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Title: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: 24KT on February 26, 2009, 02:40:13 PM

U.S. May Have Caused The Trouble,
But Canada Could Suffer More
Wednesday February 25, 2009
Julian Beltrame, The Canadian Press

(http://www.citynews.ca/images/2008-10/oct1708-cashregisterbill.jpg)

Consumer confidence hits new lows. Housing prices crumble to 2003 levels. Unemployment insurance claims rise five per cent in one month.

The three sobering indicators reported Tuesday point to an economy that, if not in free-fall, is close to it. But are they describing the severe recession in the United States or Canada?

In actuality, only the third item listed - employment insurance claims - is a Canadian statistic.

But economists say both countries are suffering from the same economic malaise, even though the Canadian federal and provincial governments are in better financial shape and Canada's banking system is among the soundest in the world.

"I know that the conventional wisdom uniformly shared is that Canada will fare better than the U.S., but I wouldn't be so sure," says David Wolf, chief economist for Merrill Lynch, one of the first private-sector analysts to predict a house price collapse in Canada.

"This financial crisis is a bit like a tsunami, and although the epicentre was in the U.S., it doesn't matter how far away you are, the impact depends on what your coast looks like. And Canada has a particularly bad coast because we're a small economy, we're an open economy and it faces the U.S."

Part of the reason is the global nature of the crisis, says TD Bank analyst Richard Kelly, which like a falling tide is sinking all boats.

Fourth quarter economic contractions in Germany (8.2 per cent), Italy (7.1), Japan (12.7), United Kingdom (5.9) are outpacing the U.S.'s 3.9 per cent for the September-December period. Canada's fourth-quarter economic reading, to be released Monday, is expected to show gross domestic product contracted by about 3.5 per cent.

Another reason for the depth of the decline is that Canada's economy is so interlinked with the U.S. that the old adage - when America sneezes, Canada catches a cold - still largely applies.

On Tuesday, Statistics Canada reported that 538,200 Canadians received regular Employment Insurance benefits in December. That's up 25,000 or 4.9 per cent more than in November and applies to a period before 129,000 job losses recorded in January.

In the United States, the Standard & Poor's/Case-Shiller U.S. National Home Price Index plunged more than 18 per cent during the October-December quarter from the prior-year period, the largest drop in its 21-year history.

And the Conference Board said its consumer confidence index, which stood at about 37 last month, plummeted to 25 in February, easily the worst since the group began compiling the measure in 1967.

In testimony before Congress on Tuesday, Federal Reserve chairman Ben Bernanke held out some hope the United State could come out of recession later this year, but also cautioned it could be later. And recovery was contingent on everything going right, he added.

"If actions taken by (the Fed and Obama administrations) are successful in restoring some measure of financial stability, and only if that is the case, in my view there, is a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery," Bernanke said.

The timing for rebound is similar to his counterpart at the Bank of Canada, although governor Mark Carney believes Canada's bounce-back will be stronger.

Certain fundamentals are stronger in Canada, agrees Wolf, but they won't necessarily result in stronger growth this year than what the U.S. will experience.

While most economists see Canada's economy contracting between 1.5 per cent and two per cent this year, and the U.S. slightly above two per cent, Wolf says he would not be surprised to see the order reversed.

That's because the U.S. entered a recession a year ago and has already made adjustments while Canadian business and consumers are only now starting to cut back. And because they are behind the curve, they are paring more aggressively.

The 129,000 job losses recorded by Statistics Canada in January dwarfs any single month decline south of the border, when the 10-to-one population difference is take into account. As well, December's 5.4 per cent plunge in retail sales is more than any single monthly U.S. contraction.

"There is a view out there that they (U.S.) are terrible and we're OK," said Liberal finance critic John McCallum, a former chief economist with the Royal Bank.

"That's totally wrong. Whether it's worse than the U.S. or better, it's going to be very bad and because we're later into it, it's going to be more of a shock to Canadians."

