Of course I’m not talking to you.  The shout out goes to our friends south of the border.  I’ve always been a huge supporter of the US.  Their ingenuity, their spirit of entrepreneurship, their commitment to country and flag has historically set the example for others to follow.  Yet today, this once great nation seems hell-bent on imploding. They spend so much of their time looking inward; they fail to see that others may have the answers, if they would only care to pay attention.  It’s not like they have to look far to get the answers.  As the Friendly Giant would say – for those of you under 40 google the show the Friendly Giant – “look up….look way up”, to Canada. (more…)

No…my apologies…it could still be a train.  Just when we start to believe that maybe, just maybe, we can get through a couple of days without some pending crisis, BAM, there’s more talk of a double dip recession.  I know the press subscribes to the adage, “if it bleeds it leads”‘.  The truth is the global economy has taken more bullets than James Caan did in that famous scene in The Godfather, when Sonny was gunned down at a toll booth in New Jersey.  Unlike Sonny in the Godfather, the global economy keeps getting up for more.

Here in Canada we got the news that housing starts are down.  Job creation has been flat now for two consecutive months.  Our unemployment rate inched up to 7.3%.  The uptick was ever so slight, but the fractional increase represents real people without jobs.  Furthermore, CMHC reported that refinances were down by 40% since the new rules came into effect.  When I visit a mortgage broker I always ask them what percentage of their business is refinance versus purchase. One individual stated it was at least a 50/50 split.  If that was reflective of all broker business we would be trending to a 20% decrease on year over basis.  The picture will become clearer when the Q3 numbers are released, but suffice to say no one should be expecting increase on a year over year basis.  As a matter of fact, being flat year over year means you’re gaining share.  The BOC stated, the overnight lending rate would remain at 1% until the middle of 2012.  Some analysts are suggesting there be no changes until 2013.  That’s a clear sign of how fragile our economy is.  When rates increase it will be a clear signal that our GDP numbers are headed in the right direction, more Canadian’s are being employed and the markets have stabilized.

Surely there must be something positive coming out of the U.S. 

President O-Blah-ma was at his oratory best when he spoke to Congress about the new “Jobs Bill”.  It was reminiscent of the speeches he gave on the campaign trail, you remember, “Yes We Can!”.  I think we’ve all come to the realization that means, Yes We Can…talk a lot…and do very little.  The President introduced a “Jobs Bill”, with an omission, how will it be funded?  He’s going to get back to Congress on that in a couple of weeks. No rush, all the time in the world. I see there was a $44 billion trade surplus in the U.S. last month. A lower valued U.S. Dollar helps their exports, but when investors look for a safe haven they still flock to the U.S. Dollar.  This makes it tough for the U.S. to manipulate their currency (not that they would ever do that).  According to the American’s it’s only the Chinese who do that.  Bottom line is the U.S. will remain in a quagmire until they fix their housing crisis.  It’s a drag on their entire economy.

How about Europe?

Some good news is that some austerity measures are taking hold in Ireland, Portugal, Spain and Italy.  They still have plenty of work to do but at least those countries are taking some positives steps.  Greece? It appears that representatives of the Greek Government are still more concerned about holding onto power, rather than introduce real austerity measures which could put them back on the right course.  It’s going to get a lot worse in Europe before it gets better.

Finding silver linings today is a bit of a challenge.  But every once in a while we find that nugget.  Vancouver, Toronto and Calgary made the top 10 cities in the world to live in.  From where I sit Canada is THE best country in the world to live in.  I wouldn’t trade our problems for any other countries problems.  We’ll do our part, but damn it, they got to do theirs.

Until next time

Cheers

We all have some ground to make up, and the good news is we have fewer distractions.  The summer is unofficially over.

