Friday, October 24. 2008
Opening Offer of 3% - HUH?
In Ontario 65,000 Provincial Civil Servants are up for Contract Renewal this year and our Government’s opening offer is 12% - that’s 3% a year. Now pardon me, and maybe even forgive me – but a question to the Teachers Union – how is 3% a below par offer?
I’m astounded that some Government negotiator has placed a higher amount than private industry has enjoyed as an ‘opening offer’ – cause we all know they’ll need to move, even if just for goodwill.
I as well am not happy about the economic bail-out going to Bay Street chums, but how does the Teachers Union see an above the board, fabulous offer as – being asked to carry the new financial hardships on their back?
Most of us will roll back, this year, next and even maybe the next/ Net neutral would be fantastic….it’s going to be an interesting year as we see if sulking unions with in-tact pensions, protected holidays and more security than is left in the shambles of Industry take it [us] to the wall and if Mr. McGuinty possesses the same gut determination as former President Regan “go back to work, or you’re all fired”.
I’m astounded that some Government negotiator has placed a higher amount than private industry has enjoyed as an ‘opening offer’ – cause we all know they’ll need to move, even if just for goodwill.
I as well am not happy about the economic bail-out going to Bay Street chums, but how does the Teachers Union see an above the board, fabulous offer as – being asked to carry the new financial hardships on their back?
Most of us will roll back, this year, next and even maybe the next/ Net neutral would be fantastic….it’s going to be an interesting year as we see if sulking unions with in-tact pensions, protected holidays and more security than is left in the shambles of Industry take it [us] to the wall and if Mr. McGuinty possesses the same gut determination as former President Regan “go back to work, or you’re all fired”.
Sunday, October 19. 2008
Financial Markets at Rest? Not yet!
A perspective for Canadians
EVENTS –
The past weeks have been a roller coaster ride on the stock markets. Even economists & pundits – the “wizards’ are in new territory. Some publicly admitting – they “just don’t know”.
WHAT WE DO KNOW –
- Banks are pricing ‘risk’ into their rates so mortgage rates have been spiking. In Canada the Central Bank was surprised that the Big 5 Banks went a only quarter point down when the Central Bank went down a half point. Risk based pricing, so absent from the economy is back. But it will seek ‘right’ levels that we were previously used to.
- Governments around the globe will be saddled with debt from their cash injections to help manage the ‘markets’. So it will be in each government’s ‘best interest’ to promote a low rate policy.
- Fears of Inflation do not seem to be a near-term concern. So rising rates are an illogical presumption.
- And High Rates compete with the Stock Market for where investors will park their cash – and these days the stock markets need all the help they can get. YES low rates seem in the “best interest” of all.
IF higher rates are around the corner, its almost a good thing – as it will have meant the bailout worked, the economy is roaring ahead, and higher rates were brought in to cool things out…now that would be a change in headlines.
GOT A VRM Mortgage? Stop. Think.
In this time of change - Uncertainty breeds fear. Do not hastily exit an advantageous mortgage by listening to whispers of “lock-in-now” before mortgage rates climb. YES – if someone you know has a VRM mortgage with, for example a five year term, guaranteed to be half below prime – then why lock-in? It may well be a knee-jerk reaction to a rumor picked up by the Media last week, that said – “If you have a VRM, you can’t lock in fast enough”.
SILVER LINING –
And the fresh, international approach, (which seems to have begun in Europe), to planning and policy (the bailout) growing should ultimately calm “market turmoil”. Decisions today should be made with long-term views.
NEXT –
The US Dollar will likely not be the only International Benchmark currency. Likely a ‘pool’ of world currencies will emerge in what has finally been recognized, and is desperately being reorganized as one giant system called the “new global economy” - a now old term, that is finally about to reach reality - maybe. Funny how crisis can promt action.
EVENTS –
The past weeks have been a roller coaster ride on the stock markets. Even economists & pundits – the “wizards’ are in new territory. Some publicly admitting – they “just don’t know”.
WHAT WE DO KNOW –
- Banks are pricing ‘risk’ into their rates so mortgage rates have been spiking. In Canada the Central Bank was surprised that the Big 5 Banks went a only quarter point down when the Central Bank went down a half point. Risk based pricing, so absent from the economy is back. But it will seek ‘right’ levels that we were previously used to.
- Governments around the globe will be saddled with debt from their cash injections to help manage the ‘markets’. So it will be in each government’s ‘best interest’ to promote a low rate policy.
- Fears of Inflation do not seem to be a near-term concern. So rising rates are an illogical presumption.
- And High Rates compete with the Stock Market for where investors will park their cash – and these days the stock markets need all the help they can get. YES low rates seem in the “best interest” of all.
