One of the byproducts of getting older is perspective.  Gone are the days of being emotionally invested in a professional sports franchise.  What happens on the ice, the court, the diamond or football field will not alter my life one iota. Irrespective of what happens during a game the same responsibilities await me the next morning.  I don’t get worked up over million dollar athletes who get to extend their childhoods by playing a game for a living.  But I must confess that the historical meltdown by the Toronto Maple Leafs Monday night brought back memories for me.  It’s been a long time since I yelled at the TV, wondering if my flat screen TV was going to be functional by the end of the game.

Alas, sanity prevailed.  As soon as the game came to an end I went back to being my dispassionate self as it relates to the local hockey “heroes”.  I’ve long since stopped being an apologist for the Leafs.  Don’t get me wrong, I go to games but I go more so for the experience.  So now when people, usually those who reside in other parts of the country say to me, “Leaf suck”, my answer is, “agreed”. That usually stops the conversation. Now, there was no stopping the conversation about the Leafs colossal collapse Monday night.  Leaf nation is stunned,  numb and frankly I worry about some being suicidal.   Everyone in Toronto is talking about the Leafs blowing a three goal lead with only ten minutes to play in the seventh and deciding game between the Toronto Maple Leafs and Boston Bruins.  The analysis by the sports media is, and will continue to be, unrelenting.  This is way too much fun for them.  One radio station found a creative way torture Leafs fan by interviewing a statistician who calculated the probability of the Leafs winning that game from a historical context.  Kid you not, the stat’s geek looked at every game seven played in the NHL since 1918 to determine the probability of the Leafs winning the game.  For example, when the Leafs made it 3-1, based on history the probability of the Leafs winning was 95%, when the score was 4-1 it was 98%.  I laughed out loud in the car when I heard this.  This exercise was nothing more than plunging the knife a little deeper.  Poor Leaf fans, maybe the team should change the saying The Passion That Unites Us All to The Therapy That Unites Us All.

The only impressive thing about the game was the press conference with Leaf coach Randy Carlyle following the game. To have to face the media and answer questions why he and his team failed so spectacularly cannot be easy.  Like in business a leader’s character is measured by how they deal with adversity.  A hockey coach is the leader of the team.  Most teams take on the coach’s personality, and if that holds true for the Leafs it will serve the players well.  Carlyle made no excuses.  Someone in the media asked if the officiating worked against his team and he refused to be drawn into that debate, he simply said his team ran out of gas.  He was calm, leveled headed and waited until there were no more questions to be answered.  I couldn’t help but admire the dignity and accountability he exhibited under the most trying of circumstances.

So now that the Leafs have gone down in the hockey chocking history, I’ll have to change my TV viewing habits.  Maybe I should start watching Dr. Phil.  I suspect some Leaf fans might be making an appearance on the show.

Until next time

Cheers

We live in exciting and historical times.  The way we communicate with each other, the way we conduct business, almost every aspect of our life has been impacted by the digital revolution.  We’re a part of history because the digital revolution is having a dramatic impact on our lives.  Look at the impact your mobile phone has on your life.  A recent survey I came across indicated that over 90% mobile users keep their device within arm’s length 24 hours a day.  All of us, to a degree, have become reliant on technology.  For some in the world technology and social media has dramatically changed their lives.  Look at the Arab Spring, and the impact social media had on the Egyptian populace to create political change.  You can debate if they’re better off today than they were yesterday, devil you know versus the one you don’t.  The point is political change happened in Egypt because of the free flow of information.  That’s powerful and it gives us reason to marvel at the profound effect that social media has on individuals, and nations as a whole.  However, not much is written about the darker side of the digital revolution.  

Nationhood building is bold, it’s exciting and the drama unfolds in real time.  But the same tools that can galvanize a nation of people can also be used against them.  Everything we do today almost invariably leaves a digital fingerprint.  Every aspect of our lives, likes, dislikes, habits etc. is being captured.  Just think what an autocratic régime can do if they had the resources to invest in technology to monitor every aspect of their citizens lives?  If you’re concerned about your civil liberties being infringed upon today, just imagine what it is going to be like in countries where the rule of law is nothing but a talking point or just another way to extort money from the West.  Autocratic countries which have the means and resources to invest in technology will take stalking to a new level.  It’s happening now and stopping this is next to impossible.

