Do you fear the double-dip recession?
It’s the economic fear above all else: the double-dip recession.
Indeed, for all the progress we’ve made since 2008 – the jobs we’ve created, the careers we’ve restored, the finances we’ve repaired – there’s long been an unspoken cloud lingering over it all. What happens if this whole thing falls apart again?
And, to be sure, no one can agree on anything. The latest on the prospect of a double-dip recession – defined as another downturn following economic expansion that lasted less than two years – has come from the CIBC, who said Tuesday that everyone’s financial nightmare is “unlikely” to happen.
“We’re not in material danger of a rude double-dip in the next two quarters,” CIBC’s chief economist, Avery Shenfeld, told the Star, addressing recent reports that the odds pointed to another Canadian recession.
Those reports, of course, were in response to Gluskin Sheff and Associates’ chief economist David Rosenberg – or, as he’s more commonly known, the turd in Canada’s punchbowl.
Rosenberg increased the odds of a double-dip Canadian recession to 67 per cent this week (he had them as low as 45 per cent in June), citing government stimulus fades and the contraction in bank lending as reasons for the higher downturn possibility.
The notorious Bay Street suit’s predictions caused Shenfeld to respond Tuesday, and so it goes with the prospect of a double-dip recession: he said this; she said that; no one really knows for sure
And across the globe, bankers can agree on even less. U.S. consumer confidence dipped to its lowest levels since February last month, hinging on job fears and the nightmare of another dip in mass layoffs and sapped consumer spending.
On the other hand, China – another of the world’s largest and most important economies – announced Tuesday they see “little risk” of a double-dip happening on their side of the globe.
So maybe the lesson to be taken from all this isn’t “no one knows,” it’s “temper your short-term expectations.”
In Canada, even those like Shenfeld who don’t expect a double-dip to arrive still predict a slowdown over the next half-year. In other words, we may not reach a full-blown second recession, but it won’t exactly be free spending across the country, either.
“It all boils down to the consumer,” Rosenberg acknowledged this week.
Consumers, then, do you fear the double-dip recession?
By Jason Buckland, MSN Money
Posted by: BeyondProphecy | Jul 28, 2021 1:34:43 AM
I do not fear a double dip recession, I am expecting it.
Being a casualty of the initial onslaught I have nothing left to lose anyway, but still take a passing interest in the charade.
The fact of the matter is Canada is a snow ball in flight and with certainty will hit the same wall of reality the rest of the world has made contact with already. If we remain true to form we will synchronize fate with out big brother next door - this is usually a three year lag, looming rather quickly.
The issues for Canada are somewhat buffered by the fact that the majority of the working population is either a direct employee of some form or level of government or an indirect employee through outsourced services and goods firms who supply the government.
This has masked the tragedy of the gutting of the so called private sector. The private sector is now a synonym for low paying minimum wage employers.
We will seem to fly OK until the public sector begins to tighten the belt as global economics come into play. We have only one customer and that customer is broke and looking to become self reliant like all other grossly indebted sovereign nations who are rapidly turning to self-sufficiency, or as it is called "protectionism."
The average Canadian lives paycheck to paycheck and is debt leveraged more than even the American consumer was at the time of the so called meltdown. Real estate values in Canada are insane when compared to the earning capacity of the market, one flinch of the interest rates and "submerge" will be the catch phrase of the day.
Ever increasing taxation is leaving consumers without disposable income, the energy of a paycheck is skimmed directly into government coffers making it unavailable to general commerce. An honest income earner sees only about 22c out of every dollar earned, rising fixed costs leave people on tip toe to make basic obligations.
Grey and black markets and under the table transactions are being forced by onerous before and after taxation. Folks are finding every way not to buy new... many are already is raw survival mode.
Canada has become unattractive to corporations - and as government scrounges for every last penny to support the 60% + of paid by tax money employees or on benefits and pension citizens... the handing of the same dollar around the circle will become an economic detraction as time slides by and prevents growth.
The saving grace is the government - as the major employer has the capacity to claw back up to 50% of the payroll in the form of income tax. This makes it difficult for "real" private sector employers who have to compete against unreasonable compensation packages offered by the government who are really only paying half of the advertised salaries they pay.
The banks of course seem sound, they are stuffed with money originating indirectly from the government payrolls, unfortunately less and less people qualify for credit or mortgage. In the interim the Canadian government is piling up debt and deficit faster than the dwindling working population can support. Given the global climate for trade balance - the export opportunity pools are drying up quickly and the competition such as China and India will soak up the dregs, Russia has moved into top spot for oil supply... So...
