Recession Over

[onthebottom]

According to the Bank of Canada, this recession will be over in our lifetime for those under 20 years old. Just kidding! The Bank is projecting an end to the recession in CANADA before the end of 2009 followed by a robust 3.8% growth in 2010. Don't sell those Canadian bank and commodity stocks!

Is this the same organization that predicted Canada would not slip into recession with the US?

OTB

 

[onthebottom]

It's not necessarily manufacturer's causing this. Consumers are demanding lower and lower prices yet North American workers (aka consumers) are demanding high wages.

Net result, the "Walmart" effect. We know have an economy in NA based on consumer spending not industrial production for export. Economic cycles are going to shorten and downturns will be deeper and longer as when the consumer taps out, the gig is up for some time.

Actually I think Canada's economy is based on exporting raw materials to the US and the auto industry, the US economy is based on services.

OTB

 

[mindingmyownbusiness]

Bang on

Here are 3 stupid things that banks do:
1) Outsource credit risk analysis to debt rating agencies.
2) Hedge risk with counterparties that are capital challenged,
3) Excessive focus on cutting costs by saving on paper clips.

The one U.S. bank that concentrated on its knittings is Wells Fargo, not very exciting but smart. I think another bank that is smart is Bank of New York (but I think it is now caught up in the State Street mess).

I read a news report in December quoting some employees of the ratings agencies - they knew the ABCP's were bad news but still gave them A+ ratings that suckered consumers. The problem was that the rating agencies are paid by the institutions who are putting together these instruments -of course the tendency is to appease the one who pays you.

I am still waiting for the S&P and Moody's to be held to account.

 

[Rockslinger]

One of my dancer friends who graduated from grad school in 2008 said that she still dancing because nobody is hiring in the public sector either. Her profession would generally be in the public sector. In the meantime, dancing pays the student loan, rent and puts food on the table.