Duck......

[Cranky]

I had dinner with a good friend of mine. He is saying that the housing industry is about to collapse. I'm talking about 70% contraction which would mean that 30% of the overall economy is about to disappear. Compound that with disappearing manufacturing jobs and pretty soon, the only job all of us will have is sellinr ice cream cones to each other on the unemployment line.

Then I listen to the news and they are saying the same thing for different reasons.

So, are you ready for it and how are you going to handle it?

[The New Guy]

Not going to happen.

We are not heading towards a crash. We are not heading towards doom and gloom. There will be a couple months of insecurity, a couple years where we recover, but the end of the world is not at hand. It's just the media wants you to think so.

The major market collapses of the past century have been marked by one factor - the refusal of the government to get involved until it was too late. In this case the government has gotten involved and as a consequence things will stabilize much faster than they would have otherwise. Panic stories, however, are big in the media these days - and because the fear of terrorists or liquids on airplanes is somewhat dimished, the economy is their target.

Besides - how do you fighure that 70% of the housing industry = 30% of the economy. I believe (and I have no source for these numbers, but I'm sure I read it somewhere) that the housing industry accounts for at most 15% of the Canadian economy. That means even a catastrophe like a 70% contraction is still only a 10.5% contraction in the economy.

By the by, from what I hear the Canadian construction industry is still doing much better than the American construction industry, and no critical collapse is predicted by any of our business economists here as far as I know (and although they don't always tell me everything, being in IT means I know quite a bit that I'm not supposed to know). We sell accounting packages to construction companies, so you can take that for what it's worth (two cents or thereabouts).

[CrocRob]

Well I'm still waiting for that significant Canadian bank to go under, so I'll hold off for a moment before telling all my friends to sell their assets off.

Luckily, I don't own any real estate anyway.

[Cranky]

Mar 12, 2009 11:05:32 GMT -5 The New Guy said:

Not going to happen.

We are not heading towards a crash. We are not heading towards doom and gloom. There will be a couple months of insecurity, a couple years where we recover, but the end of the world is not at hand. It's just the media wants you to think so.

The major market collapses of the past century have been marked by one factor - the refusal of the government to get involved until it was too late. In this case the government has gotten involved and as a consequence things will stabilize much faster than they would have otherwise. Panic stories, however, are big in the media these days - and because the fear of terrorists or liquids on airplanes is somewhat dimished, the economy is their target.

Besides - how do you fighure that 70% of the housing industry = 30% of the economy. I believe (and I have no source for these numbers, but I'm sure I read it somewhere) that the housing industry accounts for at most 15% of the Canadian economy. That means even a catastrophe like a 70% contraction is still only a 10.5% contraction in the economy.

By the by, from what I hear the Canadian construction industry is still doing much better than the American construction industry, and no critical collapse is predicted by any of our business economists here as far as I know (and although they don't always tell me everything, being in IT means I know quite a bit that I'm not supposed to know). We sell accounting packages to construction companies, so you can take that for what it's worth (two cents or thereabouts).

Sigh....my own contrarian. If you want to do the "mine is bigger then yours", the guy I was having dinner with is the huge Ontario builder. When I say 30% you need to include hundreds of thousands of trades, related industries, lumber, concrete, sales, legal, banking, etc. Housing is larger then automotive. Then there are the spinof jobs to that.

Anywho....we shall see how bug the hole is really going to be.