Are you surprised the governments in Ontario, Canada, and Obabma’s administration are being so tough on the auto industry?  Here is a story from the globe where the premier of Ontario has sent GM back to the table with CAW and said “you need more concessions”, WOW.

Another question, should they be this tough?  Why do you think they are?

I am slightly surprised given how much they threw at banks on Wall Street, and AIG with way less demands, or actually none for that matter.

Yet the Auto industry is getting so many conditions on the money they will get, which is way less?

Do you think that the auto industry should just die, so that the companies can be re-organized to be leaner and meaner?

I think that that is actually what the governements are trying to do, make the unions come to the table with more.

Tough times for them yes, but for many years the unions hammered these companies so hard to make so uncompetitive that they are in the mess they are in.

Let’s see what is happening.

Let me know your thoughts

This story in the Globe is indicating that investors and the overall market feeling in Wall Street as the first quarter ends is that we are heading in the right direction.

What I found really surprising was that the market actually has risen 21% in fewer then 3 weeks and no one really knew that?  Where are the reports for that?

On the news this morning they are reporting heavily that “as a sign of the times, GDP is down .7% in january”?? Are they serious? Reporting news in January is no longer RELEVANT today?

What do you think for the second quarter? Are the stock and real estate markets at the bottom and stabilizing?  If so will that last for the balance of the year?  Will we see increases in the second quarter for these important markets or just stabilization and increases for the third quarter?

Steven Harper has been busy this weekend on Fox news and on CTV’s question period warding off critics saying that Canada has entered into a period of structural deficits which will force him to substantially raise income taxes in the future.

I have a couple thoughts on this and the article:

1. Why worry about things that haven’t happened yet?  I get that critics and the media alike need to do this, but do we?  What would these people have Harper do?  If he does nothing to respond to the recession or worse if he worries about what will happen two years from now instead of focussing on what is happening NOW then what?
2. I don;t think i agree with Harper’s continued assertion that Canada will be the first to emerge from the recession, simply because we were the last ones to arrive at the party.  In my opinion he forgets that the reason we came at all was because all our customers were there.  We can not leave UNTIL our customers leave.  We are an export country period.  Our customers have to start buying before we come out of this recession.  This is why we HAVE to stand on the sidelines and cheer like hell for Obama, Geitner, Bernanke and the rest of the US team.

GO USA GO!!!

Was at a private function on Wednesday night hosted by Macquarie Financial and part of the presentation touched on Genworth Financials “Homeowner assistance” program.  I knew about this program but admittedly had forgot about it’s application.

However in these times I wondered aloud that likely it is more relevant now. In fact it is highlighted on Genworth’s home page (see link above), which tells you everything you need to know.

The key we were told is going to your lender BEFORE you get in arrears, you will be negotiating from a stronger position.  If however, you are in arrears does not mean you can not still approach your lender to discuss options.  If you have Genworth financial Insurance, then make sure you tell the lender that,  and better yet just go directly to Genworth.

If you have CMHC insurance then you will have to cross your fingers as they don’t have a specific program that I am aware of, but I am told they are working on one given the times we are in.

Thanks Genworth.

The story broke yesterday and at first glance I couldn’t decide how I felt about it.  Jeffrey Rubin was often controversial, and certainly colourful.

Granted a lot of his predictions were off, but a lot of them were on too.  Sounds like most economists in my mind, but due to his flamboyance he cerrtainly had his critics, just check out the comments on the story.

Avery Shenfeld takes over for him and I think he is a good replacement.  I saw him speak in January at a private function and I thought he was pretty good.  Certainly much more conservative in his approach then Rubin.

Are you going to buy his new book?  The description seems kind of ominous, but I think worth reading, I am going to.

Before everyone jumps on the bandwagon of I knew the market would come crashing down I thought I would get out in front of the news today and say a few things about it.

1. First everyone expected that we were going to have some down turn after the wonderful week we just had in the markets
2. This is relatively normal as the market tries to turn around to a recovery there will be times like today investors take their profits out

What do you think about the market drop today?

I have heard many stories when they Quote Don Drummond from TD and he is ALWAYS negative. However this story is worthy of a healthy discussion I think.

What do you think?  Will we see a small recovery that will then be mired by runaway inflation and thus increased interest rates?

Does anyone have other economists suggesting this?

I am going to do more research because abviously it is relevant in terms of the advice we give.

On another hand what would be “incredible” interest hikes?  If Prime right now is 2.50% and likely going to 2.25% soon what is prime tripled?  That would not put us in a catastrophe when we look at the historical rate for variable rates.

However wat if people buying homes this year and into next year through the recovery and are making there decisions based on affordability at the rates they get now, then see their rates go up?

What is the moral of this?  PLEASE buyers and mortgage advisors make sure people you are making buying decisions based on affordability for interest rates higher then today to prepare them for the “potential” of higher interest rates in Canada or make sure people are taking fixed rates if they are in any way “on the edge” of the approval affordability.

Good story to engage some conversation…is this a “spring thaw” in the real estate market, in other words that normally at this time of year we see prices rise due to increased activity or are we seeing a fundamental balancing of the market?As I have said in my recent video on this no one is ready to call 30 days of data “the bottom” and I think that with the positive news of increased activity leaking out, some sellers who have been sitting on the sidelines waiting, may jump back in flooding more inventory to a weak market.We need at least 60 more days of the same kind of data (increased sales activity, increased sales to new inventory ratios, lower absorption rates, and stabilizing median prices) then we can say with more confidence that the market is at bottom.

Richard Waugh, the CEO from Bank of Nova Scotia spoke in Vancouver today and told the audience that the global financial system has begun to stabilize.  I hate to tell you I told you so…but I did.“My sense is that the financial system, and this includes globally, is beginning to stabilize. So economies will stabilize, I expect, near the end of the year.”

This story is pretty interesting.  It makes one ask the question if the seasonally adjusted average price for ALL the US is only down 9.6% since it’s peak in April 07 then where is this meltdown?To me it seems as usual the regional areas that are experiencing 30+% drops are “hogging” the news.The same thing in Canada, it is the hotter areas that had the biggest boom that are seeing the biggest drop, insert Calgary and Vancouver here,  but in reality across the country the news is not all bleak in the housing market.  It is just nobody seems to care what is happening in those areas.