Another dark side of the digital revolution is the harm it can bring by destroying reputations or sullying someone’s good name.  Facts are damned because anonymity acts as a factual cloak.  A recent victim, former Toronto Maple Leaf general managers Brian Burke, has decided to fight back.  Burke has filed a lawsuit with the BC Supreme Court saying he was defamed.  Simply put, Burke was targeted by 18 anonymous individuals on- line, stating that he was let go by the Toronto Maple Leafs for having an affair, and impregnating a local Toronto sportscaster.  For those of us who have followed Burke’s career, we’re not surprised that he would fight back.  I commend Burke for what he’s doing.  Too many times individuals and organizations do not fight back for fear of fueling the fire.  Also factoring in the decision not to defend one’s self is the cost to do so.  Burke has the will, the time and the resources.  According to Burke’s lawyer, Peter Gall, “a lot of people think they can with impunity say whatever outrageous things on the Internet and nobody’s ever going to be able to find them or hold them accountable.  Brian is going to hold them accountable.”  The first thing Burke’s lawyers are doing is seeking court orders against websites that published the comments.  These companies will have to disclose who these individuals are.  The fact that fictitious names are used to post anonymous comments does not mean that it cannot be traced back to the author.  Compelling websites to provide the real names of individual is one thing, but I would take it a step further.  I would hold these websites equally responsible.  The notion that these websites cannot control what people say is rubbish.  If a website provides gasoline, newspapers, matches, knowing there will be am inferno that makes the website a party to the arson.  If the websites engages in aiding and abetting they should be held accountable.

On the lighter side of the digital dark side, I came across a story that made me laugh out loud.  A doctor in the U.K. has opened up a Digital Detox Centre.   For a mere $30,000 you can send your child away for 28 days for digital detox therapy.  The doctor claims that after 28 days your child will be back to normal and no longer addicted to all things technology.  If you don’t find this bizarre, and you think this therapy might be good for your child, I have a proposition for you.  For $1,000, including travel expenses, I will come to your home and give you my version of digital detox therapy.  I will ask you to round up all of you child’s technology; a secondary search will be required because the little darling is hiding something, somewhere.  When I’m satisfied that I’m in position of all the technology, I will excuse myself and go to your bathroom, and I will fill up your bathtub with water.  Within seconds none of the child’s technology will ever work again.  I’m up a grand, and you can blame it all on the meanie man.

Until next time,

Cheers.

As I drive into work every day, and I make no apologies for that, it’s impossible not to notice how much Toronto’s landscape has changed in the last ten years.  There was a time when driving on the Gardiner Expressway provided views of Lake Ontario to the south, and Toronto landmarks to the north.  Those views have all but disappeared.  If you find concrete and glass esthetically pleasing then a drive on the Gardiner is a must.  Not exactly my idea of visual bliss but who am I to judge or question progress?  If there’s a need, and demand, someone will build it.  And build it they have.  Yes, that’s what makes my drive into work every day, (I guess I could say I’ll take public transit in the future to score some brownie points…nah) a little less more stressful.  I have to look at the concrete jungle knowing the condo market will bring hell fire and brimstone of biblical proportions on our industry, and the overall economy.  It’s too much to bear, unless you’re a condo owner in the downtown core who can charge between $2,000 and $2,500 for a 700 sq. ft. condo.  And based on the now called Residential and Tenancies Act, tenant protections only apply to buildings that were occupied before 1991.  Soooo, if you own a condo in Toronto, and you’re a landlord, you can increase rents as high as you want when the lease expires.  Let me rephrase that, to as high as you can get.  Good news for condo owners, bad news for renters.

