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Moody's Turns To Canada: Ontario Outlook Revised To Negative, "Softening Economic Outlook" Cited
And so the focus shifts to the quietest neighborhood on the block: "The negative [Moody's] outlook on the province [of Ontario] reflects the softening economic outlook, Ontario's growing debt burden, and the extended timeframe to achieving a balanced budget." What's next: someone dares to question the stability of Canadian banks which as we it turns out may have a few hundred billion in hyper-rehypo assets (Canadian Imperial Bank of Commerce (re-pledged $72 billion in client assets), Royal Bank of Canada (re-pledged $53.8 billion of $126.7 billion available for re-pledging)) pledged there... and there... and there... and so, ad inf.
From Moody's:
RATINGS RATIONALE
The change in the outlook reflects Moody's assessment of risks surrounding the province's ability to meet its medium term fiscal targets given the recent slowdown in provincial economic growth and the resulting risks to the province's ability to stabilize the recent accumulation in debt.
"The negative outlook on the province reflects the softening economic outlook, Ontario's growing debt burden, and the extended timeframe to achieving a balanced budget," said Moody's Assistant Vice President Jennifer Wong, lead analyst for the Province of Ontario.
The province's Fall 2011 statement, released in November, revised its forecasts down for provincial growth in 2011 and 2012 to 1.8% and 1.8% from 2.4% and 2.7%, respectively. The provincial economy is particularly affected by the moderation in US growth, given its higher export share relative to other Canadian provinces and the high proportion of international exports (roughly 80%) destined for the US.
The province set out in its 2011-12 budget a plan to return to fiscal balance in 2017-18. Moody's has highlighted that the extended period of fiscal consolidation presents an element of risk in achieving the planned consolidation path, and a risk to stabilizing and reversing the recent deterioration in the province's financial position. At March 31, 2011, Ontario's net direct and indirect debt, at roughly 200% of consolidated revenues, was at the high end of the spectrum for Canadian provinces, whose ratings remain in the narrow range of Aaa to Aa2.
The slowdown in provincial economic growth presents a challenge to the already lengthy planned consolidation path, particularly given the strong expense growth seen in recent years. Expense growth leading up to the recent downturn was relatively robust, highlighting the challenge ahead. Indeed, expense growth averaged 7% annually in the five years to 2007-08, with health expenses having grown at an average of 8%. The fiscal plan presented in the 2011-12 budget assumed expense growth of roughly 2% annually for the duration of the plan.
Nevertheless, Moody's reports that Ontario's high investment-grade rating reflects high debt affordability and the high degree of fiscal flexibility inherent in the institutional framework governing the way Canadian provinces operate. The current low interest rate environment has enabled the province to issue long-term debt bearing historically low coupons. While the proportion of revenues consumed by interest payments has increased with the recent accumulation in debt, this remains manageable given the province's fiscal flexibility. Moreover, the province's large and diversified economy and growing population provides access to a broad and productive tax base and, as such, remains a source of credit strength.
While Ontario retains sufficient fiscal flexibility inherent in the institutional framework to adjust its fiscal outcomes, thereby improving its financial position, difficult policy decisions are required.
"We believe that increased fiscal discipline will be required to sustain debt affordability," said Ms. Wong. "If a credible plan to address the fiscal imbalance and stabilize the debt burden is not implemented in the next provincial budget, expected in March 2012, downward pressure on the province's Aa1 rating would emerge."
Moody's P-1 rating on Ontario's commercial paper program remains unchanged.
The Province of Ontario is Canada's largest province, representing approximately 40% of national GDP. The province's population measured approximately 13.2 million in 2010.
WHAT COULD CHANGE THE RATING UP/DOWN
A rating upgrade is unlikely in the near term given the current context of continued consolidated deficits and debt accumulation.
An inability to address continued consolidated deficits and to stabilize the debt burden over the medium term would put downward pressure on the rating. Further downward revisions to growth would also place pressure on the province's ability to achieve medium term fiscal targets and would place negative pressure on the rating. Finally, if debt affordability were to deteriorate due to higher-than-expected increases in debt levels or a significant rise in interest rates, the province's fiscal flexibility would be reduced, exerting downward pressure on the rating.
The methodologies used in this rating were "Regional and Local Governments Outside the US", published in May 2008, and "The Application of Joint-Default Analysis for Regional and Local Governments", published in December 2008.
Please see the Credit Policy page on www.moodys.com for a copy of these methodologies.
REGULATORY DISCLOSURES
Although this credit rating has been issued in a non-EU country which has not been recognized as endorsable at this date, this credit rating is deemed "EU qualified by extension" and may still be used by financial institutions for regulatory purposes until 31 January 2012. ESMA may extend the use of credit ratings for regulatory purposes in the European Community for three additional months, until 30 April 2012, if ESMA decides that exceptional circumstances arise that may imply potential market disruption or financial instability. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.
For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
Information sources used to prepare the rating are the following :
parties involved in the ratings, parties not involved in the ratings, public information, and confidential and proprietary Moody's Investors Service information.
Moody's considers the quality of information available on the rated entity, obligation or credit satisfactory for the purposes of issuing a rating.
Moody's adopts all necessary measures so that the information it uses in assigning a rating is of sufficient quality and from sources Moody's considers to be reliable including, when appropriate, independent third-party sources. However, Moody's is not an auditor and cannot in every instance independently verify or validate information received in the rating process.
