geoffrey

Same here. I don't carry a balance and the most I've ever had on my card is probably $5k or $6k when I paid for a vacation or for some courses. Yet the issuer (major bank) pumped up the limit to now $20k. Why? Don't know. But no one told me about it. Correct. Have you read about how GS needed to reduce the mortgages of hundreds of homeowners around Boston because their mortgages exceeded the value of the homes and that was not fair? Cost the firm $60mm, and they weren't even the underwriter, just securitization. Same mentality. When people screw up, it's the bank's fault. Plenty of us don't get into debt traps. That's why they offer the credit. The few they do need to suck it up and make sacrifices. Retailers pay huge fees to the credit card firms. They don't benefit. Don't worry about the fraud, it happens and your covered. The benefit to your credit rating of consistantly paying off your card in full every month is way more valuable than the hassle of fraud. It could save you thousands over the life of your mortgage if you qualify for a better rate as a result. Statistically, your more likely to get screwed by the convenience store. Online purchasing is safe.

There is no good "real news" there. A bunch of fired people started "their own businesses." The reality? They are probably doing little side jobs making 1/5 of their previous salaries. When real full time jobs increase, let me know. We can all celebrate then.

Why cheer someone on for something that will never happen? Obama is the master of just sending out crap to his fanbase that he has no hope of ever accomplishing. Better yet, they love him for it. "Everyone will get great medicare, lower taxes, nicer houses, better schools and a pony!" WOOOHOOOO!!! "Because we CAN!" Oh ya? This guys is seriously so full of it. I hadn't heard this lastest Christ-like proclaimation, so thanks for showing me that he really is so into himself that he's a threat to the stability of the entire world. Next he'll end hungry in Africa by proclaimation. Plan? None. But Obama said so.

Or rising interest rates force everyone to default on their massive, huge, unsecured (their houses are worthless) debt. The next cycle is looking far far worse than this one. Next time, under high inflation, rising rates, etc., the Fed cannot possibly print money like now. The future of the economy 3 or 4 years out is far uglier than now. 77/78 didn't have a massive crash in real estate or Bear Sterns failing. The only reason the market hasn't gone lower is because the US increased it's national debt by 10%. Easy. You can sustain an economy for awhile by printing money and borrowing from the Saudi's. But not forever. No, it wasn't panic. There is no solvent bank in the United States today. That's not panic. That's an actual crisis. The value of the economy declined far more than that. If US banks leverage 10:1 (Canadian style) versus 40:1 or 50:1, that represents a decline of 80-90% of the capitalization in the United States. This isn't reflected in today's market, but will be a necessity as loan losses grow. These stress tests were a joke and understated the problem, and even then are recommending capitalization in the 20:1 range. If Goldman Sachs calls in $300b in loans to reduce leverage, that's going to destroy alot of economic power. Compound that across at least 10-20 major players in the US and UK. Now banks don't hold all the leverage, but are a key source. If banks are deleveraging, so too will companies that can no longer get debt financing from banks that aren't lending. Mortgage bankruptices are huge right now, but banks don't have to write them off under the new accounting standards, so long as they are securitized in some weird way that makes them 'hard to value.' The underlying value of the houses to be foreclosed is also going to be substantially less than what the banks expect. Once the banks start selling these foreclosures, the housing market will tumble again. There are no sources of potential optimism in the US housing market. During the Savings and Loans crisis, many executives went to jail for exactly what these big bank guys have done now. This probably deserves another post. It's absurd that no one has been jailed for the fraudulent activities that some of this was founded upon.

This has nothing to do with outsourcing and everything to do with people living beyond their means. Big labour is a big part of the problem.

I didn't say banks should be free of criticism, and hidden fees and charges are certainly not acceptable. However, if you don't want debt, don't borrow money. I can't hold the banks responsible for people's inability to determine priorities and live within their means. How do you tell the difference between those that use it properly (I have $25k available in revolving credit, zero balance) and those that don't? You can't. But that doesn't exempt people from paying for their debts. The reason why rates and fees are so high is because people don't pay back their cards and the bankruptcy process is too generous to individuals.

The US generates most of it's "wealth" through Americans buying and selling houses to each other and packaging and selling the associated debt. That's not real wealth. The value of what the US exports to the world is significantly lower than what it imports (services included). Investors just love sending their money to the American banks to lend to individuals and companies that buy and sell houses. That's really all they've got August. Houses. Back and forth. Nothing more. No one does anything real in the US other than service others that buy and sell houses or borrow against the house they buy. When the trade in houses slows, the economy dies. That's what your seeing today. The US produces very little to the world. They just sell their debt to foreign investors. Money is not a claim on real assets, but a claim on the future expected worth of the economy. A piece of equity or debt is a claim on an asset, and who holds those? Foreigners.

