How's Your Economy Doing?

[Michael]

One odd thought struck me today coming home from work...

There is no recession or any evidence of a recession going on here in Toronto. Seems very weird.

From my window, I can count sixteen high rise buildings under construction (all inside the downtown core). There are another couple dozen building projects going on in the 'inner' suburbs as well. All are still in progress, some even doing evening overtime and weekend work. Even one or two new construction projects are just breaking ground.

And the May real estate numbers in Canada showed that the city of Toronto had an increase in sales of 2% for the month of May compared with May 2008. Toronto's average housing price and office leasing rates have stopped rising, but are not falling at all.

This seems bizarre - especially given that the 100km circle around Toronto is probably the largest concentration of auto manufacturing in North America and that industry is hurting bad. The city of Toronto's main industries are the NYC combination of banking/finance with entertainment/tourism - and both of those sectors ought to be hurting. Even bars and restaurants are doing okay right now and the hotels aren't empty - I can still see several 'tour-buses' parked outside a couple hotels nearby where I live, so that business is still moving at least. Toronto does get lots of bus-tours coming in for live musical shows (Broadway style shows) and this is an important part of the economy one would expect to suffer in a recession - again, Toronto is very dependent upon US tourism.

Even the company I work for (only 30 people) is doing okay - and over two-thirds of our sales comes from exporting to the US as well, so every thing just seems weirdly out of sync with what I read in the news all the time. :ummm:

(knocking wood) :D

So I'm curious, does anyone else see any physical evidence of a recession going on in where they live? I'm not talking about the bad news economy, but your own actual visual or personal evidence of economic decline? Abandoned/stopped building sites are probably the most obvious indicator of economic trouble, but I'm sure there ought to be others.

[The Drunk Guy]

Hate to copy and paste, but I answered this in another thread (where it went ignored:p)...

Two years ago, this shit would have scared the hell out of me. I was bouncing from job to job with no real goal in mind and I could very easily have ended up jobless without possibility for benefits. Now that I have a "career position," I find it all abstract. This has been the first month I've really struggled during the recession and that's only because we're moving and had the equivalent of three months rent to pay at once.

I also find it weird because I see jobs opening up all the time and people spending money just like normal. Traffic shows that people are still vacationing and vehicles are just as expensive as ever (if no moreso). The only think I have really noticed is that residential construction has taken a pretty big hit despite commercial construction carrying on as normal.

Perhaps it's just the calm before the storm. Maybe it just see it this way because I live in rural Kentucky. Is it all going to come crashing down in a year or two?

[Michael]

Yeah, well I actually typed this up and posted it to the "Random Thread" but then decided to delete that post and post it as a thread. :)

Glad to see I'm not the only one who is living in some weird twilight zone. :D

[The Drunk Guy]

Further deja vu...One odd thought struck me today coming home from work...

There is no recession or any evidence of a recession going on here in Toronto. Seems very weird.

From my window, I can count sixteen high rise buildings under construction (all inside the downtown core). There are another couple dozen building projects going on in the 'inner' suburbs as well. All are still in progress, some even doing evening overtime and weekend work. Even one or two new construction projects are just breaking ground.

And the May real estate numbers in Canada showed that the city of Toronto had an increase in sales of 2% for the month of May compared with May 2008. Toronto's average housing price and office leasing rates have stopped rising, but are not falling at all.

This seems bizarre - especially given that the 100km circle around Toronto is probably the largest concentration of auto manufacturing in North America and that industry is hurting bad. The city of Toronto's main industries are the NYC combination of banking/finance with entertainment/tourism - and both of those sectors ought to be hurting. Even bars and restaurants are doing okay right now and the hotels aren't empty - I can still see several 'tour-buses' parked outside a couple hotels nearby where I live, so that business is still moving at least. Toronto does get lots of bus-tours coming in for live musical shows (Broadway style shows) and this is an important part of the economy one would expect to suffer in a recession - again, Toronto is very dependent upon US tourism.

Even the company I work for (only 30 people) is doing okay - and over two-thirds of our sales comes from exporting to the US as well, so every thing just seems weirdly out of sync with what I read in the news all the time. :ummm:

(knocking wood) :D

So I'm curious, does anyone else see any physical evidence of a recession going on in where they live? I'm not talking about the bad news economy, but your own actual visual or personal evidence of economic decline? Abandoned/stopped building sites are probably the most obvious indicator of economic trouble, but I'm sure there ought to be others.Banking makes since: people are repositioning what they have left into "safer" gambles, like CDs. And I've noticed tourism seems unaffected, yet different. Perhaps the long distance visitors are being replaced with closer visitors. (That's been my take on seeing more local people in the national parks in this area all spring.)