IF higher rates are around the corner, its almost a good thing – as it will have meant the bailout worked, the economy is roaring ahead, and higher rates were brought in to cool things out…now that would be a change in headlines.
GOT A VRM Mortgage? Stop. Think.
In this time of change - Uncertainty breeds fear. Do not hastily exit an advantageous mortgage by listening to whispers of “lock-in-now” before mortgage rates climb. YES – if someone you know has a VRM mortgage with, for example a five year term, guaranteed to be half below prime – then why lock-in? It may well be a knee-jerk reaction to a rumor picked up by the Media last week, that said – “If you have a VRM, you can’t lock in fast enough”.
SILVER LINING –
And the fresh, international approach, (which seems to have begun in Europe), to planning and policy (the bailout) growing should ultimately calm “market turmoil”. Decisions today should be made with long-term views.
NEXT –
The US Dollar will likely not be the only International Benchmark currency. Likely a ‘pool’ of world currencies will emerge in what has finally been recognized, and is desperately being reorganized as one giant system called the “new global economy” - a now old term, that is finally about to reach reality - maybe. Funny how crisis can promt action.
REPUBLISHED - Bravo to Brave…Martin Sullivan
WAY WAY BACK in March of this year I cheered then Chairman of AIG, as he lamented and warned of Mark-to-Market take downs. I chickened out in June and pulled the story - BUT I repost it here and now - it was right then and its right now, In Canada new standards announced Oct 16 - relieve Canadian Banks from the onerous pressure of Mark-to-Market. And AIG is here, but gone - some of it stupidity from their British branch, some if the famed necessity of Mark-to-Market accounting.
BELOW are my original comments from March of 08.
The Sheriff of Wall Street aka “the Spitz” rode his white stallion up and down the backs of us all. He built a modern day McCarthyism, Salem Which Hunts – fear, fear of being accused of not having enough ‘compliance’. We began to look in closets for ‘compliance’ and under pillows – like it was an object. Imagine the shame of it being said “you don’t have compliance’. The Spitz it is revealed didn’t quite have it either – but so long as it looked like there was ‘compliance’ it would be such a good world, so much better.
And then a new pet grew called ‘Sarb-Ox’. A wild animal – that was supposed to cull the beast of ‘compliance’ solved by the boogey bear of - disclosure. And some entities (corporations) finally said “too much”. They said it quietly of course for fear of The Spitz. But quietly some of them moved to London and other exchanges of the world to avoid the “Sarb-Ox’ beast.
Its coming undone – even with Sarb-Ox still on the loose, not as wild, and now more tame – but still its come undone. And in the midst – funny enough so too did the “Spitz”.
Well congrats and Bravo to Martin Sullivan of AIG – I dun’o if he’s right or wrong as far as his firms reporting goes – but he’s opened the floor to the question….is the reporting right? Is the disclosure working, is it real – does it need adjustment? So does it? Are we going to be brave enough to enter the dialogue?
Before we answer – remember, is was America that put “anti-bribery legislation into place” – forced and forcing themselves to take a moral high-ground. So seemingly strict it tied the hands of US companies operating overseas…seemed good at the time…BUT there was an unseen consequence…at the Xerox office in Cairo – the ‘company’ paid the local phone repairman a tip, a stipend of about $15. per month to keep Xerox connected – this was, under the new ‘law’ considered – illegal. Xerox Cairo stopped illegally bribing the phone repair man to keep their service at operational levels and poof, so went the phone service – gone.
Reporting, disclosure, transparency – all good. But is there really any of it – or is it fog, that only is conveniently lifted by “Spitz” like fella’s to expose when it best suits ‘their’ needs?
Lets encourage Sullivan, let’s engage the question – if the transparency that’s been built, that’s torn down so many, was so great – how’d this mess happen?
BELOW are my original comments from March of 08.
The Sheriff of Wall Street aka “the Spitz” rode his white stallion up and down the backs of us all. He built a modern day McCarthyism, Salem Which Hunts – fear, fear of being accused of not having enough ‘compliance’. We began to look in closets for ‘compliance’ and under pillows – like it was an object. Imagine the shame of it being said “you don’t have compliance’. The Spitz it is revealed didn’t quite have it either – but so long as it looked like there was ‘compliance’ it would be such a good world, so much better.
And then a new pet grew called ‘Sarb-Ox’. A wild animal – that was supposed to cull the beast of ‘compliance’ solved by the boogey bear of - disclosure. And some entities (corporations) finally said “too much”. They said it quietly of course for fear of The Spitz. But quietly some of them moved to London and other exchanges of the world to avoid the “Sarb-Ox’ beast.
Its coming undone – even with Sarb-Ox still on the loose, not as wild, and now more tame – but still its come undone. And in the midst – funny enough so too did the “Spitz”.
