Attention, class.
As of this day, there are 610,000 Canadians collecting pogey. In the US, about 6.1 million people are on unemployment benefits. Yes, on a per capita basis, exactly the same.
Ottawa coughed up $75 billion to rescue our banks by buying their soon-to-be-maybe-toxic assets, those 0/40 mortgages. In the US, Washington splashed $750 billion over the banking sector to prevent its collapse. Yeah, right again, proportionately the same.
Governments in Canada will soon be sucking up an equity stake in GM and Chrysler since they are already into these staggering companies for billions. Ditto in Washington.
Canadian households have the highest level of debt as a percentage of disposable income in history, sitting at just under 130%. In the United States, families have also never been so indebted. In that country, it’s just over 130%.
We have newspapers and television stations keeling over, with CanWest battling bankruptcy and CTV begging the CRTC for new revenues. In the US, media in many major markets are on their knees – a reflection of how badly advertisers are doing.
We have swine flu. They have swine flu. Their steel plants are shutting. Ours, too.
Their interest rates are, like, zero. Ours have crashed to nothing. They are paying first-time homebuyers. So are we.
But wait. The median home price in the US dropped 23% in the past year, and in markets like California (the size of Canada), home values are down between 50% and 70%. But up here, the national average has declined by merely 7.5% in the past 12 months. In fact, as the current magazine cover above shows, some people think this is a giant, double double, made-in-Canada buying opportunity.
Are they prescient? Or just frigging nuts?
Well, if you ever needed a concrete example of how our we-are-not-Americans complex can compromise good judgment and intelligence, go buy a copy of Canadian Business. The mag has set a new low in questionable journalism, I’d say, in a manufactured piece peppered with irrelevant factoids and conclusions intended to get advertiser hormones flowing. I mean, class, let’s not forget some of the true facts here:
* Americans let real estate prices inflate without any attempt at correction by the central bank, and so did we.
* Americans relaxed lending standards with subprime teaser mortgages and liar loans. We dropped them with forty-year ams, zero-downpayments and self-recognition mortgages.
* US banks got lazy and greedy and approved almost all lenders. Our banks okayed mortgages based on postal codes.
* American household debt levels are extreme. So are ours.
* At the height of the American housing bubble, people were spending six times their incomes for houses. In Vancouver they were spending 10 times their incomes.
* The US housing meltdown has lasted for more than 4 years. Ours is one year old.
* The American economy crashed by a stunning 6.2% annualized rate in the last reporting period. Ours plunged by 7.3%.
* The Americans regressed from the worst federal budget deficit ever to an even-worse one. We bungee jumped to one of our worst-ever deficits, from a surplus.
* GM is losing a third of its workforce in the States. In Canada, half the guys on the line will be gone.
And today the feds announced monthly Canadian job losses of 79,600 – equivalent to a US figure of almost 800,000 – a staggering number which they have yet to hit.
So, our housing market correction should last one-quarter as long as the American melt? Based on what, exactly? The fact we’re not Americans?
Sorry. Failing grade. We may have better beer and hockey thugs, more donuts and duck-strewn tailing ponds, but do these things really make us superior? Is a young couple buying a semi in the Beaches for $600,000 getting the opportunity of a lifetime? Or squandering a future?
Time will tell. But the odds are this pathetic blog will be even more relevant in a year than it is now.
Class dismissed. And don’t forget your damn flu masks.