I don’t know about you but Labour Day Weekend feels like the end of summer for me.  I know the official date to bid farewell to summer is September 22, but Labour Day Weekend reminds me of things to come.  As a kid I hated to see the CNE in Toronto close for another year.  Why? The day after it closed it was back to school.  No kid looks forward to going back to school, unless it’s that kid that always sits in the front row, raises their hand to answer every question, and their goal is to be on the honour role and not to get stuffed into a locker.  Back to school also means traffic will be a mess, especially the first week after Labour Day Weekend.  Everyone is back from summer vacation, but while people were away enjoying summer, they all seemed to have forgotten how to drive.  Drive…neutral…reverse, no different from July 1st, but some folks need a week to adjust.

Another adjustment we have to make after Labour Day is the weather.  Right on cue we reached a high of 17 in Toronto, on Labour Day Monday.  On Saturday it was 34, and on Monday I was looking for a jacket.  The only people happy to see the temperatures fluctuate to that degree, pardon the pun, is Al Gore and the Enviro-Nazis.  You see they don’t call it global warming anymore, now it’s called “Climate Change”.  If the earth gets warmer or colder…they’re always right.  I’m always leery of a zealot or a fanatic.  When you identify fanaticism, usually the motivation is money.  It’s been widely reported that since Al Gore took up the environment as his cause for being, his net worth has grown to $100 million.  For that kind of money people will say and believe in just about anything.  I know one thing for sure, Al Gore won’t have to turn down the thermostat this winter to pay the bills.  If the truth be told neither will we. We’re Canadian’s…winter is around the corner…we deal with it.

As the temperature starts to drop, and the kids have re-acquainted themselves with old friends back at school, our business refocuses to the tasks at hand.  The banks year-end is October 31st, and for the rest of us we have another four months to make our year.  We actually only have three months to work with because December is, well, December.  If you’re not working on anything by December 15th, you might as well shut her down.  Before we get to December we all have an opportunity to make up for lost ground.  Statistics suggest that our industry Q3 numbers will be sluggish.   That’s code for down on a year over year basis. The numbers will probably indicate that we’ve had further overall market share erosion.  I don’t believe the numbers will be alarming but further decrease in market share will create a certain amount angst, and a lot of chatter.  The good thing about our industry is we don’t just babble, we do.  We’ve all been extraordinarily resilient over the last few years.  We have to draw on the lessons we’ve learned from the past, and put that wisdom to good use as we enter Q4.  We all have some ground to make up, and the good news is we have fewer distractions.  The summer is unofficially over.

Until next time.

Cheers,

It’s finally here and there’s no way to avoid it. I’m not referring to recent headlines, the stock market, US debt and downgrading or the economic crisis in Europe. What I am referring to is the funding of our healthcare system, and our aging population. No political party, while governing or in opposition, has had the courage the face these issues. For too long government has put votes in front of fixing the problem. Health care in this country has always been treated like the sacred cow, and because of inaction, the system is broken. To be clear, healthcare in this country is provided by some of the best medical practitioners in the world. But they are expected to perform miracles within a system that’s flawed. The system is going to have to change because the government will no longer be able to throw money at the problem. There just isn’t enough money anymore.

The reason the government is facing this problem is simple, the number of working-age taxpayers will not be able to foot the bill going forward. The Globe and Mail reported last week that the government has held closed-door meetings, at the highest levels, about this issue. According to the Globe and Mail, “Canada, currently the 27th oldest country in the Organization for Economic Co-operation and Development, is on track to become the 11th oldest within 20 years. It’s a challenge that will spark debate over Canada’s retirement age, fertility rates and immigration, while risking generational tension between a growing population of older voters and a shrinking pool of younger taxpayers.“. These figures are staggering.

Healthcare and the aging population will impact us all of us economically. Today we have a tiered healthcare system. Irrespective of what anyone says it’s in place today. Why is that a professional athlete in this country, who requires a medical procedure, be it testing or surgery, can have the procedure done within 24 hours? The reason – someone is paying for it. I recently experienced this first hand. I went to see a specialist a couple of years ago and he said that I required a MRI. He said that he could get me in within 3 months. However, if I wanted to go to a clinic in Buffalo, he could get me in within 24 hours, for a cost of $1,000. I went to Buffalo the next day, and gladly paid the money. I think this is our future, private healthcare. I don’t see what other option we have. A combination of public and private healthcare is the only solution. If this indeed comes to fruition it will have an impact on all employers. If the day comes where employers in this country recruit based on private healthcare insurance, there will be a direct correlation to wages. Private healthcare is costly, and employers will have to balance the capital cost of insurances versus wages. Last time I checked yearly income was an important factor when qualifying for a mortgage. There’s always a domino’s effect.