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When will you downgrade the US of A ? You need permisssion from the sage of Omaha? Or the CEO likes his job too much?
"and the extended timeframe to achieving a balanced budget"
Will the US ever have a balanced budget?
"Why do you look at the speck of sawdust in your Canada's eye and pay no attention to the plank in your own eye?"
Because Canadians have been spouting off that their banking system is "secure" and better than the rest of the world. If you listen to any of the real estate commissions (or read some of the idiotic statements coming from real estate agents themselves) you'd see how naive they are. Housing has been artificially kept afloat from actions taken by CMHC, securing ALL mortgages in Canada, in effect, transferring all liability onto the taxpayer.
As such, all real estate agents and bankstas have gone orgy wild the last few years pumping housing. When she blows, look out. Canada is sitting on the edge of something very painful.
maybe america will invade.
Remember the war of 1812 - 1814? The one Americans seem somehow to forget?
Ontario (government) doesn't like people with disabilities and is determined to get them out of the private and public sector by punishing anyone who hires a disabled person - they even punish employers in other provinces who hire Ontarians who are disabled. Goes into effect January, 2012:
Accessibility for Ontarians with Disabilities Act (AODA)http://www.accessabilityadvantage.ca/about-aoda.php
How will being compliant help my business?Approximately 1.85 million people with disabilities (one in seven) live in Ontario.
In Canada, the buying power of persons with disabilities is now estimated to be $25 billion, a figure that more than doubles when you factor in the influence these individuals have on the spending decisions of friends and families. Source: Employment of Persons with Disabilities in the Province of Ontario Research Report; WCG International Consultants Ltd. in cooperation with the Ontario Chamber of Commerce.
It makes good business sense to be accessible to people with disabilities; it boosts your bottom line, your image in your community and your relationship with employees.
Will there be costs associated with AODA compliance for our organization?
That depends on how much accessibility your organization has already built into its structure, policies and practices. Organizations just starting out can expect upfront costs related to undertaking accessibility assessments, consulting support and training.
The other side of the equation, i.e. your return on investment, is well worth considering: companies that take the extra step of offering inclusively designed products, services and environments open doors to a consumer market worth $25 billion. That’s the estimated spending power of people with disabilities, according to an RBC study in 2000 – just the tip of the iceberg when you consider these individuals influence the purchasing decisions of an additional 12 to 15 million Canadians every year.
According to research published by The Martin Prosperity Institute (affiliated with the University of Toronto’s Rotman School of Management), the impact of AODA on the Ontario economy over the next five years could result in an annual increase in revenues in the range of $3.9 billion to $11.1 billion for retail and tourism alone.
What happens if my business is not in compliance?Under the Customer Service Standards, the government will apply fines of up to $50,000 per day or part day for Directors and Officers, and fines of up to $100,000 per day or part day for the corporation.
hhhha! Nice Ahmeexnal. Eeeeeeh indeed.
But what a sight. Downgrades everywhere. Sovreign, state, national, notional, city, state and county.
All down together.....
Then....NAU....Amero.... trans texas corridor.... en-foldment!
ori
/this-that-and-the-4th-reich/
A casual & random Walk Down Ontario's Main Street would tell any half-awake organism all they need to know about the state of Canada's largest (by population and economy) province's health, and I'm quite confident that a perusing of the real books and records of the banks and financial institutions there, despite Globe&Mail protestations and denials, would reveal a similarly depressing tale about the state of its finance/banking health.
Canada & Australia have two of the largest real estate bubbles that have yet to burst in earnest.
true. cost of a 1 bedroom far exceeding 5x salary for example, sometimes 10x.
nobody is debating that there is overvalued realty and a rebalancing is due.
the question is how much risk has been leveraged-in? have lending standards hit
ludicrous speed? are there any alt-a liar-loans? has there been any securitization?
was a fraudulent non-existant guarantee touted? have they reneged on proper
notarised liens? has there been any robo-signing?
if not then there's no systemic risk. it's just an over-exuberant economy biting
back a recession. people will lose jobs, houses, but insitutions won't go down
dragging the public with them (hopefully).
I thought the largest real estate bubble around was China? Herp dee derp!
Is the fucking government of Ontario smoking crack? Time to get the fuck out of Ontario while you still can.
eat a beaver save a tree ..
maple syrup bubbles pop too! I am Canadian !
wake up you frozen muff humpers. What did you think was going to happen?
What does this have to do with hiring? From what you've posted, it looks like if your business doesn't have a wheelchair ramp, you're getting fined.
$50K per day is a hefty fine, holy crap.
It seems like they're forcing people to make modifications to accomodate the disabled, and "encourage" hiring disabled people.
Here's an example from the mandated "course" (paraphrased):
If a Quebec furniture manufacturing factory has a retail outlet in Ontario and that outlet has a wheelchair disabled person, then the retail store AND THE FACTORY IN QUEBEC must become wheelchair accessable. Disabled people are an extreme LIABILITY come January.
Thank GOD I'm not disabled.
According to the IQ test scores of 99% of the population, they ARE disabled. They just don't know it.
The course covered that as well. It made sure to point out that there is something called "intellectually disabled". Can you believe it?!