Moonbox, Reducing the money supply will increase the "COST" of money, increasing REAL interest rates.

Yes, this is currently a problem. Your right. i.e. any stimulus provided by the additional government spending will be offset by a reduction in the pool of money available for private loans. Currently under way. What's worse is that with inflation comes increased interest rates. Which increases the debt service costs for the government, forcing them to borrow more money, forcing the Fed to print more money, forcing inflation higher, forcing interest rates up, forcing the government to pay more in interest costs, forcing the government to borrow more money, forcing the Fed to print mor.... I'm sure you see it now. Finanaced by some dude sitting on his couch laughing at you in Beijing. Even if your not in debt Wilbur, someone else is borrowing on your behalf. Chances are your company finances your wages, and your government is borrowing so you don't have to pay as much tax. Lots of people are borrowing in your name. Canada isn't in bad shape. But in the US, it's ugly. The government has borrowed about $125k on the backs of the average family of 4. Your right, it's not. But the balance of power is shifting from those that borrow the money to those that have the money.

Should have let them fail along with the worker's pensions. I don't have as generous a pension as GM workers. Why do my tax dollars go to saving that?

People still have a fundamental responsibility to not spend beyond their means. Banks are quite truly the ***hole of the corporate world. But these people come willingly to them. They want the 50" TV, boat, and other stuff. Why not? The bank gives it to them. Are they being taken advantage of? Maybe. People need to stop buying things on credit. An argument can be made for a house but that's about it. Any other purchase on credit is financially stupid. Bank fees are negotiable if the bank doesn't have you by the balls. I only pay 1 flat fee (which is waived due to balance) for my personal and many commercial accounts I hold with one of the major banks. I pay nothing for my banking. I have three credit cards which I pay no fees and no interest. I pay a small $50/year fee on my Aeroplan card, but that's because I want the insurance and 3 or 4 free flights I get with it each year. Now if I had no money, no investments and a ton of debt, I'd be paying fees. People willingly give themselves up to banks. As a free market person Argus, you shouldn't be critical of the banks. These are choices people make.

They and Asia will lead the world out of this crisis because they are not hamstrung by massive debt and the unsustainable lifestyles of their citizens. They encourage their individuals to save and invest. We encourage our individuals to spend and borrow. Simple flow of funds. Add onto that the oil that most Western nations import from Saudi and the goods we import from China. We're screwed brother. They own our asses (and assets). Anyone that produces tangible "stuff" and sells it is way better off than those that play with financial products now a days. The party is over.

Overvalued? Perhaps. As the US issues more treasury securities and the demand for treasuries increases, people need more USD to purchase such securities which drives up the American dollar. Currencies react to supply and demand sort of like anything else. People love USD to buy t-bills. That's why it's so high. You can even see on "good" market days, the USD drops as people move to other investments in equities or whatever else. Banks and other firms are also deleveraging, which reduces the supply of currency, driving up the price (more deleveraging in happening in the US versus Canada, hence the swing in currency).

I've been short CanWest since $5/sh... I covered on Friday. The company is 90% for sure going to zero. Terrible, worthless assets and huge debt.

The gasoline price has everything to do with the CAD/USD exchange rate than it does with supply/demand right now. I paid $2.05/gallon in Seattle a couple weeks back, more than 50% off last summer. The Canadian dollar has declined 30% against the greenback since the summer of 2008. Our gas prices should move up 30% as a result. Approximates: Summer 2008 ($0.90CAD to $1USD) Oil: $140USD or $126CAD Gas $1.40/l in Canada Now ($1.30CAD to $1USD) Oil: $45USD or $58.50CAD Gas $0.80/l in Canada So oil has declined only 50% in Canada in Canadian terms, not the 70% it has in the States. Pump prices have decline about 45%. Not that big of a discrepancy, definitely could be due to local supply constraints or any number of factors. Canadians are paying a reasonable price for gas.

They are going to hurt too in UAE. I'm actually in process of some job stuff in Vancouver... we'll see. I think I like their economy more than Calgary's in the next few years. The new royalty program is moving resources to BC from here. Who knows. I want to go to a city that is more based on intellectual capital than resources. It's been good in Calgary, but that's looking bleak now from here. Now if only they didn't have such disgusting taxes!

