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Pinterest Mom posted:Uhh... Why?
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Mar 19, 2013 21:27
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Pinterest Mom posted:I have a pretty big problem with the minister's office calling up a bank on a whim and telling them that their interest rates are too low. When the government intervenes in the economy, I feel it should be rules based, transparently, and in a way that renders the government accountable for its actions. Personal debt is now at 165% of disposable income and borrowing costs have been so persistently low that it has lulled many consumers into a sort of stupor. Things could get pretty nasty if this whole thing blows up. Seeing the government call out an irresponsible policy by a bank strikes me as refreshing, not inappropriate. Given that we have absolutely terrible corporate accountability(Conrad Black had to be charged in America, for gently caress's sake) and fairly lax regulation I really can't get that worked up about the government interfering with some bank's private decisions, given that in this case they were doing it openly and in a way that actually protects the economy.
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Mar 20, 2013 20:56
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I agree that it shouldn't, but as my father likes to say, the perfect is the enemy of the good. And given all the other distortions in our "free market" economy I have trouble getting worked up over this particular one.
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Mar 21, 2013 00:23
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There would need to be a massive paradigm shift regarding the appropriate role of the central bank, probably not just in Canada but throughout the English speaking world, before it would be politically feasible to change the banks mandate. Given that political paradigms tend to change every couple generations, especially when times are dire, that is hardly an unimaginable step. But its worth emphasizing that right now there is massive pressure at both the national and even to some degree the international level for us to maintain the status quo. And if a change does come, expect a lot of pusback, followed by wailing and gnashing of teeth. A lot of people take the central bank`s current mandate very seriously.
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Mar 21, 2013 01:00
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I would imagine that people factor their social and familial networks into any calculation of where they'd prefer to live. Also, as lovely as America is, I don't think people who can otherwise avoid it particularly enjoy living in a country that seemingly treats anyone who isn't born there like a criminal.
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Nov 4, 2013 01:35
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Lexicon posted:It is simply not possible for the USA to be mentioned among Canadians without the sniping starting shortly thereafter. I've lived in America and it was a great experience, one I'd love to repeat in the future, but there are a lot of hassles involved in moving to the USA, especially if you're planning to work. Also the way that the boarder guards dealt at various points with my sister, my parents and in particular with my aunt (born in Iran) did put a pretty sour taste in my mouth. Maybe you had a different experience but for most of the people I know including myself crossing the American boarder - especially if you're going there to take a job - is a huge and thankless hassle.
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Nov 4, 2013 01:52
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Lexicon posted:I totally agree that the CBP can be, shall we say, unsympathetic (though admittedly, never in my personal experience - I always get way more unnecessary hassle by CBSA, if anything). Oh I didn't mean to imply that at all. I've always found Americans to be extremely friendly and personable when I'm in the USA. When I lost my wallet in Manhattan somebody who overheard my plight immediately gave me their subway pass and the concierge who eventually found the wallet lying on the street went to a great deal of trouble to get it back to me with all my credit cards, ID and money. It left me wondering whether Manhattan is a friendlier town than some people think, or whether Toronto is just so cold and unfeeling that my standard expectation about the kindness of strangers is overly cynical.
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Nov 4, 2013 04:27
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sitchensis posted:I was on the verge of breaking up with someone this past summer. We share a 1 bedroom in Calgary. Because of the floods I couldn't find a decent place to move into for anything approaching a reasonable price. Ended up staying in the relationship. There is a reason that fiscal and social conservatism dovetail together nicely. You might think unregulated markets would horrify a true conservative since they are so destructive toward community life (this was the stance of our old Red Tories) but on the flipside the coercive pressures of the market have often been perceived as a sort of cudgel for enforcing social mores. Malthus was particularly blunt about this but if you read neoconservative academics in the 1970s and 80s they are saying basically the same thing: market discipline is necessary to maintain social order and encourage household formation. Anyway I was in a similar situation to you a few years back. All I can say is I'm very happy, in retrospect, that we had a month-to-month lease. It gave our landlords more power but at the end of the day it meant that we weren't stuck together when the relationship had run its course.
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Nov 6, 2013 18:30
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Mr. Wynand posted:See also: the student loan catastrophe brewing up in the states. In the short term it seems as though this policy has allowed the Canadian government to keep consumer spending up even though wages are stagnating or even falling. Rising home values has seemingly become a major prop in keeping aggregate demand up at a time when the government is cutting spending and the corporate sector is hoarding cash. It's also given a lot of people jobs in industries like construction and real estate. None of this, of course, is to say that you're wrong about how disastrous the long term effects of this policy could turn out to be. But there is an underlying logic here that seems to tie into a reliance on housing to help power the economy ever since the great productivity slow down of the 1970s. It seems like politicians have relied on housing (though perhaps not consciously) to mask the weakness of our economic performance over the last few decades.
