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Flaherty is trying to scare you

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Jim is in the news again, wringing his hands about potential problems in the global economy.

Finance Minister Jim Flaherty fears the world could be faced with another recession, given the fragility of the global economy and especially the troublesome debt and deficit situation across the border.

“I am quite worried,” Mr. Flaherty told CTV’s Question Period Sunday. “We have lived three-and-a-half years now since the credit crisis started in late August, 2007. We are seeing in Europe, in particular, some very difficult situations.”

Has nobody told him it’s different here?

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rp1
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These politicians are so myopic. Can they literally only see what is staring them in the face and can not be denied? Greece was always going to default. Anyone who followed this could see it coming. When it finally blew up in 2010, the ECB and IMF decided to "lend" them more money to avoid "risks" to the financial system. What a farce. And Harper telling the world that Greece can manage with austerity? That's wishful thinking. I guess his job is to deliver the line with a straight face. So far only Iceland has got it right: default and start prosecuting bank frauds. It's amazing what the IMF and friends are trying to get away with. Why would anybody ever deal with them? They'll only help you dig a deeper hole. Ireland can't pay and must ultimately default somehow.… Read more »
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7 years 19 days ago
patriotz
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This really doesn't have anything to do with Greece, etc.

Flaherty knows that the Canadian RE/credit bubble, which he and his government engineered, is going to collapse and he needs a scapegoat.

That's all.

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7 years 19 days ago
jesse
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rp1 Greece situation and Harper's comments show that you should never believe statements from anyone who is worried about upsetting "investor confidence".

Patriotz is right that Flaherty's comment is part of a setup to justify more deficits in the upcoming budget. Keynes's ghost is knowingly smiling and nodding his head.

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7 years 19 days ago
Keeping An Eye On Th
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The main difference between Greece and Canada is that Canadian politicians managed to entice consumers to take on huge debt loads, whereas the Greek elite used government spending and borrowing to keep the party going. Individual Greeks are not as heavily indebted as Canadians, nor do they pay as much income tax. Also, consider the off loading of the federal government onto the provinces, and the provinces onto the civic governments. The talking heads talking about the Greek workers and their outrageous entitlements, but has anyone done a comparative study of how inefficient and excessively expensive Canadian government workers are from every level of government? I would hazard to guess most of the workers would not cut it in private businesses, at least not at the same wage level. I doubt Canadian Government workers are more productive than the Greeks.… Read more »
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7 years 19 days ago
patriotz
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@Keeping An Eye On The Pimps:

With all respect, Greece is basically a 3rd world country that got admitted to a 1st world economic community and was able to use a 1st world currency without adopting 1st world norms of governance.

That's the root cause of its problems as it is for Portugal, Ireland, and Spain.

There isn't really anything fundamentally wrong with the governance or economy of Canada, we were in pretty good shape 5 years ago compared with most 1st world countries. The problem is that instead of taking a few knocks to adjust to the global and domestic challenges of that period, the government and consumers have chosen to live beyond their means to give the illusion that Canada is above them. Which means taking bigger knocks later.

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7 years 19 days ago
vreaa
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Flaherty is preparing us for ongoing loose lending policies.

The Vancouver RE bubble is going to implode when lending is at emergency levels of looseness and there is going to be absolutely no policy interventions that will be able to buoy it up this time around.

Perhaps that'll be the cleanest way of resolving the mess.

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7 years 19 days ago
chip
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@patriotz:

"There isn’t really anything fundamentally wrong with the governance or economy of Canada, we were in pretty good shape 5 years ago compared with most 1st world countries. "

Alberta and BC were (are) in pretty good shape. But Ontario and Quebec are not. Today Ontario's per-capita deficit profile is worse than California's and Quebec is, well, Quebec with a more than $200 billion debt adding $11 billion more every year.

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7 years 19 days ago
vreaa
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Misallocation Of Human Capital During Speculative Bubbles –

"What do you call societies that depart from meritocracy? What tends to happen to them in the long term?"

