Editor: Eric Atkins, eatkins@globeandmail.com
CHART OF THE DAY
Carrying the load
Consumers will take back seat in recovery
The free-spending U.S. consumer can always be counted on to keep the economy humming, right? Not any more. After a plunge in home prices, massive layoffs and a stock market crash, consumers are in no mood to spend. They are socking their money away at a rate not seen in 14 years. Enter Washington. Today's chart shows government spending will far outweigh consumer spending in jolting the U.S. economy back to life. "That's highly unusual," says Avery Shenfeld, an economist at CIBC World Markets. More than half of the $787-billion (U.S.) stimulus package will be spent next year. Mr. Shenfeld says Washington's efforts can't offset the decline in consumer spending, but should prevent a dreaded double-dip recession.
Eric Atkins
IT'S A BIG DAY FOR ...
... NOSTALGIA
A year after the collapse of Lehman brothers and the shotgun marriage of Merrill Lynch and Bank of America, much ink and air time will be spent rehashing the great crash of '08. It's a time to look back at the causes and examine the lessons learned from the risky moves that led to the greatest financial crisis in decades. For those of you who don't have the time - or the stomach - to examine the entrails of an economic wreck, here are the highlights:
Your portfolio of TSX-listed stocks is worth about 12 per cent less.
The unemployment rate is 8.7 per cent, the highest since 1998.
There are 387,000 fewer jobs than a year ago.
THE TWO RITCHIES
In the market for a Picasso but you somehow bought a Bullmoose mobile yard construction crane? Next time check the fine print. Since late July, when Toronto fine art auction house Ritchies closed its doors amid financial distress, the similarly named but entirely unrelated Vancouver-based industrial auctioneer Ritchies Bros. has had to work double-time to reassure confused consigners of its own good health. As Ritchies Bros. prepares for a large sale tomorrow of more than 1,700 items (we've got our eye on a totally cool Mack concrete mixer truck as well as a John Deere hydraulic excavator), and Ritchies promises to reopen for a sale of Canadian and European art next week, we help you sort out the key differences:
Ritchies
Website: Ritchies.com
Upcoming: Select sale, Sept. 22, 23
Usual offerings: Warhol, Group of Seven,
decorative arts
Previous prices: Lawren Harris panel, $175,000
Atmosphere: Downtown sale room
with genteel charm
Ritchies Bros.
Website: rbauction.com
Upcoming: One-day bonanza, Sept. 15
Usual offerings: Asphalt pavers,
hydraulic cranes
Previous Prices: Paron 7570 lowboy trailer
(unused), $127,500
Atmosphere: Muddy parking lot.
Simon Houpt
THE UPSIDE: WHY THE RECESSION IS GOOD FOR YOU
Could it be that the recession has actually been good for your health?
Aprocryphal accounts of Big Mac sales rising during the slump notwithstanding, researchers at the University of Washington have found that mortality rates decline as unemployment figures rise.
As Dr. Stephen Bezruchka writes in the latest edition of the Canadian Medical Association Journal, "Economic recessions have paradoxical effects on the mortality trends of populations in rich countries."
The reason? In countries like Canada, which has a strong social safety net, loss of income rarely prevents citizens from accessing essential needs: food, clean water and shelter. In fact, Dr. Bezruchka suggests jobless Canadians have a unique opportunity to spend quality time with family and friends while avoiding workplace stress. This certainly lends credence to the newly coined phrase funemployed.
David Fielding
Monday, Sept. 14
The economy:
Statistics Canada reports second-quarter capacity utilization rates. Economists expect an improvement from the prior quarter.
Trade:
Chief negotiators from the World Trade Organization resume Doha round trade talks in Geneva.
Tuesday, Sept. 15
The economy:
Canadian labour productivity for the second quarter.
U.S. retail sales for August.
U.S. business inventories data for July.
U.S. producer price index data for August.
U.K. inflation rate.
Companies reporting:
Adobe Systems Inc., Best Buy Co. Inc., Kroger Co.
Wednesday, Sept. 16
The economy:
Canadian manufacturing survey for July.
U.S. consumer price index for August.
U.S. National Association of Home Builders' housing market index for September.
Thursday, Sept. 17
The economy:
Canadian consumer price index for August.
Statscan publishes leading-indicator data for August.
U.S. initial jobless claims for the week ended Sept. 12.
U.S. housing starts and building permits data for August.
Companies reporting:
Fedex Corp., Palm Inc.
Friday, Sept 18
Canadian wholesale trade for July.
See At the Bell, Page 9
Eric Atkins
Simon Houpt