Current Economic Conditions

Ah Statscan...a cheery oasis of good economic reporting... But I am confused.... <p><b>October housing starts tumble 22%</b> <p>OTTAWA <p>November 8, 2007 at 10:25 AM EST <p>THE CANADIAN PRESS — Housing starts declined 22 per cent in October compared with September's exceptionally strong activity, Canada Mortgage and Housing Corp. reported Thursday. <p>The month-over-month drop in the seasonally adjusted annual rate to 219,500 from 281,300 “reflects the exceptional strength in new construction in September rather than weakness in October,” stated CMHC economist Bob Dugan. <p>“Much of the decline in October can be attributed to the fall in multiple starts. We continue to expect that residential construction activity will remain strong throughout next year, with the trend decreasing gradually between now and the end of 2008.” <p>The actual number of starts last month was 20,738, down 5.4 per cent from 19,682 in October 2006. <ul><p>[link:www.reportonbusiness.com/servlet/story/RTGAM.20071108.whousingstarts1108/BNStory/robNews/home| ROB]</ul> <p> <p><b>Foreclosure wave sweeps America</b> <ul><p>[link:news.bbc.co.uk/2/hi/business/7070935.stm| BBC]</ul> <p> <p><b>A Nation on borrowed time </b> <p> By Mike Whitney <p>11/12/07 "ICH" -- -- On Monday, Asian stock markets took another drubbing on fears that the credit squeeze which began in the United States would continue to worsen in the months ahead. Every index from Tokyo to Sidney fell sharply continuing the “self-reinforcing” vicious cycle of losses started last week on Wall Street. The Nikkei 225 average fell 3.3%, India’s Sensex dropped 2.9%, Taiwan tumbled 3.5%, and Hong Kong’s Hang Seng slumped a whopping 4.5%. The subprime tsunami is presently headed towards downtown Manhattan, where nervous traders are already hunkered-down in the trenches---ashen and wide-eyed-- awaiting the opening bell. Local supermarkets reported an unexpected early–morning run on Valium and Tylenol. Good thinking. <p>Amid the deluge of bad news over the weekend; one story towers above all the others. The yen gained 1.5% against the dollar. (9% year-over-year) That means that Wall Street’s biggest swindle, the carry trade, is finally unwinding. The over-levered hedge funds will now be forced to sell their positions quickly before the interest-rate window slams shut and they’re stuck with humongous bets they cannot cover. The faltering yen is the grease that lubricates the guillotine. $1 trillion in low interest loans--which keeps the trading whirring along in US markets--is about to get a haircut. Cheap Japanese credit is the hidden flywheel in Hedgistan’s main-cylinder. Once it is removed, the industry will seize-up and clank to a halt. Fund managers can forget about the vacation rental in the Hamptons. It’ll be sloppy Joes and Schlitz Malt-liquor on Coney Island from here on out. <p><b>snip</b> <p>Over the weekend Deutsche Bank announced that losses from “securitized” subprime mortgages were likely to reach $400 billion. The news sparked a sell-off in the Asian markets where investors have become increasingly eager to pare down their holdings of US equities and dollar-backed assets. Overnight, the greenback has become the leper at the birthday party; everyone is steering clear for fear of contagion. Foreign central banks are looking for any opportunity to dump their stockpiles of dollars in a manner that doesn’t disrupt their economies or the global financial system. Their intentions may be prudent—even honorable—but it won’t forestall the inevitable blow-off of USDs that is likely to commence as soon as the financial giants reveal the real size of their losses. New regulations have been put in place that will require the banks to provide “market prices” for their assets. This will expose the degree to which they are under-capitalized. When word gets out that the banking system is underwater; there’ll be a run on the dollar. <p> On Sunday, the AFP reported that the Group of Seven richest nations (G7) is considering direct “intervention” in the dollar’s decline to prevent a “disorderly correction”. <ul><p>[link:www.informationclearinghouse.info/article18713.htm| Information Clearinghouse]</ul> <p>As the old Willie Nelson song says, ' <p><i>Turn out the lights <p>The party's over <p>They say that <p>All good things must end...</i>

"Office, Infrastructure Demand Will Sustain Canada's Construction Boom in 2008... A favourable outlook for non-residential construction should go a long way to offsetting any pending slowdown in residential homebuilding in Canada, maintaining the industry's position as a major driver of domestic growth, according to the latest Real Estate Trends, released today by Scotia Economics."<br />
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<a href="http://www.vivelecanada.ca/article.php?story=20071107095558480">http://www.vivelecanada.ca/article.php?story=20071107095558480</a><p>---<br>"George Bush has declared the war on terrorism to be the cause of his generation. The cause of Canadian sovereignty will be ours." - John Godfrey, MP for Don Va