One in seven (14%) of Ontarians are legally classified as "disabled". God help us!
If you calculate the purchasing power of the disabled it comes out to $13,000 each.... is that a lot? How much of that is a direct result of government subsidies/benefits?
Here's another example from my company's course:
If you own a "no returns" clothing store (Goodwill/Salvation Army etc) and your changing room isn't big enough to fit a wheelchair then you must make good on any returned items from a disabled customer because they were not afforded the opportunity to "try on said piece of clothing".
How about they go shop somewhere else, or simply absorb the cost themselves?!
There will be signs on clothing stores "NO WHEELCHAIRS ALLOWED"! That is the unintended consequences of these economic rulings.
They cannot enforce a provincial statute in another province. They can try, but the Province of Quebec will send an army of lawyers to the Federal court, and fight this with all the might of the Constitution. There are limitations to what provincial powers can impose. I will be looking forward to seeing this battle in court. I hope Ontario gets kicked in the nuts for this. It's like the Fucking Helms-Burton law the Americans tried to impose on Canadian companies. There is something to be said about fucking power hungry bastards extending their tentacles in places they shouldn't be. Tentacles can be cut off eventually...
Thank God we did not take Canada in 1812.
CANADA HAS TOO MANY FROGS.
jusman, it was actually two wars.
the americans invaded in 1812 .. lost
then they re-tried in 1814 and lost again..
lol maybe that's why Harper has been tying Canada to the UK Monarchy lately
Let the Americans remember when the Canadians burnt down the Whitehouse. Well... with British assistance.
jon
the canadian forces worked with the british forces, the french and the indians. they were still outnumbered 10 to 1, but in the end, superior leadership, tactical brilliance and the americans (well deserved) fear of the indians is what won the battle. thats why i always am amazed at canadians that have a grudge against the french or the indians.. without their sacrifice there wouldn't be any canada. the british were busy fighting napolean on the continent and didn't have the resources available to protect the dominion of canada.
another interesting note.. the french helped to finance and arm the american army to fight the british. now, the americans think the french are crap and the british are their best buddies..
Not again? Fuck!
invade? no, no. they'll emigrate here for some unknown reason.
Emigrate where to the USA? You high? Houses are $25K in Florida wouldn't you think we would pack up and go already? Not happening champ.
There are ~3 million snowbirds that migrate to the USA (around 10% of population) every winter. That number will grow as more boomers retire. Cheap houses in Florida and Arizona are nice, but you have to take into account the costs of taxes, insurance, and upkeep - around $5K per year in Sarasota County, FL for a $30K house.
Canada is the best country in the world to live period.
I live in Ontario, it's booming everywhere
I own a company, hiring is NOT easy, construction and condos everywhere all over Ontario.
Plus Ontario in the north has pleanty of natural resources.
No worries about Ontario! move along. California? Newyork?
Personally, I think Canada should repatriate all the north-eastern blue states down to New York. Y'all can keep New Jersey. (shudders)
Let them. They'll lose another war. Again.
Yeah, we're really worried about all those Frenchmen up there.
lol...but wouldn't this be a swell time to...ya know, approve something that would help out both countries.
A mutually beneficial kinda thing, a lynchpin so to speak, which everything else hinges.
Kinda of a...keystone event ;-)
I think it's a PIPEdream, this timeLINE of yours.
Its remarkable isn't it?
Not even three-four years ago we were told by our best & brightest it takes three-four years to get it all into commercial production.
We can't wait!!!...was the common refrain.
Well...look what time it is now ;-)
Since 1977 we have heard it will take 10 years to get oil production in Anwar online, so it's just not worth it. A facility the size of Laguardia airport in an area the size of Georgia would have been operational 25 years ago.
"Since 1977..."
Well, there ya go. No, we're too busy chasing other pipe dreams and pied pipers.
We got it comin out of our ears...but "it" must be made less affordable to the masses so that the pipe dreams of the crony elites can come true.
God, I swear the inmates are running the asylum.
I'm in the process of emigrating to the US being that the opportunities and economic outlook are superior to my beloved alberta.
I understand the ratings agencies are working on a new rating quadruple a plus squared cubed which will be bestowed in the USA ASAMFP.
There are great opportunities to be had in Detroit and Paterson. You might want to contact their Chambers of Commerce. Happy days are here again.
At least we know who owns our houses... I think.
arms dealing?
Dude if you can't find a good job in Alberta you might want to pick up some breath mints
Green for you...half of Ontario, nearly all of PEI, the ones that don't speak french in New Brunswick, Nova Scotians and the most of the Newfie's have already discovered that.....
Where else can you go from earning $15 - $20k as a yard boy to hiring Ferraris for the Fort McMurry - Edmington dash in the same year....????
I have an offer in from an American company but really trying to figure it out. Love Canada, better for prepping, tons of family here. On the downsiide - no innovative companies, no big money.
I did consuliting work in the US for two years in the Y2K run up. Met a lot of different Americans, generally nice people, although most were awfully ignorant about the world outside their border (and this was in Detroit, just across the river from Canada).
Biggest reason I wouldn't move to the US: health care. I worked with Blue Cross/Blue Shield of Michigan. They had employees there who, having been there 25 years, were allowed 5 weeks vacation a year. In the department I worked with, the manager (a 50+ spinster who lived with her mom) didn't take more than 2 weeks, and so wouldn't allow any of her staff to take more than 2 weeks either. She simply wouldn't approve vacation requests.
