FFFA! Vacation! Debt! Soft Landings!

Yep, it’s that time of the week again, time for our regular end of the week news round-up and open topic discussion thread.

But FIRST! Thanks everyone for your patience while we were sluggish and inaccessible. It looks like we’re back in good shape, page load times are back to normal and we’ve changed a few things behind the scenes that will hopefully make for a more reliable site.

Here’s our regular collection of recent links to kick off the chat for the weekend:

Scotiabank: SOFT LANDING!
Have yourself a $563 holiday
New record for consumer debt
equity edges down and debt grows
Carney: Status quo
In Miami buyers pay for building
The Plunge-o-meter

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

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vancouverguy
Guest
vancouverguy

“Maybe I’m not looking at the numbers the right way.”

Correct.

Look at your chart and compare 2011 to 15 years down the road in 2026. 70-74 age group explodes from 160.9 to 302.9! Health care resource sponges in the 75-79 cohort go from 127.8 to 242.3!!! 90+ goes from 35.9 to 61.6.

Lets see who will be cleaning their bedpans. 20-24 age group DROPS from 324.6 to 286.5! Energetic 25-29 year olds droop from 330.3 to 320.7!!! Yes, we see some increases in the middle age groups, but we have a major problem here, folks.

jesse
Member

“We are nowhere close to solving the problem of our declining working age population”

Here are BC’s population projections by cohort. These are based on status quo for immigration and normal birth rate estimates.
link

I’m not seeing Japan in Canada’s next 25 years at least. Maybe I’m not looking at the numbers the right way.

vancouverguy
Guest
vancouverguy

“That is why we have and need immigration. Japan has almost no immigration.”

We are nowhere close to solving the problem of our declining working age population, and especially the dependency ratio, based on current levels of immigration.

Demography is destiny. What surprises me is how little consciousness there is in the average Canadian of this issue. Its like the people on the Titanic seeing the iceberg 15-20 years before they would hit it, and yet they still sail the same course and ram into the damned thing.

painted turtle
Guest
painted turtle
News 1130, CKNW and the Vancouver Sun are not good sources to me. Just look at how they report about the housing market 😉 The government website gives you one side of the coin: http://www.newsroom.gov.bc.ca/downloads/BCTF_claims_and_facts.pdf and the teacher’s website the other side: http://bctf.ca/publications/BargainingBulletin.aspx?id=25138 I advocate a cool head approach, in between these two extremes. * Their demands in terms of salary are insane, but in bargaining, you always ask for twice what you will get. This is the game the teachers’ union is playing, as you can see in their ‘reduced’ demands. * Eight steps grid: I think everyone should be on a 20 steps grid. * $600 every second year for eyeglasses seems reasonable * 75% pay for a maternity leave: I am OK with this. * They gave away ‘paid leave for compassionate care.’ ..etc… “We are more… Read more »
Anonymous
Guest
Anonymous
“Far more of them have DB pension plans, they are savers, and they have the opportunity to sell their houses for high prices if they have to.” I don’t think there will be more DB pensions today than there will be for the near term retirees. Maybe in 20 or 30 years there will be less but as I said these people will have the benefit of RRSPs and tax free saving accounts the retirees of today don’t have. I know saving is out of fashion today but in 5 years and 10 years from now the mind set will change from debt to savings. We have seen a big change in the US since the housing bubble burst there. Once interest rates are back to normal and our housing bubble is burst people will be saving again. Regarding using… Read more »
Anonymous
Guest
Anonymous

“However I also worked for private companies which were not the wisest.”

That is true. The difference between the private sector and government run organizations is in the private sector the business is subject to competition and if they are not run well another company that is run well will take its customers. We see it all the in competitive businesses such as restaurants. Restaurants that are not run well go out of business within months. Government run organizations just continue to waste money and because there is no competition there is no incentive to change. Everyone in the organization is guaranteed a job regardless of performance.

patriotz
Member

“Sure there are poor elderly but I don’s see the dire situation you are predicting.”

Today’s elderly are an entirely different cohort from the boomers who will constitute the retirees of coming decades. Far more of them have DB pension plans, they are savers, and they have the opportunity to sell their houses for high prices if they have to.

