22 Replies to “Y2Venezuela: The Hockey Stick Graph”

  2. So is it any wonder that as they extend unemployment benefits, that the average duration of being unemployed has increased?

  3. Phantom, where is all that capital that is leaving the market going to go? Treasuries at next to 0% return??? The expiration of the tax cuts is not news to the market. The market reacts wildly to unanticipated events, not anticipated ones.

  5. More bad news, I’ve seen estimates that up to 3 million (US) homes could come on the market just from foreclosures over the next two years. A “normal” number of US housing starts (per year) is around 1.5 million.

  6. Dr. Strangelove, Laffer explains it much better than I do. But I would expect that the capital will all go someplace the US government can’t steal it. There are lower-tax regimes in the world.
    Like China! I’m sure they’d fall all over themselves to welcome all that money. Unlike our idiots here.

  7. Phantom, while I don’t know where you’re from, If it’s Canada, I’m amazed you’d overlook this great country as a recipient and beneficiary of foreign capital flows. But that would be very ‘Canadian’ of you 🙂
    It’s is going to happen. A prudently managed economy, a sound financial system, by far the best books in the G8, low corporate taxes, actuarilly sound public and private pension plans, an economy that produces the raw materials that global powerhouses like China and the US need (not to mention other energing Asian natoins) and a centre-right government disinclined to insert itself into every business transaction.
    Once the Euro finds it’s trading range Canada’s big problem will be in trying to contain the loonie for the sake of our export market. $1.10 -$1.15 are entirely realistic.

  8. Dr. Strangelove: “I’m amazed you’d overlook this great country as a recipient and beneficiary of foreign capital flows.”
    After Alberta just jacked the oil royalty? After the recent billion dollar uproar over DUCKS in a Suncor tailings pond? After Ontario has decided to “invest” in wind power but not to lower corporate tax rates or even fix the hydro grid? Are you kidding me?
    If this country was serious about getting foreign capital in here, they’d be doing things much differently. We are among the top five most highly taxed countries in the world. We will still be more taxed than the Americans -after- their tax hike comes in.
    Capital and talent grows up here and then runs away, it doesn’t come here. The only capital coming to Canada is from guys who work a Special Deal with a province and/or the feds. Its Crony Capitalism at the root.
    How many car companies, steel foundries, ship building companies, pipe mills or any damn thing bigger than RIM have been started here in the last 30 years? Indeed, where are Blackberries physically made?
    I rest my case. And a good thing too, it was getting pretty heavy. 🙂

  10. Sobering but not unexpected news. The closing of fanny and Freddie loopholes has completely dried up the first time home buyer market.
    And similar rule changes here in Canada are doing the same. Expect a similar slowdown.
    (not that these rule changes shouldn’t have been done. The rules shouldn’t have been so loose in the first place.)
    with Obama not backing down on the bush tax cut repeal a double dip is now a certainty. I suspect this pleases him.
    Ps- beware the period between the nov 2 vote and January when the new GOP senators and congressmen are sworn in. The lame duck house and senate teamed with a lame duck POTUS could wreak havoc with lots of socialist laws, spending and pocket-lining. 2010 will be a very bad year indeed.

  13. Off-topic, but we just experienced an earthquake here in Ontario. Now, who caused that:
    a. The Harper government
    b. eastern left-wingers
    c. Bush
    d. Israel
    e. AGW
    f. Obama
    g. Muslim terrorists
    h. The G8/G20 protesters

  15. Gord Turk; the tightening of Freddie & Fannie will not have any similar Canadian repercussions as Canada never had a “no money down, don’t need a job” kind of mortgages that America had. Canadian buyers actually had to have a fair bit of down-payment or buy insurance to cover a lower than 25% down-payment.
    The American “Dream” of owning your own house was basically pushed over the edge of sound economics several times by politicians for their own agenda. The track record of those who hold the purse strings would make any Mafia Don proud. Dodd, Frank, Rangle, the list goes on and on.

  16. GreenNeck, one quite reasonable theory I’ve heard today was the oil leak in the Gulf greased the edges of the continental plate, which then moved.
    So its Barry’s fault.
    /.sarc./

  17. OMG! What a scary graph! Look at the horrific spike in unemployment since Hugo Chavez started the whole socialism thing… Can America under Obama be too far behind, with hockey-stick graph of its own? SEE?! SOCIALISM CAUSES GLOBAL UNEMPLOYMENT!!! AHHH!!! IT’S THE END OF THE WORLD!!! THEREFORE WE MUST GET RID OF SOCIALISM!!! Um… seriously. Very, very seriously.

  18. Socialism only causes unemployment in it’s “Nationalizing/Tearing Down Capitalist Greed” phase.
    After that phase is over and people aren’t animated by greed any more, there is virtually ZERO unemployment because people are animated by what’s called the “gun-in-your-face” incentive.
    Some folks might be tempted to call that slavery, but the “gun-in-your-face” helps to avoid that temptation.

  19. “Canada never had a “no money down, don’t need a job” kind of mortgages”
    Demonstrably false, even today.
    https://www.cibc.com/ca/mortgages/self-employ-rec-mortg.html
    Direct quote from that page: “you don’t need to prove your income.” Only 10% down for a “high ratio” mortgage.
    Or how about foolishness like this from TD:
    http://www.tdcanadatrust.com/mortgages/4_cashback.jsp
    Take out a 5% down/35-year amortization, get 4% cash back. That’s as close to “no money down” as you can get.
    Listings are up, sales are down, taxes are going up in three provinces next month, mortgage rates have already gone up.. there’s only one direction for Canada’s housing market to go. And it’s not up.

  20. Thank you Ian. I was away from my computer until now and hadn’t the chance to respond to TC.
    There are or rather were plenty of builders in AB who would build a house or condo for you by lending you the five percent downpayment and then finance you out to forty years.
    That is gone (as far as I know – perhaps it is not) and their is a very big dearth of first time buyers who can come up with the five percent and meet the income thresholds and there will be for a few years more at least. The loss of this feeder market is rippling through the construction sector and beginning to suppress demand and prices at all levels. The upwards jones’ escalator has stalled.
    Compounding this is the rapidly increasing number of boomers who wish to downsize to condos etc. Causing a very weak three-plus bedroom market.

  21. Oh and by the way,
    Hugh hewitt reported last week that the obamians are
    looking at removing the deductibility of principle residence mortgage interest.
    There is some strength to the argument that this is a good idea, but to even talk of it at this point in time is very harmful.

  22. Congress has allowed the National Flood Insurance Program to lapse.
    This means that many lenders will not be willing to finance home sales in areas that are considered flood risk, since no insurance is available at this time.
    this is the first time ever that congress has cared so little for its obligations as to allow a program that directly impacts millions of Americans go under. And it is due to the decision of congressional leaders to do…..nothing.
    How much this will contribute to a second meltdown of the mortgage and real estatem markets is not clear yet, but it will be substantial.
    The disruption from this lapse is growing by the day.
    Where are our Congressional leaders?
    Where is the media? Is the media a watchdog or a lapdog?

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