I asked one staffer why she didn't complain to HR. She responded that if Eva Braun got wind of it, she'd first make her life hell, and then find some pretext to fire her. Then, she told me, she has two kids at home, she's divorced, and even if she could find a new job (these were the late 90's boom time remember), she'd probably have to go into an HMO, whereas at BCBS, she had full coverage. Bottom line: she, and all the others, ate Eva's fecal matter to keep their jobs (note: in other departments, such as the IT group, people enjoyed their five weeks. One guy arranged it so that he only worked 3 day weeks in July and August, enjoying his cottage in northern Michigan the rest of the time).
So, people stayed in jobs they hated because of health care, and that gave bosses enormous power to treat them like crap. Here in Canada, even though I've been unemployed a few times over the last ten years, I haven't had to worry about my diabetes treatment. Bosses can still treat you like crap, but you don't have to worry about getting sick if you quit.
Never mind the crime, the urban blight, and the race warfare differences; I'd stay in Canada just so I can keep my self-respect at work.
But they have the tar sands and now the Winnipeg Jets. Certainly, nothing bad can ever happen to Canada. Their housing is still underpriced and under supplied. Just ask their real estate agents.
It is so funny that all of the hockey teams left Canada because they couldn't compete with such a weak Canadian dollar. Their dollar got strong and they lured back the Jets. They will probably get the Phoenix Coyotes and a couple of other ridiculous American hockey teams. I'm looking at you Nashville. What are the chances these teams will return just in time for the Looney to get crushed and the Canadian economy begins to make the American economy look good?
Just check out the real estate prices in Canada sometime. Yikes. We are talking Florida ugly. Good luck, hosers.
Hey! That Stanley Cup is worth money. Just ask Bawston.
http://prohockeytalk.nbcsports.com/2011/06/01/stanley-cup-final-could-pu...’s-economy/
downpayments of 25% or more do not have to be insured thru the CHMC, it's carried directly by the banks. we don't do robo-signing here, we do credit checks, our nickels have beavers on 'em, and.... most americans think canada borders pakistan. bet y'all didn't know that the oBLAHma's have millions stashed at the royal bank! i wonder why! gotta go, rainbow country is on, followed by the forest rangers!
Canada is being set up for a fall, where their assets will be stripped away for pennies on the dollar by the likes of Souros. It doesn't take many of the tribe to put the essentials in place; loose money, reduced social cohesion through multiculturalism. Their department for immigration is also their multicultural department, and Canada doesn't accept any more white immigrants.
you should take some time to read about how CMHC works.
Spot on!
My dad called it "The Goezintas".
2 goezinta 4 twice.
How much money does the average Joe Slob need to make a payment on a 3.5% 40 year amortized mortgage on an average house that's now worth about $500, 000? @#$% all! And what happens when that rate goes 5%? Well, it's more and they can't afford that extra. Canucks are maxed out.
It's 1988 all over again.
Canada is toast. Our housing prices are going up 5% per month, year over year. Our personal debt is growing and we're now over a trillion in debt personally.
http://www2.macleans.ca/2011/03/23/a-mortgage-monster/
Herkimer
Yup banks are lending to anyone who can fog a mirror. It'll implode soon enough.
For someone who resides in cash-strapped Toronto, and $30 billion in-the-hole Ontario, I will never be one that would think, and/or state, that our banks or banking system are 'secure'.
Using very little effort, one can obtain the derivatives exposure of the likes of TD Canada Trust, Bank of Montreal, Royal Bank and CIBC. It isn't all re-assuring. But of course, the presstitutes here are all suffering from the need to spew the same verbage that 'all is well'.
Now, about that over $1 trillion in consumer debt for a country with only 32 million citizens.....
Thanks for this Betty.
How exactly can I find the derivatives exposure of TD Canada trust?
Thx
How very unfortunate. I had hoped there were some islands of sanity left.
Too rich!
Quiet eh? Reminds me of Munch's most famous opus http://upload.wikimedia.org/wikipedia/en/thumb/f/f4/The_Scream.jpg/240px... ...
or mabye watching Runaway Train with the sound turned off...
Naivete has it's advantages...death will come quickly. One day everything was good, and then, it was over.
Ontar-i-ari-o. Gloria in excelsis Deo.
Don't expect it from Moody's. They are a shill for the admin. This move has more to do with their "downgrade everyone else so the U.S. looks good" policy than anything.
I agree Red Leader....but the "tip-toeing" has got to stop at some point or else the dagger soon pointed at one's own neck.
I am SICK TO DEATH of these rating agencies causing havock in the sovereign debt markets. Honestly, where does this end? Patriotic equity and bond investors all over the world are being punished by these doomer attitudes and pessimistic ratings. This is a time when investors should be rewarded for their faith in the world economy, not punished for it.
Well shit just be really bad. These fuckers usually wait two after somebody blows up
canada should downgrade moodys. weren't they rating all those sub-prime mortgages AAA ? many would argue that they were the MAIN cause of the system failure.. they were either inept (beyond all imagination) or totally corrupt.
many would argue that they [ rating agencies] were the MAIN cause of the system failure.. they were either inept (beyond all imagination) or totally corrupt.