So, who are these renters that now have to fork over significantly more of their disposable income for shelter?  People who want to be closer to work, don’t want to depend on cars, want all the amenities at their door steps, have no desire to live amongst the suburban sprawl etc.  Sound like first time home buyers?  That indeed is one of the reasons that demand for rental units is on the rise in Toronto.  There is no doubt that first time home buyers (or as it became fashionable to describe this sector as the tail end of the credit curve) were significantly impacted by all the changes to mortgage rules.   What’s one to do if you can’t buy a home?  Living with mummy and daddy might be an option, assuming your parents are eligible for sainthood.  But the only other option is to rent and that’s lead to a BOAM!  As in rent will increase.  It seems like the condo supply side of the equation has not caught up with investors, and there’s enough data to suggest that it will not.  Toronto is no different than most major urban centers in North America.  Over the past 20 years there’s been an urban renaissance, empty nesters, first time home buyers, people looking for different life styles, flocking to the core to buy property.  When land is scarce, last time I checked no one was building land, purchasing a condo may end up being the only option.

Who really knows what the future holds for the condo market.  On one side of the argument you have the” thinkers” predicting Armageddon.   On the other side of the argument you have the “doers”, the actual builders working within the free market economy.  They didn’t amass their fortune by guessing or taking bets on projects worth hundreds of millions.  If I had to place a wager my money is on the “doers”.

Until next time.

Cheers

Click Here:  An interesting infographic on Toronto condo market

March is the month where we start to believe that winter may be finally coming to an end.  March brings promise, unless if course you’re talking about the economy.  Never mind the snow and cold temps that much of the country had to deal with.  It pales in comparison to all the economic news as relates to the month of March. 

Here’s some of the low lights:

1. The Canadian economy lost 55,000 jobs in March.  Economists were predicting that 6,500 new jobs would be created.
2. Our Unemployment Rate ticked up to 7.2%
3. Some of the less than stellar news is creeping into April. 
4. Our Loonie took it on the chin this morning because of our poor job numbers.
5. Conference Board of Canada reports that Canada finished next to last of the world leading economies when it comes to spending and business research development.
6. The U.S. Labour department reported that a mere 88,000 new jobs were created in March.  There are fears that the budget cuts in the U.S. may drag down job creation going forward.
7. Blah, blah, blah…

If you ever needed to make up an excuse to celebrate, you have one now.  Make a toast over the weekend that March is behind us.  I plan on suspending reality over the weekend because all of the above awaits for me on Monday. 

Until next time,

Cheers.

“I wonder how you would feel if you received a call from the government saying we would rather you not buy down interest rates.”

Ever run across something that doesn’t sit right.  That nagging doubt that you can’t put your finger on, and it just hangs out there. I experienced that a few days ago after reading an article in the Globe.  I decided to take few days and give the article one more glance to see if my original reaction would still be the same.  Yup, nothing changed.  The article in question appeared in the Globe on Wednesday, March, 20th.  The headline read, “Flaherty Pushes up Lending Rates – Finance Minister called lenders to express displeasure at mortgage competition, raising bankers’ hackles“.

Few will or should care about a bankers disposition, but I think we should all care when big brother over reaches.  I do not how else I can categorize the direct influence over pricing by the government in the private sector. As reported in the Globe, Minister Flaherty contacted Bank of Montreal to chastise them for lowering rates in an attempt to buy market share.  A call also went out to Manulife, but the scolding was delivered by one of the Minister’s underlings.  It’s easy to say who cares if faceless corporations get their wrists slapped.  But any government encroachment of pricing in the private sector should give us all pause.  Imagine you are a mortgage broker who has embarked on a strategy of rate buy-downs.  The merit of such a strategy is irrelevant, what is relevant is that you have the right to earn or lose money based on your competency or incompetency.  We live and work in a free market economy, and the state plays an important role; pricing of products should never be one of them.  I wonder how you would feel if you received a call from the government saying we would rather you not buy down interest rates.  I get it – that would never happen based on the actions of a handful of brokers. But entrepreneurs of all sizes share a common principals, and for it to be different based on the size of the enterprise alone undermines the fundamentals of competition.

Another part of the story I find troublesome is why did this become public?  I suspect the Minister of Finance would be put directly through to the CEO of both Bank of Montreal and Manulife.  For appearance sake alone this arm twisting should have been done in private, and not worn like a badge of honour in public.  The general public already believes that the working relationship between the government and banks is too cozy; these stories don’t help to dispel that notion.

Until next time,

Cheers.

