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Old 09-29-2008, 03:39 PM   #76
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Man, my 401k is going to take a beating...... down more than 600 pts.!?!?! You've got to be friggin kidding me!
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Old 09-29-2008, 03:52 PM   #77
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Alberta has always gone through booms and busts but I don't think the interest rates will go as high as you say. When there is a downturn they won't need to increase interest rates because the prices will naturally come down.

The only way to reduce the yo-yo effect of commodities in Canada is to keep balanced budgets and then to lower taxes for corporations so other industries want to come here instead of just relying on commodities. The provincial government has already done that. 10% provincial corporate taxes. The federal government will do the same if the conservatives are elected again. The conservatives want to institute a savings plan of 5,000 per year to earn investment income tax free. Certainly save your annual mortgage lump sum payments in there and remove it tax free to lower your mortgage balance a little further every year.

Things will slow down in the oil sands when the royalties go up 5 years from now when they increase. Stelmach is trying to increase other industries but it will take time. It's amazing how many people have moved here and not just oilsands workers. Many are moving to Saskatchewan as well. I would think continuing to look for other sources of energy beyond oil, like nuclear power will help to offset oil as the major industry.

Certainly if the federal government didn't make us eat inflation and put the interest rates down so low things wouldn't have boomed as much and people wouldn't race to get into debt and growth would have been more stable. Unfortunately only the federal government can influence central bankers. The federal government avoided raising interest rates to curb our inflation because Ontario was doing bad so they kept them down. Ontario would scream if it was raised. Also higher interest rates compared to the U.S. would mean foreigners would invest in us a lot meaning the Canadian dollar would increase. You know that exporters would also scream if there was a high dollar. I don't know what to do beyond what is being done already. The people themselves are also coming to Alberta because they say they can't find anything in other provinces. Certainly if other provinces did the appropriate things we wouldn't have as many people coming here. These are more things the Alberta government has out of their direct control.

Be thankful that the federal government has a surplus and will not likely be in the situation the Americans are in so there is still room for us to get into debt if it's an absolute crisis and we need to. The U.S. is already got a large deficit that will take years to narrow and they can't so easily bail out companies without going further into debt. I think a crash may be necessary and while people are on welfare programs the companies will have to start over again and act risk averse. If the government keeps bailing out people then there is no risk in the eyes of the investor and they will do more stupid investments. Capitalists are supposed to be risk averse. What's happening now is that the Capitalists don't really exist anymore. Nobody is saving and companies are leaning on the taxpayer. To be honest I'll have to do some more studying on recessions. Certainly the Keynesian method of just making more money failed in the '70's and unemployment mixed with inflation (stagflation) and they needed extremely high interest rates to make people feel confident in the currency. This lead to a huge recession in the '80's but the peopl had confidence in the currency and inflation reduced so people could go back to work again. No pain no gain. No matter where you look at it any move to reduce the loss simply transfers losses to either inflation, job losses, or taxpayers getting an increased tax burden. Throughout the '90s and '00s the interest rates shouldn't have been kept so low. I think that's the real solution. When the debts get cleared off and people start over there should be reasonable interest rates available. Most economists think 4% grows well with the economy. The rest has to do with the people which should stop gambling. The government can't stop people from making dumb greedy choices. Part of the recession was to punish bad behaviour but so many people don't understand economics and the cycle has to repeat. Super low interest rates can create fake jobs by having crappy companies exist that shouldn't. When the interest rates go up the useless jobs disappear and the government comes in with EI.

Another problem is politics. Nobody wants a recession during the election cycle so there's always a short term incentive for politicians to push central bankers to prime the pump.

Do the best you can and just plow your extra money into the house. It usually takes 10 years minimum to pay off a house and there will be economic shocks that appear during that time. Some people take on extra jobs. Wives who were at home will start working to make extra income.

It's worth the effort. My dad has enough saved to retire (despite having low paying jobs all his life and only safe investments with low rates) and his house is paid so the recession doesn't affect him at all unless the inflation goes to 100%. There's definately a light at the end of the tunnel when you do this work. This is the time people can enjoy a better standard of living. Ignore commercials and peer pressure that says you should enjoy life while you are young. When you pay your house become an investor. You're savings helps the economy so we don't have to constantly print tons of money.

