“Italy and Spain will be left with little choice but to plug its nose, open wide and except the bitter medicine. Both Italy and Spain are too big to fail.”

Canada wasn’t the only nation that celebrated this weekend. The Austerity Bowl, better known as Euro 2012 soccer final was played this weekend. The finals were a nice distraction for those of Spanish and Italian decent – that was before the game started. The final wasn’t much of a game because Spain destroyed the Italians on the field. Soccer purists could marvel at Spain’s dominance and breath taking skills. But if it was an exciting game you were looking for, you would have been better off channel surfing. If you missed it the final score it was Spain 4 Italy 0. Ouch!

Prior to Sunday’s final game you couldn’t help but notice the flags of European countries being proudly displayed by motorists. If it’s like this in Toronto and other Canadian cities can you imagine what it must have been like in Spain and Italy leading up to the game?! These two countries could sure use a distraction. Both countries are in dire straits when it comes to their respective economies. Both Spain and Italy’s have had to look for handouts from their European ruler, Germany and the IMF. The only thing missing for the Italian and Spanish President is a piece of cardboard that reads, can you spare a trillion? Spain’s unemployment rate has now reached a shocking 25%, and they can only envy Italy’s 10.2% unemployment rate. Investors view Italy as being much safer than Spain, but that’s like picking your poison. Home sales in Italy have dropped by 20% in 2012, and they cannot service their $2 trillion debt. That being said home prices have remained steady in Italy, and their banks are not nearly exposed as Spanish banks. But Italy’s irresponsible government spending in the last twenty years has given them very little leverage to negotiate favorable loan terms. Italy and Spain will be left with little choice but to plug its nose, open wide and except the bitter medicine. Both Italy and Spain are too big to fail. They are the 8th and 12th largest economies in the world, their neighbor, Germany, cannot afford to let that happen. Greece? A throw away. The two aforementioned countries? Not a chance. Germany will figure out a solution and Italy and Spain will have to accept the terms; Like maybe having Angela Merkel’s picture on all their currency, including coins.

If the fine people of Italy and Spain derived any kind of pleasure prior to the final, good for them. A distraction doesn’t make the problems go away but being able to put aside everyday problems for a brief moment must have been such a relief for them. I suspect that good number of people in Italy and Spain must be envious of us here in Canada. Sure, we have our issues but when compared to other countries around the world they would gladly trade their problems for ours. How fortunate that those of Italian and Spanish nationality get to live in such great countries like Canada. That applies to individuals of every nationality that lives in Canada. Maybe one day everyone will remember to celebrate Canada during international sporting events; something simple, like displaying the Canadian Flag along with your country of origins flag when driving around the city. No one can use the excuse “I didn’t think of that”. The final was played on Canada Day.

Until next time

Cheers

Ah, but this time it’s not about casting a vote in a federal, provincial or municipal campaign.  We here in Ontario will exercise our democratic right in early October, the pre-set date for the Provincial election in Ontario, the election I’m referring to is the upcoming CAAMP Board election. As someone who has campaigned twice I can assure you the process of getting elected is as political as any other election.  It takes organization and a commitment of time and resources to get elected.  To all the individuals that have put their names forward to run this year, I commend them for their courage and willingness to volunteer their time for the greater good. (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

I think it’s safe to say that summer has finally arrived. I hear the snow melted yesterday in Calgary, and in Vancouver they’re calling for two days of sunshine, in a row. So summer must be around the corner. But you’ll really know when summer is here when Peter Mansbridge begins the National with the following intro; “Greece is on the verge of declaring bankruptcy….the war in Afghanistan rages on … US unemployment rate hits a staggering 14%…But first our top story…Heat Wave Hits Toronto”. And this is the reason why the rest of Canada hates all things Toronto.

Firstly, as Canadian’s we’re fixated on the weather. Have you ever noticed how much time we spend talking about the weather. Yet for some reason the press elevates the weather situation in Toronto. Look, 33 degrees is hot, but when it’s about Toronto, the humidex factor is always added. It’s not enough to say it’s 33 degrees, the reporter has to say “it feels like 46 degrees”. It’s like some kind of bragging right. Here in Toronto we’re equal opportunists. In the winter it’s all about the windchill. When it’s reported that with the windchill it feels like -28 in Toronto, people in Edmonton and Winnipeg roll their eyes and say “bleeping wimps”. When it comes to the weather, Toronto measures itself by how cold or hot it is. The long range forecast for Toronto, I know this because I’m Canadian, calls for a hot and dry summer. So for everyone living outside of Toronto, don’t be surprised if you hear on The National that the Mayor of Toronto, Rob Ford, has called out the military to help us cope with the heat. The military will walk the streets of Toronto with umbrellas to shade us from the sun.

The summer is a great time of the year, but it can pose challenges for business. Firstly, don’t buy into conventional wisdom that business will slow down because it’s summer. Last time I checked bank’s weren’t boarding up branch windows, with a sign posted on the plywood that say’s…”We’ll be back in September”. It’s difficult but you have to remind your staff, and yourself, that it’s business as usual. Secondly, make a commitment to outwork the competition. Most of your competition will check out, mentally or physically. The majority of people will be lured by the distractions that summer brings. When your competition is playing, you have a great opportunity to eat their lunch. Thirdly, accept the fact that your staff wants to enjoy the summer months, but it doesn’t necessarily mean lost productivity. Flexible hours are an option, and you may decide to knock off early on Friday’s. That’s fine as long as everyone is focused throughout the week. The bills got to be paid.

Until next time.

Cheers