Sure signs that spring just around the corner.  Firstly, March break.  The airports are packed, and people working at the airports are exceptionally snarly. Second, baseball spring training is in the home stretch and soon the boys of summer will make their way home.  Thirdly, the Masters Golf tournament is weeks away.  And lastly, the Toronto Maple Leafs have begun their annual collapse.  Sports reminds us that spring is just around the corner, at least is does for me.

Another indicator that spring is just around the corner, not sports related, is the Federal Budget.  I suspect tradition will continue, which means Minister Flaherty will be sporting a new pair of shoes.  I wonder if the Finance Ministers actually does the shopping or is one of his flunkies responsible for picking out the perfect pair.  Be that as it may, Flaherty doesn’t have much wiggle room, so grand solutions for our sputtering economy should be tempered.  Government revenues are down (I really hate that term because when has the government ever earned revenue?) so spending cuts should be expected. Increasing taxes on an already over taxed population is not a solution.  The question that needs to be answered is which government programs will take the hit. Provinces and municipalities will wait with bated breath to see where infrastructure spending will be directed.  The government has made statements that we should not expect an equal distribution of spending on infrastructure.  It appears that some children will be more special than others to the ruling Conservative.   

Flaherty has his hands full trying to navigate Canada’s economy amidst all the uncertainty.  Now it appears that that he will factor insanity into his global equation.  That’s the only way I can explain the EU’s decision to tax bank depositors in Cyprus to offset their bailout.  Will this cause a run on the banks in Cyprus, and other European countries that fear that the EU may impose the same punitive measures in their countries?  Bold decision can lead to drastic mistakes, example – American government allowing Lehman Brothers to fail.  The course will probably remain the same – boring; and I suspect that’s what Flaherty will give us on Thursday.

Until next time,

Cheers.

I suspect it didn’t take long for Mark Carney to conclude, after testifying before the U.K Treasury Select committee, that life might a little different for him in the U.K.  Nothing to do with culture or driving on the wrong side of the road.  Going from Rock Star status in Canada to please justify your salary, your yearly housing allowance, and why should we except an interloper to be the next Governor of the Bank of England, is a tad different from what Mr. Carney has been experiencing in his native homeland.  In Canada it’s Careymanaia, in the U.K.,  it’s not what have you done for us lately but rather you’ve done nothing for us to date, therefore, we’ll treat you as such.  Check out some of these British headlines about Carney.  The Sun, “Heavy Metal Fan to Run Bank of England”.  Why?  The Sun found out that Carney would blast AC/DC’s Back in Black before he played hockey while at Harvard.    The Daily Mail, “Jolly Hockey Sticks English Wife”, referring to Carney’s wife who is now open game.  The Telegraph also let be known that Mrs. Carney was fair game.  “Mrs. Carney, who met her husband, Mark, at Oxford, is Vice-President of Canada 2020, a left wing think tank, and reviews environmentally friendly products”.  Oh my god, and they’re going to let her into the country? They also referred to her as an “eco-warrior” and that she believes “banks are rotten”.  Until I started doing some research for this blog I had no idea about Mrs. Carney or Mark Carney’s musical tastes, and nor do I care.  But they do in Britain, and he’s treatment by the U.K. press will be nothing like what he’s  accustomed too.  No gushing in the U.K. 

I must confess that I did not watch Carney’s entire performance before the U.K. Treasury Select committee.  I caught little snippets of the hearing and based on what I saw I came to the following conclusion; if political stupidity and inane questions were an Olympic sport, Canada wouldn’t come close to the podium.  U.S. –  Gold, Britain – Silver, and any country from the Balkans – Bronze.  One of the esteemed U.K. Treasury Select committee members asked Carney to explain liquidity.  When the camera zoomed in on Carney for the answer, I could swear he had that “Did I just hear this moron right?  I’m the Governor of the Bank of Canada, and he thinks he can stump me  with this question” look on his face.  There was a doozy of a follow up question from the President of the Mensa Society, “Are you familiar with QE3?”  I have to hand it to Carney, from what I witnessed he was extraordinarily patient and he played the game.  But I’m looking forward to the book Carney will write at some point in the future, and I hope he shares his thoughts about the first public grilling he took in the U.K.  As for the committee member who asked these questions I suspect his thoughts were not unlike Homer Simpson’s, “okay brain, I don’t like you and you don’t like me… Just get me through this hearing and I’ll go back to killing you slowly with Guinness”. (Note to reader: the last line works much better if you read it out loud while impersonating Homer Simpson).

