Recession

[rhuarc29]

Alberta now in recession:

http://m.thestar.com/#/article/news...berta_likely_to_face_recession_this_year.html

It will spread.

Yeah, to Saskatchewan.

It's not surprising Alberta or Saskatchewan would face the prospect of a recession when they've seen such growth due to high oil prices. What would you expect to happen when the price tanks? I'd be greatly surprised if it spreads outside those two provinces. Canada, as a whole, will follow the U.S. And the U.S. is looking quite strong at the moment.

Even so, we all know the economy is a house of cards. Pull one out, and the rest may follow. It depends what card. I don't believe oil will be the trigger.

 

[fuji]

how do you equate an article that says "Alberta LIKELY to face recession" sometime in 2015 to your comment "Alberta now in recession"?

The official declaration of recession is a backwards looking thing.

 

[fuji]

Yeah, to Saskatchewan.

It's not surprising Alberta or Saskatchewan would face the prospect of a recession when they've seen such growth due to high oil prices. What would you expect to happen when the price tanks?

Absolutely. And Toronto will be next. Where do you think Canadian banks make all their money? The oil patch projects were massive things with huge capital financing requirements, all set up by Toronto based financial institutions. The oil patch is a big part of Toronto's economy too. The banks are going to start cutting people in Toronto which in turn will hit all industry in Toronto as demand slacks off nation wide. Then there's also the matter that Toronto banks are underwriting mortgages for people in Alberta who now will not be able to pay them off, etc., etc., not to mention other Canadian businesses that were selling products to people earning oil salaries, financial sector salaries, etc., etc.

This is going to spread.

 

[Rank5]

Recession is coming.

I can't wait. I missed out on the last one and didn't put my money in the stock market.

I can't wait until the stock market and housing market collapses.

People who lived beyond their means will suffer, while people who have saved (like me) will have an amazing opportunity to buy assets on the cheap.

Edit: Oh, and SPs will get less clients and will get desperate and lower their prices due to the lower demand. Any man who keeps his wealth and survives this recession will live like a god among peasants.

 

[tml]

Alberta now in recession:

With Stephen Harper ad PM they will get all the financial help they need.

 

[angrymime666]

I can't wait. I missed out on the last one and didn't put my money in the stock market.

I can't wait until the stock market and housing market collapses.

People who lived beyond their means will suffer, while people who have saved (like me) will have an amazing opportunity to buy assets on the cheap.

Edit: Oh, and SPs will get less clients and will get desperate and lower their prices due to the lower demand. Any man who keeps his wealth and survives this recession will live like a god among peasants.

I have no formal education in predicting economic change in canada.

however, I do not see the housing market going in the toilet when lending rates are at an extreme low. I do not see a housing market collapse unless the rates go up significantly over a very short term period of time(I do see a collapse, but not for several years and until lending rates rise) . significant, would be a jump to several percent. perhaps a slow down in the sales of homes, but I dont see a loss that soon. if rates did go up significantly we would see a huge blow to the new construction market, and I dont see the government raising rates since it would cripple that sector.

a bailout for albert oil, that sounds about right. par for government behavior

 

[tribunus]

Got a bad feeling about this year as well. My portfolio was golden until oil went into the dumps. Oil prices affect everything, especially the big banks which I have a tonne of.

The experts are saying move your money to the states. I have a fair amount there already but I'm not convinced it's going to be much better.

 

[Rank5]

I do not see the housing market going in the toilet when lending rates are at an extreme low.

To be honest neither do I. But I do see the stock market having a major correction as the P/E ratios are at all time highs.

I have been hoping for a stock market crash in 2014. Maybe 2015 will be my lucky year.

Yea the housing market depends entirely on the low interest rates set by the bank. Some said it would raise in 2014 but that didn't happen either


But yea, when stocks go down and interest rates go up, it is gonna be sweet because I am tired of leaving all my savings in cash.

 

[Insidious Von]

Yes Alberta is in a recession but the great Jim Prentice is loathe to admit it, some of his backbenchers are even calling for sales tax. Hence the $550 million bribe to Linemar, someone has to pick up the slack. Canada had a much more diversified economy when Harper became PM. He gambled on sustained growth for the oil patch and now he's reeling. Cutting funding for RD hasn't helped, from 1945 to 1958 Canada was the world's most innovative nation. The program has been dying by a thousand cuts, since Harper became PM we've dropped below the top 20. For all intent and purpose we are a dedicated commodities economy with all that it entails.

Saudi Arabia has another reason for not cutting oil production, delay the inevitable arrival of new energy technologies coming online. Next week The Economist will have a special report on energy. For the collective health of your portfolios I strongly recommend that you read it!

 

[fuji]

What a suprise, a Fuji, prediction in trouble.

