“I’m great!  Okay, enough but me. So what do you think of me?” In my mind that’s how the conversation went between President Obama and Prime Minister Trudeau at last week’s State Dinner at the White House. I’m sure trade issues, environmental concerns, and Canada’s military support in the Middle East all came up in conversation; but I can’t help but think that at some point the two leaders exchanged winks and knowing head nods. The body language spoke volumes, like, this is really cool. Sure, we might have economic issues to deal with, a refugee crisis, security concerns, an obscene amount of national debt, but that should never get in the way of having a good party; and what a party they had.

In fairness, a state dinner at the White House is not a common occurrence for Canadian PM’s. If I’m not mistaken the last time the head of state from Canada was the guest of honour at the White House was in 1997. President Clinton warmly welcomed Prime Minster Chretien for an evening of Pomp and Circumstance. Let’s see, Clinton and Obama, Democrats; Trudeau and Chretien, Liberals. I find it deliciously ironic that the intelligentsia always campaigns on helping the impoverished, working for the middle class, saving mother earth, but would never dare using photos of a state dinners when campaigning to the masses. That would be too difficult to square. The all-knowing and chosen ones are best fit to suspend reality. There’s no point trying to square the lavishness because it is too complex for simpletons to understand.  It’s something that’s always done, and that should be enough. Oh wait, Prime Minister Harper never had a state dinner in his honour. I’m sure it was simple oversight and had nothing to do with political ideology. (more…)

This has gone from improbable, to doubtful, to laughable, to now possibly feasible.  Go ahead, say it out loud: President Donald Trump.  As I’ve written in the past, I’m somewhat of a political junkie, and for some inexplicable reason I find politics interesting.  Following politics today requires a sense of humour as well, because laughter beats the alternative, crying (unless of course the tears are a result of busting your gut from laughing).  Following the shenanigans today, the Republican and Democratic Primaries, can’t help but make you laugh. Yes, I include the Democratic Primary as well. On one side you have an elderly communist, I mean socialist, if I’m not mistaken he served with Abraham Lincoln as his Secretary of State, and on the other side you have a candidate where the majority of her own party doesn’t trust her. She’s also being investigated by the FBI. In fairness, the Democratic Primaries are the opening act for the wonderful vaudeville act playing nightly, the Republican Primary.    

Never, in my wildest dreams did I think that Trump had a chance.  I firmly believed that this was nothing more than a publicity stunt for him, and that Republican Party would do whatever was necessary to put a stop to him. Well, it hasn’t worked out that way. Donald Trump now believes he can become the president of the United States of America, and why wouldn’t he? His candidacy has now become a movement.  The more outrageous his claims become, the more his popularity grows. The more he changes his positions, on a daily basis, the more people lineup up to hear him speak. The angrier he becomes, the more American’s say “he’s our guy”. His road to the White House still has many miles to go. The American political system is a little convoluted. It’s not about the number states he wins, but rather the number of delegates he receives in each state. In many States the delegates are distributed by the proportion of votes the candidate received in the primary election. In other words, if you finish in second, you still win delegates.   To become the republican nominee, Trump would require (more…)

It looks like our neighbours south of the border will get something “special” this holiday season; like an interest rate hike. After almost nine years the U.S Federal Reserve rate is about to be increased.  Chairwoman, Janet Yellen, has been itching to raise rates for a while now, and the latest economic data from the U.S. gives her an opportunity scratch that itch. A rate hike is a signal to Americans, and the global economy, that worst is behind them, and the need for government to stimulate the economy is in the rear view mirror.

Or is it? The U.S. November job report indicated that over 200k jobs were added to the work force, their dollar is soaring, the unemployment rate has been cut almost in half to where it stood in 2008, so what’s not to be giddy about? Well, there is data to support that consumer spending, housing starts, and job creation have flattened. So the question is what happens if their economy has flattened, while at the same time the overnight lending rate is going up? Some pundits are actually suggesting that raising the rates now gives the Fed some wiggle room if they have to lower rate, yet again, to stimulate the economy. It’s not as if this hasn’t happened before.  Like back in 1930′s, a rate hike, followed by a quick rate drop, all the while knee deep in the Great Depression. Yeah – that little historical nuisance.

So what does the Fed’s move to increase rates mean for us here in Canada? For the time being, not much. We normally walk in lockstep with the U.S. Fed, but we’re about to decouple from that standard practice, and continue on the path we are on today. The reality is that our economy is still too fragile to mimic the Fed’s move. The oil sector in this country has been hammered, and the fallout has been far reaching. Some are suggesting (more…)

Just coming back from New York, and I’ll spare you the cliché.  New York – bright lights, the city that never sleeps, blah, blah.  All true, but the bright lights I’m referring to is a select group of loyal supporters of Merix Financial.  We  had the pleasure of hosting a number of mortgage brokers in New York to attend the World Business Forum.  The event is held over  two days and attendees at the conference are leaders and executives from around the world.  The lineup of speakers have diverse backgrounds and experiences.  It’s the diversity of the speakers which provoke thought and critical thinking.  The two day event allowed all of us to exit the echo chamber that we all find ourselves occupying.  That is a critical element of professional development.  Thought provocation forces you out of your comfort zone.

