It plays an important role for many in our society.  I bristle at those who condemn people of faith because “science” can’t prove the existence of what they believe in.  Of course I’m not referring to people who bastardize or prostitute their faith in the name of war or violence.  The people who do this are nothing more than charlatans and con artists, irrespective of religious doctrine.  I have great respect for people who frequent their house of worship, and truly feel better for doing so.  The fact they feel spiritually uplifted is reason to applaud them.  If faith causes people to treat each other with respect, kindness and human decency, then these people should be admired and not mocked.

There’s also another kind of faith, our faith in mankind.  Regrettably our faith in mankind is being tested with far too much regularity.  Our faith was tested, yet again, when evil visited Sandy Hook Elementary School, in Newport Connecticut.  I have no idea how to categorize the actions of the mass murder other than pure evil.  The killing of innocent babies leads me to set aside reasoning or any form of rationale.  Gun laws will be debated, as will mental health treatment, but in my mind clinical terms cannot be used to describe the actions of the cold blooded murderer at Sandy Hook Elementary School.  He possessed a human shell but he was devoid of humanity.

As shocking as the barbaric act was, I’m equally shocked at how compassionate and forgiving people can be.  The father of one the slain babies held a press conference and said that his prayers were with the murderer’s family, for they too are grieving.  This man had not even buried his six year old daughter, and yet his faith in religion and mankind leads him to embrace the murderer’s family in their time of grief.  My reservoir of compassion runs too low to be able to do the same.  What I also can’t do is watch the endless news coverage.  How much heart ache is enough?  CNN posted pictures of all the victims, which included the boys and girls who were slain.  I can’t look at the pictures because when I do I think how they were systematically executed.  The son of b!t$& who murdered these babies had to reload to finish what he had set out to do.  I can’t imagine how the parents of the slain children are dealing with this.

I know the cable news channels have to fill time, and this is news.  But enough is enough.  One of the most simple and moving tributes came from, of all places, Saturday Night Live; for a TV show that has no boundaries they exhibited extraordinary dignity and simplicity.

Until next time,

Godspeed.

We are quickly approaching a significant date, a date which had a profound impact on the global economy and our physchy.  This August is the fifth anniversary of the beginning of the Global Financial Crisis, yes, it started a half decade ago.    What were you doing five years ago?  I suspect you were reading the headlines of the day wondering what does it all mean to me?  It was unfathomable to think back then that sub-prime mortgages, ARM teaser rates, and new terms to the general public like derivatives and swaps, could nearly bring down the global economy.  And yet here we are five years later, dealing with a fragile economy because aftershocks are still being felt because of the GFC, Global Financial Crisis.

Plenty has been and will continue to be written about the Global Financial Crisis and its aftershocks, example being the state of the U.S. economy and the European crisis.  However, little has been written about the lingering affects of the crisis will have on our collective physchy.   I see examples of it everywhere. You don’t have to look any further than the deep distrust and vitriol people have towards banks, and bankers.  Mention Wall Street, executive compensations packages, stock markets and the like and most people will speak of these in contemptuous terms.  That to me will be one of the most significant fallouts of the Global Financial Crisis; the demonization of success.

It has become fashionable to disparage and criticize success.  What was once admired and encouraged is today scorned.  You’re successful?  You make a large sum of money? Shame on you.  It really has become open season for those who are successful.  Politicians and journalists have been exploiting this sentiment for the last five years and will continue to do so until consumer confidence returns in force.  To be clear this not an attempt to justify million dollar comp packages.  But I will say this, if it doesn’t bother you that Shea Weber of the NHL’s Nashville Predators just signed a 14 year contract for $110 million, why are we bothered by what business leaders  earn?    I understand the argument that the wealth gap between middle class and the affluent is widening but its too easy to suggest that fairness would be severed by simply making the affluent pay more.  But it’s becoming fashionable to suggest that because if you’re successful, wealthy, well, you must have done something wrong to earn that wealth.  And if you ‘re legit, you should have to pay  more for the sins of your business brethren.