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Dec 6, 2013 16:33
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The energy boom is contributing to the wrecking of the environment and its crowding out value added industries like manufacturing so I'm not sure how much of a bright side it really is. Its given a lot of people out west jobs and that's certainly a good thing but it would be easier to celebrate if places like Alberta were at least spending some of that money to prepare for the day when the energy boom ends.
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Dec 6, 2013 16:43
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MickeyFinn posted:I don't think there has been a 'productivity slump' at least not by any metric I have seen. Can you explain this? I didn't say anything about a slump, which would suggest an actual decline in labour productivity, I said that productivity growth has slowed down after its postwar peak: From Statistics Canada:  Other than a slight bump in the 1990s - due to the implementation of computers? - the trend has been toward slower growth. The picture is even worse when you compare Canada to other advanced countries, in particular the US. The Globe and Mail posted:Canadian productivity: Even worse than previously thought Glend Hodgson tries to dance around the implications of his own conclusion by suggesting that maybe somehow the oil sands will eventually start contributing more substantially to productivity growth rather than just draining capital out of the value added sectors of the economy, but the following graphs taken from Jim Stanford's "Staples, Deindustrialization, and Foreign Investment give further evidence that the rise and fall of the Canadian manufacturing sector play a large role here, and that our drift back toward being a raw resource economy plays a big role in the slow down. Note how mining lags behind manufacturing in terms of productivity:   
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Dec 7, 2013 18:48
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Engineering bubbles has basically become an industrial strategy for the neoliberal era in the West so if the current bubble does burst then its quite likely the government's response will be to desperately try to re-inflate it.
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Dec 20, 2013 18:39
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CTV News posted:'We don't really have a debt issue'
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Jan 6, 2014 18:57
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What else is he supposed to say? "Honestly, I'm terrible at my job and the only reason our economy isn't flaming out is because of an asset bubble and China's voracious hunger for our natural resources." After all that private debt is one of the only reliable sources of demand in the economy. Both corporations and governments in Canada are doing their best to restrain spending so debt financed consumer spending, much of it tied to home prices, has to take up the slack. While I'm sure Flaherty is privately concerned about consumer debt his hands are basically tied. Any attempts to unwind that mess would have the potential to undo the rest of the Conservative's economic agenda by throwing us back into a recession.
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Jan 6, 2014 19:56
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It doesn't help that the demographics who vote or pay attention to politics are the same groups who are the most likely to own a home and have a mortgage. People don't enjoy thinking that their livelihood hangs by a thread so of credible sounding authority figures keep telling them everything is fine then people are usually quite happy to accept those reassurances regardless of how valid they actually are.
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Jan 6, 2014 21:07
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Baronjutter posted:Every single co-op I've ever heard of has always fell into horrible drama, the more hippie-ish the more likely. All this cooperation and democracy and communal labour sounds nice but all it takes is a single disagreement and suddenly the entire building is a hostile environment and nothing gets done and poo poo is falling apart. A dude I knew bought into one somewhere in central BC that was a group of "like minded" arty hippie types and within a few months it was basically survivor with factions and plots and people forming alliances to kick other people out or make life miserable for them. And these aren't idiot 20-somethings these are fully grown adults. Then again co-ops tend to attract a few "types". The people I've known who lived in co-ops tended to really enjoy and value the experience and it helped instil, or at least reinforce, more communitarian values. I would be cautious about over generalizing your own experiences too much here.
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Jan 29, 2014 22:56
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So this thread will be one year old toward the end of this month. What are the chances that one of you guys - Cultural Imperial or someone else who has contributed regularly to the thread - would consider starting a new thread with an updated op covering developments over 2013 and perhaps attracting some new posters who might currently be intimidated by the size of the current thread? There's lot of interesting information being discussed here and it seems like it might be worth pushing it toward a slightly larger audience.
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Feb 1, 2014 21:44
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Cultural Imperial posted:Sure! It might be helpful to include some kind of explanation of why it appears that real estate prices in Canada are above what market fundamentals would justify. The current op mentions the ratio between rent-to-house-price-ratio which is worth mentioning but it might also make sense to mention that(correct me if I'm wrong) the local price of real estate should generally reflect local incomes, something which no longer holds true in much of Canada. It'd also be good to have the op link to articles like this one that explain how a slow down (let alone a real drop) in the housing market could have such dire effects on the rest of the economy. This is all stuff that has been brought up in this thread but it might be good to have it all amalgamated into a new op.