Bank of Montreal economist Sal Guatieri agrees that Canada and the U.S. could face similar futures in terms of economic growth, or lack of it, but still believes Canada's recession will be milder.

He points out that the U.S. has been in recession for over a year, whereas Canada only entered negative territory in the fall. But the big difference is jobs.

"Gross domestic product is probably not the best measure of economic performance, the best measure is employment," he said. "We could see U.S. job losses exceeding five million before recovery later this year. In Canada, we're likely to see 400,000 total job losses" for the duration of the slump.

That will be cold comfort, he is quick to add, predicting Canada's recession will wind up resembling the downturn in the early 1990s, "which was a severe recession."

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: War-Horse on February 26, 2009, 06:39:14 PM

But all of those Bush tax cuts shouldve worked to strengthen us and you........ :D

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: 24KT on February 26, 2009, 06:59:44 PM

Quote from: War-Horse on February 26, 2009, 06:39:14 PM

But all of those Bush tax cuts shouldve worked to strengthen us and you........ :D

 ::)

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: drkaje on February 27, 2009, 10:01:54 AM

Canada will definitely suffer because they can't really raise taxes much higher. :) The US economy tanking will dry up a lot of cash that would have typically flowed north.

Canada will have to grow its own economy.

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: 24KT on February 27, 2009, 10:18:54 AM

Quote from: drkaje on February 27, 2009, 10:01:54 AM

Canada will definitely suffer because they can't really raise taxes much higher. :) The US economy tanking will dry up a lot of cash that would have typically flowed north.

Canada will have to grow its own economy.

Then we'll start by selling muzzles to prevent the musings of smart mouthed doctors in the USA  >:(

That oughta be a BIG seller!  :D

No doubt our softwood lumber industry will be negatively impacted for a while, but we're Canadians,
...we'll figure out a way to turn this crisis into a golden opportunity and come out smelling like roses.
We always do.  It's the Canadian way! :D

Our free trade deal with India will no doubt help considerably.

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: drkaje on February 27, 2009, 10:37:46 AM

Quote from: jaguarenterprises on February 27, 2009, 10:18:54 AM

Then we'll start by selling muzzles to prevent the musings of smart mouthed doctors in the USA  >:(

That oughta be a BIG seller!  :D

No doubt our softwood lumber industry will be negatively impacted for a while, but we're Canadians,
...we'll figure out a way to turn this crisis into a golden opportunity and come out smelling like roses.
We always do.  It's the Canadian way! :D

Our free trade deal with India will no doubt help considerably.

You're all whores, LOL!

This whole mess started with Clinton and NAFTA, LOL! Anyone with a brain or an ability to do simple math can see that. I (someone who damn near has to remove shoes and socks to do math) even know monopoly money had a higher value than Canadian before NAFTA. :) Canada sucked but at least they were self sufficient.

Clinton sacrificed our own jobs/future for NAFTA and GAT under the delusion that free trade would move in both directions. It was stupid to pretend tariff based countries, especially those that are highly socialized, would have the flexibility to do "free trade" in both directions. Everyone knew the 'once they see how good free trade is Canadians (especially French Canadians) will loosen up' were wrong.

NAFTA was the first nail in our coffin. The only good thing is that Canada has become spoiled and will have to suffer some with us because all they did was take. :)

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: 24KT on February 27, 2009, 11:05:28 AM

Quote from: drkaje on February 27, 2009, 10:37:46 AM

You're all whores, LOL!

This whole mess started with Clinton and NAFTA, LOL! Anyone with a brain or an ability to do simple math can see that. I (someone who damn near has to remove shoes and socks to do math) even know monopoly money had a higher value than Canadian before NAFTA. :) Canada sucked but at least they were self sufficient.

Clinton sacrificed our own jobs/future for NAFTA and GAT under the delusion that free trade would move in both directions. It was stupid to pretend tariff based countries, especially those that are highly socialized, would have the flexibility to do "free trade" in both directions. Everyone knew the 'once they see how good free trade is Canadians (especially French Canadians) will loosen up' were wrong.

