End of the recession?

[GenerationW]

Link3 was the early 1990s depression. Neither regime survived the depression.

Depression?

 

[jade_lee]

John Hussman - PhD economist and former professor of economics and international finance at the University of Michigan - has a great quote:

If you look carefully at the economic data that shows improvement, and correct for the impact of government outlays, it is difficult to find anything but continued deterioration in private demand and investment. What we do see is a government that has run what is now a trillion dollar deficit year-to-date, representing some 7% of GDP.

That sort of tab will undoubtedly buy some amount of Cool-Aid, but it has been something of a disappointment to watch how eagerly investors have guzzled it down. It is not at all clear that short-term, deficit-financed improvement necessarily implies sustained growth in the context of a deleveraging cycle. This is like somebody borrowing money from their Uncle and then celebrating that their income has gone up.

How could any Canadian think our country is out of this recession? Trust the BoC?
Trust our federal leadership? I think not.

 

[GenerationW]

First of all, the trillion dollar deficit is Obama's deal, not our guys.

Second, are you saying our economic statistics are doctored?

 

[jade_lee]

First of all, the trillion dollar deficit is Obama's deal, not our guys.

Second, are you saying our economic statistics are doctored?

You saying this current Canadian federal government and the BoC have not been encouraging bailout cash to flow?
I most certainly am suggesting that many corporations are cooking their books. Some have been caught and are quite please that regular folks don't regularly read court dockets.

 

[GenerationW]

You saying this current Canadian federal government and the BoC have not been encouraging bailout cash to flow?
I most certainly am suggesting that many corporations are cooking their books. Some have been caught and are quite please that regular folks don't regularly read court dockets.

No to your first question -- I imagine that any federal government in power at this time would have been involved in these bailouts. Our provincial government has also doled out cash.

As for many corporations cooking their books, that would also suggest that a large number of chartered accountants (not to mention government auditors) are also crooks (or cooks). Not to say it can't and doesn't happen, but I don't believe that it's wildly out of control.

 

[kEiThZ]

Economic statistics collected by StatsCan and the BoC don't rely on Corporate earnings reports. They use aggregate data to come to their own conclusions. That's why these institutions are trusted. It's only in the head of conspiracy theorists that stats are doctored, aside from the fact that even corporate earnings reports are doctored, it's pretty hard to doctor the entire economy's inventory and output reports which StatsCan uses. These two government institutions are apolitical and independent and have been doing a great job for decades. What would be different now?

And for the record our deficit is not 7% of GDP. It's no where close to that. And our cumulative deficit over the next five years will be something like 15% of GDP at most. The US is set to hit that mark next year. Most of Europe will hit that mark the year after. If the Bank of Canada is correct and we are pulling out of this recession, then even 15% might be too high.

 

[kEiThZ]

You saying this current Canadian federal government and the BoC have not been encouraging bailout cash to flow?

They sure have....encouraged by the Opposition who wants an even larger stimulus package. Keynesian economics is the in thing these days. Are you suggesting that the government should have put out no bailout at all?

And by the way the BoC is responsible for monetary not fiscal policy.

I most certainly am suggesting that many corporations are cooking their books. Some have been caught and are quite please that regular folks don't regularly read court dockets.

Irrelevant. Economic statistics don't use company books. StatsCan publishes their methodologies. Go have a look if you want more info.

 

[Blues]

^ Ever since the oil boom in Alberta, Saskatchewan, Newfoundland and Nova Scotia, our economy has been de-linking from the ill always be more than one market for it. If Americans aren't thirsty enougUS slowly but surely. The thing about oil is that there wh for our oil, there's always China or India. Unfortunately, ignorant Americans like yourself haven't caught up to that reality. We aren't USA junior anymore. That's the reason we sat out the last recession (the one in 2000 in the US). And the resource sector is a big part of why we are pulling out of this one fairly quickly. This short Wiki article explains our situation in the early 2000s recession:

http://en.wikipedia.org/wiki/Early_2000s_recession#Canada

As for your slag at our institutions.... the Bank of Canada is reliable and apolitical not like institutions in the US. If it says Canada is pulling out of a recession, we Canadians tend to believe it. But there are other signs as well. Housing sales are up sharply in many cities. Home prices and housing starts are rising and some industrial sectors are coming back to life as well.

