“Debt is endemic. They use lines of credit to make mortgage payments. They routinely increase the size of their home loans to renovate. Four in ten people now say they have trouble paying their monthly bills. And yet 70% own a house. Prices have been bloated by cheap money, not greater income.” GT
As if the fast degenerating geo-political situation isn’t bad enough, here’s another lorry load of concerns to add to the pile.
[np_storybar title=”Historians will ‘tar and feather’ Europe’s central bankers, says Nobel laureate” link=”http://business.financialpost.com/2014/08/21/historians-will-tar-and-feather-europes-central-bankers-says-nobel-laureate/”]
Prize-winning economists say policy blunders have pushed Europe into a depression that will put Japan’s Lost Decade in the shade
The UK and U.S. economies may be on the mend at last, but that’s not the pattern elsewhere. On a global level, growth is being steadily drowned under a rising tide of debt, threatening renewed financial crisis, a continued squeeze to living standards, and eventual mass default.
I exaggerate only a little in depicting this apocalyptic view of the future as the conclusion of the latest “Geneva Report”, an annual assessment informed by a top drawer conference of leading decision makers and economic thinkers of the big challenges facing the global economy.
The only way…
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Below is a response I wrote about achieving work/life balance during an Organizational Behaviour discussion I have been participating recently – felt it might be a good fit here too!
The first thing that comes to mind when considering work/life balance is the image of a teeter-totter, the idea of balancing work & life seems to be like trying to perfectly balance the two sides of a scale.
First of all let’s look at working days vs. non-working days for the average Canadian. In one year, most Canadians work 236 days (including all public holidays, weekends and allowance for 14 days’ vacation) – this leaves a balance of 129 non-working days. Already there is an imbalance in most Canadians own lives and their working lives. In order to achieve a “balance” there is already a need for the perception and value of our personal lives to somehow outweigh/offset the perception of our working life.
It is possible to work harder and longer if you are able to balance out the other side of the teeter-totter with a higher quality and standard of living! Unfortunately for more and more Canadians this simply is not possible. Families are being forced to live in smaller and smaller houses, condos and apartments due to affordability – costs of living and individual purchasing powers are increasingly unable to effectively contribute to improved standards or livings.
One of the biggest issues I see in trying to balance work/life is people’s perception and definition of “work” itself.Where one person might quantify work in the amount of hours they work another might quantify the definition of work based on what they actually do/produce.
Individuals that define their work as “hours” invested outside of their non-working lives often seem to forget to consider the “extra” hours involved directly with travelling to and from work. These unpaid hours are increasingly becoming more and more of a burden on people’s ability to balance work/life as commute times increase and affordability issues force people to live further and further away from work.
When workers end up commuting to standard legacy era 9-5 Monday to Friday jobs they are essentially investing up to 45 mins to 60 mins each way away from their personal lives – commuting is rarely a low stress activity and Canadians living in major urban centers seem to be forced to expose themselves to stressful/time consuming activities even before they have started their normal work day. Add on getting home, managing family and personal lives at the end of these days and it’s no wonder that more and more Canadians are showing higher levels of work-stress and inabilities to effectively manage the life side of the balance equation.
Workers that view their work based on what they do are also often feeling more and more challenged to find a work/life balance. Many Canadian workplaces are fast paced and in reality impersonal environments (as the concept of “emotional labour” would suggest). Compounding the feeling of being unable to balance work and life would be a workers possible feelings of not being truly valued or recognized within their organizations – though it is true that beers on a Friday in the office or work get-always might raise morale within the organization, these novelties often wear-off quickly for those that can easily see beyond the tactics of trying to “appease” employees. At the end of the day, everyone wants greater success, continued career growth and higher rewards (financial and personal) over a career of free beers in the office on Friday and similar notions.
I am completely convinced that many are able to find great work/life balances through being able to enhance their own lives or attain higher standards of living and not so much through being able to manipulate their work environment/perception!
It has been quite some time since I have posted anything original here – taking the time out of my own leisurely luxury to sit – think – and write is a hard sell especially in the middle of summer.
There have been three key releases in the past couple of months though that have caught my attention and re-kindled my interest in the hundreds of thousands of financially illiterate Canadians my age (25 to 35) that have been committing financial suicide since 2008. Allow me to bring you up to speed.
#1 June 2014 – Statistics Canada released that the level of household credit market debt to disposable income edged down to 163.2% in the first quarter, compared with 163.9% in the fourth quarter of 2013.
