Welcome To The Depression...

[Gary Ruben]

Re: Welcome To The Depression...

and it will continue to fall... let me enlighten you with my theory :) Its called supply and demand.

The boomer generation is by far the largest demographics group and has been setting the market trends since the late 60's. This demographic group has generally not done much about preparing for retirement except depending on Government pension, possible union pensions and pouring money into mutual funds in the last 10 years because they know they are going to retire soon. During the last 10 years because this large demographic group has been pouring money into the market, there has been a great demand, thus driving prices up. At this point more and more boomers are retiring and pulling money out of the market... too much supply and not enough demand. Pull that amount out of the market and it was bound to crash. Simple supply and demand. Things will only get worse as Government pensions and union pension plans are hit with a large number of people retiring thus demanding more money.

No amount of government bailouts are going to help. Most of the companies that are in trouble because they have to give out large amounts of cash to a large percentage of retiring employees. Their cash flow can't sustain that kind of cost.

Maybe you're right the market will continue to fall. If you look back on the messages, Nov. 9th I wrote:

"So what do I expect to signal a turnaround? A low on the Dow of around 6800. Our dollar at around 65 - 70 cents. Oil at between 30 and 40 dollars a barrel. Your expectations may be different."

Yesterday the Dow finished slightly below 6800. It finished at 6763. I guess we'll find out if that is any kind of real support level. It woudn't bother me even a little bit if I managed to miss the bottom by less than 50 points.

Pensions come in different flavours. There are defined benefit and defined contribution pensions. Defined Benefit are, in my opinion, better than defined contribution but I suppose it depends on the viability of the company. I wouldn't want to be drawing a pension from a company which is going bankrupt.

Still, you have to remember those pensions don't come free to the employees. They pay into them. Many employees don't get a say into what the pension plans are invested. The company, not the union, invests the money. I didn't have a say in where the government invested my pension money. Personally, I could care less but I do expect them to pay the pension. I don't really care where they get the money. Of course, with pension funds directed by the unions I guess the employees must get a say. They elect their union.

Government pension plans also differ. As far as I know Quebec looks after their own pension plan and citizens. I contributed to the CPP. Quebec has the QPP. According to the Globe and Mail they lost 26.4% last year on investment loses. Now Quebec is losing their pension money I hope they don't come asking Ottawa for my pension money. Here's the article.

http://www.theglobeandmail.com/servl...Story/Business

In any case, a lot of people who pay into these pension funds don't live long enough to collect. They have amortization tables they should be using for this. The last stats I saw, which was admittedly years ago, showed the death rate between ages 65 and 70 was high. I realize some people live to almost 100, but not that many. 112 to 116 is often the age of the oldest person in the world.

Did you notice Canada narrowed the list of nations which will get the bulk of support for aid to 20. Haiti made this short list.

The GG prorogued parliament and saved the government. What country did she come from?

http://www.theglobeandmail.com/servl...y/?query=haiti

How's the economy doing in the west? Is Vancouver coming up with much money for the Olympics? I've been reading about money for the Olympic village, increased security costs and so forth. A few months ago someone here told me BC was doing fine so maybe these things are no problem.

[Ken Craft]

Re: Welcome To The Depression...

Capitalism contains the seeds of its own destruction.

[Gary Ruben]

Re: Welcome To The Depression...

Capitalism contains the seeds of its own destruction.

The Americans are starting to dabble in socialism. They liberated the shareholders of Citigroup from 36% of the company and have seized large positions in other companies.

[Ken Craft]

Re: Welcome To The Depression...

David Lewis was prescient when he discussed "Corporate Welfare Bums."

[Bob Armstrong]

Re: Welcome To The Depression...

Hi Ken:

I think that was David Lewis phrase, no? His campaign plane was " Bumair " if I remember.

Bob

[Gary Ruben]

Re: Welcome To The Depression...

Ed Broadbent was prescient when he discussed "Corporate Welfare Bums."

I think Bob is right about it being David Lewis and his "Corporate Welfare Bums". It livened up an election campaign as I recall.

I used to like to listen to Oshawa talk radio years ago when Ed was still in his early days of politics. Sure wish they would dust off some of those tapes and play them again.

I once voted for Stephen Lewis. I lived in his riding. Did some work for them on election day as well. For disclosure, I was never a card carrying member of the NDP or any other polical party. I've since voted both Conservative and Liberal.

Those who don't have any socialism in them when they are young have no heart. :)

[Ken Craft]

Re: Welcome To The Depression...

Are we quoting Churchill now? Thanks for the correction re. Lewis. ( I was only 8 during the '72 campaign.) Onew of the best speeches I've ever attended was given by his son Stephen speaking on the AIDS crisis in Africa.

[Gary Ruben]

Re: Welcome To The Depression...

Are we quoting Churchill now? Thanks for the correction re. Lewis. ( I was only 8 during the '72 campaign.) Onew of the best speeches I've ever attended was given by his son Stephen speaking on the AIDS crisis in Africa.

Did Churchill say that? I'd have expected him to add that those who didn't have capitalism in them when they were old either didn't have money or didn't have brains. :)

Stephen was quite the orator. While we couldn't vote him into government in Ontario, we did vote in Bob Rae. Bob Rae had the government at a bad time during hard times. I thought he had a rough first year but his performance improved by the second and then third year of his term. I recall many unions pulled their support from him.

In the bad old days when GM workers didn't make much money the Oshawa riding used to vote NDP. Broadbent used to win there. After the wages went up the voting pattern changed and it's Conservatives and lower taxes these days.

All I really know about taxes is that they are the price I pay for the society in which I live.

I no longer vote NDP for reasons I don't want to get into here.

[Ken Craft]

Re: Welcome To The Depression...