All in all, Canada is on the brink of meeting certain reality, all the flags are red all the way down the track.
The truth that cannot be avoided is 1 - 1 = 0.
Until things correct down to true value... recovery cannot commence. If the system could not work with 22 Trillion pretend money in it, how can it work without it?
If for instance the DOW had proceeded along its natural growth line in the past decade it would be at about 3700 points today. Until it goes there where it should be... nothing can move forward.
The markets are totally disconnected from any sort of reality and are motivated by designer newspaper headlines and articles... they are no less than out and out casinos with entrapped fund managers with no place else to play.
I probably overstated everything... perhaps not?
Posted by: WTF | Jul 28, 2021 10:04:00 AM
Beyond Prophecy, You should likely change your name to Totally offbase and incredibly wrong.
I read your comments a couple times, since I could not believe the "points of fact" you tried to raise. Perhaps you should endeavor to read more before posting such unbelievable facts.
There is no 1,2,3 year lag from the USA to Canada. Due to the business transactions and exports to the USA and the heavy interaction of both countries, most slowdowns affect both countries in a similar manner. AN example of this would be the automotive industry in Ontario and the Energy Sector in Alberta. Both were affected quite quickly in the last recession due to the slowdown in the USA.
I don't know where you get your stats from , but the majority of Canadians are not on the public payroll. CUPE which is one of the larger Public Sector Unions in Canada has over 600,000 member according to their website. Since June 2009, the private sector has added over 350,000 jobs, on top of the existing people who did not lose their jobs. I do not think CUPE or any other union has added 350,000 jobs in the last 12 months.
Canadians make 22 cents per dollar... You have your facts wrong again. Please recheck reality. Russia in the top spot for Oil Supply? Where do you find your facts. Banks have not cut back on loaning that I have noticed and I have had alot of business with them over the past 18 months. Perhaps you are just "totally disconnected from any sort of reality and motivated by designer newspaper headlines and articles."
I sympathize with your job loss, but don't try to gather more gullible people by spewing completely unbelievable opinions.
You could visit some websites that show Public Service employee numbers, private sector employee numbers, taxation in Canada and Top oil exporting, importing and reserves.
Posted by: humanone2 | Jul 28, 2021 10:16:59 AM
i am just an ordinary pensioner with no clout accept my vote---and i dont feel that is enough to stop the pus that is sure to come---i cant see how all the stimulus money helped us at all----it just prolonged the agony----what the hell are we gona do IF the economy goes for a shit again and i feel it will---i am 65---seen a lot over the years---i cannot but feel helpless---there is something inherently wrong with the capitalist system---and no i am not a socialist----
Posted by: maxmeg50 | Jul 28, 2021 10:23:43 AM
Wow now, Somebody who actually thinks like me and has both feet on the ground. I don't think you overstated anything, there really is a true disconnect with real estate prices,taxes,and wages that has been helped along by home equity loans or so called "found monies". My girlfriend and I make $90,000 a year and we live day to day, dept free basically, but paycheck to paycheck. If we are priviledged to have such earnings,then whats going to happen to the less fortunate when their homes are worth about 1/2 of what they are currently selling for, which is the "real market". I have been saying for the past 20yrs that we have been living in a "false economy" totally out of touch with the realities of average wage earners ability to pay. My earnings last year were less than I earned in 1986 and I talking my gross, not my net. Still doing the same job, still working my ass off,but heh nothing I buy today cost more now does it!!.When we hit the wall and its coming, God help use all!!!.
Posted by: Rick | Jul 28, 2021 11:01:17 AM
Were double dipping in New England... Its a given... I really can't see how Canada can avoid the second period of this mess, like they did the first... Hold on to your hat.... Its ugly..
Posted by: donald young | Jul 28, 2021 12:20:33 PM
Taxation is too high because all levels of government think there are three taxpayers instead of only one, and debt levels are excessive, and governments will run out of sources of other peoples money.
There may not be another recession, but there will be a reckoning for debtors.
Posted by: GenXer | Jul 28, 2021 3:18:37 PM
I think the main thing is that we learn from what just happened (and the recessions before this one). Many of us lived beyond our means and don't have any 'safety' fund to draw from in bad times. I am focused on living more within my means and accumulating far less stuff and slowly am saving up a 'rainy day' or safety fund in the event me or my husband lose our jobs. Also, I am paying off alll credit card debt slowly but surely and have come to realize that if i cannot pay it in full then i am living outside of my means (which clearly we were doing). I frankly make an excellent income with my husband and wonder, if it is hard for us, how on earth people with less than income are managing at all.