NAFTA was the first nail in our coffin. The only good thing is that Canada has become spoiled and will have to suffer some with us because all they did was take. :)

Canada doesn't suck.  >:(

We knew what we had to do. We deflated our currency and saw a huge influx of investment for it. Lucky us.  :D
At the same time we lowered our deficit and got our house in order. WTF did the US do?
Please... don't remind me.

I'm gonna go start working on that MD muzzle design right now!  >:( 
...and I'm not sending you any maple syrup. {hrmph}

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: shootfighter1 on February 27, 2009, 11:08:23 AM

Canada has a lot of good looking women, maybe they can export that resource. 

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: Soul Crusher on February 27, 2009, 11:12:11 AM

Quote from: shootfighter1 on February 27, 2009, 11:08:23 AM

Canada has a lot of good looking women, maybe they can export that resource. 

I went to Montreal for the NHL all star game.  Many hot french canadiens over there.

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: 24KT on February 27, 2009, 11:12:39 AM

Quote from: shootfighter1 on February 27, 2009, 11:08:23 AM

Canada has a lot of good looking women, maybe they can export that resource. 

 :-*

When I send my MD muzzle shipment, I'm gonna make sure it's one muzzle short.

carry on.  :D

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: drkaje on February 27, 2009, 11:58:55 AM

Quote from: jaguarenterprises on February 27, 2009, 11:05:28 AM

Canada doesn't suck.  >:(

We knew what we had to do. We deflated our currency and saw a huge influx of investment for it. Lucky us.  :D
At the same time we lowered our deficit and got our house in order. WTF did the US do?
Please... don't remind me.

I'm gonna go start working on that MD muzzle design right now!  >:( 
...and I'm not sending you any maple syrup. {hrmph}

Better save one of those muzzles for yourself, LOL!

Canada sucked ass and you guys literally couldn't give away that currency.

While the Canadians were getting American jobs and contracts to lower their deficit we all know what Clinton was doing: selling US debt to the Chinese in hopes that the dot.com bubble wouldn't burst before the the economy recovered. :)

They also eased standards and shifted people from welfare to long term social security disability to manipulate welfare to work numbers.

NAFTA needs to be cancelled and re-negotiated to terms more fair to both sides. Only an irresponsible retard, with downs, would sign a free trade agreement with a country that doesn't employ Americans readily, has language restrictions and an active separatist movement for French wannabes. :)

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: a_joker10 on February 27, 2009, 12:44:47 PM

Quote from: drkaje on February 27, 2009, 11:58:55 AM

Better save one of those muzzles for yourself, LOL!

Canada sucked ass and you guys literally couldn't give away that currency.

While the Canadians were getting American jobs and contracts to lower their deficit we all know what Clinton was doing: selling US debt to the Chinese in hopes that the dot.com bubble wouldn't burst before the the economy recovered. :)

They also eased standards and shifted people from welfare to long term social security disability to manipulate welfare to work numbers.

NAFTA needs to be cancelled and re-negotiated to terms more fair to both sides. Only an irresponsible retard, with downs, would sign a free trade agreement with a country that doesn't employ Americans readily, has language restrictions and an active separatist movement for French wannabes. :)

The US has benefited greatly from NAFTA
http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2008/asset_upload_file855_14540.pdf

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: drkaje on February 27, 2009, 01:30:03 PM

Quote from: a_joker10 on February 27, 2009, 12:44:47 PM

The US has benefited greatly from NAFTA
http://www.ustr.gov/assets/Document_Library/Fact_Sheets/2008/asset_upload_file855_14540.pdf

"There are three kinds of lies. Lies, damned lies and statistics." :)

Unemployment falling, for example, could easily be due to people on welfare changing status when going on permanent disability. On top of that, displaced people were taking lower paying jobs to survive. How can tons of jobs/contracts being outsourced to India, Mexico and Canada not have a negative impact on the economy?

Clinton is probably the most skilled politician (= professional liar) of our generation but NAFTA was a huge mistake. Any immediate bump in the economy was offset by the decreased production and job numbers in the US.

