If you've been paying attention to politicians, our whoring media, and other vested interests...then you can be excused for believing that the worst of the economic mess is behind us. If however you've been paying attention to basic reality, and are using simple common sense, then you know there's still a lot more pain to be felt, especially here in Canada.
As much as we may like to discount the reality, our economy is tied to the fate of our southern neighbours. The U.S. is our single largest trading partner, everyone in Canada knows that...hence as their economy goes, our's is soon to follow. We've already seen this, the US economy slid into recession back in the summer of 2008, and our's followed close behind about 6 months later.
So how are things looking in the land of the free and the home of the over leveraged? Not good. Jobless numbers for June were just released and the numbers were worse than expectations. No doubt there are spin masters already at work trying to find a way to turn this straw into gold, but reality is reality no matter what is said about the emperor's new clothes....the immediate and near term future doesn't look good.
467,000 American jobs lost in June, and the average number of hours worked dropped to 33.
With the U.S economy being about eight and a half times bigger than our own, the numbers would equate to job losses here of almost 55,000. About the only good news to come out today was the reaction of the world oil price, which slid to under $67 a barrel U.S. Of course those living in and around Alberta's oil patch can be forgiven if they don't see this as something to smile about.
Why do we keep hearing about 'green shoots' and an impending recovery? Pretty simple really, our economy is basically surviving on cheap credit right now. According to Statistics Canada our savings rate had fallen all the way to 1.2% back in the 90s, and one can only assume it hasn't gotten any better in the ensuing decade. With little or no money in the bank to fall back on, that means Canadians must rely on credit to make expensive purchases.
People who are anxious about their jobs, the value of their homes and the overall economic picture...they're not going to be too keen on maxing out their lines of credit. Hence the full court press we're seeing by elected officials and media to convince the great unwashed that our naked economy is actually beautifully arrayed in the finest garments.
How bad are things? Credit to former renegade MP Garth Turner for unearthing this little gem.
How would you like to own a home worth about $1,000,000? Don't think you can afford it? No worries, there's a seller on kijiji willing to let you have this beauty with no money down. They'll even give you $125,000 for the down payment and another $50,000 to help cover the mortgage expenses for a year or so.
Sound too good to be true? Assuming the listing is legit, my guess is we're looking at a builder with a model home to unload. The land and building materials probably cost the builder in the neighbourhood of $500,000. If he can get someone to buy it for a cool million he'll net about 500K in profit according to my assumptions. Tossing the would be sucker...err, I mean buyers $175,000 is a small price to pay to unload this puppy.
The builder gets his money from the mortgage provider, and the new home owner just has to pray real estate values don't tank. A ten percent drop in RE values means a $1,000,000 mortgage on a home worth $900K. A 25% drop could spell bankruptcy and financial ruin.
I'm sure someone will jump in though, what the hell...just listen to politicians, media and real estate shills. Jim Flaherty would probably recommend it right now, then in 3 months he'll say its dicey and 6 months later he'll say it was a mistake. But then....nobody is predicting that we're in for some very troubling economic times.
As much as we may like to discount the reality, our economy is tied to the fate of our southern neighbours. The U.S. is our single largest trading partner, everyone in Canada knows that...hence as their economy goes, our's is soon to follow. We've already seen this, the US economy slid into recession back in the summer of 2008, and our's followed close behind about 6 months later.
So how are things looking in the land of the free and the home of the over leveraged? Not good. Jobless numbers for June were just released and the numbers were worse than expectations. No doubt there are spin masters already at work trying to find a way to turn this straw into gold, but reality is reality no matter what is said about the emperor's new clothes....the immediate and near term future doesn't look good.
467,000 American jobs lost in June, and the average number of hours worked dropped to 33.
With the U.S economy being about eight and a half times bigger than our own, the numbers would equate to job losses here of almost 55,000. About the only good news to come out today was the reaction of the world oil price, which slid to under $67 a barrel U.S. Of course those living in and around Alberta's oil patch can be forgiven if they don't see this as something to smile about.
Why do we keep hearing about 'green shoots' and an impending recovery? Pretty simple really, our economy is basically surviving on cheap credit right now. According to Statistics Canada our savings rate had fallen all the way to 1.2% back in the 90s, and one can only assume it hasn't gotten any better in the ensuing decade. With little or no money in the bank to fall back on, that means Canadians must rely on credit to make expensive purchases.
People who are anxious about their jobs, the value of their homes and the overall economic picture...they're not going to be too keen on maxing out their lines of credit. Hence the full court press we're seeing by elected officials and media to convince the great unwashed that our naked economy is actually beautifully arrayed in the finest garments.
How bad are things? Credit to former renegade MP Garth Turner for unearthing this little gem.
How would you like to own a home worth about $1,000,000? Don't think you can afford it? No worries, there's a seller on kijiji willing to let you have this beauty with no money down. They'll even give you $125,000 for the down payment and another $50,000 to help cover the mortgage expenses for a year or so.
Sound too good to be true? Assuming the listing is legit, my guess is we're looking at a builder with a model home to unload. The land and building materials probably cost the builder in the neighbourhood of $500,000. If he can get someone to buy it for a cool million he'll net about 500K in profit according to my assumptions. Tossing the would be sucker...err, I mean buyers $175,000 is a small price to pay to unload this puppy.
The builder gets his money from the mortgage provider, and the new home owner just has to pray real estate values don't tank. A ten percent drop in RE values means a $1,000,000 mortgage on a home worth $900K. A 25% drop could spell bankruptcy and financial ruin.
I'm sure someone will jump in though, what the hell...just listen to politicians, media and real estate shills. Jim Flaherty would probably recommend it right now, then in 3 months he'll say its dicey and 6 months later he'll say it was a mistake. But then....nobody is predicting that we're in for some very troubling economic times.
Comments are welcomed and feel free to pass this along via email or through a social network like FaceBook, just click on the ‘Share’ icon below.
Posts
Seed Newsvine
No comments:
Post a Comment