Posted by: Greedy Government and Banks!! | Jul 28, 2021 3:56:43 PM
I am just sick and tired of hearing people say we live beyond our means! F*ck! What means? Tell the government to ease the damn taxes they keep shoving down our throats and up our a*ses! One needs a vacation once a while in order to regain their sanity from working and barely seeing any money from their paychecks. Don't ya' agree?? And the banks, Gad, I do not even want to go there, they keep on predicting false forecasts, just so interest rates can keep on climbing, and they can pocket more bonuses etc. Pretty soon, it seems that this world and all the wonderful luxury that money can buy will be available to the rich and famous. This world has gone to sh*ts because of greed. It's severly inbalance and like a mother in labour, the world is in pain, what gives????? This is my 2 cents on the matter.
Posted by: diane10 | Jul 28, 2021 5:30:49 PM
I do believe we are headed for a double-dip recession. The European situation looks a little bit better with the late July passing of the banks' stress tests. Some large Canadian and American corporations have posted excellent Q2 profits. However all of this is not truly representative of the mess the global economy is in. I'm not an economist, but sovereign debt seems to be the big culprit here. How in hell did governments get themselves in situations where they OWE hundred's of trillions of dollars? There are individual states in the U.S.A. that are virtually bankrupt-and it's not just California. In Canada, the province of Ontario, once a "have" province and formerly the industrial backbone of the country, is now officially a "have-not". What a disgrace!
Governments worldwide have to start reining in expenses and that includes millions spent on G-summit photo-ops. This will entail higher taxes and cuts in services. People will be angry but they have no further to look then at themselves. There is a global attitude towards entitlement, no worse than right here in North America, where we think governments should support us from cradle to grave. The credit card is the holy grail. It's time politicians stopped pandering to our every whims and made budget over spending a thing of the past.
The G-7 made 2016 as the date for balanced budgets. Live on!! The Bank of Canada recently readjusted its GDP statistics for 2010 from 3.7% growth to 3.5%. Then they lowered the rates further for 2011 from 3.1% to 2.9%. That's barely sustainable growth. I think it will be flatter than that. Sorry folks for the gloom and doom, but it's going to be tough sledding!
Would love comments on my first opinion piece......
Posted by: Nodough | Jul 28, 2021 7:10:12 PM
We are being backed into a corner after I pay my bills the only thing left is credit. The cost of everything we need is so high that there is no money for Want! anymore. I don't see how this can end well and I don't think I am the only one thinking this way
Posted by: Craig Schroff | Jul 28, 2021 9:18:29 PM
Double dip? no folks this is the big drawn out single dip with chocolate on it, one must take into account the ill advised govt. bailout of the banks 2009, this was the big fatty of all mistakes. The govt. should have given the mortgagees of Canada the 40 billion to pay off their mortgages and the extra money that they had left they could and would have spent to stimulate the recovery to the tune of 1/2 trillion dollars. Instead we have the canadian mortgage and housing corp getting ready to do a freddy mac and fanny may show any day, the govt. is weak, the economy is weak,the housing bubble in Canada is going to blow because nobody that is young can buy a house for what $350,000 + on a fricking$12 P/hr part time job! Wake up fellow Canadians, dump the global agenda, elect independant cadidates in every election,unite to focus on Canada as a unique culture and a free land. To hell with war, oil and wallstreet.Feed our own, house our own, then help others, stand up for a true democracy or die slaves of the new reich or is that the new rich?
Posted by: David | Jul 28, 2021 9:50:22 PM
We are at the threshold of a new economic era. Rather than extended periods of economic growth interrupted by short contractions, it will be extended periods of gentle decline punctuated by brief booms. There are two factors at work. Firstly there is a shift of wealth from West to East and South. China, India and Brazil will have an improving standard of living but their gain will be our loss. That is because of the second factor which is that the World as a whole is pushing up against resource limitations. So when China consumes 19 million barrels of oil per day, the U.S. will be consuming say 12 or 13 million barrels per day. This (and other resource sharing crunches) will play out in a declining standard of living for Americans (and for other people in the West).