Yes. But those incentives are driven by the demands of the 'average investor'. Foolish. You miss a quarterly estimate and everyone dumps you. It's not the managers faults that they build short-term incentives to promote the short-term desires of investors. Enron was not an accounting rule issue... it was fraud. All the regulation in the world will not stop thieves. Whoa... nope. Sorry. That's a huge accusation that you should back up a little bit. Rating agencies were not fraudulent. Let them leverage and let them fail. Any counterparties and investors to these banks knew how much they were leveraged. You bought or lent to them? Ooopss! Let them fail. SIVs are a key component of risk management, you know that. Eliminating SIVs would do more harm then good. There is nothing wrong with SIVs or securitization that is done prudently. Agreed.

Did anyone cry for the guys at Lehman Brothers? I'd just call it a necessary correction. These people make unreasonable money. They are going to get to know how much their skills are worth really quick! The cost component is no longer competitive and that's the union's fault. Many of the companies have their hands tied on parts and some parts of their lineups due to union contracts (Ford trucks must be built here, etc). I think they are bailing the companies out, not the plants dobbin. And those companies directly hold 100% of the ownership of their Canadian subsiduaries. A US bailout is a bailout for Canadian manufacturers as well. The bottom line is less people are going to buy cars and people will lose their overprice jobs until the market balances. A bail out is just delaying that a huge taxpayer cost.

A marginal cost for users on a highway per trip is a better and more equitable way of running a highway. The public has no upfront cost in construction. And only those that use it, pay for it. If you don't drive and are a more environmentally and socially concious public transit user (not me), why should you have to pay for drivers to get to work faster than you? That's not fair. It really isn't. Pay per use makes sense! Further, paying for something up front is a bigger hit to taxpayers. Taxpayers pay interest on the financing used to construct that road. Instead now, it's plowed into an equity return for the firm. Not to mention, there is now an efficency and performance incentive. I can think of very few things that are more fair, equitable and common sense than privatization of roads.

If I buy your house, have I bailed you out? No, I purchased an asset. Buying these mortgages is like purchasing assets. The government even earns a return and paid less that what these things will be worth 5 years from now when risk premiums are lower. Great investment, good job to the government. Banks are happy, taxpayers should be happy. Prime rate is 3.75% at national banks and 1-Yr LIBOR is 2.85%. What the hell are you talking about no break on interest rates?!?! Your a clueless fool. Banks are operating at slim margins on variable ST debt. Long-term debt is so unpredictable right now that LT mortgage rates need to price uncertainty. Good luck selling a 5 year mortgage at anything less than 6% to the market. No one will buy it! The cost of money has increased dramatically and your whining about the bank not cutting your mortgage ENOUGH?!? God help us. There really are some that just don't get it. On my mortgage right now, I am paying less in interest (1.75%) than the bank pays on the debt used to finance it. Huh. Go figure. They are losing money because they've given me such a break! You have no idea how the financial sector works and it's apparent. Don't be critical of policies and decisions that are just beyond your level of understanding. Just because you don't get it, doesn't make it wrong. Plus, buying mortgages off banks at a discount decreases their profit (loss on sale of assets). But you'd know that being the financial wizard you are, wouldn't you!? Oh please. The US is stupid to bail out the auto industry too. Just let it die already. Kill of the wasteful union jobs ($100k/year door screwer-on'ers) and let innovative Japanese manufacturers make better product at lower cost. Seriously. Why do we need GM? It's a big hulking union ship that will constantly be sinking under the weight of it's crew. The difference with banks is we are helping great instituions weather a storm where they are at a disadvantage to their peers due to government intervention. The auto industry was a failure from day one, not because of the credit crisis but because it's just in terrible shape. GM is one of the worst managed large companies in the world. We shouldn't support that crap. We should support strong industry leaders, not foolish union shops that will never be profitable on their own ever.

If Calgary is 3rd safest and Montreal 2nd, we are in serious trouble as a country of drivers.

The hell?

Major projects are already starting to idle. CNRL and PetCan have both scaled back major projects. CNRL from $4b this year to just $500m next. Ouch! I'm starting to look for work a little further west now. Not that I'm worried about my job. But Alberta is in for a rough ride the next couple of years.