Bank of Canada warns economy could be in for a rough ride
http://m.theglobeandmail.com/report...-a-rough-ride/article22441239/?service=mobile

 

[rhuarc29]

Absolutely. And Toronto will be next. Where do you think Canadian banks make all their money? The oil patch projects were massive things with huge capital financing requirements, all set up by Toronto based financial institutions. The oil patch is a big part of Toronto's economy too. The banks are going to start cutting people in Toronto which in turn will hit all industry in Toronto as demand slacks off nation wide. Then there's also the matter that Toronto banks are underwriting mortgages for people in Alberta who now will not be able to pay them off, etc., etc., not to mention other Canadian businesses that were selling products to people earning oil salaries, financial sector salaries, etc., etc.

Good thing I'm not in big banks. And I only just got heavily invested in energy in the last few weeks, before oil rebounds to $70. All I see is positives for me. Cheap gas, a more desirable position for my company towards exporting to the U.S., investment opportunities, etc. My company has already saved thousands in transportation costs alone. That's happening across the country. This is a net win for most industries.

I'd like to see oil stabilize, simply because I think these major swings are unhealthy overall. But certainly not to $100+ levels.

 

[onthebottom]

You've made your prediction, I've made mine. We can come back and look at this thread in about 8 months. The official declaration of a recession is a trailing indicator following two consecutive quarters of negative growth -- I predict that starts now and that in 6-8 months it'll be declared.

I am not predicting another "great recession" like the financial crisis. I am predicting a recession, though. The recession will be global, and will be experienced in the US as a (falling) demand driven recession. In Canada it'll be a combination of falling demand (following the US) magnified by the impact of falling oil prices. Canada will go into a recession because of the demand issues; the oil price decline will simply exacerbate it.

Note that the decline in oil prices is not only because of over-supply, but also because of falling demand, which is pretty quickly going to transfer through to a crash in consumer confidence.

Still feeling good about this?

 

[fuji]

Yup.

 

[HEYHEY]

I have to agree with fuji on this one, not gonna be a good year for canada.

 

[onthebottom]

I have to agree with fuji on this one, not gonna be a good year for canada.

I think Canada will go sideways but where Fuji and I disagree is on the US.

 

[MRBJX]

I think Canada will go sideways but where Fuji and I disagree is on the US.

Whats to disagree about with the US?

Recession is upon us.

 

[SkyRider]

With all the recent job losses, the recession is already here for many people. Hang on to your job and save your money or you might end up in front of an MP or SC begging for spare change.

"Before the days of the NHLPA, when players finished playing they were on their own. The pension only kicked in when they were 65 and it was not very good. Many players (see older question) had no education or experience to fall back on and had to find employment based on their notoriety or fame.
Many players would suffer from the loss of income and fame. Busher Jackson would end up as street person begging for handouts in front of Maple Leaf Gardens, a place where he used to be a hero. Doug Harvey was living in a donated railway car. Bobby Baun lost his farm (his retirement investment) to expropriation for a cancelled airport east of Toronto. These are but a few of the many who were cast aside when their playing days were over."

P.S. Remember those ads that said if you put away $20 a month when your are 21, you will have $1 million by age 65? Think that was assuming a growth rate of 10%. What investment grows at 10% annually now? Certainly not GIC's.

 

[onthebottom]

Whats to disagree about with the US?

Recession is upon us.

Upon Canada - perhaps, US is still growing...

I'll stick my up for US and sideways for Canada prediction...

 

[FirstCaveman]

An interesting read - since this thread was started on Dec 14th, oil has gotten even cheaper, the BoC has responded with a 25 bp drop, and there are persistent rumours that they will do it again in March. Harper is in full panic mode, trying to shift our focus from the economy to the politics of fear.

Gotta go with OTB - Canada flat while the US continues it's progress. Canada flat because the oil crisis will cut both ways... bad for Newfoundland, Saskatchewan, and Alberta energy sectors, but lower energy costs will put some valuable dollars back into consumer pockets, manufacturing and distribution across the country.

 

[onthebottom]

An interesting read - since this thread was started on Dec 14th, oil has gotten even cheaper, the BoC has responded with a 25 bp drop, and there are persistent rumours that they will do it again in March. Harper is in full panic mode, trying to shift our focus from the economy to the politics of fear.

Gotta go with OTB - Canada flat while the US continues it's progress. Canada flat because the oil crisis will cut both ways... bad for Newfoundland, Saskatchewan, and Alberta energy sectors, but lower energy costs will put some valuable dollars back into consumer pockets, manufacturing and distribution across the country.

It will be important to watch manufacturing data, was down 1.9% in November, that is a worry. Will that extra money from cheaper gas lead to incremental spending or will it go to higher priced imports due to a weaker loonie....