Tag Archives: bay street

Canada will be in a recession – The fundementals are not sound?


Posted: October 06, 2008, 8:01 AM by Jonathan Ratner
Market Call

Declining GDP in the fourth quarter of this year and the first quarter of 2009 will bring the Canadian economy into an official recession, UBS predicted Monday.

“The Canadian economy, which has been only barely above water for nearly a year, does not escape the global undertow…” strategist George Vasic told clients.

He cited weakness in exports and sharp reductions in commodity prices as where the impact is being felt most. While domestic demand has held up, UBS expects weaker confidence will put activity on hold.

Scotia Capital is also forecasting Canadian and U.S. recessions, along with 100 basis point cuts from the Bank of Canada and U.S. Federal Reserve “that could come at any time.”

But for the first time in a long time, the underpinnings of the Canadian economy are sound going into the downturn, Mr. Vasic said, highlighting historically average consumer debt service ratios and a balanced budget.

“…it is not always the case that when the U.S. catches a cold, Canada gets pneumonia,” he added, predicting that consumer sentiment should hold up better.

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Why you should not ignore Jack! Is it time for a new vision for Canada?


Maybe its time for change? Maybe its time for a new Prime Minister? We like to think the Tories are the best for managing deficits, however, Ronald Reagan, Brian Mulroney, Mike Harris (Ernie Eves), George Bush and now maybe Harper, will show us that maybe those ideologies just do not work? The Conservatives say that our fundamentals are sound. However, who are they fooling. They are not true Libertarians. There own platforms calls for an approx 1-2 % growth. Economist say that this is highly optimistic, if not deceptive. With the U.S slowdown it is more likely to be a 1-2 % downward turn. That amounts to, in a recent broadcast on CBC Newsworld of a 3.3 billion dollar shortfall. Hmmm! Sounds familiar? Remember Ernie Eves? Yes, Ontario was left with a large deficit, even though our “fundamentals were sound” in Ontario. Makes me wonder, what are the Conservatives going to cut in order to balance the books? Will there be some form of privatization of Healthcare or key Government corporations? Read more below from a recent National Post article on Jack Layton. It maybe time for Canadians to give the guy a chance.  By: Isaac Thomas / G.T.A Patriot Contributor

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By: John Ivison, National Post
Published: Monday, September 29, 2008

Jack Layton

Jack Layton

Jack Layton has never really been taken seriously. Beyond the fiercely partisan types who crowded into a community centre just off Danforth Avenue yesterday, the NDP leader has always been regarded as a harmless buffoon — a man so smug, he’d drink his own bathwater. Jack — let’s call him Jack — has always said outrageous things and nobody has paid too much attention to this point.

But perhaps it’s time people actually started listening.

The NDP leader unveiled his party’s platform yesterday in front of a boisterous crowd in his own riding. It was a virtuoso performance.

“Friends, I sense a real excitement out there. A sense of hope that this time, in this election, we can really make a difference,” he said.

“And maybe we can even make a little history.”

If current polling trends continue, he could do just that, by taking possession of the keys to Stornoway, the residence of the leader of the Official Opposition. The NDP started the campaign as much as 19 points behind the Liberals — some polls now put them in a statistical tie.

On the surface, much of the New Democrat platform will seem appealing to many Canadians — families would receive an enhanced child benefit payment of up to $400 a month; billions would be spent on affordable housing; students would be given a $1,000-a-year grant; more doctors would be hired and their loans forgiven if they work in family medicine; and everyone would get an extra day off work in February. Unlike in days of yore, this would not mean plunging the country into deficit. Budgets would be balanced and personal income taxes would be held steady.

In short, Jack made a convincing case that if he became prime minister, we could trust him to spend our money wisely. There he is in his campaign literature, sleeves rolled up, in the living rooms of the hard-pressed Canadian families helping them make ends meet. No wonder he’s flying high in the polls — he’s identified real problems, real issues and promised real solutions.

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The bailout has failed


The lower house of the US Congress has voted down a $700bn (£380bn) plan aimed at bailing out Wall Street.
The rescue plan, a result of tense talks between the government and lawmakers, was rejected by 228 to 205 votes in the House of Representatives.

About two-thirds of Republican lawmakers refused to back the rescue package, as well as 95 Democrats. Shares on Wall Street plunged within seconds of the announcement, after earlier falls on global markets. A White House spokesman said that President George W Bush was “very disappointed” by the result.
He would meet members of his team in the coming days to “determine next steps”, spokesman Tony Fratto said. The vote followed a day of turmoil in the financial sector. Wachovia, the fourth-largest US bank, was bought by larger rival Citigroup in a rescue deal backed by US authorities.

Benelux banking giant Fortis was partially nationalised by the Dutch, Belgian and Luxembourg governments to ensure its survival. The UK government announced it was nationalising the Bradford & Bingley bank. Global shares fell sharply – France’s key index lost 5%, Germany’s main market dropped 4% while US shares also lost ground.

So grave are the consequences of this decision, reports the BBC’s Kevin Connolly from Washington, that the speaker of the house paused for several long minutes after the vote was taken before declaring it official.
The no vote plunged the world of Washington politics into turmoil and the markets into deep and instant chaos with rapid falls on Wall Street, our correspondent says. Mr Bush had argued that the bail-out plan was a “bold” one which he was confident would restore strength and confidence to the US economy.

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We should stay the course! Isn’t that what the captain of the Titanic said before it sank?


By Jim Stanford

Canada and the Economy

Canada and the Economy

We all know the Conservatives are the “rational economic managers,” right?  After all, their tax cuts, free trade agreements, and tough-love social policy are all motivated by the need to free the entrepreneurial beast within us, and allow us to pursue our natural proclivity to truck and trade with wild abandon.  The productivity of the free market is the common intellectual (or should that be ideological?) thread that unites all the disparate, carefully calculated Conservative policy proposals.

How odd, then, that the record of Canadian productivity growth since the Stephen Harper government came to power is so uniquely awful.  StatsCan released their second-quarter productivity numbers on Sept. 10 (http://www.statcan.ca/Daily/English/080910/d080910a.htm).  Productivity declined by 0.2%, the third quarterly decline in a row.

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Lehman Files for Biggest Bankruptcy in American History, rumors of warnings with AIG and Citibank and the coming market meltdown


Sept. 15 (Bloomberg) — Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history.

The 158-year-old firm, which survived railroad bankruptcies of the 1800s, the Great Depression in the 1930s and the collapse of Long-Term Capital Management a decade ago, filed a Chapter 11 petition with U.S. Bankruptcy Court in Manhattan today. The collapse of Lehman, which listed more than $613 billion of debt, dwarfs WorldCom Inc.’s insolvency in 2002 and Drexel Burnham Lambert’s failure in 1990.

Lehman was forced into bankruptcy after Barclays Plc and Bank of America Corp. abandoned takeover talks yesterday and the company lost 94 percent of its market value this year. Chief Executive Officer Richard Fuld, who turned the New York-based firm into the biggest underwriter of mortgage-backed securities at the top of the U.S. real estate market, joins his counterparts at Bear Stearns Cos., Merrill Lynch & Co. and more than 10 banks that couldn’t survive this year’s credit crunch.

“There is likely to be a domino effect as other firms and individuals who relied on Lehman for financing feel the effects of its meltdown,” said Charles “Chuck” Tatelbaum, a bankruptcy lawyer with Lauderdale, Florida-based Adorno & Yoss and former editor of the American Bankruptcy Institute Journal. “The whole thing is frankly frightening for the U.S. economy.”
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