I'd like to hear your thoughts on the PC's failure to institute any form of restriction on "scrapping the top soil" or send raw bitumen down the line to the states. That I think is the key issue in making our economy more diverse and keeping it going at a sustainable pace. Also the PC's are still not regulating the pace of our devolpment. There isnt any Albertan that does'nt see the complete lack of planning that has sent us into high construstion inflation and the resulting failure of out infustructure.

Retirement is not as big as a concern for me as some others. My pension will be the equivalent of 38hrs per week when I retire. Should I being living at a point that with my RRSP's and my house being paid off that I cannot live within those means, then I'm doing something seriously wrong! I contribute 14-18K a year to my pension/RRSP's so I'm fairly comfortable thanks to being a Union tradesman.

Interest rates can rise if the bottom falls out. They will rise. If they rise and house prices (in some areas eg. McMurray, Grande Praire, Athabasca) fall back to where they should be (100-200K less) people will just hand their keys to the bank and walk away. This is where the interest rates will rise. I'm pretty secure but when we were considering going on strike last year people could'nt afford it. Between house, truck, quad, skidoo, bike payments lots of tradesmen were 3-4 workless weeks from being broke. Its a sad reality and far more prevelent in my field.

I agree the economy runs in cycles but we need to have more cusioned lows and more level headed highs. When we accomplish this we will have a economy that we can be comfortable with.
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Old 09-29-2008, 04:22 PM   #78
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I'd like to hear your thoughts on the PC's failure to institute any form of restriction on "scrapping the top soil" or send raw bitumen down the line to the states. That I think is the key issue in making our economy more diverse and keeping it going at a sustainable pace. Also the PC's are still not regulating the pace of our devolpment. There isnt any Albertan that does'nt see the complete lack of planning that has sent us into high construstion inflation and the resulting failure of out infustructure.

Retirement is not as big as a concern for me as some others. My pension will be the equivalent of 38hrs per week when I retire. Should I being living at a point that with my RRSP's and my house being paid off that I cannot live within those means, then I'm doing something seriously wrong! I contribute 14-18K a year to my pension/RRSP's so I'm fairly comfortable thanks to being a Union tradesman.

Interest rates can rise if the bottom falls out. They will rise. If they rise and house prices (in some areas eg. McMurray, Grande Praire, Athabasca) fall back to where they should be (100-200K less) people will just hand their keys to the bank and walk away. This is where the interest rates will rise. I'm pretty secure but when we were considering going on strike last year people could'nt afford it. Between house, truck, quad, skidoo, bike payments lots of tradesmen were 3-4 workless weeks from being broke. Its a sad reality and far more prevelent in my field.

I agree the economy runs in cycles but we need to have more cusioned lows and more level headed highs. When we accomplish this we will have a economy that we can be comfortable with.
Like I said before the interest rates are controlled by the federal government and the PC's can't really do anything in those regards. If we want to export to the U.S. governments usually try to mimic close their rates so our products aren't too costly.

If people have to hand back their keys and then so be it. It's time for people to realize that the government can't always be there. At least you have a plan. Many people are retiring with mortgage payments. They didn't save anything for the 40+ years they worked. They will get only CPP, OAS, and GIS. That's a major crimp on people who expect higher standards of living.
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Old 09-29-2008, 04:28 PM   #79
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Like I said before the interest rates are controlled by the federal government and the PC's can't really do anything in those regards. If we want to export to the U.S. governments usually try to mimic close their rates so our products aren't too costly.

If people have to hand back their keys and then so be it. It's time for people to realize that the government can't always be there. At least you have a plan. Many people are retiring with mortgage payments. They didn't save anything for the 40+ years they worked. They will get only CPP, OAS, and GIS. That's a major crimp on people who expect higher standards of living.