[Dominick]

So I'm curious, does anyone else see any physical evidence of a recession going on in where they live?
Negative.
Housing market is calm but not in crisis. Traffic jams are as big as ever. Public and private projects are popping up at a steady rate.
I still think this is the normal economy. It doesn't really matter that the supercharged one blew up its engine.

[The Drunk Guy]

Negative.
Housing market is calm but not in crisis. Traffic jams are as big as ever. Public and private projects are popping up at a steady rate.
I still think this is the normal economy. It doesn't really matter that the supercharged one blew up its engine.
My fear is what happens when the inflation increase really hits home with the smaller wage increase. What happens in a year or two when credit is even scarcer in the Americas and Europe? What happens when groceries surpass rent/mortgage in cost with the next gas hike?

I say it seems normal for now, but it's teetering perilously close to an edge of disaster.

[partofme]

The only thing you might call physical is that businesses in general are slower than they used to be in general. Also there are a lot more for sale signs in front of houses. But no it isn't like you see places being boarded up or anything. Other than that I do know people have been laid off in my area and those looking for a job are having a much harder time finding them. While I was still looking recently I would find several things to put in my resume for at first back in September but before I finally landed something recently I was lucky to find one thing to put in for per week. The thing is it wouldn't have been so bad if I wasn't tied to the area. My wife has a great job here and we own a house so I was mainly looking within 50 miles. If I had been willing to move it would have been no problem to get something pretty quickly in Louisville, Nashville, or Saint Louis.

[Michael]

Negative.
Housing market is calm but not in crisis. Traffic jams are as big as ever. Public and private projects are popping up at a steady rate.
I still think this is the normal economy. It doesn't really matter that the supercharged one blew up its engine.

Yes, it does perhaps seem like that. And yes, commuter traffic jams are BIGGER than ever around here - especially the last couple of weeks. :shrug:

(I'm placed so that I 'counter-commute' against the flow of traffic to my work) :D

[drgoodtrips]

Nothing I observe on a day to day basis indicates "recession". I do have friends and loved ones around here that are feeling the effects in one way or another, but that's about it. Even houses are selling more quickly, it seems. When I bought in 2007, there were a lot of houses that had been on the market for a long, long time. These days, the for-sale signs go up and then they come down. Of course, it could be that fewer people are trying to sell their homes, but the flip-side is that the lack of for sale signs also means that places around here are not in foreclosure.

In my neighborhood, I cannot think of any unoccupied homes at all. The ones that have sold have gone relatively quickly.

[drgoodtrips]

Yes, it does perhaps seem like that. And yes, commuter traffic jams are BIGGER than ever around here - especially the last couple of weeks. :shrug:

(I'm placed so that I 'counter-commute' against the flow of traffic to my work) :D

I used to counter commute when I lived in the city of Chicago proper and my company moved out to the suburbs. Unfortunately, in Chicago, it makes no difference. During rush hour, the traffic forecast in all directions on all major streets going everywhere is "uggghh....."

Until I moved out to the suburbs, my round trip commute was about 3 hours (for a round trip drive I can make in 40-50 minutes in the wee hours with no one on the road).

[dilettante]

My neighborhood has seen a steady increase in the number of homes for sale since we moved here last fall. I don't think its that more people are selling so much as the fact that no one is buying and therefore once a home goes on the market it stays there.
We've also seen numerous small businesses and franchises on the main commercial strip near here shut down or relocate to a cheaper location over the last six months.

I'm not sure what the story is with the businesses, but I think the housing problem here is that everyone believes it's still last summer and they think they can sell their 1 story house for $950,000 (to cite one insane example a few blocks away). Only in the last couple weeks have I seen anyone actually lower the asking price.

My job and my wife's job are secure (go-go academia!) but my parents (who both work in real estate, one in Georgia the other in New Mexico) are going crazy trying to predict what will happen to house and lot prices over the next three months.

[andrewl]

One odd thought struck me today coming home from work...

There is no recession or any evidence of a recession going on here in Toronto. Seems very weird.

From my window, I can count sixteen high rise buildings under construction (all inside the downtown core). There are another couple dozen building projects going on in the 'inner' suburbs as well. All are still in progress, some even doing evening overtime and weekend work. Even one or two new construction projects are just breaking ground.

And the May real estate numbers in Canada showed that the city of Toronto had an increase in sales of 2% for the month of May compared with May 2008. Toronto's average housing price and office leasing rates have stopped rising, but are not falling at all.