[A very eloquent response to the suggestion that prospective buyers in Vancouver should not be 'elitist', but should accept and buy the very modest accommodations that they can currently afford.]

http://wp.me/pcq1o-2qg

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7 years 19 days ago
registered
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@8 vreaa: It's industry marketing 101, "only those who scrape, save and sacrifice all on our product are the true entitled." It's deeply repugnant and anti-democratic but don't you dare mess with their tax write offs!

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7 years 19 days ago
Li Kai Shing
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Where is lavishing Lick

PNE is hiring soon

Need peoples to walk around with large stuffed animals so get suckers think they can get lucky.

Rick only get lucky with stuffed teddy bear, maybe Barney doll.

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7 years 19 days ago
Li Kai Shing
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Why worry about Greece?

Everyone there named either George or Aristotle…even the women.

Barbers there go broke.

Chinese not like greek condos…..smell of calamari and olive oil.

Need crowbar to separate men from the boys. Rick broke his last one.

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7 years 19 days ago
bubbly
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@patriotz: GDP per capita of Greece is $27,302 – far from a third world country. Their problems are simply a result of socialist entitlement policies and an extremely corrupt government. That should be a lesson for other countries, but I think that most people will feel more comfortable blaming the free market instead.

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7 years 19 days ago
bubbly
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I think that a global recession is unavoidable. Once things blow up, I expect US dollar going up, Canadian dollar, commodities and silver going down. Not sure about gold. Vancouver real estate will look like it's 2008 again.

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7 years 19 days ago
Troll
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@Keeping An Eye On The Pimps: Love it. First we have the Vancouver = Detroit meme on VCI. Now we have the Canada = Greece theory. Delusion-central.

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7 years 19 days ago
Lazar
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Greece as is, being corrupted, broke, crappy etc. is still many light-years ahead of China. Where would you rather live, think about that?

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7 years 19 days ago
Li Kai Shing
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No Vancouver is Uranus…

Uranus is mine

bahahahahahhahah

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7 years 19 days ago
Troll
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@bubbly: If we have a pop in China, then we'll likely see a pop in Aus and Van RE.

As China goes, so goes Van RE HPI.

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7 years 19 days ago
Dave
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@chip:

It won't be long until Quebec has a higher Provincial debt than our total Federal debt.

And then they will expect Canada to bail them out. Quebec needs to get it's act together.

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7 years 19 days ago
pricedoutfornow
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Breaking News! Royal newlyweds won't visit Vancouver during Royal Visit.

WTF? Don't they know this is a "World-Class City" on par with London, Paris and New York City??? We have mountains!

http://news.ca.msn.com/top-stories/royal-newlywed…

(Ok, vote me down, I know this is irrelevant and ridiculous)

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7 years 19 days ago
Lazar
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@Dave:

Who else should bail them out, France?

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7 years 19 days ago
Lazar
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@pricedoutfornow:

They are visiting Canada not China.

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7 years 19 days ago
Drachen
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@Dave:

It won't be long before Vancouver real estate collapses and we make Quebec's debt look like chump change by comparison. The CMHC will bail out many of the speculators here. Are you going to be just as quick to jump on that particular bandwagon when it's BC receiving handouts?

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7 years 19 days ago
Troll
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@Drachen: Don't forget that CMHC is flush with cash from insurance premiums. There will be no going to the taxpayer for bailouts, except in the most extreme of housing crashes, ie >10% default >40% crash. Their financial statements are publicly available, go through the math for yourself.

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7 years 19 days ago
patriotz
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@Troll:

There will be no going to the taxpayer for bailouts, except in the most extreme of housing crashes, ie >10% default >40% crash.

Actually in the short term (<4 years) I agree that there will probably be no government bailout of CMHC as it would be too embarrassing with a short time to go until the next election. Instead I think CMHC would just borrow more money to pay out claims by lenders, raise premiums, and hope for the best going forward.

After the next election, more likely.

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7 years 19 days ago
Dave
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@Drachen:

You sound pretty certain about this outcome. How have your predictions been to date?

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7 years 19 days ago