Tech support, customer service & -x-ray reading  are just a few of the jobs that have been exported.

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: 24KT on February 27, 2009, 01:35:32 PM

Quote from: drkaje on February 27, 2009, 11:58:55 AM

Better save one of those muzzles for yourself, LOL!

 :o  {hrmph}

(http://www.jaguarenterprises.net/images/em/nod.gif)

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: a_joker10 on February 27, 2009, 01:36:48 PM

Quote from: drkaje on February 27, 2009, 01:30:03 PM

"There are three kinds of lies. Lies, damned lies and statistics." :)

Unemployment falling, for example, could easily be due to people on welfare changing status when going on permanent disability. On top of that, displaced people were taking lower paying jobs to survive. How can tons of jobs/contracts being outsourced to India, Mexico and Canada not have a negative impact on the economy?

Clinton is probably the most skilled politician (= professional liar) of our generation but NAFTA was a huge mistake. Any immediate bump in the economy was offset by the decreased production and job numbers in the US.

Tech support, customer service & -x-ray reading  are just a few of the jobs that have been exported.

None of those jobs went to Canada.
They went to India.

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: drkaje on February 27, 2009, 01:48:04 PM

Quote from: a_joker10 on February 27, 2009, 01:36:48 PM

None of those jobs went to Canada.
They went to India.

Let me make sure I understand you. You're arguing that manufacturing contracts going to Canada and other countries where US companies could never possibly compete doesn't translate into a loss of jobs?!

That's the big joke. Everyone became poorer over time but it took a while to see it because a lot of crap got cheaper because so much manufacturing and production shifted outside the US. Throw in the ability to use credit for daily purchases and people can easily ignore the fact they're slipping under. :)

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: a_joker10 on February 27, 2009, 01:59:33 PM

Quote from: drkaje on February 27, 2009, 01:48:04 PM

Let me make sure I understand you. You're arguing that manufacturing contracts going to Canada and other countries where US companies could never possibly compete doesn't translate into a loss of jobs?!

That's the big joke. Everyone became poorer over time but it took a while to see it because a lot of crap got cheaper because so much manufacturing and production shifted outside the US. Throw in the ability to use credit for daily purchases and people can easily ignore the fact they're slipping under. :)

No I am arguing about NAFTA.

You are the one including other countries.

When our dollar hit parity, many factories started closing here a jobs went south.

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: drkaje on February 27, 2009, 02:24:11 PM

Quote from: a_joker10 on February 27, 2009, 01:59:33 PM

No I am arguing about NAFTA.

You are the one including other countries.

When our dollar hit parity, many factories started closing here a jobs went south.

Is "parity" smart people-talk for it ceased being cheaper to produce things in Canada?

Title: Re: U.S. May Have Caused The Trouble, But Canada Could Suffer More
Post by: a_joker10 on February 27, 2009, 04:58:15 PM

Quote from: drkaje on February 27, 2009, 02:24:11 PM

Is "parity" smart people-talk for it ceased being cheaper to produce things in Canada?

UMMM IT really isn't cheaper to produce things in Canada.
The trade deficit America has with Canad is because of Commodities. Like oil, gas and hydro power.
http://www.bls.gov/news.release/ichcc.t01.htm

Table 1. PRODUCTION WORKERS: Indexes of hourly compensation costs (United States = 100)                                  -16-    Table 1. PRODUCTION WORKERS:  Indexes of hourly compensation costs in manufacturing,             34 countries or areas and selected economic groups, selected years, 1975-2006    Country or area                 1975    1980    1985    1990    1995    2000    2003    2004    2005    2006    Americas    UNITED STATES.............       100     100     100     100     100     100     100     100     100     100    BRAZIL.................. ..         -       -       -       -       -      18      12      14      17      21    CANADA.................. ..        99      92      88     110      96      84      87      94     101     108    MEXICO.................. ..        24      23      12      11      10      11      11      11      11      12