The Justin Bieber, Lady Gaga and economic messiah status Carney experienced in Canada will soon be a thing of the past.  It’s time to put the big boy pants on and get ready to play in a much different school yard.  Besides setting monetary policy for the third largest economy in Europe, Carney will have to deal with a press who can’t wait for him to stumble.  They’ll poke an prod into his personal life, and the paparazzi rule in the U.K.  His new salary is three times greater than what he earned as Governor of the Bank of Canada.  That’s more than fair because his grief is going to increase tenfold.

Until next time

Cheers

Payment Shock – It’s a term we’re familiar with in the mortgage industry, and it’s in the news again.  But hallelujah, this time it has nothing to do with the mortgage industry.   Nope, payment or bill shock making the news today is about the billing practices of the duopoly which controls all things wireless in Canada.  Here’s the definition of a Duopoly – “situation in which two companies own all or nearly all of the market for a given product or service. A duopoly is the most basic form of oligopoly, a market dominated by a small number of companies.  A duopoly can have the same impact on the market as a monopoly if the two players collude on prices or output. Collusion results in consumers paying higher prices than they would in a truly competitive market”.  

You can decide if the definition fits as it relates to the wireless providers in Canada.  As you’re mulling it over keep this in mind, the OECD (Organization for Economic Co-operation and Development) conducted a survey which concluded that the average Canadian cellphone user is paying among the highest bills in the developed world.  To be exact, the OECD determined that Canada has the third highest wireless rates in the developed world. 

Not surprising neither Rogers nor TELUS agree with the OECD findings; but regulators are causing both companies some indigestion.  Both Rogers and TELUS are regulated by the CRTC (Canadian Radio-Television and Telecommunication Commission) and a new wireless code is being drafted by the CRTC.  The CRTC would like the service providers to automatically suspend certain services once a customer is charged an additional $50 above and beyond their normal monthly plan.  At first blush you may agree with the CRTC position, but keep mind for most of us in the mortgage industry we would exceed the $50 overage by the first Tuesday of every month.  Imagine if you had to call your service providers every time the meter went past $50?  If you think wait times for service is less than satisfactory today, imagine what it would be like if this was implemented?  Rogers and TELUS were summoned to the hill to provide their thoughts and views on the proposed draft.  Suffice to say that neither Rogers nor TELUS said, “we agree with you CRTC, and it’s about damn time you did something about the high cost of wireless fees in Canada.”  They said what you would expect them to say, and why wouldn’t they?  They’re protecting their own turf.   Setting aside the self-interest of the wireless providers in Canada,  the real issue is when regulators want to do right by consumers but the practical application of said efforts may result in even more consumer dissatisfaction.  Regulatory changes or new “codes” being enacted and implemented has a domino effect.  Everyone in the mortgage industry already knows that.

On one hand you can applaud the CRTC for trying to do right by consumers.  Who wouldn’t want to pay less to their wireless provider?  On the other the CRTC’s position is a little bit of a head scratcher as it relates to practicality.  As for the CRTC this might be a case of not seeing the forest from trees.  Instead of expending all this time, energy, money and brain cells on way to protect consumers from price shock, maybe the CRTC is missing the obvious.  Maybe the CRTC should make it easier for new entrants into the Canadian wireless market.  Competition serves consumers well.  Why shouldn’t that apply to the wireless industry in Canada?

Until next time,

Cheers.

Much has been written and said about mortgage debt and affordability recently.  No point in belaboring what has and has not been done to address this issue. I’m sure there will be plenty of that in the future, as well ample hang ringing about the so-called condo bubble, specifically in Vancouver and Toronto.

Manhattan Living...