Well congrats and Bravo to Martin Sullivan of AIG – I dun’o if he’s right or wrong as far as his firms reporting goes – but he’s opened the floor to the question….is the reporting right? Is the disclosure working, is it real – does it need adjustment? So does it? Are we going to be brave enough to enter the dialogue?
Before we answer – remember, is was America that put “anti-bribery legislation into place” – forced and forcing themselves to take a moral high-ground. So seemingly strict it tied the hands of US companies operating overseas…seemed good at the time…BUT there was an unseen consequence…at the Xerox office in Cairo – the ‘company’ paid the local phone repairman a tip, a stipend of about $15. per month to keep Xerox connected – this was, under the new ‘law’ considered – illegal. Xerox Cairo stopped illegally bribing the phone repair man to keep their service at operational levels and poof, so went the phone service – gone.
Reporting, disclosure, transparency – all good. But is there really any of it – or is it fog, that only is conveniently lifted by “Spitz” like fella’s to expose when it best suits ‘their’ needs?
Lets encourage Sullivan, let’s engage the question – if the transparency that’s been built, that’s torn down so many, was so great – how’d this mess happen?
Sour Grapes from Merrill
Timeline - 14th of September the venerable firm Merrill Lynch gets into unthinkable trouble – they fail. Not really – they got saved in a fire sale. Still ugly for such a long standing giant.
10 days later – Local Merrill Lynch economists - David Wolf & Carolyn Kwan, predict a mortgage meltdown will whack the Canadian real estate market, the magnitude of which would equal the events in the US.
Now on a sunny day, I’m told I can see far enough to find the storm clouds. I call it forward looking radar. What Msr Wolf and Mdm Kwan did was either a sour grape approach to their new, or as yet, undetermined employment, or just plain trying to join an alarmist bandwagon a tad too late.
Silly goofs, while I think we here in La-Belle Canada think ourselves too invincible, David & Carolyn fail to understand that the mortgage meltdown was precipitated by Money Traders – the poor homeowners fell into the soup after.
Not to replay the facts, stats or arguments here, just only to say – hey David, hey Carolyn – did you see the fundamental differences?
If risk had been priced in, the economy could have handled Homeowners that got whacked. BUT the economy could not handle the FI’s that leveraged, derivatized, swapped and put 125% of the face value of mortgage pools out at bonused rates “cause it was just so damned attractive”. And the math, if it ever could be figured out, which I’m sure won’t happen, then it’s likely a good bet that the economists wrote solid opinions as to why a bundle of 100 million of mortgage backed securities ended up selling for 150 or even 200 million due to what? Salesmanship, confusion or just being too tired to care.
Yes the Canadian market will likely have price adjustments –but not of the magnitude you unhappy birds suggest. The trigger to our local markets will be as in the rest of the world – general consumer confidence. The driver could be employment levels – and if they take a hit, well then it won’t be mortgage meltdown – it would’ve been economic.
To be fair, its been tough to see days ahead, never mind months, but David and Carolyn are late, late in the game and wrong side of the 49th.
10 days later – Local Merrill Lynch economists - David Wolf & Carolyn Kwan, predict a mortgage meltdown will whack the Canadian real estate market, the magnitude of which would equal the events in the US.
Now on a sunny day, I’m told I can see far enough to find the storm clouds. I call it forward looking radar. What Msr Wolf and Mdm Kwan did was either a sour grape approach to their new, or as yet, undetermined employment, or just plain trying to join an alarmist bandwagon a tad too late.
Silly goofs, while I think we here in La-Belle Canada think ourselves too invincible, David & Carolyn fail to understand that the mortgage meltdown was precipitated by Money Traders – the poor homeowners fell into the soup after.
Not to replay the facts, stats or arguments here, just only to say – hey David, hey Carolyn – did you see the fundamental differences?
If risk had been priced in, the economy could have handled Homeowners that got whacked. BUT the economy could not handle the FI’s that leveraged, derivatized, swapped and put 125% of the face value of mortgage pools out at bonused rates “cause it was just so damned attractive”. And the math, if it ever could be figured out, which I’m sure won’t happen, then it’s likely a good bet that the economists wrote solid opinions as to why a bundle of 100 million of mortgage backed securities ended up selling for 150 or even 200 million due to what? Salesmanship, confusion or just being too tired to care.
Yes the Canadian market will likely have price adjustments –but not of the magnitude you unhappy birds suggest. The trigger to our local markets will be as in the rest of the world – general consumer confidence. The driver could be employment levels – and if they take a hit, well then it won’t be mortgage meltdown – it would’ve been economic.
To be fair, its been tough to see days ahead, never mind months, but David and Carolyn are late, late in the game and wrong side of the 49th.
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