In some aspects I understand the cynicism towards business leaders, and bankers in particular.   Why wouldn’t there be?  Where are the indictments for those who perpetrated the Global Financial Crisis?  Prosecutors made Bernard Madoff pay, and deservedly so.  But his was school yard compared to those who nearly brought down the global economy.  This injustice fuels the mistrust and demonization of those who are successful.  I hope this doesn’t result in future generations saying to their children, “dream big, be average”.

Until next time.

Cheers.

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The one significant difference between the Australian and Canadian broker market is broker market share.  CMHC just reported that in Canada, broker market share is 27%.  In Australia, it’s 42%.

Attending the MFAA Conference has accorded me the opportunity to garner insight into the Australian broker market.  The stakeholders in Australia are as passionate and committed to their industry as we are in Canada.   I am struck by the market similarities we share, as it relates to the overall economy, and the broker market specifically.   One similarity we share is negative press. The issues are different but the press in Australia is as committed to fear mongering as it is in Canada.  There’s no talk of too much consumer debt here, yet their average mortgage balances are no different than in Canada. Here the primary focus is all that could go wrong beyond Australia’s boarder, which in turn will lead to the destruction of the Australian economy.  

Europe’s an issue; however, the press in Australia is casting its worrisome gaze in China’s direction, which on the surface is laughable.  China is Australia’s largest trading partner.  The Aussies distanced themselves from the U.S. market years ago.  They decided to hook their wagon to an emerging market like China, and fortuitously decided to distance themselves from the world’s largest sub-merging economy, the US.  Ah, but gory headlines are needed, so the focus is on China’s slowing economy.  It appears that 7 1/2% growth is no reason to celebrate or feel comfortable.  The talk is will China have a soft or hard landing, which ultimately will impact the Australian economy.  Can you imagine,  if the US was forecasting 7 1/2% growth, and what that would mean for the Canadian economy?  Yet somehow 7 1/2 % growth in China could have a negative impact in Australia.  Just wondering what part of 71/2 % growth produces a hard landing?    I guess the old saying about the press is no different in Australia – “if it bleeds…it leads”.  

The one significant difference between the Australian and Canadian broker market is broker market share.  CMHC just reported that in Canada, broker market share is 27%.  In Australia, it’s 42%.  I’ve asked every Aussie I’ve spoken to at the conference the following: “how did brokers grow their market share to 42%”?  As I suspected, there was no one definitive answer, but there were some underlying themes.

It appears that the psyche of the average Aussie plays a part in those market share numbers.  Aussies have a deep distrust of the banks and animosity towards their profits. Many Aussies believe the higher cost of borrowing has contributed to those bank profits.  Yet, banks in Australia have a 90% market share of all broker business.  So that distrust and anger has not resulted in less business for the banks. In large part that is due to the lack of competition, but it appears also that consumers look to brokers to provide them with the best of the least tasteful option.  Interesting, to say the least.

Another critical factor which contributes to the success of the broker channel is the investment that the large firms make towords advertising.  I had the pleasure to speak to Michael Russell, CEO of Mortgage Choice in Australia, about this very subject.  Without getting into specifics, Mortgage Choice invests multiple millions of dollars in advertising.  Their individual franchises advertise on their own, which collectively exceeds the dollar amount committed to advertising by Mo rtgage Choice corporately.  Throw in Aussie Hone Loans, and number of other firms which advertise, and it’s easy to see why an Aussie consumers would chose a mortgage broker.  Some of the larger broker firms in Australia spend more on advertising than the banks do, as it relates to mortgages.  The messaging is choice, service, quality of broker, trust and yes, pricing.  Since the GFC (Global Financial Crisis), Aussies are far more focused on price.  However, price alone is not enough.  The Aussie borrower is looking for utility and competency.  

There’s plenty to learn from the Australian broker experience.   Volumes speak, like $90 billion a year in origination.  I’m looking at a rate sheet from Westpac, one of the major banks in Australia, and their 5 year fixed rate is 6.99%, and the good news is their ARM pricing has been reduced to 7.09%.  You may be surprised to learn that 60% of all mortgages in Australia is ARM.  The most recent MFAA Home Finance Index, which measures consumer sentiment, indicates that the percentage of consumers who would chose a broker first, as compared to those who would chose a bank first, is almost identical.  We share many similarities with the Aussie broker market, yet some of the differences are profound.