Investment? Alberta leads investment by three fold over Ontario. Economic growth and jobs are created here. Yes, Ontario has bank head offices. Congratulations. Alberta's GDP/capita is nearly twice that of Ontario's. The reality is that Canada is a petroleum and energy nation. Our dollar, the indicator of our financial health comparitively to the world, is directly attached to the price of oil. I'm glad Ontario has found a role in assisting Alberta in being successful, but realise that's all it is. The energy is produced here and in BC and Sask to a lesser extent. Ontario just gives us banking to do so, and that is even to a lesser extent. What matters now is Alberta's economy, not Ontario's. It's been dying for some time. -- Here is the TSX 60 sorted by head office location: CALGARY (21) TSX: AGU Agrium Inc. Materials TSX: CNQ Canadian Natural Resources Ltd. Energy TSX: COS.UN Canadian Oil Sands Trust Energy TSX: CP Canadian Pacific Railway Ltd. Industrials TSX: ENB Enbridge Inc. Utilities TSX: ECA EnCana Corporation Energy TSX: ERF.UN Enerplus Resources Fund Energy TSX: FDG.UN Fording Canadian Coal Trust Materials TSX: HSE Husky Energy Inc. Energy TSX: IMO Imperial Oil Ltd. Energy TSX: NXY Nexen Inc. Energy TSX: NCX NOVA Chemicals Corporation Materials TSX: PWT.UN Penn West Energy Trust Energy TSX: PCA Petro-Canada Inc. Energy TSX: SJR.B Shaw Communications Inc. Telecommunication TSX: SU Suncor Energy Inc. Energy TSX: TLM Talisman Energy Inc. Energy TSX: T Telus Corporation Telecommunication Services TSX: TA TransAlta Corporation Utilities TSX: TRP TransCanada Corporation Utilities TORONTO (24) TSX: AEM Agnico-Eagle Mines Ltd. Materials TSX: BMO Bank of Montreal Financials TSX: BNS Bank of Nova Scotia Financials TSX: ABX Barrick Gold Corporation Materials TSX: BVF Biovail Corporation Health Care TSX: BAM.A Brookfield Asset Management Inc. Financials TSX: CM Canadian Imperial Bank of Commerce Financials TSX: CTC.A Canadian Tire Corporation Consumer Discretionary TSX: IMN Inmet Mining Corporation Materials TSX: K Kinross Gold Corporation Materials TSX: L Loblaw Companies Ltd. Consumer Staples TSX: LUN Lundin Mining Corporation Materials TSX: MG.A Magna International Inc. Automotive TSX: MFC Manulife Financial Corporation Financials TSX: MDS MDS Inc. Health Care TSX: NA National Bank of Canada Financials TSX: NT Nortel Networks Ltd. Information Technology TSX: RCI.B Rogers Communications Inc. Telecommunication TSX: RY Royal Bank of Canada Financials TSX: SC Shoppers Drug Mart Corporation Consumer Staples TSX: SLF Sun Life Financial Inc. Financials TSX: TRI Thomson Reuters Consumer Discretionary TSX: THI Tim Hortons Inc. Consumer TSX: TD Toronto-Dominion Bank Financials TSX: WN Weston, George Limited Consumer Staples VANCOUVER (5) TSX: FM First Quantum Minerals Ltd. Materials TSX: G Goldcorp Inc. Materials TSX: TCK.B Teck Cominco Ltd. Materials TSX: UUU Uranium One Materials TSX: YRI Yamana Gold Inc. Materials MONTREAL (7) TSX: BCE BCE Inc. Telecommunication Services TSX: BBD.B Bombardier Inc. Industrials TSX: CNR Canadian National Railway Company Industrials TSX: GIL Gildan Activewear Inc. Consumer Discretionary TSX: AER Groupe Aeroplan Inc. Consumer Discretionary TSX: SNC SNC Lavalin Inc. Industrials TSX: YLO.UN Yellow Pages Income Fund Information Technology SASKATOON (2) TSX: CCO Cameco Corporation Energy TSX: POT Potash Corporation of Saskatchewan Inc. Materials SOUTHERN ONTARIO (1) TSX: RIM Research In Motion Ltd. Information Technology -- Toronto has only 4 more head offices than Calgary in the TSX60, and Calgary's market cap far outweigh's Toronto (value of companies). So you tell me where the power is? Saskatchewan, Calgary and Vancouver have more than 50% of the market value of the entire TSX market. Wake up. The economic power is in the west, no where else. Dion doesn't know that, or respect it. So he cannot be a PM. If he became one, the economy should leave and go somewhere that it is respected.

Harper will kill the polar bears, the market will crash, the Americans will invade Iran, all our food will have listeria and health care insurance will cost you $1million per year starting tomorrow morning. Or so I've been told.