Hey, I said that repeatedly here two years ago, and was junked over and over.
BTW, how many staffers from SP, Moody's, etc., went to jail or were fined? Yeah, that's what I thought...
I'd say the ratings were overly optimistic for a number of years. but yes,
ratings agencies are things of the past. they are vestiges an old system of
asymmetric information. everybody does their own counterparty dilligence
nowadays, so we need to replace ratings agencies with somekind of credit
market, where you put skin in the game. something like intrade predictive
markets for credit events.
death to the ratings agencies.
Downgrade at will, leave fucking hockey alone. canadians rarely realize how their resource rich country government is fist fucking them outside their ears. Occupy Canada, a protest of three.
I'm a little jealous, but live in mushagain. " I got money, but the weather sucks." does not work well.
It's about time the Canadians get a Moody's beating!!!
-John
http://www.youtube.com/CarMarketer
In the 1990's the government of Canada was screaming at the rating agencies because they did not downgrade enough. This time, I suspect, will be different.
Just don't tell the Globe and Mail!
http://silverliberationarmy.blogspot.com/
Ah yes, The Glibe and Stale. What a glorious rag.
The "Glibe and Stale"? I'm not familiar with that publication.
Perhaps you meant the Grope and Flail? The Moan and Wail? The Mop and Pail? The Groan and Fail? The Ghost and Pale?
A once-grand newspaper that never recovered from the tender ministrations of Ellsworth Toohey - er, William Thorsell.
thanks for that blast from the past!
William Thorsell: while I was fervently hoping to be able to add the tag line - who never recovered from from the rough trade of Frank Magazine - a bit of cursory research showed me that Bill, like most er, avid pianists, landed on his feet, with a gig to recast(read: destroy) the ROM...just another of the countless reasons I have to be so happy to have fled from Cuckoostan.
Ka-Na-Da...a cultural hot spot...kinda like Pompeii, back in the day, eh?
Boots on the ground.. leather - canadian - http://hedge.ly/gFWVSm
Bob Rae days redux.
The thing that really, really scares me is that he is still the interm leader of the national liberals......
Of course the economy in Ontario is gonna slow down. It snows there.
That is correct Sir. Of course the economy slows in the winter with the snow and stuff, but it picks up in the spring when the construction crews mop up the melted igloos and start building the teepees. Ontario should be quadruple A just like the good ol' US of Merica!
In the spring you are apt to hit a soft patch.
they're hopin'!
ontario will be fine
they have a practically unlimited supply of unharvested granite counter-tops, so their credit is way above new york's...
plus, quadrillions of minnows...
...which speculators can parlay into pike...
...then, go for some muskies...
fabulous opportunities, BiCheZ!
whippoorwills! and LOONS!
wtf does moody's know? eh?
Oh Canada, bitchez!
O Canada! My home and naive land!
That depends on that the definition of "Land" is, is.
Bullish
The ratings agencies appear to be having a good old time with these worldwide insolvency festivities. I assume none of the execs fly in Cessnas, own a hot tub or go out after dark.
oooops. You know during the Cold War the Russians had "city buster nukes." Wall Street however may have invented the first "country buster." i wonder what the plan for their Army of Mind Martians is after that one blows.
Eh?
please tell me as you tap away on your..."computer" that you're an "off the grid kind of guy."
C'mon, dad. Get off. Yer crushin' my smokes.
He shoots, he scores!
Canada, being such a resource based economy, is starting to stare over the edge of a cliff right now. If China continues to slide downhill, hitting commodities hard, then that's the first show to drop.
The second will be the massive, as of yet unpopped, housing bubble.
Canadian banks are always touted as being so strong and so regulated, but they're only as strong as their balance sheets, and if those have a bunch of underwater sludge on them, then it's enema time, and all these people thinking they'll retire on their RRSP's full of Bank Preferred Shares and going to have a really bad day.
How does the Canadian economy look with oil at $70 per barrel?
How does shale gas look with oil at $200/barrel?
How does shale gas look without fracking?...not good.
But we will have plenty of diesel to power the machines to clean up after the earthquakes.
sure, but commodities collapse, CAD goes down, manufacturing picks up again in Ontario and Quebec...lumber gets cheaper in BC (as does the weed). booya - Canada be naturally hedged.
And how pray tell would manufacturing pick up again. Who are we going to manufacture for? The North American economy will be in the proverbial shitter so even if some commodities such as lumber get cheaper, what are we building, certainly not houses, that other's are going to need.
Why the Americans will be more than happy to print up some dollars to buy our hard work.
Manufacturing was hollowed out years ago in Ontario.
Oh, but 'they' think that they've solved that problem by introducing the feed-in tariff program for solar energy. Those installations must have 60% Canadian Content in them. So, solar panel manufacturers have set up in Ontario, only to see the price of solar panels fall outside of Canada, thereby threatening the need to buy those more expensive so-called, Ontario-made panels. After all, how the hell do you enforce a 60% Canadian Content rule?
http://countylive.ca/blog/?p=20548
http://www.intelligencer.ca/ArticleDisplay.aspx?e=3395586
http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/installers-homeowners-cash-in-on-solar-industry-slump/article2259666/
Yeah but you guys do a great job lightening our load of frn's with your toll roads that don't tell us what the cost is until we get a bill in the mail two years later saying, "pay up or lose your license". I don't remember the name of the road but it skirted the northern Toronto suburbs. I think I paid aprox 50 bucks for a thirty mile road I drove on twice. My sympathies to all of you who have to use it frequently.