What does this mean – well simply stated this means that Canadians STILL owe $1.63 in non-mortgage CONSUMER DEBT (Credit cards, car loans etc.) for every $1.00 they net in disposable income. It really should not need further explanation – The OECD offers very detailed indexes that compare our current debt to income ratio with the rest of the world.
#2 July 2014 – Canada’s economy created a net 200 jobs in July, far fewer than analysts had expected, in a further sign of how employment growth has stalled, Statistics Canada data indicated. Analysts had forecast a gain of 20,000 jobs after the loss of 9,400 positions in June.The unemployment rate dipped to 7.0% from 7.1% as fewer people looked for work. The most important metric to focus on here however is the labour market participation rate which dropped dramatically again to 65.9%.
Read what some of Canada’s top economists had to say about these job numbers below as sourced from the Financial Post.
CAMILLA SUTTON, CHIEF CURRENCY STRATEGIST AT SCOTIABANK:
“There was a shocking drop in full-time jobs, down almost 60,000. We did see a drop in the unemployment rate, however, that drop only came on the back of the participation rate, so it’s not encouraging at all.
“Overall, it goes in line with what we’ve seen seasonally in the July report, which is that it tends to miss expectations over and over again.
“All in all, it highlights a very disappointing pace of job gains in Canada.”
NICK EXARHOS, ECONOMIST AT CIBC ECONOMICS:
“Even if growth looks to be accelerating, the labour market is still stuck in neutral.
“What you see is what you get in Canadian labour market—a whole lot of nothing. Though the economy looks to be in good health, and there are signs that the Bank of Canada’s desired rotation to exports and business investment may be in the early stages of being realized, none of that strength is being translated into jobs. Absent progress there, don’t expected the Bank to be too keen on shifting from its neutral policy stance.”
ROBERT KAVCIC, SENIOR ECONOMIST AND VICE-PRESIDENT AT BMO:
“The jobless rate was down a tick but we are now seeing the lowest participation rate in 13 years, so that’s another indication that things are a little bit worse below the surface.
“I think this keeps the Bank of Canada on the sidelines for now, even though growth is looking quite a bit stronger in the second-quarter. There is really no job growth anywhere outside of Alberta right now. I don’t think this has any impact on changing the bank’s tone or its outlook for policy, if anything it probably keeps them right where they are.”
ARLENE KISH, SENIOR ECONOMIST AT IHS GLOBAL INSIGHT:
“Did Canada’s job market take off on vacation in July? We hope so. Otherwise, this could be a signal that Canada’s economy is not doing as well as expected. The change in fulltime positions and part-time positions is a hard pill to swallow. In fact, on a year-to-date basis, full-time employment is up only 0.4% y/y while part-time jobs are up 2.2% y/y. This is not an indication of a thriving economy.
“Job creation is not as strong as we had expected. Employment growth this year will probably give the worst performance since the recession, coming in below 1%. With stronger growing Canada and US economies expected next year, job growth should improve.”
PAUL FERLEY, ASSISTANT CHIEF ECONOMIST AT ROYAL BANK OF CANADA:
“Disappointing report, not only showing no gain in July, (but) follows weakness in June. We have a return to volatility in terms of the series so far this year.
“Certainly (the Bank of Canada) raised concerns about the weakness in labor markets and today’s report kind of reinforced those concerns, tempered a bit by the unemployment rate moving down, but a fair bit of weight is put on employment growth. It leaves them in a position where they remain on the sidelines holding rates where they are and continuing to monitor the data.”
PAUL ASHWORTH, CHIEF NORTH AMERICA ECONOMIST AT CAPITAL ECONOMICS:
“At first glance, the drop back in the unemployment rate to 7.0% last month, from 7.1%, looks encouraging. But closer inspection shows that decline was only because a further 35,400 discouraged job seekers gave up and left the labour force. As a result, the participation rate slumped from 66.1% in June to a 13-year low of 65.9% in July.
“We can’t help thinking that if the Bank of Canada had a dual inflation/employment mandate like the Fed, then it would now be seriously considering whether a cut in interest rates is needed.”
KRISHEN RANGASAMY, SENIOR ECONOMIST AT NATIONAL BANK FINANCIAL:
“The July report, while disappointing on the surface, was better in the details. The private sector created jobs, and paid employment recouped most of the prior month’s losses. The drop in full time employment is disappointing, although we’ll take that with a grain of salt given the apparent increase in hours worked in the same survey.