The so-called “condo crisis” (oh, how the mere thought of it makes the press salivate) in Vancouver and Toronto came to mind after I read an article in the Wall Street Journal. The article focused on the cost of condos in Manhattan. The current median price of a condo in Manhattan is the lowest it’s has been since 2004. Could Manhattan’s experience be a harbinger of what’s to come for Vancouver and Toronto?  If it is then maybe the 36 people in Toronto who don’t own a condo already should go and get one.

According to the Canadian Real Estate Association, the average home price for the month of December in Toronto was $501,361, and in Vancouver it was $730, 912.  Remember this includes dirt to go along with the walls.  In Manhattan the average condo price in 2012 was $835,000.  However, adjusted for inflation it was the lowest since 2004.  Can you imagine the headlines if Toronto was similar to Manhattan’s reality?  The median price in Manhattan for a 2 bedroom condo was $1.26 million, 3 bedroom was $2.37 million and a 4 bedroom was $4.75 million. Adjusted for inflation these are the lowest prices since 2004. According to the Wall Street Journal article there’s a disconnect between buyers and investment indicators.  Buyers are saying there’s not enough affordable housing and yet when you take inflation into account prices have actually declined.  So is it a good time to buy a condo in Manhattan?  I’m not familiar with the Manhattan’s housing cycle so I’m not sure, but what I can say is this: at an average price of $2.37 million for a 3 bedroom condo in Manhattan, I think Toronto is a good buy.

Some might be aghast that I would compare Manhattan to Toronto.  Well, Toronto is the 4th largest market between the US and Canada.  Therefore, I think it’s valid to look at values on a comparative basis.  That’s exactly what foreign investors did when buying property in Vancouver and Toronto. As absurd as we think our prices may be, the investor from Hong Kong looks at our market and thinks of great value.  As we all know value is driven in large part by consumer perception.  The perception of Vancouver and Toronto is that consumers buying condos are doing so at their own peril.  Yet in Manhattan, home buyers lament the high cost and scarcity, all the while being told now is a good time to buy.  It’s interesting how some things never change.  Here’s a headline that helped shape New Yorkers perception of their condo market, “Great Scarcity in Apartments…Never before has there been such scarcity of apartments on Manhattan Island.”  That headline came from the New York Times, in 1916!

Until Next Time

Cheers

On Monday, February 4, a little piece of Canadiana is no more.  Yesterday was the official date where banks and businesses would no longer receive  pennies.  Yes, that useless little copper coloured currency has gone the way of the Canadian one a two dollar bills – out of circulation.  The difference being that the one and two dollar bills were replaced by coins. Why? Because they were actually worth something.  The penny?  Not so much.

I like money, who doesn’t? But for most people the penny has become a nuisance. For most people it’s been like this for a long time.  How many times have you reached into your pocket to retrieve change and penny drops on the ground.  You look down at and say to yourself, “it’s not worth the effort of bending over and picking it up”. So you just leave it and walk away.  You do this not because you think you’re a baller.  You leave it be because it’s not worth the effort of bending all the way down to get it.  What would total strangers think of you if you we’re to ?  Not going to allow anyone to think poorly of you over a penny.  Nope, that useless, bacteria infested coin just isn’t worth a simple knee bend.

I suspect right now you’re thinking, “Soon the penny will be history, and I wish someone would provide me with some useless information about the penny which might come handy if I ever play Trivial Pursuit again”. Lucky you!  The penny was put into circulation in 1858.  The high cost of copper back in 1920 forced the government to make the penny smaller in size.   The Queens likeness first appeared on the penny in 1965. Shall I go on? No, eh?  What if I was to say, “A penny for your thoughts?”  Just dawned on me that “a penny for your thoughts” really means that you don’t put any kind of value to what the other person is thinking.  Finally! There’s some value in a penny.

 Until next time,

 Cheers.