Until next time

Cheers

For God’s sake they should get a couple of thousand tugboats, some good strong rope, and tow this island somewhere closer to civilization. 

In the name of all things holy it’s far.  For God’s sake they should get a couple of thousand tugboats, some good strong rope, and tow this island somewhere closer to civilization.  For transparency I was fortunate to be able to sit at front of the bus for the flight over.  That gave me the opportunity to stretch out and get some sleep, some seven hours’ worth.  It was the other fifteen hours that I had to fill, and what I learned is that to pass that amount of time away you need a distraction.  Like food!  The flight attendants try to feed you at every moment.  “Mr. Bozic, is there anything I can get you?” Let me see, it’s been 22 minutes since my last meal, “sure, how about some dim sum and 4 bags of chips”.  I’m not kidding.

The real estate market is red hot here – This according to the cab driver who drove me to my hotel.  Property values are increasing by 10% annually, and he owns multiple properties. Hmm, interesting.  I was afraid to ask him if he was a part-time mortgage broker.  Let me rephrase that, I was afraid of the answer.  I have this illusion that the Australian mortgage broker industry wouldn’t allow that.

As soon as I unpacked at the hotel in Melbourne, I went for a walkabout.  I went out and picked up two newspapers, which I planned to read from front to back, so that I can get a flavour of what’s current and happening in Australia.  On the front page of The Australian and The Daily Telegraph was this number one story: the original Wiggles are no more.  Yes, Australia’s jewel and gift to children’s programing is going through a radical makeover.  Three original members are leaving for personal reasons; the usual, wanting to be closer to family etc.  Yeah right, one day the truth will come out and we’ll all learn that there’s a Yoko Ono story in there somewhere.  One of the replacements is, are you sitting down, a Wigglette.  Only 22 years of age, Emma Watkins is the new face and the first female member of the Wiggles.  If you’re wondering she will dawn the yellow shirt.

Australian stock market has tanked.  It’s lost all of its gains in 2012. The European debt crisis dominates the business section but the major banks here feel they’re insulated because they have been preparing for the inevitable for some time now.  Australia biggest trading partner is China.  As goes the Chinese economy so goes Australia’s.

The best five year fixed rate I could find is 6.5%.  Gulp!

Melbourne is a lot like Vancouver, from architecture to the overall feel.  Melbourne hates all things Sydney; just like Vancouver and Toronto.

The learning continues.  The bastards drive on the wrong side of the road.  I was nearly killed twice jaywalking.

Revolving doors at the hotel turn in the opposite direction.  Smacked my head a few times – D’OH!

Clearly I speak funny.  I was in Melbourne for less than twelve hours and two people asked me the following: “so you here on vacation, mate?”

The most important thing I’ve learned so far is that there’s no awkwardness in meeting family for the first time. It was odd talking to my cousin on the phone, making plans to meet at the hotel and having to describe what I was wearing so he could pick me out of the crowd.  He found me, and I got a chance to spend some time with him, his beautiful daughter, his brother and his mom, my aunt.  They were extremely gracious and they treated me like family.  It doesn’t matter what happens from here – that will be my lasting memory of this trip.

Until next time

Cheers

It’s hard to imagine that Europe’s economic situation could become more uncertain but you have to hand it to the Europeans, they figured out a way.  The “left” is taking control of the political leavers in Europe, and the response was somewhat unexpected.  The markets did not react negatively to the elections in France, and Greece last weekend.  Pundits on Wall Street are suggesting they have already built in the outcome of the elections.  It’s seems somewhat odd that the markets took the elections in stride given past responses to the European crisis.  Ah, but that was on Monday.  By Tuesday the markets started to react as investors finally took note.  The delayed reaction was surprising because recent history suggests that the markets will respond negatively to all things Europe.  Manchester United loses 1-0 to Bolton; the Dow and TSX down 200 points.

