Tuesday, September 30, 2008

bleak monday

Yikes! Ouch! The TSX gave up 840 points today, DJ took it's biggest single-day loss ever. Tokyo closed down 340-something just a bit ago, Hang Seng down over 400 with an hour or so to go. Stephen Harper said today that the Canadian economy has "good fundamentals", and that what is happening down south, well, we are insulated. It's different here. Jeebies, doesn't that sound familiar? I might have felt better had he been wearing a cardigan when he said it.

The TSX is down 9% today, and my memory bank echoes with the words that the losses were $104 B-B-B-Billion - out of Grampa's retirement pension fund. Out of those Mutual Funds that were sold to you so adroitly. Market-linked GIC's? They did not sound good to me, and I didn't buy 'em. Oil down 10 and a half bucks on the day. What else?

The meltdown is upon us. I made sure today that all of our cash holdings were spread out to be covered by CDIC. I would advise you to do the same. I have to say though, that I do not even trust CDIC solvency if this keeps going. This is historic. Remember it. Oh, never mind my admonition, you will remember it. Alberta's boom may be on hold for a while if this continues (and I am sure that it will).

I'm looking forward to buying a house in Shaughnessy for $300K when this is over.

Still want a Harper majority? A Dion majority? Forget it. The only hope we have is for coalition gov't. A co-operative government, where decisions are made by consensus amongst the parties that represent the majority of Canadians. Don't want to see Young People Fucking? How about All of Us are Fucked? Pardon the vulgarity, but it is that stark.

There are those who say that this is a manufactured crisis, and I lean toward that. Here we have right-wing governments - under Bush and Harper gutting our treasuries, cutting taxes while increasing spending. Harper's gov't has turned a 14 billion $ surplus into a near deficit in 2.5 years. Some say that the only reason we are not in deficit, is the sale of frequencies to cell phone companies (reaped about $3.4 billion, if I remember correctly. We would be a billion-seven in the red else). That was a one time deal. Kinda like when Campbell sold BC Rail, and tallied a surplus. And look where that got us. 400,000 jobs have disappeared under Harper's regime, with plenty more to be lost.

Watch The National on CBC tonight. It is worth the watch. There is a very good interview with Elizabeth May. The Greens are the most centrist party of all of them, but they don't have the vicious experience of the House. I think that May could tame the Liberals, and pull them back to the centre in a coalition. That is what Canadians really are. We also pull together in difficult times.

Here are some vids to relieve you from my rantings - which will continue manana. Some of the vids are amusing, some stark. A good few have tunes. I hope you like at least one. There is some really heavy schtuff to come.





Mike said...

"Harper has turned a 14 billion $ surplus into a near deficit in 2.5 years. "

All by his lonesome? I have issues with the guy as well, but I do not credit the liberals with building our economy up and I do not credit the cons. for tearing it down.

There are a lot of other non-political factors here and a world-wild economy to consider. The GST cut was stupid, sure, income trust tax was good, softwood is forever debatable... but how in your mind did he tank this entire economy? (not trying to slam you or anything, I am really curious as to any non-blanket arguements)

Anonymous said...

Here's THE blanket argument for you:

"Know them by their works."

Not by the BS they spew.

But by what actually happens under their watch.

solipsist said...

mike -

The GST cut was all it took.

Of course Harper has a whole caucus to share the blame, but he is the top-down leader.

The economy has been as robust as it was under the Liberals (in fact, more robust - with the oil prices that we have been seeing), until just recently. A BoC interest rate hike would have cooled the dollar, and not hurt our exports nearly as much.

The Harper gov't has been increasing spending, while cutting revenues, and just like the Republicans to the South, is the biggest spending government in history. We know what is happening there. There is nothing left in the cupboard for hard times.