“Given how choppy the series has been this year, it’s best to look at the longer-term trend for a more reliable picture of the Canadian labour market. On a 12-month moving average basis, Canada is creating on average roughly 10K/month, mostly in the private sector, although all on a part-time basis.”
CHARLES ST-ARNAUD, ECONOMIST AT NOMURA GLOBAL ECONOMICS:
“Overall, the report is negative. It shows that job creation has stalled. Moreover, the continued decline in the participation rate over the past year suggests that the unemployed are losing confidence in the labour market. The stalled labour market suggests that consumer spending could weaken in coming quarters.”
RANDALL BARTLETT, SENIOR ECONOMIST AT TD ECONOMICS:
“No matter how you slice it, the labour market remained in the doldrums in July.
“All in all, today’s employment release was very discouraging, as the economy continued to shed full-time jobs and unemployed Canadians in the thousands decided to stop looking for work. Even in the sector that saw the largest gain, educational services, this looks to be partly related to seasonal-adjustment factors as opposed to actual jobs being created.
“This follows a string of lackluster employment reports for Canada, sending a clear signal that the labour market is stalling, in spite of the Canadian economy expanding in each of the first five months of 2014. Meanwhile, job gains south of the border continue to roar ahead.
“That said, we do expect employment to pick up over the second half of the year, based on an improving export sector. However, job gains will likely remain modest as the export sector tends to be more capital intensive than other sectors of the economy.”
ERIN WEIR, ECONOMIST AT UNITED STEELWORKERS:
“To misquote Gordon Lightfoot, Canada’s job market took a black eye in July.
“Statistics Canada reported today a loss of 60,000 full-time jobs in July, which more than wiped out all previous gains in full-time employment over the past year. Fewer Canadians have full-time work today than in July 2013. July’s withdrawal from the job market pulled the participation rate down to 65.9% – the first time since 2001 it has fallen below 66%.
“These dismal employment numbers should refocus public policy on creating jobs. Investment in needed public services and infrastructure should take precedence over austerity.”
#3 August 2014 – Canada’s housing starts beat economist predictions for a fourth straight month in July, led by the most single-family home projects in almost two years.
The pace of work on new homes rose 0.7 percent to a seasonally adjusted annual pace of 200,098 units, the fastest since October, from a revised 198,665 in June, Ottawa-based Canada Mortgage & Housing Corp. reported today. Economists forecast a decline to 193,000, according to the median of 18 responses in a Bloomberg News survey.
Most economists and the central bank have predicted that rising prices and near-record debt loads would curb demand for housing. Instead, home resales, prices and starts have climbed after a tough winter, as mortgage rates remain near record lows.
WHAT DOES THIS ALL REALLY MEAN? Well in one line it means this – Canadians are grossly over indebted, many are working poor quality jobs with poor wages, no pensions and no real job security AND still they are buying houses in a market that by every single indication is massively over valued and by definition is in fact an asset bubble.
The risk that is being absorbed by Canadians is immense – the exposure to fraudulent and poorly managed mortgage lending practices has been the primary driver of Canada’s “triumphant” march through one of the worst financial melt-downs the Western World has been in years – which by the way was caused in large part by over-indebtedness and sub-prime lending practices.
The Joneses just purchased another $350,000 condo, boat & BMW on their combined $80,000 a year salaries – are you as stupid as they are?
“Canadian employers created barely any jobs in July, surprising forecasters and reinforcing the Bank of Canada’s decision to keep interest rates low.
Statistics Canada’s monthly tally of hiring and firing produced a net gain of 200 positions last month, as a 60,000 increase in part-time jobs marginally outweighed a 59,700 plunge in full-time positions. …
“There is little job growth in Canada and the degree of slack in the labour market remains elevated,” David Watt, chief economist at HSBC’s Canadian unit, advised clients in a note.
Canada’s moment as a standout among the world’s richer economies is over. The country weathered the financial crisis relatively well and gross domestic product and employment rebounded to pre-recession levels faster than most of its peers. Economic growth now is coming much harder. For the better part of the year, Canada has tended to follow monthly gains in hiring with offsetting declines in the…
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What We Don’t Know About Canada’s Housing Market Could Sink Us – http://huff.to/1AXNy6u
Why We Need to Stop Measuring Success in Six Figures – http://huff.to/1pAZTrg
This Is Your Life In Weeks – http://huff.to/1Aq3qyi