407?
That money does not go to Ontario. The Ontario government cleverly leased the road to foreigners while neglecting to keep control of such things as toll rates and maintenance.
"As part of a controversial plan to balance the budget, and just prior to the Harris government's re-election campaign, the highway was leased to a conglomerate of private companies in 1999 for $3.1 billion, who renamed the route 407 ETR. The company, known as 407 International Inc., is owned by a consortium of Cintra Concesiones de Infraestructuras de Transporte (major shareholder) from Spain, Macquarie Infrastructure Group, and Montreal-based engineering firm SNC-Lavalin. The deal included a 99-year lease agreement, unlimited control over the highway and its tolls and a restriction under which the government may not build any nearby freeways which might potentially compete with 407 ETR"
Even if China slows, it is still growing at an incredible pace. Commodities will continue to rise. The riots we are seeing around the world are just the beginning. They are starting in countries where people pay large fractions of their personal budgets for food, but they will eventually hit OECD shores.
As for Canadian banks, they have unloaded all their toxic mortgages onto the Government agency, Canada Mortgage and Housing Corporation. The Government will fott the bill when the housing bubble bursts. Expect socialization of real estate as Canadian who live within their means pay taxes to fund a government agency that helped suckers buy Vancouver crack shacks for $1 million and more.
Stephen Harper is an economic disaster. Only a matter of time before his "conservative" finances are revealed. At that point, he will have upset the left with moves like his recent one on Kyoto as well as the right (who will be infuriated that their taxes are supporting house-poor "millionaires").
Er, what toxic mortgages? We never had the boom in "interest only with crushing balloon" mortgages, or the NINA mortgages that the US had- you had to have some income (and prove it) and at least 5% down. Sure, there are some people in over their heads, but it's not near as bad as you suggest. A lot of people were scrambling to get into homes this year; watch for a slowdown next year, but no outright collapse. Even Vancouver, which has the worst market as far as "affordability" is concerned will remain relatively bouyant, thanks to Chinese investors who look at 1) prices relative to, say, Hong Kong or Sydney, and 2) relatively relaxed government compared to Beijing, and continue to buy hand over fist.
Uncle Warren pissed his beloved BAC got downgraded. Now Moody's on the offensive.
Couple thousand rehypo'ed here, another couple thousand rehypo'ed there -- pretty soon you're taking about being seriously broke.
Too late. The election was 2 months ago.
"We believe that increased fiscal discipline will be required to sustain debt affordability," said Ms. Wong.
Ok, bad joke of the day: If I call her, do I get the Wong number?
Go ahead, boo me off the island. I couldn't resist. I have a disease ok....
I both wanted to mark you up and down at the same time for that! But chose down...sorry!
I agree. I voted for his post before I voted against his post.
Canada is fucked. Look at Vancouver...the highest square foot property values in North America. Bid up by the Chinese as a place to send their kids for the summer. What most people do not realize about Canada is that mortgages travel with the individual, not like the states. Here you can throw the keys on the desk of your banker and walk away. In Canada, if you can't make your payments the debt stays with you. I would hate to have half of my money in a million dollar, 600 square foot condo and the other half in penny stock copper mines, as it appears most Canadians do...
But if you are Chinese you did pay in cash.
Yes, but the Canadian who competed against the comp didn't. Seriously, I have been saying this for years. If you misbid a house in Canada, you are owned by the bank for life. It works fine as log as prices are going up. I work for a company up there...what is going on in Vancouver is stunning.
A whole lot of canuckleheads about to find out that deleveraging is a bitch.
"William," thanks for adding weight/support to my long-running position/argument.
There's far more Chinese students running around there than people realize, and these "kids" will be called home by mommy and daddy when China's economy starts to suck it in. I've postulated that this pull-back will knock the legs out of the housing market up there, and all those highly-leveraged home "buyers" (who counted on rental income [yeah, ask me how I know]) will start dropping like flies.
People need to understand that big shifts can come about by mere percentage points.
If things get bad in China, why will the Chinese go back, instead of coming over here?
When China turns down, 'Daddy' will hop on a plane to Vancouver before he gets re-educated, arrested or worse. Why do you think that they are lined up for passports/exit visas? There is no way that the new Canadians will decamp to Shanghai.
Mr Finn,
Mr Finn you have hit the nail bang on the head. Exactly...Canadians will carry that debt forever, most do not realize that. Most condo's are already asking for 60% down for non-Ontarions (I'm sure it's the same for Vancouver) buyers (and getting it) Canada mortage protection kicks in after 20% down (your off the hook after that). The majority of Canadian condo sales have been made at 5% down....the owners will now incurr full losses for eternity if the bubble pops. It's a recipe for disaster.
How bad is it? I;ve been reading about an imploding bubble there for the past two years...
for the summer? yeah, right! that's where the bulk of the Chinese Communist Party is going to end up once The Mainland implodes. Expect "the Aircraft Carrier" to appear soon thereafter.