Further; why do you say that the IT tax was a good thing? Foreign buy-outs mean no tax paid in Canada (by my limited understanding). The Cons did not prove that there was "tax leakage", and only provided 18 pages of blacked-out documents to bolster their argument. I could just as well say that I cannot share the information behind my argument, but would that make my argument valid? I think not.

People more knowledgable than you or I say that the IT thing has cost Canada tax revenues. (I don't have any links handy, so you will need to do your own reading on that.)

That is the simple answer to your question.

as anon. below you says: "Know them by their works."

solipsist said...

mike - I edited the post to reflect that it was Harper's gov't, and not him by hisself. It is still a fine distinction though, and it is still top-down.

Mike said...

Solipsist - Thanks for the responses.

GST cut - We are in agreement then, this was a waste, "fucking stupid", if I may. The cut should of came once spending was curtailed, or, the cut should have hit income taxes directly....but only after you cut spending.

The $100 carbon tax, it was BS. It takes a lot of money to collect tax dollars, and once they have a large pool of cash good things can be done with it. (versus miliions of taxpayers having $100 each)

$0.02 diesel - Will just get absorbed in the market; it is political pandering in my eyes. Lower taxes are always good, I again personally prefer user taxes over income taxes so I am bias.

IT's - The issue as actually with the dividend tax credit, for that to be equitable you have to assume the corporation is paying 20-25% corporate taxes (same as small businesss) for the total taxes to make sense. Intergration means total taxes paid by Co. & Shareholder should be the same as if the shareholder earned the monies directly.

This was not happening, so companys began converting to trusts, if they paid out all their suprluses, taxes would be 100% payable by the unit holder.

Now, if that investor was a US citizen, or a US hedge fund, there is no taxes payable in Canada. Inter-company dividends are also not taxable, so the only ones paying taxes (in Canada), were small individual investors.

If Ontario Teachers Pension bought it, taxes were deferred until they pay it out.

BCE and Telus were about to convert and they would not have been the last. We would of ended up with a large portion of the TSX and many private co.s all heading to income trusts. Without intervention, nothing would have stopped this and Canada's tax base would be CDN individuals and unprofitable public companies. Seriously, it could of fucked our country right over.

So now "pensioners" lost billions. (Why is it always the elderly and the children that get hit, Remember Bre-x, the news kept telling us it was pensioners loosing money, and children of investors that were always brought up by the MSM) Everyone involved took a hit, even myself and I was a little pissed at the time. But what no one focused on is that Harper took steps to resolve the unequity with the eligable dividend tax credit of 45%.

Also, IT's do not halter or facilitate forign takeovers, do they? The turst is a tax setup, I do not think it effected ownership, per sey.

As far as them costing money,I don't see it. It is the exact opposite, here is proof: You purchase 100 shares of microsoft. You recieve a divident, you pay CDN tax. You get a gain, you pay CDN tax. Microsoft makes money, they pay US tax. So, and the end of the day, the US company pays US taxes, the CDN investor pays CDN taxes.

Now, imagine MS converted to a trust (not possible I know, but for arguments sake) that trust simply pays out all its earnings, and no longer has to pay US taxes, so the IRS looses.

No if's, and's, or but's, there is not a single penny that will go to the IRS under the trust setup, IRS just looses. Reverse it and it would have been the same.

At the end of the day, the 2% gst cut is probably my biggest gripe. It was ill advised and I think the benefits for the poor households is likely non-existence. It was a stupid, stupid move. I would like to vote for someone else simply over this issue, but I don't know who. Spending increases are a problem, sure, he promised cuts and increased spending 5-7% (per year) or something. But is he the first pollution to do so? You compared him and his spending increases with our southern neighbors;a geographical comparison. I would offer that you could make the comparision chronologically as well, Didn't the liberals also promise to cut spending and then ignore those promises? I remember when the gun-control was the topic of the day, they stated "future efficiencies" or something and they never came. Like Kyoto, the liberals agreed to go back to 1990 pollution levels; but sat back and watched pollution increase and did nothing. (They could not have done anything anyway as pollution is more of a social/economic factor than a political one, but that is another discussion)

Again, thanks for the discussion on this and for all your past posts. I have had you RSS'ed for several months.

