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