In the money: With Americans struggling to keep up with their mortgage and car payments, not everyone is feeling glum. There has been a rush of stories in the last couple of days about those who serve the underbelly of the economy—pawn shops, repo men and liquidators. Such scavenger industries typically clean up when people run into hard times, and this slowdown is no exception. A lot of people get upset at the prospect of these businesses capitalizing on the suffering of others, but the fact is they play a role not unlike vultures in the wild. They just do it with more neon.
Trading down: The late-90s discount brokerage craze that saw every butcher, baker and candlestick maker open a trading account to play the stock market has been presumed dead for a while now. It was last seen shackled to Nortel’s plunging share price after the dot-com crash. Seven years later the shakeout continues. E*Trade Canada has been sold off to Scotiabank in a bid by its U.S. parent to stave off financial ruin. Meanwhile, the few customers tiny eNorthern had (I’m one of them) just got a letter stating it will cease operations next month. R.I.P.
Number cruncher: Last month, Canadian home resale prices fell for the first time since 1999. The Canadian Real Estate Association says the average national resale price fell .4 per cent to $341,096. On its own, the drop is not much of a concern. As the CREA points out the decline follows zany double digit growth in Calgary and Edmonton last year. But as with everything these days, the complete and utter collapse of America’s real estate hangs over Canada’s housing market like a ugly, black cloud.
Boom or Gloom: President George W. Bush has been sounding increasingly gloomy about America’s economic prospects. In January he said the economy was “fundamentally strong.” By March, with the mortgage crisis in full swing, he saw a “resilient economy.” Now, with banks failing, Bush says the banking system is “basically sound.” Not exactly a ringing endorsement.
Ticker tape: John Aiken at Dundee Securities says CIBC’s exposure to the U.S. subprime mortgage and bond insurance markets may force it to be merged with another bank… Now no one needs to know what you do when you’re alone with YouTube… GM realizes only GM can save GM…