 The stock market aside, this wasn’t a good week for Europe.  Some economists are suggesting that Europe is once again in, and heading towards another deep recession.  Last month Europe’s aggregated economy contracted.  Spain now holds the dubious distinction of having the highest unemployment rate of member countries in the EU.  It’s estimated that one in four Spaniards are unemployed today.  You know Europe is teetering when Germany and France’s economy has come to a sudden halt.  The population of Europe is looking to punish someone for the mess there in.  The first big shoe to drop was in France.

There’s a new president elect in France.  President Hollande is a left wing ideologue.  He exploited the mood of the French population, and convinced them that they could tax and spend their way to prosperity.  He convinced the French population that France could recover without having to impose deep austerity measures.  France’s new president wants to move from transatlantic agreements and focus more on member countries of the EU.  This will impact Canada.  The Harper Government has been negotiating with the EU about a new free-trade agreement but now that Hollande is controlling one of the leavers the free trade agreement may not come to pass.  At the very least it might be put on the back burner.  France is not the only country to move to the left.  Greece, they’re back.  Yes, a new government was elected in Greece last weekend, one that promises to spend their way out of debt.  Correct me if I’m wrong – but I think that way of thinking contributed to mess they’re in today.  It’s worrisome to see the direction Europe is headed in.  But I also understand when people feel hopeless, confused and desperate, the impulse is to roll the dice and hope for a miracle.  How much worse can it get?

It can get worse, a lot worse.  What was unthinkable a year ago, countries defaulting, is starting to look more probable.  The IMF will not put up with Greece if they attempt to increase spending.  There may be no more bailouts, and if that was to happen there’s no way Greece could remain a member of the EU.  There’s a real possibility that we’ll be witnessing history; rather appropriate given a number of countries in Europe appear to be history.

Until next time,

 Cheers.

From time to time all of us put our faith in people we know nothing about.  We assume that if our life was in danger a police officer would risk their own life to save us.  We assume that if were in a burning building a fireman would navigate the flames of hell to save our life.  We assume that if we ‘re attacked by terrorists our politicians would respond in a way to not only protect us but to extract vengeance as well.  We assume our children are safe in schools because the faculty and staff would do everything humanly possible to protect them.  I only started to think about this after reading about sinking of The Costa Concordia.  It’s only dawned on me now how much blind faith I’m capable of. (more…)

Why is that we have to make things so difficult.  Sometimes the answer is simple, and the solution stares you in the face.  Yet for many in our society the obvious is too easy and they would rather debate and bludgeon us with theory.   The poppy is now being debated.  Should we wear one or not?  Does it glorify war?  Should we wear a white poppy which denotes peace?   I guess we’ve solved all the world’s problem that it’s time now to debate the poppy. (more…)

As the Greek economic tragedy unfolds before our very eyes, you may have missed that a Canadian has  been asked to come in and help clean up the mess.  Mark Carney, Bank of Canada Governor, was appointed head of the G20 Financial Stability Board.  The FSB will be responsible to bring in more regulations and oversight to world markets.  (more…)

Normally when you think of politicians the word brilliant does not come to mind.  There’s an appreciable difference between being a brilliant politician and an effective legislator.  You can be a brilliant politician and do nothing for the people you serve.  Brilliant politicians know how to play the game.  One of the best game players was President Bill Clinton.  Think of the scandals he faced, as well impeachment proceedings, and he walked away from it all, unscathed.  Some might suggest that his reputation have forever been tarnished.  (more…)

 There are historical events that take place in everyone’s lifetime which are seared in our memory.  Every generation has their moment.  I thought about what historical events do I remember vividly as we approach the 10th anniversary of 9/11.  Three events immediately came to mind…

’72 Summit Series

The 72 Summit Series.  Canada versus Russia…. good versus evil… democracy versus communism.  This was more than a hockey series.   I was 12 years old back in 72.  Like the rest of the country I so desperately wanted the good guys to win.  Back then I didn’t get political nuances, all that mattered to me was that my heroes were playing against this team from far away.  I remember when the series moved to Moscow for the final four games, my first thought was, oh-oh, school’s going to get in the way of me being able to watch the games.