As I mentioned in my last blog, the purpose of my visit to Mexico last week  was to attend the TMG conference.  I was asked to take part on a lender panel, where I and a number of my esteemed lender colleagues,  would answer questions about our industry.  A question that was put forth to me was, “do I believe that regulators would make further changes to mortgage rules in 2013?”  My crystal ball was a little foggy that morning, it could have been the tequila, so I applied reasoning when answering.  I answered, “no “.  No one can say with absolute certainty what the government may or may not do.  But today’s reality leads me to believe that any further changes to mortgage rules may create unintended consequences, which could result in harming our economy even further.   My view is that of CAAMP’S, the most recent changes to mortgages rules may have over reached.  If the most recent changes to mortgage rules was intended to slow down home sales, then one would have to say mission accomplished.  Due to all the changes to mortgage rules over the last three years all of us are feeling an impact in some form or another.  This is the new norm, and time will tell if regulators went too far this time.  So, I’m less concerned about further changes to mortgage rules in the immediate future than I am about rhetoric.

There’s a good article in the Globe and Mail about what could possibly happen to the Canadian housing market when you cry wolf enough times.  Consumer psyche is a fragile thing.  If people in authority, and those supposedly in the know, say it often enough consumers will deem it to be so.  Good evidence of this came from the most recent Maritz survey on behalf of CAAMP.   Over sixty per cent of the general population believe Canadians have taken on too much debt.  Yet close to seventy per cent of the respondents do not believe it applies to them.  So how did they come to formulate this opinion?  Did they conduct a survey in their neighborhood?  Are they all qualified economists?  They form their opinion based on headlines,  and those that are responsible for fanning the flames.  It’s the rhetoric that I’m most concerned about now.  The mind is a powerful thing, and those in sales know how import their psyche is when it comes to success and failure.  Never would I suggest to ignore the facts as it relates to business.  That’s suicide.  Those of us in the industry can separate facts from hyperbole.  But does the consumer do the same?  Of course not.  They’ll form their opinion on sound bites and snippets of information.  Thus my concern about rhetoric, especially coming from those who have fallen in love with the sound of their own voice.

Here’s the link to the Globe and Mail article, it’s a good read. 

Until next time,

Cheers.

The sports world was a buzz yesterday with the announcement that Brian Burke (President and General Manager of the Toronto Maple Leafs) was told that his services would no longer be required.  As often is the case in these situations; code is used when making the public announcement.   At a press conference yesterday President of Maple Leaf Sports & Entertainment, Tom Ansell said the following “Brian will not have direct authority over hockey operations…We want to thank Brian for accepting his new role and staying on with our organization.“  That new role is place holder for Mr. Burke to give him time to work on his transition.  The fact of the matter is that Mr. Burke was terminated, fired, gassed, punted or any other such term that is used by all of us to describe what REALLY happened.  It doesn’t matter where your name is slotted on an org chart, being terminated is a devastating process.  Being terminated is something employees take personally.  And on termination the employee is being told that the organization is best suited to go forward without them.  How can than not be personal?  Now throw in the fact that it’s all taking place in the public eye, now that’s tough.

It’s easy to say that the public aspect of termination comes with the territory; absolutely, but there is a human element to it.  Regrettably people forget or just don’t care.  I was listening to an all-sports radio station on the way home last night and one caller into the station said, “I was praying for this to happen.”  Really?  With all things going on in the world this is what the idiot caller picked to pray for?  Ignorance aside, you can’t help but wince when someone goes through something like this in the public domain.  I feel for Mr. Burke but there’s a lesson here.  I don’t believe his termination was necessarily performance based; if it was, why now?  I think this decision was based on style versus substance.  It’s also a case of personal principals trumping corporate objectives; therein lays the challenge.  Effective leaders depend on their intuitive skills and internal compass.  But there’s a balance, and the question becomes when do you put your principals aside for the greater good?  Sometimes shareholders, the board or even employees may suggest the path chosen by the leader may not be the right one.  But ultimately the leader will decide if he/she is willing to risk their employment over principal.  As romantic as it may sound that you will never compromise your own principals, there’s the issue of pragmatism.  Is it worth winning the battle only to lose the war?

Termination is never easy.  I struggle with having to do it.  It’s a duty and responsibility that I have, and I will execute it.  But I can assure you that it’s caused me many sleepless nights.  Over the years I’ve come to accept the fact that I will never be able to truly separate the personal from the business when terminating someone.  I know that it is no consolation for the person being terminated but if there ever comes a day where I don’t consider the personal element of a termination…it’s the day I will not be able to look at myself in the mirror.

Until next time,

Cheers.