And after oil, the rest of our economy is starting to focus on these emerging markets as well. You maybe our biggest trade partner today. But increasingly our most valuable exports go elsewhere. And in time so will most of our trade. Our leaders have realized for a while that hitching our wagon to a falling star is not a good idea.

And lastly your jibe at the dollar. I seemed to recall last summer when the 1 CAD was worth 1.35 USD. Even now during this recession we are at about 1 CAD = 0.90 USD....and there's still a lot of establishments in the northern US and in places like Florida that will give Canadians a 10% discount and accept the dollar on par....guess they are just that desperate for business. The days of 1 CAD being equal 50-65 cents US are long gone and are never coming back. The fiscal irresponsibility of successive US governments (even Obama won't do that much better on this front) will ensure that. Even by percentage of GDP, our government will spend less on its 5 year deficit than merely the next 2 years of deficit in the US. And that's coming from a lower debt-GDP ratio. On top of all that, Canadians tend to vote out governments that don't balance the books. You can be sure that that it will be an election issue if the economy improves and the books aren't balanced. There is no such hope for you in the US.

I won't brag too much about the fact that we were the only country in the developed world not to lose a financial institution to the recent turmoil, or the fact that we don't have pension (and we have a more generous pension plan) or health care liabilities going into the future. Let's just agree that the fundamentals are sufficiently different that we don't always follow the same economic path.

Oil is fluxuating commodity. When the price of oil is high, it's a great boon to oil-producing regions. However, when it drops, it hurts. Houston smarten up after the last time oil drop big-time and diversified.

I really don't know too much about the health care liabilities in Canada. How does it work? Do you mean that your health care funding is in the black in regards to spend?

 

[doady]

Brampton Transit recently post ridership stats for July. Yikes! It is the worst month so far. Recession certainly not over yet.

 

[wonderboy416]

I sure hope it's over come November.. as that's when I'll be back in the job market... yikes

 

[ganjavih]

I have a feeling many people posting in this thread don't know the definition of recession.

 

[afransen]

Recession is not a cut and dried concept. It isn't just two or more consecutive quarters of negative growth.

 

[kEiThZ]

Oil is fluxuating commodity. When the price of oil is high, it's a great boon to oil-producing regions. However, when it drops, it hurts. Houston smarten up after the last time oil drop big-time and diversified.

As a net oil producer, Canada is positioned to reap the rewards of the upswing. And oil from Alberta, Nova Scotia, Newfoundland, Saskatchewan (and to a minor extent BC as well) certainly helped cushion the blow of the recession in these regions and to some extent in the non-oil producing regions as well.

I really don't know too much about the health care liabilities in Canada. How does it work? Do you mean that your health care funding is in the black in regards to spend?

Canada's health care funding is run as a PAYGO scheme paid with tax revenues. We don't have complicated rules that make health care funding complicated since we have a single payer system. This means that we can fund health care according to how much is needed (and how much the taxpayers of the individual provinces are willing to pay for). This also means that there's no real need to store up funds like was done for the Canada Pension Plan (which now has enough reserves to last till 2025 at least....if I am not mistaken). Given that Canadians by and large are willing to pay higher taxes for health care, I don't foresee a health care funding shortfall (the odd shortage maybe...usually owing to a lack of doctors.... but the system isn't in danger of outright collapse or being unable to service huge segments of the population like in the US).

 

[afransen]

It would probably be wise to partially prepay for health care. We're going to see some incredible increases in health care costs as the boomers retire and become increasingly decrepit. Almost enough to make euthanasia look appealing!

 

[kEiThZ]

It would probably be wise to partially prepay for health care. We're going to see some incredible increases in health care costs as the boomers retire and become increasingly decrepit. Almost enough to make euthanasia look appealing!

^ You should be careful...lest something like that get quoted by Fox News as the view of a typical socialist Canadian blogger.

I'd agree with pre-paying but in this case it's complicated. Health care is paid for with general revenue. Are you suggesting setting up a savings fund to plan for future health costs or an effort to reduce current debt levels to allow for increased debt occurring from taking care of the boomers?