Look at the average financial position of people 50 or so and it’s scary. There’s been lots of reporting of it in the media.

Anonymous
Guest
Anonymous

“You cannot have long term growth of GDP with a shrinking population of working age people.”

That is why we have and need immigration. Japan has almost no immigration.

patriotz
Member

Has anyone seen any actual numbers indicating that federal and provincial pension plans are likely to have trouble making payouts?

Experience of US plans is a poor model as a large amount of their payouts is medical benefits.

Anonymous
Guest
Anonymous

“Voluntary retirement saving simply does not work for most people.

Well it seems to be working now does it not? Sure there are poor elderly but I don’s see the dire situation you are predicting. RRSPs have not even been around for that long and the tax free savings account is new. People retiring in 20 to 30 years should be better off than people who are retired now. The government is providing incentive for people to save for retirement that is enough.

Anonymous
Guest
Anonymous
“A good place to start is elected officials’ salaries and pension plans. I don’t want to come across as supporting pensions for politicians but you can make a much better case they get a good pension over a regular government employee. Politicians have a short career and are subject to lose their job every 4 or 5 years. Government workers have jobs for life and almost never lose their job. I also think when you look at politicians salaries they are relatively low for the job they do. The Premier makes around 200K per year which is less than the average fire or police chief in a small suburb. The head of BC Ferries or BC Hydro makes triple the amount of the premier. So politicians get lower pay, poor job security with better pensions where government workers get job… Read more »
patriotz
Member

“If the taxes were treated with outmost respect, not as an opportunity to fatten up a high officials/employees coffer, perhaps money would go to where it is needed..”

To me this sounds like another variation on “the government spends too much on other people and not enough on me”. You know where the money is needed, not the government which is elected by everyone.

Now let me say that I certainly think that the government spends money on things that aren’t needed. Problem is people don’t agree on what those things are. Government get elected because they spend money on what pleases the most people.

Anonymous
Guest
Anonymous

“So let’s assume their assertions need to be taken with a grain of salt…”

The demands of the teachers were fact not opinion. Prove it wrong. The Fraser Institute was reporting the actual demands. These demands were discussed in the local media for months. You can get all the info you want on the ridiculous demands of the BC teachers here:

http://www.bcpsea.bc.ca/bc-teachers/teacher-collective-bargaining/in-the-news.aspx?BlogTagID=ac6589b9-d61b-4e03-917f-b8e125a6afd8

“Teachers ask for 15 per cent wage increase over three years”

squeako
Guest
squeako
Rebuttal..: “So, somebody takes their kids to public school in the morning, stops off at the doctor’s office for a checkup or to see results of some blood tests, then drives to (highly-subsidized) university for classes for the day…using roads and freeways that are well-maintained compared to many other countries, using bathrooms and drinking water, relying on police and emergency services, etc, etc. Aren’t we paying taxes for that? 2/ If the taxes were treated with outmost respect, not as an opportunity to fatten up a high officials/employees coffer, perhaps money would go to where it is needed.. “..and then at the first chance they get, this person makes a bee-line to the border to, not caring about it because taxes in Canada don’t go to back into society for decent services. 1/ A beeline might not happen if people… Read more »
vancouverguy
Guest
vancouverguy

“It’s the losses that are public”

Yep. Privatize the profits, socialize the losses. They pulled that trick in the US, same thing will happen here. Same as it ever was.

mac
Member
mac

ADMIN,

The reply arrow no longer appears. FYI. Don’t know if this is another glitch? Maybe just on Apple. Don’t know.

patriotz
Member

“Are developers, realtors, and bank profits completely “private” if they are enabled by a housing market driven by CMHC insurance backed by taxpayers? ”

Yes. It’s the losses that are public.

vancouverguy
Guest
vancouverguy

“What I see around me is a tendency to classify things as either good or bad, white or black, for or against, left or right”

True. We need to realize that there is no deep line in the sand between the private and public sectors.

