Friday, October 03, 2008

Quotes du Jour: The Canadian Economy

From the Toronto Star:

Today marked the end of a horrendous week for Canadian investors, who watched Toronto's benchmark index fall a total of 1,322.64 points or 11 per cent over five days of frantic trading.

And, if that isn't enough to prove that our economy is teetering, how about this news?

Investors pull billions from funds

Canadian investors, rattled by sinking stock markets and worried about the safety of their money market investments, yanked a whopping $4.6-billion from their mutual funds in September.

It marked the biggest month for net redemptions suffered by the domestic industry since the Investment Funds Institute of Canada began collecting data in 1990.
“A bubble has burst,” and investors fear that they are going to see a further deterioration of their savings, independent fund analyst Peter Loach said in an interview.

More on that bursting bubble:

Mortgage defaults on the increase

Real estate downturn hits homeowners and investors

Colette Derworiz, Calgary Herald
Published: Thursday, October 02, 2008

For years, bankruptcy trustees and credit counsellors in Calgary haven't had enough work.

But in the past couple of months, the workload has picked up as some Calgarians fall behind on their mounting debts and mortgage payments.

"We are seeing people now who are going into bankruptcy, walking away from properties that in the last . . . four years in Calgary has been very, very, very rare," said David Smith, a trustee in bankruptcy at Bromwich & Smith Inc. "Now it's becoming more common."

Here's further proof that all is not well in Texas North - the land of milk and honey oil.

So, what does Steve have to say about all of this?


OTTAWA (Reuters) - Canada's prime minister accused the United States on Friday of panicking over the financial crisis and tried to assure nervous voters ahead of the Oct 14 general election there that is no need to worry about Canada's economy.

Prime Minister Stephen Harper, whose opponents regularly accuse him of being too close to President George W. Bush, said his Conservative government had avoided the mistakes made in the United States.

"If we don't panic here, we stick on course, we keep taking additional actions, make sure everything we do is affordable, we will emerge from this as strong as ever," he told a televised news conference in Saint John, New Brunswick.

Why does that remind me of you-know-who's "stay the course"?

I guess that's all we can know about the Conservative party's platform considering the fact that they haven't even released one yet. (As Jack Layton asked Steve during the debate last nite, Where's your platform, Mr Harper? Under your sweater?).

Apparently, there is a platform on the way next week (from Bush...or John Howard...or maybe Karl Rove). Maybe they'll pull a Hank Paulson and only make it 3 pages long (exceptionally arrogant power grabs included).

But, as Don Martin reminds Canadians:

Of course, no platform promise comes with a guaranteed delivery. An analysis of the 2006 Conservative platform showed barely half their promises were kept and, as a party holding a major policy convention next month to chart its future, everything they propose now seems subject to change by party members.

As he writes, these platforms are "usually not worth the paper they're written on". True, but we still expect them to thoroughly outline their lies before each election anyway.

Meanwhile, Flaherty is out there right now lying. (Maybe that is their platform since it so obviously was the last time around.)

Flaherty says bailout needed in U.S., not in Canada

He said Canada's banks are well-capitalized and within their statutory requirements, and households are "in much better shape" than their American counterparts.

Speaking in London, Ontario, he said Canadians are able to afford their mortgages, and he repeated assurances by Bank of Canada Governor Mark Carney that there are few signs that banks are restricting credit to households and that there is no evidence that companies are facing unusual credit restrictions.

That's interesting, considering the Bank of Canada just pumped $12 billion into the system today.

In one swoop, Canada's central bank shoved another $12 billion into the country's financial system Friday, an increase of 150 per cent from previous injections.

The move means the Bank of Canada has boosted the extra dollars it has pumped into the Canadian economy from $8 billion to $20 billion.

"In light of persistent pressures in these markets, the bank announces additional steps to provide term liquidity through term purchase and resale agreements," said the central bank in a press release.

Then there's this: CIBC to use $1B Cerberus cash to stop mortgage writedowns. And this: Week ahead: Canada's labour market in for a body check.

You get the drift.

Pay no attention to the smiling man behind the sweater vest.

He and Flaherty - The Bubble Won't Burst Twins - don't want to be disturbed. They have an election to win.

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