All the games would be broadcast in the afternoon.  I really didn’t get differences in time zones back then.  Alas, there was no need to worry.  My grade 7 teacher wheeled a TV into the classroom, and there we watched game five, six and seven.  Then the unthinkable happened.  After game 7 our teacher reminded us that were going on a field trip, and unfortunately we wouldn’t be able to watch the eighth and deciding game.  Clearly she was joking, and I believed that up until the moment I was getting on a school bus to go on the field trip.  I was furious, I couldn’t believe we would miss the deciding game because we were going to a nature preserve, to look at plants and bugs.  As game time approached I made a decision, I had to find a way to watch the game.  When we drove up in the school bus I noticed there was a building on the property.  I decided to have a look.  The building was empty and I went for a walk about until I found a room that looked like a cafeteria.  I walked in, and is if my prayers were answered, there was a TV.  I went to turn it on, promising god that if the TV worked I would be really good.  He heard my prayers, its minutes to game time.  Then my teacher walked in…arms folded across her chest…she asked me, “and what do you think you’re doing Mr. Bozic”.  Back then I didn’t understand rhetorical questions, was so I answered “I’m watching the game”.  She gave me my marching orders but I responded with, “I can look at bugs and plants any day of the week, but this hockey game is history”.  She walked out and I thought this game better be worth it because my old man is going to kill me.  You see back then you didn’t defy teachers, at least not in our house.  As I contemplated that my life will probably end in four hours, I figured that’s what would happen when I get home from school, my teacher and fellow classmates walked into the room.  We all sat there together and watched this amazing hockey game. When Paul Henderson scored the winning goal, with less than a minute to go in the game, the room went nuts. I remember walking up to my teacher and hugging her, and to say thank you.  I remember her looking down on me, with a smile on her face, and she said, “you were right”.  Some teachers are amazing.

John Lennon

I remember the night John Lennon was murdered because I just started working at a radio station.  Many moons ago I worked on air, and my first gig was an overnight jock at a radio station in Orillia, CFOR.  During my 45 minutes of training, I was told keep an eye on the news wire.  It’s a service radio stations subscribed too, and the newsmen would use the copy to read on air. So there I am, a rookie announcer, all by myself at the station, nervous as hell and the wire service is going crazy.   I heard some beeping coming from the wire service machine, so I figured something big must be happening. I walked into the newsroom, I looked at the  copy which was being printed, and there it read, BULLETIN…JOHN LENNON GUN-DOWNED IN NEW YORK.   Holy &@!?…what do I do now?  So I went into the music library and pulled out every Beatles album the station had.  I played Beatles music for rest of my shift, and went on the air every 15 minutes with updates about John Lennon’s murder.  There was no protocol to follow so I winged it.  Thankfully the program director was on side the next day, and I’m sure all my listeners that night – the overnight gas station attendant and the two cab drivers – appreciated the music.

9/11

I was supposed to be on a plane on 9/11.  I was at the Fairmont Hotel at the Vancouver airport on the morning of 9/11.  I had a plane to catch back to Toronto.  I woke up that morning, made some coffee, and started to read the newspaper.  I’m reading yesterday’s news so I’m completely oblivious to what’s going on.  I then get a phone call from my cousin, who lives in Vancouver, and he asks me if I’m watching the news?  I said no, and he said turn it on, I think we’re at war.  I thought what the hell? Did he fall out of bed and bump his head?  Okay, I’ll play along.  I turned the TV on, and I watched in stunned disbelief for about twenty minutes.  For some reason a voice in my head said, “get away from the airport”.  I packed up my clothes and made my way to my cousins place.  I had to stay there for 5 days before I could get a flight out.  I’ve never wanted to come home so badly.  I just wanted to be around family and friends.  It’s been 10 years since 9/11, and our world changed dramatically that day.  Especially for the 27 Canadian families who lost loved one’s on 9/11.

Godspeed.

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