I was Ontario Federation of Students Chairperson in 1992-3. We felt Rae had sold us out. He's just continued selling out as his career has "progressed."

[Gary Ruben]

Re: Welcome To The Depression...

I was Ontario Federation of Students Chairperson in 1992-3. We felt Rae had sold us out. He's just continued selling out as his career has "progressed."

I felt Bob Rae was between a rock and a hard place. He tried to manage a very bad economic downturn and not hurt the most vulnerable in society. Rae days was job sharing and everyone kept their job rather than cutting the size of government.

Did the Students Federaton feel better or worse under Mike Harris? That's a question which always intrigured me for the unions which pulled their support.

I voted to re-elect Rae and his government. He passed my test of if his government did a good enough job to deserve another term.

[Ken Craft]

Re: Welcome To The Depression...

I was back in NB in June 93. Didn't have to suffer under the Harris years. At least the Left expected Harris to be their enemy.
Rae betrayed his allies. Bay St. was never going to vote for him but he toadied to them. He should have governed from the Left as per party policies.

[Gary Ruben]

Re: Welcome To The Depression...

I was back in NB in June 93. Didn't have to suffer under the Harris years. At least the Left expected Harris to be their enemy.
Rae betrayed his allies. Bay St. was never going to vote for him but he toadied to them. He should have governed from the Left as per party policies.

The cost of room rental in a school for a chess club or other activity became prohibitive under Harris. I think some of the clubs in the Toronto area might have closed. I noticed the Scarborough Club changed meetings places and maybe Bob could comment on the drop of membership during those years.

I don't think much was done for infrastructure either. One day people turned on the light switch. The lights didn't go on and that was all she wrote for the Conservatives. Never mind it wasn't specifically their fault.

I think simply dismissing Rae by saying he betrayed his allies and toadied to Bay St. is simplistic.

Governments need business as much as or more than business needs them. Trudeau recognized this with his NEP which help cushion the rising price of energy. The result was when times got better he still had companies operating in Canada. For the most part industry and manufacturing stayed.

Now many are closing up shop. When things turn around some companies will be operating in Mexico and other more favourable jurisdictions.

All summer we heard about Peak Oil. I think what we saw was Peak Demand (China was building for the summer Olympics). The prices killed off business and it's now working it's way through the financial markets, along with the ABCP, subprime mortgages, Credit default swaps and so forth.

Companies which close down or move their oprerations to the U.S. for lower taxes won't likely be back. Neither will those which move to Mexico.

[Jason Lohner]

Re: Welcome To The Depression...

How's the economy doing in the west? Is Vancouver coming up with much money for the Olympics? I've been reading about money for the Olympic village, increased security costs and so forth. A few months ago someone here told me BC was doing fine so maybe these things are no problem.

Economy is crap in my area... Main employer is the two saw mills, one shut down and the other runs on a skeleton crew. Next is a specialty saw manufacturer COE which shut down (around 400-500 people let go) and the last large employer is Valid industries (does 'bump outs' on Trailers/buses/RV's) which let go about 150 people and is running on a skeleton crew. In a town of 16,000 this is a total disaster. Luckily we are on a lake and many people come here to retire and it is a tourist area, so the town isn't going to become a ghost town. The interior of BC is really hurting. Don't know about the Vancouver area as it is a different world (as is Vancouver Island).

As for the Olympics, I have never been a supporter so I would be glad if it just went away. I don't believe the government should be taking my money for frivolous sporting events. I can almost guarantee that 2010 is going to be a financial disaster of Montreal proportions. They will try to blame the provincial liberals but if memory serves me right it was the NDP who submitted the bid.

BC is suffering, but it could be worse, I still remember the 90's under the NDP and Hell will freeze before I will ever vote NDP again (Yes I have voted NDP!) . The economic policies put BC into a recession when the rest of North America was having one of the largest booms in history... can you imagine what their policies would accomplish under a global recession?

[Jason Lohner]

Re: Welcome To The Depression...

Capitalism contains the seeds of its own destruction.

Actually Adam Smith said a lot about unbridled Capitalism. He said that companies would often gather in 'cartels' to artificially rise prices. His main thesis was that true capitalism would support many competing companies that would keep prices low and affordable to the average consumer. Companies would not just 'rake in the money', they would have to compete. What passes for capitalism today is certainly not the Capitalism in its historical context. laisse-faire economics hasn't really been put into place since WW1. Adam Smith warned people about this but he is not often quoted in full context.

[Gary Ruben]

Re: Welcome To The Depression...

Economy is crap in my area... Main employer is the two saw mills, one shut down and the other runs on a skeleton crew. Next is a specialty saw manufacturer COE which shut down (around 400-500 people let go) and the last large employer is Valid industries (does 'bump outs' on Trailers/buses/RV's) which let go about 150 people and is running on a skeleton crew. In a town of 16,000 this is a total disaster. Luckily we are on a lake and many people come here to retire and it is a tourist area, so the town isn't going to become a ghost town. The interior of BC is really hurting. Don't know about the Vancouver area as it is a different world (as is Vancouver Island).

I know Catalyst Paper is hurting and their share price way down. I heard some time ago ships didn't want to load the newsprint without a proper letter of credit from the buyer because they were afraid they wouldn't get paid for the shipping cost.

I was reading they laid off 260 at the Elk Falls Mill and 375 at Crofton. The share price is only 16 cents but I didn't pick up many because I'm not sure if they can survivie.

I know this stuff is cyclical but this is ridiculous.

You're right about BC having problems. B.C. and Quebec are the only 2 provinces with a Carbon tax. Can't figure out how a high energy user like Rogers Sugar (Lantic) can keep operating in those provinces and paying the tax. I listen to a conference call that company had a few months ago and that tax was mentioned. I can tell you from my experience a sugar plant uses an awesome amount of natural gas.