Posted by: Tom1973 | Jul 28, 2021 10:42:12 PM
Yup, things are definitely going downhill. Luckily I own a business that, although business is down, still generates enough revenue that my wife and I can draw healthy paychecks. What amazes me are how many people are still using credit to make large purchases. We live in a world where high paying manufacturing jobs are disappearing, NEVER to return. Are all those people that made $25.00 + per hour going to work at Walmart? Probably the only thing that will save North America in the long run would be a consistantly high cost per barrel of oil for a few years. If oil shot say to $200.00/barrel, in the short run we would have chaos, but slowly companies would realize that cheap Asian labour couldn't compensate for exorbitant shipping costs. Gradually manufacturing would come back. Like I mentioned, for a few years things would be "Depression level" bad, but long term countries have to produce stuff not just endlessly consume stuff if they want true economic prosperity.
Posted by: Sandy | Jul 29, 2021 8:22:14 PM
What the hell am I to do...... I am a hairdresser unemployed. My busness closed last year exactly the 30th of this month. I don't own a home and my husband is on long term dissability. He has stage four cancer that is currently in remission. We went to an advisor today and all they offered my husband and I were mutuals with a prospect of 8% before everyone elses fee's. So 6 % on 20,000. All I have in the world. I have had 2 buisnesses and both had to close. WTH am I to put a hope and a prayer on.
Maybe Rama OMG
Posted by: i smile | Jul 30, 2021 3:49:56 PM
There is a shift going on worldwide. The west is now having to become open-minded in their thinking. The tragedy is this could have been avoided. People with high expectations and bad habits concerning money has made them vulnerable to financial ruin. It is a tough way to learn the basic financial principles that the masses never learned. People who survived the last great depression learned lessons they never forgot, but the generations since then learned nothing from that era. The depression generation continually warned people of their insane behaviour, but they were ignored, and ridiculed, much to people's present day misfortune.
Posted by: Lisa | Jul 31, 2021 8:55:51 AM
Man, this is not good...but I agree with almost all of this. "Beyond Propecy and Ismile"...you both think alot like myself. All I can add to this is, get ready for this recession getting alot worse. The "Great Depression" came to mind as I was reading all of this. I am telling my friends to try hard to learn to live WITHOUT now, and when we get hit hard, we will be ready for it. If you can live off the land, you will be fine.
Hey, the other way to go...become a maid or a chef for someone rich, and you're set for life.
Posted by: Jeff | Aug 3, 2021 5:02:56 PM
Sorry "Beyond Prophecy", like was pointed out the majority of people in Canada are not employed by the governments and governments, like other empoyers have and are still not hiring and have, in fact layed off a number of people. Anyone that visits a government employment website can see this, where I live there were approximately 80 jobs posted about 18 months ago, a month later, and continuing today, there are only about 15. The federal government webiste shows a similar cut back in job postings and some of the ones on there are for filling "inventory" for when they start to hire again. In addition many of the jobs posted are being postponed so even though it appears there are jobs in fact there are none at all.
There are several things to be considered, first that the recession, although over technically, is still affecting us and the recovery will be measured in several years, not a few months, with or without stimulous spending. Hiring traditionally lags behind economic growth so even if the world economies were all doing okay it would be at least a year before the job market would improve significantly. The simple fact is that with the recovery going to be drawn out over several years job growth will be intermittant for at least the next few years.
Will we drop back into another recession, not really, but at the same time we will be subject to a period of ups and downs in all economies, not just those of the west.
Posted by: Mike | Aug 3, 2021 9:23:21 PM
Nobody has talked about the Canadian and US demographics where our population is aging rapidly and peak wealth and spending years are peaking as well. Harry S Dent is an excellent reference on what drives economic growth. Basically Canada and US are mature economies that have to naturally contract as other new economies like China come to the forefront. This is a "natural" cycle in capitalist economies and therefore in "real" money terms, the Canada and US economies will shrink until there is another major leap in technological innovation which will increase our productivity by a significant amount. This will take at least 10-20 years according to Dent which means an economic depression is coming, folks!.
Posted by: jim | Sep 8, 2021 9:59:46 AM
canada has one of the best economies out there recession only hurt those who were blind and could not see it coming evolution will be the main determining factor in weather we are to survive as a country
one of the biggest problems that we have is that we are living on someone else's ideas ie Chinese etc.
we have spoiled our children giving them everything for nothing without teaching them the importance of saving for a rainy day people in less fortunate country's live just as well as we do without i pods homes the size of stadiums etc we need to invest in economic education to our younger children and upgrade our level of education in general we need to produce not import
Posted by: Out There Somewhere | Sep 10, 2021 10:00:22 AM
As I read these comments I weigh it:
This is not rocket science, brace yourself