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Thursday, March 05, 2009

Good Hunting

For those in the know, that is a BG (Battlestar Galactica) expression. Just after the CAG briefing each morning, it is the last thing said to the pilots as they disperse. But it could just as easily be a TSX expression these days, or a Dow Jones expression. The Dismal PM, Stephen Harper, was a bit, ahem, premature in his calling of a bottom for the stock market back in the fall. He issued advice for Canadians to buy stocks as he thought they were on sale then. Obama was closer to the truth - with indices falling to mid-1990 levels, one thing is for certain: stocks are now on sale. And I love a good sale.

But it does seem a bit too much like fiddling while Rome is burning. This is a disruptive recession, or it should be. GM will fail, along with many others (please, God, let it be Starbucks next!) and people will have to re-evaluate what it is to be successful. The old ways of doing business will give way to the new ways. And to be quite honest, these new ways have not yet emerged. So what to buy? Good question.

The goldbugs are clear in their message; and my own adviser is pretty old school when she says to buy oil and gas. I also could use a home, but reality has yet to set in in Calgary and real estate prices are still, well, stupid. So perhaps I just wait, trapped by my own inertia. But I have sneaking feeling I may be missing out on something big. Kind of like knowing there's a big lottery going on and not having a ticket - I am still sitting on the sidelines.

Good thing I don't equate my own happiness to my net worth. Then I really would be in trouble.

Monday, March 02, 2009

Throwing Good Money After Bad...

Well, here we go again. Looks like another mega-auto bail-out is on the way, as GM and Chrysler (owned by a private equity concern, BTW, so we can't even see their books to know they need the money) blow through another few billion a month, and the begging bowls come out yet again. When will it end? Will it end? Or will we keep propping up these companies, because they are TBTF (Too Big To Fail)?

Has anyone bothered doing the math on the first bailout? The feds and ON Gov't gave $3.29 billion. There are 150,000 people directly employed by the sector in Canada. Now, again this is crude math, but that's close to $22,000 per person! For only a few months!

I've got a better idea. Give the money (or at least some of it) to non-profits to help retrain these folks, or to help them start their own businesses. Or even hire them directly for that matter! If they can't put together cars for a living, can they use those skills to do something else? Anything else? There must be some transferable skills in there somewhere! Could they be, oh, I don't know, mechanics??? Or are we full up of mechanics in Canada?

Seems the Swedes have got the right thinking in place. When GM tried the same sly-dog trick on them and said that Saab would go under if there was no Swedish bail-out, the Minister stated clearly that their government was not in the business of propping up failing businesses. Unemployment insurance, daycare, healthcare, absolutely they will be there for their citizens, but not corporate welfare. Now that's keeping your eye on the ball and not letting mission creep direct your economy.

Although...I really have to wonder...if it was Ikea who came knocking...Nahhhhh!