out of the restaurant where I worked and hide. This was a French creperie, and I worked a morning shift doing the breakfasts – all healthy stuff like crepes with yoghurt, fruit and honey, freshly squeezed orange juice (squeezed by me suffering from a giant hangover, using an ancient heavy iron press on dozens of oranges cut in half), freshly baked bread rolls, etc. etc.

Anway, we were paid a pittance because we were illegal workers, but even the Greeks who worked in other restaurants and bars didn’t make a lot of money. What to do? Well we were there for months and gradually got to know each other so we created an alternative economy and bartered our employers’ goods amongst ourselves. When I finished my shift at around 11.30 a.m. I would walk up the narrow back streets with crepes, orange juice, etc. on a tray and deliver it to Nick’s Hamburgers where they were just opening up for the day. Later that evening, if I fancied some junk food, I could get it for free. We also catered for various bar staff, night club staff and waiters from other restaurants who wanted to eat something healthy while listening to Vivaldi, and in return we could expect free drinks that evening, or perhaps a different kind of meal in someone else’s restaurant.

Even though we had very little hard cash, we managed to live very well, and these trades were not conducted as a large scale enterprise, just two or three breakfasts each morning to the relevant people, small enough quantities that it would go unnoticed. In fact, we could operate with no money at all and our hard cash was used for rent and the odd occasion that we actually went somewhere different where no-one knew us.

Yes, it was stealing – but our employers were stealing from us so we felt no guilt (and of course we were young, so guilt didn’t really come into it!).

So, I envisage a group of people out in a rural community who each have something to offer and can set up some kind of system where they loosely trade amongst themselves with useful items. Garth says in his book that an allotment could be considered, where everyone takes it in turn to put some work in. That’s one way, but it is putting all your eggs in one basket. What if a gang of roaming city thugs trip over a large cabbage one dark night and realise they are in an area full of juicy veg produce? The community could lose the lot in one raid. It might be better for one household to grow this, another to grow that, and so on – spread it around so it isn’t easy for outsiders to work out where it is….

#154 Pat G on 02.10.09 at 10:12 pm

CS #32

Just a few suggestions and I haven’t got to the very end of Garth’s book (so far, it is very good!) and there may still be a lot of ideas I haven’t thought of. He has pages of lists to be considered. Here are a few thoughts of my own:

Coleman lamp from Canadian Tire – There was a kind that had a ‘mantle’ to light with a match that we had when I was a kid and it seemed to be good.

Air tight tins to keep dried foods in – i.e. oatmeal, wh.wh. flour, powdered milk, powdered eggs, wh. wh. pasta, cookies, Carnation hot chocolate, instant tea and coffee, baking soda & baking pdr., cinnamon, garlic pdr. and other favourite herbs and spices (they don’t take up much room), maybe canned puddings

i would also try to have a few jars of spaghetti sauce,
canned fruit, canned salmon and tuna, fruit juice or V-8,
pop, bottled water, small jars of Miracle Whip, canned vegs.

Javex, Purell, Alcohol, Muskol or some form of DEET, t.paper and paper towels, dish and laundry detergent, band-aids of various sizes and shapes – some with non-stick surfaces, antibiotic ointment, tooth brushes and t. paste, other hygiene products, Visine or Systane,
antihistamine

Dish cloths and dish towels, bedding, J-cloths and shop cloths, Handy-wrap or Saran

I don’t know if you can get small battery-run fans but that could be useful either for cooling oneself or to try to direct heat from your wood stove.

Shovel, cultivator, seeds, watering can, fertilizer – and if that works, maybe canning supplies

These are just a few off-the-top-of-my-head thoughts but maybe they might help.

Anyway, good luck!

#155 Jimster on 02.10.09 at 10:17 pm

#50 Ron

Google “December 23, 1913”

The end of the, “US Federal Reserve Bank”.

#156 Bill-Muskoka (NAM) on 02.11.09 at 8:30 am

#148 North Vancouver Citizen Jr. on 02.10.09 at 6:27 pm

My Dad laughed but he thinks your joke might be racist.

Well, if that joke is racist then I guess an OPP cruiser is too? Actually, I am going to take your comment as a little bit of twisted satire and laugh.

BTW, do you know why they paint the door on an OPP cruiser white? So the Constable can find it. ;-)

#157 Bill-Muskoka (NAM) on 02.11.09 at 8:40 am

#157 dekethegeek on 02.10.09 at 8:26 pm

You forgot to mention the costly special tools required to do the work. Contractors make investments in equipment and recoup the costs over many uses.