What I'm trying to get at is that the PC's can try to make this economy far less boom/bust so when the economy does slow it does'nt slow to the point of people lossing their houses. You need to relize that the government does play a role in economy, like it or not. I don't think you'd be so flippant with people lossing their houses if you were around in the 80's when houses were being given away. I don't think either of us are old enough to be so dismissive of hard times, we have'nt seen them yet.
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Old 09-29-2008, 04:42 PM   #80
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It's interesting to me that we continually here others bashing Wall Street for defrauding those of us on Main Street and if it were not for greedy WS we would not be in this mess.

Last time I checked, we were in this mess because of home prices and defaulting on loans. Seems to me that if Main Street would have been more fiscally responsible like putting 20% to 30% down on a home, buiying a home they could AFFORD, or getting a traditional loan and not the 'loan to help me get into a house I can't afford' we wouldn't be in this mess.

Fact is: WS greed AND greed from MS contributed to this mess.



I agree 110%. Sure, Wall Street & banks created bad loans (with the help of deregulators in DC). But it's the morons who took out the loans who really are to blame. Come on, do your friggin' homework before you take out a loan. Everybody their brother knows that an ARM is a stupid mortgage. Anyone with two shits of a brain knows that you don't buy a house that's going to eat up more than 50% of your income. And yet that's just what happened. I can't tell you how many friends I have who bought houses in the last 4 years because "prices will just keep going up," and who complain that they're "house-poor." Stupid.


Now, it's the stupidity of Main Street again that's holding the rescue up. People who seriously think that it's designed to fix "Wall Street's mistakes," and not their own. Folks who also fail to realize that when banks don't have money or comfort, they don't give out loans to Joe Shmoe when he needs to buy a car or a house, go to college, or start a business. The loans they do give out go only to those with outstanding credit, and at moderate interest rates.

Man, people are stupid.
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Old 09-29-2008, 04:43 PM   #81
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It's not being flippant. The federal government can't smooth the economy without raising interest rates during a boom and lowering them during a bust. If our major trading partner doesn't do that then our hands are tied because we want a cheaper dollar to sell exports to the U.S. If the U.S. keeps it low we have to lower it or our currency will be worth more than theirs and they will buy less from us. It's all connected.

I'm not saying that a recession doesn't hurt. It does but I'm tired of worrying about things I have no control over. The only control we have is what we do. Ask Stelmach what to do and he won't have an answer because nobody would have an answer. When oil crashes and we don't get a hold of our spending here we will be a deficit. At minimum we will use the heritage fund which is the only thing we have. The rest is voting Liberal and having them increase taxes to pay for poor people. When the economy stabalizes what advantage do we have then with higher taxes?

If you have any ideas then name them. All governments do is take money from the taxpayer and move it to someone else.
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Old 09-29-2008, 04:48 PM   #82
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It's not being flippant. The federal government can't smooth the economy without raising interest rates during a boom and lowering them during a bust. If our major trading partner doesn't do that then our hands are tied because we want a cheaper dollar to sell exports to the U.S. If the U.S. keeps it low we have to lower it or our currency will be worth more than theirs and they will buy less from us. It's all connected.

I'm not saying that a recession doesn't hurt. It does but I'm tired of worrying about things I have no control over. The only control we have is what we do. Ask Stelmach what to do and he won't have an answer because nobody would have an answer. When oil crashes and we don't get a hold of our spending here we will be a deficit. At minimum we will use the heritage fund which is the only thing we have. The rest is voting Liberal and having them increase taxes to pay for poor people. When the economy stabalizes what advantage do we have then with higher taxes?

If you have any ideas then name them. All governments do is take money from the taxpayer and move it to someone else.

i don't believe I mentioned taxes in any of my posts. I don't mind the tax sturcture in Alberta, save for conventional oil royalities.

I think I have pointed out things that we could do. That we are in control of. Stopping the shipment of raw bitumen across the border would be one. Making sure all oilsands production is refined in Alberta. Aproaching petro chemical manufactures about coming to Alberta. Pacing the devolpment of construction so the jobs can be filled by Albertans and less by foriegn workers. These are just a few of the things we can be doing.
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Old 09-29-2008, 04:54 PM   #83
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Everybody their brother knows that an ARM is a stupid mortgage.
I remember looking at condos 3 or 4 years ago. A mortage broker recommended an ARM loan if I planned to move out of it within the first 5 years in order to take advantage of the lower initial rates. The thought that real estate values might plunge never entered his mind - that's the nature of asset bubbles. Fortunately, I passed on the condo because the price gap between owning and renting was simply too large.
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Old 09-29-2008, 05:21 PM   #84
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i don't believe I mentioned taxes in any of my posts. I don't mind the tax sturcture in Alberta, save for conventional oil royalities.