I am trying my best to figure out who is the lessor evil and I am constantly trying to play devils advocate with myself. However ever time I get infuriated with something our government does I end up finding out they still did it way better than the last guy who was in charge.

(sorry for all my typo's)

solipsist said...

I would like to vote for someone else simply over this issue, but I don't know who.

Thanks mike, for your thoughtful response.

There is a dearth of intelligent, moving candidates for election, and I think that all of us are in the same quandary. So, let us shift from sticking on the economics (although, I think that Libs, and Greens have the better visions for carbon tax, innovative technologies development, etc.), and look at the social aspects.

We are not a country infused with right-wing ideology, but are a progressive, equitable, and in many ways, humble nation. The Conservative party is simply antithetical to those values. So the choice comes down to Liberal, NDP, Green, (Bloc in Quebec), or some of the other, less visible parties (Marxist-Leninist - no thanks! - Marijuana Party, Canadian Action Party [?!], Work Less Party [not a bad idea!], etc.). Then comes into play vote-splitting on the "left". That is where we need to do our homework.

Just please, not the Conservatives...

Strataman said...

solipsist "Just please, not the Conservatives..." Maybe may be not , intellectually and social goals I relate more to Dion, HOWEVER I need to repeat whoever forms the next government is then history probably for a decade. So let's say we vote for any other party then the C's. That quarantees that that party will be decimated at the next poll. Pause for a minute WHO do you want decimated at the NEXT election? And I mean decimated the party will no longer be in existence.

solipsist said...

strataman - I see your point, but.

What if Dion were to turn out to be a brilliant PM (I'm not saying that he would, neccessarily). People had low expectations of old Lester B., but history has treated him well. We'll see what this week of scandal and debates brings, but I don't think that the Libearals will be able to form a gov't - even with the Greens. If they did manage to pull it off, I would hope that it would be a coalition, or a minority. Let him prove himself - one way or another. I don't see the Libs ceasing to exist in any event - they just have never damaged the country the way that Mulroney did, and Harper is working on. I think that it is the Cons that have the most to lose - they have no talent, and would not survive without Harper.

My only real aim here is to stop a Conservative majority.

Strataman said...

solipsist said..."My only real aim here is to stop a Conservative majority." I also see your point BUT to give Harper a minority is sort of like giving him an excuse "I couldn't do anything; they blocked me every step of the way" I'd rather the sucker sank outa site. No excuses no nothing, and besides my opinion; on the end all I'll probably vote for Dion hoping Harper get's a majority so I can say "Well I knew what was going to happen!" Talk about being confused! :-) With the global economic crisis which I personally think will be worse then the great depression (given our international dependencies that NEVER existed then); even a great Canadian PM (is there such a thing?), will sink outa site because Canadians blame who IS in power, irregardless of extenuating circumstances beyond their control.

Strataman said...

Here is my idea of likely out comes over this election and the next after.
1st possibility;
1)Harper majority, NDP official opposition(by a hair),Liberals reorganize BIGTIME.
2)Second election Liberal Majority. Harper minority.
2nd possibility
1)Harper minority,Liberal Opposition (by a hair), NDP decimated next election blamed for splitting vote,
2) Harper Majority, Liberal official Opposition. NDP outaq business, Greens dead.
3rd Possibility
1)Harper Majority, NDP Opposition, Liberals Decimated.
2) Second (Next) election Minority NDP Government with Green Party support. Liberals official opposition.
Okay all my opinion but which one do you prefer?

solipsist said...

I'll have to get back to that strataman, I'm trying to watch the French language debate, and a few other pressing things besides.

In fact, no post tonight - not enough minutes in this day for this exhausted junkie

solipsist said...

strataman - I need some other choices on that question.