Saturday, January 30, 2010
Friday, January 29, 2010
Thursday, January 28, 2010
AWASH IN A SEA OF DEBT - Maclean’s Feb.8th issue.
Canadians used to take pride in their higher savings rate, compared to the Americans. Not anymore.
It seems we have learned nothing from the American debt crisis; and here in Ontario, we have forgotten the housing collapse of the early 1980’s, when house prices dropped as much as 40 % and did not recover their old values until after the turn of the century. Speculation was rife; people kept moving up, sometimes changing homes every one or two years; speculators were “flipping” homes, and ordinary people were buying forward several months and expecting their old home to appreciate before putting it up for sale. It worked for a while, but then the market turned, and some people who had committed to a new home and waiting to sell their own at higher prices had to sell much lower and ending up with a new house but a much larger mortgage. Some seniors, selling their old, large home and hoping to move into a new, smaller home, mortgage free, ended up with a smaller home with a large mortgage. Quit claims were rampant.
Now, here we go again. Every day one can hear on the radio or see on TV finance companies advertise easy money: “you can qualify for a loan even if you have no job, or are self employed; have a paid for car not too old; or some equity in your home, even if you are a bankrupt”! This kind of advertising, preying on the poor or desperate, or just foolish, should be made illegal. It’s this kind of behaviour that got our American neighbours in serious trouble, and we are now going down the same road.
Your article references Denmark (also true of Norway and Sweden) where household carry twice the debt to income burden. This is true, but leaves out a couple of factors: mortgages are generously tax deductible, and it is advantageous in a high tax regime to carry a large mortgage; especially amongst higher income earners. Also, in comparison, the Scandinavian countries have much more generous income support policies for people losing their jobs or become unable to work because of illness, etc. Employment insurance benefits, as much as 90 % of wages, can last up to five years. This makes mortgage debt less risky. However, there also, they have been encouraged by the steady appreciation of house values over time.
Even the marketing of “reverse mortgages” to the elderly –while perhaps legitimate and useful in some circumstances –should be regulated better. These people, who prey on the elderly, or the unfortunate, are nothing but financial parasites and should be “exterminated”.
It seems we have learned nothing from the American debt crisis; and here in Ontario, we have forgotten the housing collapse of the early 1980’s, when house prices dropped as much as 40 % and did not recover their old values until after the turn of the century. Speculation was rife; people kept moving up, sometimes changing homes every one or two years; speculators were “flipping” homes, and ordinary people were buying forward several months and expecting their old home to appreciate before putting it up for sale. It worked for a while, but then the market turned, and some people who had committed to a new home and waiting to sell their own at higher prices had to sell much lower and ending up with a new house but a much larger mortgage. Some seniors, selling their old, large home and hoping to move into a new, smaller home, mortgage free, ended up with a smaller home with a large mortgage. Quit claims were rampant.
Now, here we go again. Every day one can hear on the radio or see on TV finance companies advertise easy money: “you can qualify for a loan even if you have no job, or are self employed; have a paid for car not too old; or some equity in your home, even if you are a bankrupt”! This kind of advertising, preying on the poor or desperate, or just foolish, should be made illegal. It’s this kind of behaviour that got our American neighbours in serious trouble, and we are now going down the same road.
Your article references Denmark (also true of Norway and Sweden) where household carry twice the debt to income burden. This is true, but leaves out a couple of factors: mortgages are generously tax deductible, and it is advantageous in a high tax regime to carry a large mortgage; especially amongst higher income earners. Also, in comparison, the Scandinavian countries have much more generous income support policies for people losing their jobs or become unable to work because of illness, etc. Employment insurance benefits, as much as 90 % of wages, can last up to five years. This makes mortgage debt less risky. However, there also, they have been encouraged by the steady appreciation of house values over time.
Even the marketing of “reverse mortgages” to the elderly –while perhaps legitimate and useful in some circumstances –should be regulated better. These people, who prey on the elderly, or the unfortunate, are nothing but financial parasites and should be “exterminated”.
Tuesday, January 26, 2010
Monday, January 25, 2010
Saturday, January 23, 2010
Are they sleeping? Rider’s pics zap the TTC –Saturday Star
With the ubiquitous cell phone/cameras being everywhere, you cannot even get a good nap on the job anymore. These guys should know better.
However, there is a simple way of fixing this problem and save a heap of cash for the TTC: do as other “advanced” countries do; like China, where you use an electronic charge card, much like a gift card, and just scan it in a reader and presto! No need for people, sleeping or awake. The TTC can then pay their rehabs to stay home and rest, and still save money.
However, there is a simple way of fixing this problem and save a heap of cash for the TTC: do as other “advanced” countries do; like China, where you use an electronic charge card, much like a gift card, and just scan it in a reader and presto! No need for people, sleeping or awake. The TTC can then pay their rehabs to stay home and rest, and still save money.
Wednesday, January 20, 2010
Tuesday, January 19, 2010
Monday, January 18, 2010
Sunday, January 17, 2010
Thursday, January 14, 2010
The Google news: China enters its Bush-Cheney era
The Google news: China enters its Bush-Cheney era: "I have not yet been able to reach my friends in China to discuss this story, and for now I am judging the Google response strictly by what the company has posted on its 'Official Blog,' here, and my observations..."
Wednesday, January 13, 2010
Finding ways to gain from the commodity boom - The Globe and Mail
Finding ways to gain from the commodity boom - The Globe and Mail: "Oil-service companies
Ms. Mohr's second choice for best-performing commodity in 2010 is crude oil. Vehicle sales in China overtook sales in the United States during 2009; India saw a 34-per-cent surge in vehicle sales.