Are developers, realtors, and bank profits completely “private” if they are enabled by a housing market driven by CMHC insurance backed by taxpayers? Could this gasbag of a housing bubble occurred without the public taking the risk? I think not.

painted turtle
Guest
painted turtle
I agree that government money could be more wisely spent in several ways, and that review by independent bodies could be useful. However I also worked for private companies which were not the wisest. As for black sheep, I have seen them in both in the public and the private sectors. There is no perfect model, they both have pros and cons. Crikey is raising a FUNDAMENTAL issue: we tend to take all we have for granted. May be going back in time (1920s) or travelling in some developing countries can give us a reality check of how precious the public services are. Always complaining about public services and only focusing on the negative could put them at risk and would be a major mistake, especially in a time when the health system is at risk due to demographics. What… Read more »
vancouverguy
Guest
vancouverguy

“They will be competing with younger people in the workplace, they will be drawing more GIS, and they will be getting ill more and costing the healthcare budget due to stress and poor diet.”

That is exactly right. It is surprising how much we bury our heads in the sand regarding the demographic crunch that’s coming in Canada. Our healthcare system is nowhere close to having the capacity to deal with the aging boomer wave.

Fundamentally, the Japanese housing bubble and inevitable collapse was driven by demographic fundamentals. As is ours. You cannot have long term growth of GDP with a shrinking population of working age people.

patriotz
Member

“RRSPs and the tax free savings accounts are a much better way to save for retirement.”

They would be if everyone contributed the maximum to them, like me.

Unfortunately that is not the case. Voluntary retirement saving simply does not work for most people. They lack the will. The only way to get them to save for retirement is to make them.

Having a lot of poor seniors is a bad thing. They will be competing with younger people in the workplace, they will be drawing more GIS, and they will be getting ill more and costing the healthcare budget due to stress and poor diet.

Crikey
Guest
Crikey
squeako: Agreed that we need to open the books, wide open. There is waste in so many countries, and Canada is certainly no exception. “I dont think people have an issue with paying taxes, IF they KNOW the money is going back into society as in decent services, ie “free” uni education/college, health care etc.” So, somebody takes their kids to public school in the morning, stops off at the doctor’s office for a checkup or to see results of some blood tests, then drives to (highly-subsidized) university for classes for the day…using roads and freeways that are well-maintained compared to many other countries, using bathrooms and drinking water, relying on police and emergency services, etc, etc. ..and then at the first chance they get, this person makes a bee-line to the border to, not caring about it because taxes… Read more »
squeako
Guest
squeako
“That said, why no mention of all the people shopping across the border? At least the people in Richmond pay tax on some of their purchases.” I dont think people have an issue with paying taxes, IF they KNOW the money is going back into society as in decent services, ie “free” uni education/college, health care etc. But people have witnessed waste: Olympics, sea sky hi way “improvements, top level managers giving themselves unheard of raises/benefits, politicians too, ET CETERA AD NAUSEUM Fix this by: open the books and keep them open, get them to pay back, and cut unreasonable wages. I am working in health care and we cannot even get a BP cuff (less than $100) to use on our residents (70 on my floor) and are not allowed to collect money of our own to just go… Read more »
Short'em High
Guest
Short'em High
An Observer Says: December 15th, 2012 at 6:37 pm …3) the NDP will undoubtedly hasten the crash this bubble and destroy the province through policy enabling a conservative government to come in… Remember, it’s called the Conservative Party, not the Low Cost of Living Party. Mileage may vary if, on philosophical principle, a new party starts selling off fully user funded public works (like toll roads) and group insurance like ICBC. I’m still looking for a political party with the true main plank of low cost of living. Crikey Says: December 15th, 2012 at 7:27 pm …A good place to start is elected officials’ salaries and pension plans. If you’ve been following the news lately this already happened to MP pensions in Canada. It is now law that the government funded contribution of $24 per dollar was reduced to only… Read more »
Crikey
Guest
Crikey
Yalie: “The real problem with teachers and other unionized government employees is not their current salaries, but their defined benefit pension plans.” A good place to start is elected officials’ salaries and pension plans. They are often effectively in charge of setting their own wages. They already make good salaries commensurate with their positions, but repeatedly give themselves very generous percentage raises while expecting everybody else to agree to multiyear zero percent or raises below inflation. Of course everybody else is going to be upset. Take that away, and the unions lose a very big public sympathy point. “when these ponzi schemes blow up…the unions will scream at the top of their lungs “this is our money, we earned it” Um, you and I sign a contract for me to compensate you for work you do, and later on I… Read more »