Naw. Too many angry white guys running around with guns as neighbors. Not to mention all the angry white guys up in the Great North.
That's why they call it "The Great WHITE North"...
Short CAD and AUD when China officially sinks, probably early 2012. Europe will just become an economic wasteland. EUR will run parity with USD.
And yes i am listening to Slayer
Not at all. In Canada you can still default. Recovery agencies will hound you
and it kills your credit rating at equifax for 7 years, but you can still walk away.
That's the contract of capitalism: being allowed to fail and walk away, and have
the bank eat its bad bet (after all that's why you paid it interest). In the US,
walking is getting conceivably more difficult, with forced mortage restructures,
basically bringing back nasty auspices of Dickensian workhouse slavery camps.
The essence is this. NOBODY owns you for defaulting on a debt. You paid interest
for that right to default. If the bank has a problem with this, it should have priced
its risk better.
I don't care if you work for a company in Vancouver, you obviously don't read the papers much. Vancouver condo sales had DROPPED in the past two years, both in highrise and lowrise markets. From a peak of 800 units/month in April 2009, sales have bounced around between 400-500 units a month over the last year for highrise units, and the fall is even more dramatic for low rise units.
Prices haven't fallen much, but the trend is definitely moderating in high rises, and falling slowly in low rise and townhouse units.
http://vancouvercondoreport.ca/MarketOverview.aspx
Ah-h-h, and I can well remember an article about a month ago, informing readers the Conservatives were a shoe-in for the next Canadian national election. Is it my imagination, or does the media consider the global economy wholly integrated until big chunks of it are about to fall apart, at which point the golbal economy is denied, and national economies exist in isolation?
Since the last federal election was in the spring of this year, any forecast of the next federal Canadian election would be speculating about 2015. The Conservatives did win this year's election with a majority, and while reducing the federal deficit somewhat, they have been busy doing away with the useless gun registry, the monopsonistic Canadian wheat board, and the ridiculous Kyoto nonsense, while cracking down on crime and immigration abuse, and rebalancing Parliament. Not bad for nine months' work.
I rarely post but I have 3 things to say
1. Financial Collapse
2. Buy Gold/silver
3. My eyeballs are now missing as they have been rehypothecated through my ass when I bent over today to pick up a penny in the parking lot. Has anyone seen them???
To my Premier - Dalton McGuinty ..... RETARDED MUTHAFUKKA ... it takes talent to screw up a province like Ontario. Congrat's If you and your gang of sad sack, lazy ass politicians weren't off on Xmas break for the next month or two, perhaps you would react to the news. F-OFF Dalton xoxoxo
awww. that wasn't very nice.
When was the last time you had a "good" premier?
Bill Davis Jr....
in retrospect, and irony of all ironies, William J will prove to have been ....the last good man. Life is truly stranger than fiction.
100% agree that idiot has raised income taxes, hydo rates, HST (an extra 7%) on all our bills, all during the last 2 years.
Turbo Timmy is even jelious of what this guy gets away with...
Man, are you stupid. First off, the HST just combines the old PST with the feds' GST. Dull-tone gets an extra 8% (not 7% - can't you even do simple arithmetic properly?) only on products that were PST free before the harmonisation, such as hydro, cheap fast food, etc., not on "all our bills".
I'm no fan of Dull-tone, as he has implemented sneaky taxes such as his Ontario Health tax and his electronic/enviromental tax (I bought a $99 TV, and had to shell out $13 in sales taxes and another $12 in environmental disposal fees), but he did not raise income taxes; he actually lowered some. From an HR bulletin I get:
TD1 - Personal Tax Credit Return Provincial 2010 (Effective January 1, 2010)
Effective January 1, 2010, the provincial tax rates and income thresholds for Ontario are revised as follows:
100% agree that idiot has raised income taxes, hydo rates, HST (an extra 7%) on all our bills, all during the last 2 years.
Turbo Timmy is even jelious of what this guy gets away with...
If you think Ontario is bad, don't dare look at Quebec. No innovation, reliant on federal transfers, corruption, horrible fiscal management. Only reason Canada seems so sound is because of exports of resources.
i have looked at Quebec and found it quite nice. They're going broke too though. Something about a "hybrid dehydrated tanstasfl."
Apparently, in a misguided attempt to preserve their culture, some areas no longer teach their kids English as a second language in Quebec. That'll do wonders for employment rates for the young.
No problem.. North America, especially Canada needs another source of cheap labour......
I should get junked big time but the majority of Quebecers can't be bothered to learn English.....in fact it's illegal to send a francaphone to an english speaking school in Quebec
I am a Québec francophone and I speak french, English and Spanish. I think there is a higher percentage of us that speak english than other North Americans that are fluent in a second language. And I did not junk you.
I did, I junked him the bigoted bastard. If this was the real fight club he'd be eating soup through a straw for the next month!
I am a Québec francophone and I speak french and English fluently + german and arabic functionaly. My kids speak french and english, and one of them also speaks russian fluently (at only 17-years old of age, he started learning it at 8). I think there is a higher percentage of us that speak english than other North Americans that are fluent in a second language.
And there's probably even a higher percentage of our kids that speak english than other North Americans kids that are fluent in a second language.
I too didn't junk you.