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Feb 1, 2014 23:49
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etalian posted:The local prices aren't in line with income due to easy credit and people thinking it's wise to get a barely affordable mortgage. I'm familiar with that part of the issue, I'm just saying it might be helpful in a future OP to briefly explain that part of the reason that Canadian homes are thought to be over valued is that the price of real estate in major cities so far outstrips the average income in those cities. Obviously a big part of the explanation for "how can that be" has to do with historically low interest rates. I'm just saying that it might be helpful to give people a sort of a bit of a heads up in regards to what the model is behind the claim "real estate prices are in bubble territory".
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Feb 2, 2014 02:18
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That information is good and worth including in any new OP but what I'm saying is that there should also be an explanation of why people here think homes are currently over valued in Canada. I.e. it'd be useful to explain what the indicators are that suggest that the price of real estate has moved away from what the market fundamentals would support. To people who aren't are familiar with the dynamics of the real estate market that could be really useful information. The current op does mention Canadian housing prices vs. rental prices, which is one important indicator, but I'd also suggest mentioning the price-to-income ratio, i.e. the divergance between average incomes and average home prices, a gap that has only been papered over via excessive debts borrowed at low interest rates.
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Feb 2, 2014 02:50
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Why is Japanese real estate so undervalued? Is that a hang over from their lost decade? Given that in the late 1980s they had a ridiculously overvalued real estate market I'm pretty shocked by that graph. Who knows, perhaps we're getting a glimpse of Canada's
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Feb 2, 2014 05:42
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Ardennes posted:It won't provide in the immediate manner it will take though, long-term Canada will recover but it is going to take a while. Its Harper, not Cameron, and unlike the real David Cameron our Stephen Harper has been more than willing to use economic stimulus when things go south. However you're completely correct that our economy is entirely reliant on a mixture of debt financed consumer spending that is being powered by the housing bubble and China's insatiable hunger for our raw resources. If we have a housing crash (or even a "soft landing") and a slowdown in China happening simultaneously things will get very nasty for us. Timing will matter a lot though. If the Conservatives are able to win another majority in 2015 then they might use a recession as an excuse to further slash the federal government, much like David Cameron did in the UK. If the crash comes before the election, or if another party wins the election, or if the Tories only win a minority (and somehow aren't booted out by the combined force of the opposition) then its very hard to say what the government's reaction will be. Another big question mark here is just how much exposure the bank's have to a housing bust.
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Feb 2, 2014 06:57
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China is our second largest trader after the US. Granted, we sell five times as much stuff to the Yankees as we do to the Chinese, but they are hardly irrelevant in this calculation and a slowdown in China, which seems to be on its way, won't be good news us.
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Feb 2, 2014 07:04
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Over the next decade? That seems a bit premature. We export something like 11% of our poo poo to China and around 50% to the USA, which makes a lot of sense given history and geography. I'm sure China's relative share will grow but it'd be pretty shocking if they overtook the USA as our primary trade partner in the next ten years.
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Feb 2, 2014 07:10
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Make no mistake, there's nothing centre right about Harper. He used to be in charge of the National Citizens Coalition, which is basically the Canadian equivalent of the Heritage Foundation. He's a hardcore right winger who just happens to understand that his long term plans for transforming the Canadian federal government require a lot of gradualism and tactical finesse. However in 2008 when Harper was running a recently re-elected minority government and was worried that he might lose a vote of no confidence to the combined forces of the opposition parties he was willing to ignore his own principles and enact a major stimulus program because he calculated that it was the right move to make politically. The point here being that Harper, assuming he's still in office when the poo poo hits the fan, will do whatever he calculates would be best for the Conservative party. Like I said, if the Conservatives have managed to win another majority government before the crisis hits then they will probably use any crisis that emerges as an opportunity to make even deeper cuts, much like David Cameron did in the UK. But if the Conservatives only win a minority (and assuming the NDP and Liberals aren't willing to combine forces to oust him in such a situation) or if the crisis hits before the election, then it becomes much harder to say exactly what Harper would do. His main priority is staying in power so if he thought stimulus spending would help his party's chances then he'd definitely turn on the taps. The NDP and/or Liberals would likely be willing to spend some money on stimulus but almost certainly they would never be willing to spend enough money to actually compensate for the loss of income. Probably the best Canada could hope for would be an Obama 2008 style stimulus package that lessens the full blow of the crash without avoiding many years of economic pain. Given that we already are experiencing tepid growth and high unemployment that is not an encouraging prospect. The whole situation is a bit hard to predict because at the moment Canada, which has historically been a 2 or 2.5 party system effectively has three viable political parties. The Conservatives are in government, the NDP is down in the polls but still is the official opposition and the Liberals are up in the polls but currently in third place. The result is that its a very open question how the next election will play out, and therefore its hard to know what the exact configuration of political forces will be in the event of an economic meltdown.
