This blogger forecast the current economic situation at the beginning of the year (and before) and was widely/roundly condemned for his prognostications.
His predictions for Canadian Economic situation in the coming two months (posted yesterday)...
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October 23rd:
Note: The following post appears on my current events site but I thought you might be interested, given the obvious impact on real estate over the next year.
Update facts (posted October 24th):
Here’s a prediction for you. When Parliament resumes for the briefest of sessions before Christmas, it will be to hear Finance Minister Jim Flaherty deliver an emergency budget.
This will come amid a backdrop few voters ever thought possible, when they were mulling over who to elect on October 14th. That will include a massive pullback in oil sands investments by the likes of Suncor and Petro-Canada, which started the process of bailing this week. Oil will be valued at least $20 a barrel less than the break-even point those companies need to proceed. Interest rates will have been slashed three times by a panicking central bank.
Real estate values will be tanking and new home construction ground to a virtual standstill. Layoffs will be starting on Bay Street, in the wake of Wall Street pink slips that will eventually number perhaps 200,000. GM and Chrysler will have announced preliminary merger plans – dooming not only at least one Ontario car assembly plant but redundant car dealerships in every city in the country.
The federal government will announce the likelihood of a small deficit this year and a big one next. That means absolutely no tax relief on the horizon for half a decade. Unemployment will soon rise and household equity fall. Billions more in public money will be shoveled into the financial system and there will be a few spectacular corporate bankruptcies brewing.
You will be basically unable to sell your home, unless you slash the price or take back financing. Even then, it will take months and months to find a buyer. Your line of credit will be withdrawn, called or the interest rate doubled. Double-digit rates will be common for car loans, if you can get one.
Debt, as you might imagine, will be toxic and harder to repay. Cash will be king. The stock market? Don’t ask.
You should expect these things. In fact, it might be wise to expect worse. And if you’re surprised, get over it. You’ve been had.
The Bank of Canada waited for a week after the federal election to deliver the gloomiest forecast since it was created out of the ashes of the Great Depression. If you doubt this, check its financial predictions, like an 85-cent dollar. It was printed before Thanksgiving.
Governor Mark Carney, himself a student of Wall Street and a Flaherty appointee, admitted the central bank botched its last forecast, that 2009 will be miserable and you should expect no recovery to start until at least some time in 2010. While this was happening, our finance minister was once again laying the ground for a budget deficit – just six days after Stephen Harper said there would not be one. Deficits today, as you know, mean higher taxes tomorrow. After all, that’s how we got the GST.
Speaking of which, will the Harper government increase it? Will it slash that $100 billion in new military spending? Will family income taxes rise? How about a cut in transfers to cash-strapped provinces?
Something’s about to give, and there’s only one certainty: You won’t get to vote on it.
Picture: Bank of Canada Governor Mark Carney
His predictions for Canadian Economic situation in the coming two months (posted yesterday)...
============================
October 23rd:
Note: The following post appears on my current events site but I thought you might be interested, given the obvious impact on real estate over the next year.
Update facts (posted October 24th):
- Dollar loses 7 cents in a single week http://www.reportonbusiness.com/servlet/story/RTGAM.20081024.wdollar1024/BNStory/Business/home
- ‘This is beyond volatile.’ - Stocks crash again Friday http://www.reportonbusiness.com/servlet/story/RTGAM.20081024.wmarketsstaff1024/BNStory/SpecialEvents2/home
- Ottawa reveals it’s already in deficit http://www.theglobeandmail.com/servlet/story/RTGAM.20081024.wdeficit1024/BNStory/politics/home
- Canadian mutual fund star slashes staff by 20% http://www.reportonbusiness.com/servlet/story/RTGAM.20081024.waic1024/BNStory/Business/home
Here’s a prediction for you. When Parliament resumes for the briefest of sessions before Christmas, it will be to hear Finance Minister Jim Flaherty deliver an emergency budget.
This will come amid a backdrop few voters ever thought possible, when they were mulling over who to elect on October 14th. That will include a massive pullback in oil sands investments by the likes of Suncor and Petro-Canada, which started the process of bailing this week. Oil will be valued at least $20 a barrel less than the break-even point those companies need to proceed. Interest rates will have been slashed three times by a panicking central bank.
Real estate values will be tanking and new home construction ground to a virtual standstill. Layoffs will be starting on Bay Street, in the wake of Wall Street pink slips that will eventually number perhaps 200,000. GM and Chrysler will have announced preliminary merger plans – dooming not only at least one Ontario car assembly plant but redundant car dealerships in every city in the country.
The federal government will announce the likelihood of a small deficit this year and a big one next. That means absolutely no tax relief on the horizon for half a decade. Unemployment will soon rise and household equity fall. Billions more in public money will be shoveled into the financial system and there will be a few spectacular corporate bankruptcies brewing.
You will be basically unable to sell your home, unless you slash the price or take back financing. Even then, it will take months and months to find a buyer. Your line of credit will be withdrawn, called or the interest rate doubled. Double-digit rates will be common for car loans, if you can get one.
Debt, as you might imagine, will be toxic and harder to repay. Cash will be king. The stock market? Don’t ask.
You should expect these things. In fact, it might be wise to expect worse. And if you’re surprised, get over it. You’ve been had.
The Bank of Canada waited for a week after the federal election to deliver the gloomiest forecast since it was created out of the ashes of the Great Depression. If you doubt this, check its financial predictions, like an 85-cent dollar. It was printed before Thanksgiving.
Governor Mark Carney, himself a student of Wall Street and a Flaherty appointee, admitted the central bank botched its last forecast, that 2009 will be miserable and you should expect no recovery to start until at least some time in 2010. While this was happening, our finance minister was once again laying the ground for a budget deficit – just six days after Stephen Harper said there would not be one. Deficits today, as you know, mean higher taxes tomorrow. After all, that’s how we got the GST.
Speaking of which, will the Harper government increase it? Will it slash that $100 billion in new military spending? Will family income taxes rise? How about a cut in transfers to cash-strapped provinces?
Something’s about to give, and there’s only one certainty: You won’t get to vote on it.
Picture: Bank of Canada Governor Mark Carney