Our fine forward looking government only allows $200 per tool as an instant write-off, then comes the amoritization schedule (CCA) and a PIA doing one’s taxes.

In the U.S. a small business can write of upto $25,000 per year in equipment without using the bloody Capitol Cost Allowance.

And we wonder why Canada is a backwater country when it comes to enterpreneurialship?

Now McGuinty wants to clusterf**k small buisiness by bringing in a Harmonized GST/PST tax accounting. Many of us do not charge PST on our services, so all that will happen is another idiotic escapade into Quija Board tax law.

#158 Bill-Muskoka (NAM) on 02.11.09 at 8:54 am

#92 CalgaryRocks on 02.10.09 at 1:09 pm

The U.S.’s first duty is to its own citizens. Canada should get a clue about that too. As to globalism, I agree with John Ralston Saul that is has FAILED. That does not mean we cannot cooperate with each other, but not by cutting the throats of our own people for a failed ideology designed by those who feel no alligience to their own country.

#159 Bill-Muskoka (NAM) on 02.11.09 at 8:58 am

#95 kc on 02.10.09 at 1:20 pm

Yes, how quickly the masses forget about the outrageous bank profits of a mere two years ago, or the recent ones by Exxon-Mobil. One thing I learned as CEO decades ago is that the accounting principles used by accountants are total BS! They make Voodoo look like a science.

#160 Chris in England on 02.11.09 at 8:58 am

Dana M #74:

“So if we have no moral compunction against corporations walking away from a bad agreement (or filing bankruptcy) why do we need to claim that a home owner (who may have poor education, inadequate representation when signing the contract, or just greedy themselves) has a moral responsiblity to damage their, and their families, financial health by continuing to make payments on a bad investment when the law gives them the option of mailing back the keys.”

I would never expect greater moral responsibility from an individual than an organisation, and if this kind of get-out is written into contracts, then the parties signing those contracts have legal recourse to it. But it certainly is a recipe for chaos if contracts are ripped up left right and centre and anyone is allowed to walk away from something they signed up to (and that includes the financial houses or whoever provides the money to buy whatever is being bought). Just because they can and do walk away and wash their hands of their own personal nightmare doesn’t mean that nightmare handily disappears. It doesn’t, it’s still there and becomes someone else’s nightmare (increasingly the nation’s taxpayers). If the facility to throw in the towel without penalty was removed, perhaps more caution would be exercised on both sides?

When I was growing up, most people I knew did not own their houses. In fact, I think I and my sister were the first in our family to buy our own homes. It was something not to be considered unless you had a pile of money for a deposit in the first place (unlikely) and could obtain and then support a mortgage. In this country, Margaret Thatcher suddenly work up one morning and decided it was the “right” of every working man and woman to own their own home and promptly offered up the nation’s public housing at a discount to the residents. This achieved two things: 1) everyone suddenly thought it was their right to own a house and that it could be picked up at a discount, and 2) public housing was decimated and the population rising. Everyone born since then imagines home ownership to be somehow perfectly normal and outside the big cities with transient populations renting is a quite weird choice.

I don’t know how things moved from renting to buying in Canada and the US in large numbers, but that’s how it happened here. There is a perception of “rights” and a determination to set that right into motion. This has resulted in a vast swell of home ownership, and most recently through dodgy mortgages and a rash of buy to let speculators. Not sure what the percentage of home owners in the UK actually is, but it is pretty high compared with a lot of European countries. What if they all walked away and mailed their keys to the banks? (No, it probably wouldn’t make a lot of difference to the chaos we are already in!).

I think I am just saying that surely it is time to review all the behaviour we now see as normal, including our inflated ideas of “rights”, and the handy escape hatch that allows those in certain countries to hit the eject button with little or no personal loss to themselves, but which spreads the misery and adds to the general pool of loss felt by everyone.

#161 Bill-Muskoka (NAM) on 02.11.09 at 9:04 am

#143 Jelly on 02.10.09 at 6:06 pm

She was probably a former Bell Customer Service Rep. LMAO!

#162 Bill-Muskoka (NAM) on 02.11.09 at 9:05 am

#146 go green on 02.10.09 at 6:25 pm

ROFLMAO! Thought you’d like that one! :-)

#163 Greg W., Oakville on 02.11.09 at 11:50 am

Hi Garth,
Re: my comment #111
Thanks all, for helping to clarify my misunderstanding of the 75-750 billion issue.