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Feb 2, 2014 08:39
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The idea that housing being built right now is way better than housing built 100 years ago might be true in some places but its hardly some kind of universal truism that can be invoked to demonstrate why housing is a bad investment. That's a really ridiculous statement to make. Ardennes posted:He is right-wing for Canada, but if anything the world has moved with his views. Harper would be pretty ring wing by the standards of any English speaking country. His actions are constrained by the political context he's in but he's a fairly hardline Hayekian conservative who doesn't believe in climate change. He's definitely ahead of the ring wing global curve. quote:The question is if he (Harper) is going to be willing to make any real impact in stimulus, or would trade any stimulus for "targeted cuts." He wants to stay in power, but looking at every other country in the world which has face similar, especially with the right-wing in power, they all have eventually succumbed to austerity and "labor reforms." In addition, real question of how much of a hit he will accept to the Canadian dollar which already is dropping along with the emerging markets. Canada has been getting pretty substantial austerity and some mild labour reforms for the last several years. Like I said, the question of whether the government would respond to a housing crash with stimulus spending or further austerity will heavily depend on the timing. quote:Obviously one plan is just to go back to the 1990s and use a weak Canadian dollar to attract American importing. However, there is the obvious issues of lower global and American demand. Neoliberalism and stimulus spending aren't always mutually incompatible, neoliberalism will just have a big impact on what kind of stimulus spending is permissible. As far as looking for global precedents I think that's a dangerous game. You can't really compare Canada's current position with that of an EU country or even with that of the USA in 2008. I mean you're definitely right that we're not about to see some kind of sweeping New Deal legislation or the government employing public works projects to put the country back to work, but I also don't think we can just pre-emptively say "Canada will just pull a Britain and slash its public sector".
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Feb 3, 2014 00:19
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Oh yeah we definitely aren't ready and our system certainly isn't equipped to deal with the fallout, I hope I'm not coming off as suggesting otherwise. I'm just saying that the response of the government is going to hinge quite a bit on electoral calculations (and therefore on the timing of the crash and the particular balance of forces in Ottawa when it happens). Even assuming we get some kind of stimulus its inconceivable that it will be large enough to actually replace the demand generating by the housing bubble, and even with that source of demand we already have an unemployment rate of 7.2%. A fall in real estate prices is going to result in very real economic pain, that isn't really in dispute here.
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Feb 3, 2014 01:57
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Honestly at this point a liberal / NDP coalition government seems very far fetched. The NDP would very much like to replace the Liberals as the centre left option and the Liberals are desperate to re-establish their status as the natural governing party. In the event that they win a plurality of the seats its a very big question mark as to what will happen next, and it will especially depend on who won more seats and just how heated things got during the election. The future of Canadian politics would already be very hard to forecast even if it didn't look like we were on the edge of a major economic downturn. The fact we may be approaching an Ireland style real estate collapse is not promising. I do think, however, that both the Liberals and NDP would probably be inclined to do something to "take action" if there were a big downturn so we'd get at least some increased government activism I imagine, though what form it would take is hard to say.
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Feb 3, 2014 03:02
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TD says that Canadian homes are over valued by 10%. Don't worry though folks, we're going to have price stability this year. Soft landing incoming.
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Feb 3, 2014 19:42
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mik posted:Maybe I'm just getting old, but I don't really understand the appeal to living in a giant city anymore. Ignoring jobs, which is a huge thing to ignore admittedly, what do you get in a large city? Traffic, sprawl, crowding, rude people, pollution, stupid real estate prices? For what in return? Some decent concerts and a hockey team? This is coming from someone who lived in London UK for 3 years and have been in Montreal for the last 5 years. I couldn't be loving happier moving back to a smaller city. Everyone goes on about how fantastic Montreal is, but gently caress it sucks actually living here. The infrastructure sucks, MY TAXES, rude people, the government at all levels is beyond horrible. I couldn't imagine raising kids downtown in a big city, but then again I grew up in a small city so I'm biased. Every kind of store imaginable is within walking distance, I can take transit or bike to work, lots of cultural stuff, lots of restaurants and cafes, and I've never had any real issues with rudeness, most people I deal with are quite nice and personable. Personally I can't imagine not living in a big city.