I think I have pointed out things that we could do. That we are in control of. Stopping the shipment of raw bitumen across the border would be one. Making sure all oilsands production is refined in Alberta. Aproaching petro chemical manufactures about coming to Alberta. Pacing the devolpment of construction so the jobs can be filled by Albertans and less by foriegn workers. These are just a few of the things we can be doing.
The only thing you would have to think about is if anybody is affected in a way that would make them lobby against it. I know that raw bitumen is something Obama wanted to stop because he looks at it as dirty, and Harper wants it to be shipped only to countries that establish similar reduction targets. This is already being protested. I don't know how it can be possible to hire more Albertans when there is a huge gap with the demand for labour I don't know if any government that could really do something about that. I think bringing petro chemical manufactures may be protested by environmentalists. I don't know what laws we have but the building of refineries has been limited. Global warming politics will likely get in the way of that. We already have idiots like Jack Layton flying (with jet fuel) over the oilsands trying to stop it completely.

But it certainly is a good stab looking at the situation. Nuclear power would be good, especially if we could recycle the waste. We have freer trade with B.C. If we could negotiate with other provinces to expand that it would help with increasing the variety of industries. We need some manufacturing here as well. We rely heavily on commodities in Canada.
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Old 09-29-2008, 06:29 PM   #85
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I can't believe they have been so stupid.

Let me repeat that.

I CAN'T BELIEVE THEY HAVE BEEN SO F***** STUPID.

Somebody needs to get in there and knock some heads together over the holiday tomorrow, things are bad enough as it is. Get Buffet in there or something, anything.

Post from trader on another forum:-

Quote:
Update on things:

Today has been the worst day in living memory of everyone here.

I repeat, nothing comes close to this.
We have had one day crashes but nothing of this magnitude.

As one senior person has put it,

"the dominios are in line, the first few have been tipped, now all we can do is wait..."

There is no cash out there. NONE....
The banks are very worried, the central banks even more so, the regulators are terrified and the government is like a rabiit in the headlights.


The irish market is the worst preforming market today in the western world. We are truly pariahs. No one will touch us.
I would like to see what spreads the government would get right now on the debt it needs to issue..The euro won't help much.

The FED along with every where else has opened the floodgates, if this doesn't ease up soon, it will get very dark indeed. Even if it does, we are never returning to the glory days.

Cash is king, only the foolish will enter the market now. Yes, you can make a fortune, but you could lose everything. Sensibility dictates that you stand on the sidelines. VaR numbers are sky-rocketing. The libor and futures market is so dislocated that doing anything could, and probably will, make things worse.

And tommorrow will open terribly.
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Old 09-29-2008, 06:50 PM   #86
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To be honest I am not sure this deal should have been passed.

But that is not the point, because they set it up to seem like they were passing it and they are responsible for the hit the market subsequently took.
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Old 09-29-2008, 06:58 PM   #87
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To be honest I am not sure this deal should have been passed.

But that is not the point, because they set it up to seem like they were passing it and they are responsible for the hit the market subsequently took.
What is the alternative to this deal? A depression? What? I have yet to hear a legitimate alternative from any side.
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Old 09-29-2008, 07:01 PM   #88
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To be honest I am not sure this deal should have been passed.
Can you explain why?

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But that is not the point, because they set it up to seem like they were passing it and they are responsible for the hit the market subsequently took.
Well, that's true enough.
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Old 09-29-2008, 07:02 PM   #89
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What is the alternative to this deal? A depression? What? I have yet to hear a legitimate alternative from any side.
EXACTLY!!! You really have to wonder what is going on behind the scenes.
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Old 09-29-2008, 07:03 PM   #90
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A Libertarian response:
Congress Should Vote ‘No’ on Bailout, Says Bob Barr | Libertarian Party
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