This seems bizarre - especially given that the 100km circle around Toronto is probably the largest concentration of auto manufacturing in North America and that industry is hurting bad. The city of Toronto's main industries are the NYC combination of banking/finance with entertainment/tourism - and both of those sectors ought to be hurting. Even bars and restaurants are doing okay right now and the hotels aren't empty - I can still see several 'tour-buses' parked outside a couple hotels nearby where I live, so that business is still moving at least. Toronto does get lots of bus-tours coming in for live musical shows (Broadway style shows) and this is an important part of the economy one would expect to suffer in a recession - again, Toronto is very dependent upon US tourism.

Even the company I work for (only 30 people) is doing okay - and over two-thirds of our sales comes from exporting to the US as well, so every thing just seems weirdly out of sync with what I read in the news all the time. :ummm:

(knocking wood) :D

So I'm curious, does anyone else see any physical evidence of a recession going on in where they live? I'm not talking about the bad news economy, but your own actual visual or personal evidence of economic decline? Abandoned/stopped building sites are probably the most obvious indicator of economic trouble, but I'm sure there ought to be others.

No. The destruction of alberta continues apace.

Andrew

[Sucre]

This is a good question. Indeed what you may experience individually may not correlate with the general economic data.

As far as I am concerned, there is no doubt that we were hit up-front by the recession. It materialised in 150 delegates less to our annual very successful congress than what had been budgeted (And it was a very realistic down to earth budget not implying any growth) and at the end of the year a forecated loss on our general activity of 10% of the turnover and the first loss in our entire history. We had half the Americans of last year, only 2 Japanese companies ... Delegates only booked the basic participation and all social events were down on previous years (gala dinner, only 120 participants - when we had more than 500 !!!) On the membership side, we lost a couple of associated members which filed for bankrupcy and I know for a fact that our national associations members have lost agencies as well, 10% that's a lot. I mean it is a tough business but single agencies are fighting for their survival : let say that the recession has made a bad case worse.

Personally, I am doing fine. My salary is paid every month and I even have prospects of a raise.

[Americano]

The small town near me has rapidly picked up the pace of 'missing teeth' (empty store fronts), the official county unemployment rate dropped from 16.4% to 15.3% due to people exhausting their benefits, food stamp services have been overwhelmed, an advertised fast food job receives well in excess of 100 applicants, the county and state are enacting 30% spending reductions due to overall reduced tax revenue with property tax collections running at record default rates, the list goes on.

[Michael]

...an advertised fast food job receives well in excess of 100 applicants...
This is such an odd and recurring theme.

Post a job requiring some technical skill and/or relevant experience (and pays high wages & benefits) and you get ZERO applications.

Post a job paying minimum wage that requires zero skills or experience and you get flooded with applications.

North America suffers from an extreme shortage of skills. All the high paying jobs that are in demand scream for qualified applicants, but there just aren't any available (and usually have to be imported).

And we don't have enough of those minimum wage jobs to satisfy the millions of people who only qualify for that level of employment.

And this problem has been going on for decades.

[Dominick]

There is one thing though. Belgium plays a pivotal role in the shipping of cars with its two big ports, Seabruges and Antwerp, and its central geographical location. And many of those cars get stuck here nowadays. There are now tens, possibly hundreds of thousands of cars just sitting there on the quays of these ports.
I don't regard that as a crisis though. It's simply a matter of overproduction, thus unnecessary production. And I don't see any problem with not producing things nobody needs anyway.

[Americano]

This is such an odd and recurring theme.

Post a job requiring some technical skill and/or relevant experience (and pays high wages & benefits) and you get ZERO applications.

Post a job paying minimum wage that requires zero skills or experience and you get flooded with applications.

North America suffers from an extreme shortage of skills. All the high paying jobs that are in demand scream for qualified applicants, but there just aren't any available (and usually have to be imported).

And we don't have enough of those minimum wage jobs to satisfy the millions of people who only qualify for that level of employment.

And this problem has been going on for decades.

One thing there's no shortage of in the US is MBAs. We have an enormous surplus of would-be business leaders and nothing for them to lead other than burger flippers due to our deficiency in technical education.

[Americano]

There is one thing though. Belgium plays a pivotal role in the shipping of cars with its two big ports, Seabruges and Antwerp, and its central geographical location. And many of those cars get stuck here nowadays. There are now tens, possibly hundreds of thousands of cars just sitting there on the quays of these ports.
I don't regard that as a crisis though. It's simply a matter of overproduction, thus unnecessary production. And I don't see any problem with not producing things nobody needs anyway.