For the oil-services sector, Mr. Letourneau believes drilling-service companies Energold Drilling Corp. (EGD-V) and Major Drilling Group International Inc. (MDI-T28.40----%) “are solid places to start.” Other oil-service firms include: Ensign Energy Services Inc. (ESI-T16.29----%) , ShawCor Ltd. (SCL.A-T30.10----%) and Trican Well Service Ltd. (TCW-T14.29----%) ."
Ms. Mohr's second choice for best-performing commodity in 2010 is crude oil. Vehicle sales in China overtook sales in the United States during 2009; India saw a 34-per-cent surge in vehicle sales.
For the oil-services sector, Mr. Letourneau believes drilling-service companies Energold Drilling Corp. (EGD-V) and Major Drilling Group International Inc. (MDI-T28.40----%) “are solid places to start.” Other oil-service firms include: Ensign Energy Services Inc. (ESI-T16.29----%) , ShawCor Ltd. (SCL.A-T30.10----%) and Trican Well Service Ltd. (TCW-T14.29----%) ."
Tuesday, January 12, 2010
Monday, January 11, 2010
Sunday, January 10, 2010
Thursday, January 7, 2010
Mortgage Modifications: Help or Hindrance?
Mortgage Modifications: Help or Hindrance?: "Is the mortgage modification program making things worse?� An article in the New York Times gives voice to fears that by encouraging homeowners to stay in homes that they cannot really afford, Obama's Making Home Affordable program is actually increasing..."
Europe’s WAR against ISLAM –Maclean’s Jan 18th issue.
Europe’s “war” against Islam harkens back to the crusades, and Christian Europe’s animosity towards Jews even further. Jews were persecuted and expelled at time when Islam was more tolerant and allowed Jews and Christians to practice their religion amongst the majority Islamic populations, as long as they paid their poll taxes or “Dhimmis tax ”. The Ottoman Empire was secure enough in their faith not to feel threatened by a few Sephardic Jews or a minority of Christians, with a few exceptions such as the persecution of Armenians by Turkey.
Following the breakup of the Ottoman Empire after WW l, this changed. The fairly homogeneous Arab and Persians lands were split into various artificial entities, lorded over by the British and French. This, among other, was the seeds of the present conflicts in the Middle East.
The European Islamic problem is a more recent development. The democratic/liberal west welcomed Islam to their shores –In Germany mainly Turks, needed for work in their post-war expanding economy. The Brits accepted Pakistani-Muslims from the former colony, and the French from their former North-African colonies. However, it has become apparent that integrating a foreign culture into the old and settled European society is more difficult than anticipated. This is not just the fault of the old country culture. Muslims religion and culture is so intertwined that it is hard for them to integrate with post-modern Europe. This is also, to a lesser degree, true in Canada and the US. There is more than a little truth in Kipling’s dictum that east and west shall never meet; especially when it comes to the convoluted area of culture and religion. This is no more evident than in second-generation immigrant youths who become suicide bombers and terrorists against their own country.
It is too late to put the genie back into the bottle, but at least we can put a cork in it for now, until we can find a way to “join the twain”. Otherwise, we might be looking forward to a repeat of the annihilation of Yugoslavia, but on an immense scale.
Following the breakup of the Ottoman Empire after WW l, this changed. The fairly homogeneous Arab and Persians lands were split into various artificial entities, lorded over by the British and French. This, among other, was the seeds of the present conflicts in the Middle East.
The European Islamic problem is a more recent development. The democratic/liberal west welcomed Islam to their shores –In Germany mainly Turks, needed for work in their post-war expanding economy. The Brits accepted Pakistani-Muslims from the former colony, and the French from their former North-African colonies. However, it has become apparent that integrating a foreign culture into the old and settled European society is more difficult than anticipated. This is not just the fault of the old country culture. Muslims religion and culture is so intertwined that it is hard for them to integrate with post-modern Europe. This is also, to a lesser degree, true in Canada and the US. There is more than a little truth in Kipling’s dictum that east and west shall never meet; especially when it comes to the convoluted area of culture and religion. This is no more evident than in second-generation immigrant youths who become suicide bombers and terrorists against their own country.
It is too late to put the genie back into the bottle, but at least we can put a cork in it for now, until we can find a way to “join the twain”. Otherwise, we might be looking forward to a repeat of the annihilation of Yugoslavia, but on an immense scale.
Wednesday, January 6, 2010
Monday, January 4, 2010
“Bernanke says rules can curb speculation” –Star Business, Jan.4/10
It appears that Ben Bernanke has had an epiphanic conversion from a believer I the Greenspan doctrine and the Freedman gospel of unregulated markets, to a born again Keynesian. Talk about closing the barn door after all the cows have gone missing.
Using monetary policy to quell speculative excesses or “bubbles” in housing or any other part of the economy is like using a sledge hammer to kill a fly. Increasing interest rates to dampen the housing sector, will also affect the whole economy to the detriment of all.
A better approach would be to tax the housing sector, or the sector targeted. It can be easily eliminated when the sector cools, without hurting the whole economy. But of course, that would be a TAX, and any tax is anathema to the voting public and to the business elite in particular.
Using monetary policy to quell speculative excesses or “bubbles” in housing or any other part of the economy is like using a sledge hammer to kill a fly. Increasing interest rates to dampen the housing sector, will also affect the whole economy to the detriment of all.
A better approach would be to tax the housing sector, or the sector targeted. It can be easily eliminated when the sector cools, without hurting the whole economy. But of course, that would be a TAX, and any tax is anathema to the voting public and to the business elite in particular.
Sunday, January 3, 2010
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