As for the aging population, I can see the day when reverse mortgages become more common place. The challenge will be to develop products which are more affordable for the elderly, and to create securitization vehicles for reverse mortgages. Nursing homes are costly, and adequate care is always a concern. The elderly may chose to remain in their homes for a longer period of time, and they have every right to live out their lives with dignity, in the comfort of their own homes. Ah, but what’s left for the kids? In this new world, maybe not so much.

Hopefully these issues will be confronted in an honest way. The government has responsibility to lead in these matters, and the partisan rhetoric will have to be put aside for the greater good. The taxpayer, the elderly and the sick deserve better from our government. It’s time to be honest.

Until next time

Cheers

Is it just me, or does it appear that world has gone mad? Based on the images we are seeing from England, I asked myself that very question. The images are shocking and very troubling when you consider why it’s happening. What started as a peaceful demonstration in Tottenham, has now become a violent uprising in many cities. There’s doesn’t appear to be any visible reason for why this is happening. Cities are burning for kicks. Maybe it’s just me getting older but after the third day of watching cities burn I was wondering why the British Government had not deployed the military to quell the civil disobedience. At the very least the police should have been using stronger measures to bring this to an end. The police seem to be taking the velvet glove approach with the anarchists. So far no water cannons or rubber bullets have been used. There’s reluctance by the police, pardon the pun, to pull out the big guns. The British Prime Minister, David Cameron, questioned police methods in parliament yesterday. He’s demanding the police use a much more aggressive approach with the hooligans, anarchists, arsonists and petty thieves. Gee, hugging won’t work?

The average age of the rioters is between 18 and 21. I’m not sure how the state has wronged them to such a degree that they would be willing to burn their cities down, and shame their country in front of the world. But it’s clear that in their tinny pointed heads they’ve found some irrational justification. I get it, 18 to 21 year old are dumb or rather have a lot to learn. I remember being that age, I had all the answers, how my parents survived all those years without my council was beyond me, but even being that dumb at no time did I say to myself, “I think I’ll go burn down Toronto, just for the hell of it”. Why? Because we respected authority, we were taught right from wrong, and I was more afraid of my mother than I was of the cops. That part still true today. When the civil unrest finally ends in London, we will hear the usual verbal diarrhea. The youth of Britain feels disenfranchised, they’re poor, they have no hope, blah, blah, blah. What that really means is, “I live in a world of entitlement, I’m accustomed to getting something without earning it, the state owes me, and if I don’t get mine I’ll burn the city down”. No, that’s not just anger, that’s nuts.

Conversely we’ve witnessed the Sprig Arab Uprising. It still continues today in Libya and Syria. These people took to the streets peacefully in the name of freedom and self-determination. They faced jets, tanks and bullets because they wanted to overthrow oppressive totalitarian regimes. I live in the greatest country in the world, Canada. I’ve been accorded every opportunity to succeed. My parents worked themselves to the bone to provide a better life for their kids. My success or failure is my responsibility. As I compare my so called “problems” to those who took to the streets in the Arab world, I’ll take my problems any day of the week.

There does seem to be a common thread in the in the world today. People are taking to the streets to protest. Is some cases it’s warranted, in others it’s mind boggling. So I can’t help but wonder – can it happen here? The Tea Party in the US is a populist movement. So far Tea Party demonstrations have been peaceful but partisan politics in the U.S. has become so anger based one can’t help but wonder if they will be able to keep a lid on this boiling pot. Based on the language being used by both sides in the U.S., I think there’s reason for concern. As for Canada, I think we would all like to believe that it won’t happen here. We’re far too reasonable and respectful of our community. Then I think about the G20 in Toronto, and the aftermath of game seven in Vancouver, and now I’m not so sure.

Until next time,
Cheers