Our invited guests embraced the opportunity to listen and learn from speakers whose subject matter expertise may have appeared to have only a subtle correlation to their daily actives.  But, they came open minded and prepared to see where the experience takes them.  I got a big kick watching our guests as the event evolved.  Here was a small group of people who for the most part were strangers to each other or know by name only.  However, in a short period of time small micro groups were formed to talk about issues that each individual faces each and every day at work.  It’s remarkable how quickly trust was built among the group, and it was a safe environment to say “I got a work problem, and I don’t have an answer”. Assistance and suggestions from peers was immediate, and no one held back for competitive reasons.  I can’t tell you how cool it is to watch a team come together. Make no mistake, this is a team.  As of today they know they can pick up the phone and reach out to one of their peers from across the country to help them solve a problem.  Sometimes business can be overwhelming, but it doesn’t have to be lonely.

In my humble estimation, the event was a success, and here’s why.  First and foremost, our guests wanted to be there.  That was demonstrated by their support of Merix to ensure they were invited. Also, our guests are all focused on building a business, and not just a job. That’s an important distinction. Secondly, Merix set the right expectations.  It was learning first, party second.  Don’t get me wrong, there was time to have fun.  Like the night we all went to Madison Square Gardens for a Fleetwood Mac concert.  Our seats we on the floors and we were swept up by the music and the New York audience.  Even though there was bit of a “generational” gap for some of our guests, all danced, had a few libations, and allowed themselves to be swept up by the event and the masses.  But come 8:30 am the next morning, all were ready to begin a new day.

An extraordinary amount of time and effort is put into planning one of these events.  I can never really be sure if our guests will find a benefit in attending, while leaving their business for a few days.  After the wrap up dinner we hosted on the final night, one of our guests sat next to me and gave me a book.  She wanted me to have the book because she thought I would enjoy the read.  She mentioned that she wrote a note on the inside of the cover but asked me not to read it at the table.  She said she didn’t want to become emotional.  I smiled and said I would respect her wishes.  After three hours of the book being by my side, I finally made it back to my hotel and I read her note on the inside of the cover.  It was heartfelt, genuine and so sincere.  It was right then that I knew the effort in putting this event together was worth it.

So to Gerry, Tim, Scott, Shawn, Karen, Richard, Brenda, Tracey, Sandy, Paul, Sarah, and Elisseos, if you don’t mind…let’s do it again.

Until next time.

Cheers,

Is the glass half full or half empty?  Are the measures that we’re taken to modify the real estate market balanced or have policy makers over reached?  Numbers are supposed to be black and white.  Shades of grey come into play depending on the side of the argument you’re on.

The Canadian Real Estate Association, (CREA) released data this week which will make all sides of the Canadian real estate market argument happy.  Example, according to the MLS Home Price Index, home prices have increased by 7.6% from a year ago.  Now if you take Vancouver and Toronto out of the equation, the increase was 4.6% on a year over year basis.  So are we on the cusp of a potential real estate bubble or is it simple supply side economics?  The number of homes sold came in slightly lower than a year ago.  So is demand outpacing supply, causing prices to increase?  And oh my god, condo sales increased in Toronto as well. Red Rover, Red Rover, Doom Sayers come on over.  There’s a little something for everyone. The teeth nashers and those predicting Armageddon are fist bumping each other.  Others, justifiably so, are saying it’s a balanced market.  Should the price of a real estate never rise? If that we’re the case we would all be squatters, living in tents.  The commentators I love are the ones that sit firmly on the fence.  An economist for one major bank said their analysis suggests that we all experience a 10% decrease in home values, and there could be further risk if sales activity was to increase. They were so concerned with the “risk” that they matched the 2.99% five year rate that one of their competitors came out with.  That fence post must really be uncomfortable to sit on.

Sifting through all the commentary can be confusing, and let’s be honest, depending on the amount of skin you have in the game will influence the argument and opinion you support.  To combat human nature it’s important to seek contrary opinions, and I force myself do that, almost daily.  It takes some effort to find commentary which is not self-serving, like those selling newspapers, hedge funds that are shorting the Canadian economy or politicians playing politics.  Here’s a couple names to look out for when you want broader viewpoint, economists Nouriel Roubini and David Rosenberg.  What’s their bona fide? They predicted the financial collapse of 2008. So what are they saying today?  According to Rosenberg, “Nattering nabobs of negativity – stop knocking yourself out. First, there are a host of reasons why I see inflation rising moderately, and the wage process is but one of them. There is a very interesting development taking place that is not garnering a lot of attention. The U.S. commercial banks are loosening their purse strings. As for the U.S. economy, it is looking as though Q2 real GDP growth will come in close to a 4% annual rate. Why I turned bullish on the U.S. consumer.”  Clearly he’s refereeing to the U.S. Economy, but like it or not, when America sneezes we look for a tissue.  In good times and bad.

Until next time!

Cheers,