Where’d the Recession Go?
Remember when we were in a recession? Banks and Investment Institutions raced to be the first to say we were out, with the Bank of Canada making the prediction in the summer. Prices of houses had dropped… briefly. June 2008 came roaring back turning a buyers market into a seller’s. The latest news for housing noted the only place still a buyers market in Canada is Saguenay, Quebec. Otherwise, sellers are reaping the rewards of their hard work… of living in their own purchased shelter.
Somehow 2009 is beating the records of 2007 which beat all previous records of any year before it. In 2007 lots of banks and banker’s economists were predicting a housing bust – housing affordability was off the charts. Today, houses are even more expensive, less people have jobs (8.5% of Canadians are out of work) although interest rates are next to zero. The Bank of Canada just recently warned us that we’re spending too much, we’re not saving anything and our cheap mortgages are going to balloon. The Great Recession was a economic hiccup – but there are signs we’re not past the worst.
I work in the Investment industry and a coworker calculated that trading activity for pensions and mutual funds is about a half to a third of what it should be. Most are sitting on mounds of cash, waiting to see when things settle down. That’s where the smart money is – the guys who’s job it is to navigate the markets profitably. With Dubai and Greece almost defaulting on their debt, and the US and Europe over-extended with mountains of deficits, there’s a lot of market ugliness out there.
Tread carefully.