Actually, if the father is English then the choice of language is at parent's discretion. Don't ask me why it's just the father. I'm in Quebec but right accross from Ottawa so we kinda get the best/worse of both worlds. And we got this thing called the French police, meh.
Get you facts straight, you're ignorant of the laws of the Province you live in.
BTW, I wonder why, in my neck of the woods, a majority of english speaking families send their kids to french schools, when they have the choice?
Nevermind, since you live on Quebec's side, you should know this.
A kid can go to an English school if:
You are totally correct, but only on a technicality.
That's one hell of a lot of caveats for the simple choice of what language your kid goes to school for. Its almost like sayin 'hey, you can trade whatever contracts you want on our exchange, long as you realize that the $ in your account is retained by yourself AT OUR DISCRETION! That's about one step up from the CME>...which doesn't even bother with the caveats.
Let's face it...were transfer payments to slow to the point where Quebec voted to go it's own way, the very first item on the agenda of the new government would be to axe even the very possibility of English schooling.
The fact that Quebec has a much higher level of bilingual citizens is as much a cruel reflection of the results of the Plains of Abraham as it is any innate cultural predilection of it's Francophone citizens. It just is what it is. As was the comment of the poster speciously accused of being "bigoted."
That said, le Francophonie Quebecois is a remarkable and vibrant testimony to the ability of a small cultural variant to survive and succeed against much adversity.
Desafortunadamente, los problemas que se encontrarán los Canadienses dentro de poco seran muchos mas grandes de los de cultura o de lengua!
Which kind of takes us full circle here, mais qui?
All of my dad's family live, have always lived and will always live in Quebec. All but one uncle there is on welfare and every single one of them is a proud seperatist. (So of course unilingual French)
A Quebecker who can speak anything beyond French is in the minority or an immigrant.
"Only reason Canada seems so sound is because of exports of resources."
As opposed to??
The ratings agencies can't leave anyone sitting on the sidelines, now can they? The U. S. should be up for a downgrade, any day now. Mt guess is that bank defaults in Europe will clear the deck for the U. S. to get to the front burner.
http://georgesblogforum.wordpress.com/2011/11/02/the-daily-climb-2/
Canada reneged on Kyoto this week. That was a stunning move and I applaud the leadership for that. Without the Kyoto shackles, it's "game on" in Canada for any type of business that is being choked by green fascism elsewhere.
Keep in mind folks, the entire population of Canada is less than that of California. Currency backed by resources galore. I don't see the problem.
If oil price goes below the cost of tar sands production, then there won't be much oil left for the US market which gets over 30% of its oil from Canada. Very simple. If it doesn't make sense economically to get oil out of the tar sands, they will idle.
Ontario has problems, Alberta, BC and the Prairies are booming. Quebec is a basket case of French socialists and they will suffer but not at the expense of the rest of Canada. Austerity will probably come to Canada's Socialists with a Conservative government that just shred the Kyoto agreement. Over 2 billion Chinese and Indians combined look at Canada as their potential 1st or 2nd home and increase the population of Canada by 100% in 30 years.
Ok, where's the problem?
"Very simple. If it doesn't make sense economically to get oil out of the tar sands, they will idle."
Economies of scale in reverse. POOR assumption is that things can be started up again after idle: remember: all that idle shit STILL needs to be paid on.
As far as "green fascism" goes, I think that this is a nice label to duck the realities of the world. But... what the fuck do I care whether Canada ends up trashing their environment (like China [http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/])? I say that the US should do as Forbes said back in the 70s- use up everyone else's oil first: but, that would mean acting as socialists and conserving US reserves (counter to Drill Baby Drill)- why is it that "conservatives" flip flop like a reeled-in flounder? Hello! Will the REAL "conservatives" please step up?
Oh, and B.C. booming? Yeah, right. I got my wife's ass out of there before the meltdown. Haven't missed a call yet.
Yea, BC is fucked, left in '08 as well. In Alberta now. Raping the land, but the pay is good.
Well, who the hell knows. Maybe Canada is going to trade in Euros as opposed to Dollars. Russia and China seem to get ready for the USD collapse. China importing from Canada's North via the new ports and pipelines. Interesting times!
Kyoto agreement was fraudulent to begin with. Why should a resource rich nation that shares their commodities with the rest of the world have to pay money to some obscure international fund for the pollution it creates in the process of supplying the REST OF THE WORLD with resources?
Makes no sense! And where would those penalties end up anyway? Somehow that money would probably get to Goldman Sachs is my guess..
BC is a beautiful place. I've visited there a number of times on my way to Alaska. Friendly people and overall clean.
How many people supposedly move into BC? Like 30,000 per month or so? Statistically etc.?? How many leave? I don't know but I do know that area is growing leaps and bounds, same as Alberta.
Greece doesn't have that. None of the Eurozone countries have those prospects.
When my father listens to that right wing radio crap like Charles Adler, he sounds just like you. Open your eyes and quit believing that partisan bullshit. Divide and conquer bitchez.
The Canadians seem to be big on buying utilities in the Northeastern U.S. with junk bonds. Alberta is having their Early '80s-in-Houston-Texas era right now. They have a lot of "fuel", as they call it, but they do have some problems. Vancouver is rotten, while Toronto is a good town. Montreal is in between. Interesting that a downgrade might be coming down the pike aboot now, eh?