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Feb 7, 2014 23:05
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eXXon posted:When did I say or imply that I was sore at them? Toronto Life is a rag that mainly caters to the upper crust, basically like the absurdly out of place shopping/fashion section of Now Magazine but like that the whole way through. If anything I'm surprised that they wrote about people living fairly reasonable lifestyles instead of yakking on about how they all should have joined bidding wars on single detached homes. I was briefly at a magazine that aspired to be the new Toronto Life. I remember they wrote an article on Porter airlines and described how wonderful it was because now anyone could slip down to Manhattan to catch a Broadway Show and be back on the same day. I had to point out that no, actually that's not something "anyone" could now do regardless of whether there was an airport down-town because 99% of the population don't have that kind of money. If I recall correctly their compromise was to put "in theory" as a qualifier in front of that sentence.
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Aug 17, 2014 17:05
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Cultural Imperial posted:http://worthwhile.typepad.com/worthwhile_canadian_initi/2014/11/the-manufacturing-trap.html This is a typical example of an economist missing the forest for the trees. The difference between manufacturing and resource extraction is that manufacturing is conducive to R&D and is generally more technologically innovative. Do you really think it makes no difference whether we specialize in ripping bitumen out of the ground vs. specializing in developing high technology products? It is definitely an issue that so much of our manufacturing is foreign owned but of course any policy that addressed that problem would make an economist like him go apoplectic.
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Nov 12, 2014 17:37
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So how long before the Bank of Canada starts straight up buying billions of dollars worth of securities like the US Fed has been doing for the last few years?
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Jan 31, 2015 19:38
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Cultural Imperial posted:All y'all hate qe for no good reason. Bring it. Why? Is pumping up stock prices going to magically revive an economy with lovely fundamentals? Also, I thought you hated bubbles, which would seem to be the one thing that QE is actually good at creating. ocrumsprug posted:Hopefully it works better than the version we tried in Canada where the government wrote blank checks for real estate. Do you consider printing money to inflate stock market prices to be a "blank check"? Cause that seems to be what QE has amounted to in practice.
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Jan 31, 2015 20:09
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ocrumsprug posted:
Heh, jokes. I get jokes.  Whiskey Sours posted:I feel like QE would be more effective if it were combined with aggressive fiscal stimulus. What's the point of driving down bond yields if the government is pursuing austerity? You get lovely economic conditions that hurt worker's bargaining power but stock prices hit record highs. What's not to love?
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Jan 31, 2015 22:35
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etalian posted:At least no more whining from Albertans about other provinces stealing their money. I remember in one of the older CanPol threads there was an Albertan poster (not PT6A) who claimed that if Alberta had actually put oil money in the reserve fund then the other provinces would have definitly used the federal government to steal it somehow, meaning that really poor Alberta had no choice but to pre-emptively blow all their oil money because otherwise they wouldn't get to keep it. So yeah, don't hold your breath. One way or another, whether they are doing great or doing poorly, Albertans will find a way to convince themselves that the rest of the country is screwing them.
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Feb 4, 2015 02:15
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etalian posted:it's basically a stealth country/culture that actively avoid building any type of reputation. The Canadian wastes his last request complaining that the Frenchman was smoking gauloises upwind of him.
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Feb 8, 2015 01:20
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Vaginapocalypse posted:LOL like white canadians would ever give up the chance to be racist hypocrites I see that a new student has arrived at Cultural Imperial's dojo to be tutored in the ancient and inscrutable art of trolling CanPol and CanDebt threads. It is always a pleasure to see a new practitioner learning to align their Chi into the perfect poo poo post and I wish you luck in your future endeavours.
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Feb 11, 2015 17:36
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ZShakespeare posted:hahaha yeah people are so stupid not being able to predict getting laid off 26 years in the future and having their property destroyed by landslides and the insurance company weasling out of paying up hahaha gently caress that guy so much what an rear end in a top hat. The particular charm of this thread is that it's evenly divided between interesting discussions of the economy and sadbrains masturbating to financial distress porn.
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Jun 6, 2015 03:10
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I think I would rather live out of a car than move to Winnipeg.
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Jun 9, 2015 00:00
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