You should see the shuffle game going on in the US with disenfranchised Chrysler and GM dealers trying to unload inventory in a down market. Chrysler is closing 789 dealerships and GM 1,350.

[Michael]

Chrysler is closing 789 dealerships and GM 1,350.

This is the REAL change that is needed in the North American auto industry.

The franchise-dealer networks in the US are not good for the auto business and its good to see their monopoly being broken.

Ford has had fairly good success adapting to the "Ford Store" business model (in Europe) that is the way for auto companies mostly sell their products outside the US and Canada. The Japanese & German auto companies in Canada sell mostly through direct company showrooms not dealer franchises. Ford has been using the "visit your Ford Store" tag line in Canadian advertising for a couple years now.

The dealer franchise network has been as big an albatross around GM's neck as all the retiree healthcare and pension liability/legacy issues have been. Breaking the franchise-dealer network and converting over to company run showrooms is critical for GM's survival.

Heck, even "auto-marts" are growing as a way for a bunch of different car brands to be sold at the same location (which is how most other products are retailed). This is the future of auto retailing and GM/Chrysler need to get with the program here. Toyota, Hyundai, VW and Honda have long been leading the way - North American automakers have been stuck in the 1950s status quo with a third-party standing between them and the customer.

[Americano]

This is the REAL change that is needed in the North American auto industry.

The franchise-dealer networks in the US are not good for the auto business and its good to see their monopoly being broken.

Ford has had fairly good success adapting to the "Ford Store" business model (in Europe) that is the way for auto companies mostly sell their products outside the US and Canada. The Japanese & German auto companies in Canada sell mostly through direct company showrooms not dealer franchises. Ford has been using the "visit your Ford Store" tag line in Canadian advertising for a couple years now.

The dealer franchise network has been as big an albatross around GM's neck as all the retiree healthcare and pension liability/legacy issues have been. Breaking the franchise-dealer network and converting over to company run showrooms is critical for GM's survival.

Heck, even "auto-marts" are growing as a way for a bunch of different car brands to be sold at the same location (which is how most other products are retailed). This is the future of auto retailing and GM/Chrysler need to get with the program here. Toyota, Hyundai, VW and Honda have long been leading the way - North American automakers have been stuck in the 1950s status quo with a third-party standing between them and the customer.

North American automakers have been stuck in the '50s with a lot of their thinking. Unfortunately, a large percentage of the population followed what they stated as the gospel truth, including bus-sized vehicles being required for personal transportation. Until that general public learns cheap gasoline is not a birthright, some destructive post-ww2 government policy decisions such as urban sprawl are coming home to roost and for the working class cars are utilitarian mechanical devices, GM won't change. It should have been liquidated after its stupendous failure.

[Michael]

North American automakers have been stuck in the '50s with a lot of their thinking. Unfortunately, a large percentage of the population followed what they stated as the gospel truth, including bus-sized vehicles being required for personal transportation. Until that general public learns cheap gasoline is not a birthright, some destructive post-ww2 government policy decisions such as urban sprawl are coming home to roost and for the working class cars are utilitarian mechanical devices, GM won't change. It should have been liquidated after its stupendous failure.

Yes, but bankruptcy offers a chance to break the dealer-franchise network and to clean-house of all the 'old boys' who drove it into the ground. If they can do that, then its possible they may recover. The Chevy Volt is a pretty damn good product (for example). GM/Chryler have some pretty damn good physical plant-resources lying around. Smart management can make it work.

But most of all, the problems at GM/Chrysler and to a lesser extent Ford, is the mentality-culture of executive management has been so bad for so long and this is the hardest to fix. Even clearing the top level guys won't do it because the whole second and third tier of executive management was trained and promoted under the old managers so they are followers of the same culture.

[Americano]

Yes, but bankruptcy offers a chance to break the dealer-franchise network and to clean-house of all the 'old boys' who drove it into the ground. If they can do that, then its possible they may recover. The Chevy Volt is a pretty damn good product (for example). GM/Chryler have some pretty damn good physical plant-resources lying around. Smart management can make it work.

But most of all, the problems at GM/Chrysler and to a lesser extent Ford, is the mentality-culture of executive management has been so bad for so long and this is the hardest to fix. Even clearing the top level guys won't do it because the whole second and third tier of executive management was trained and promoted under the old managers so they are followers of the same culture.

Agreed, and that mentality is all the way down to the production floor with the union still calling the shots. With liquidation blood in the halls could have been achieved to scour that mentality from the corporate culture. The 'solution' looks like yet another Amtrak or postal service.