Ian Royle

This is a very good thing.  It is euphoric Canadian consumer confidence that created this mess we now find ourselves in.  In truth, a recession is a good thing.  recessions aren’t evil things that creep up unannounced on unsuspecting hardworking populations.  Recessions are the result of runaway ambitious greed.  Recessions are the result of peoples expectations going beyond what they are willing to work for.  Economies run at optimal rates.  When stock prices soar outside of normal expectations, when real estate prices leave the common man behind and lenders have no expectations for jobs to cover the payments or any down payment to ensure buyers have a personal interest in the asset, things are gone astray.  This exuberant expulsion of money from the loan accounts of people demanding more and more goods created huge demands on infrastructure, manufacturing, raw materials and retail.  It created huge demands for workers that don’t even exist, the workers that do are run ragged trying to keep up with the work and inflation.  Salaries rise but just as soon so to do costs, it becomes a sprint, rising costs, rising wages racing one another and all for borrowed money and then as soon as one payment is missed more and more are missed and the default trickle quickly becomes a torrent.  All the pretty things people buy are gone, all the mad money is used up and everything falls below the norm as the market sorts out who over-extended themselves and who was more caution in their optimism.  I say more cautious because I have met very few who weren’t caught up in the euphoria.  There were angry contrarians but I say angry, because they were only pissed they got left behind and the contrarian stance in any bubble, rally, bull market if they cry out “THE SKY IS FALLING” long enough will see it come to pass.  And now I will be contrarian to all the cynics and bears in the market.  This too will pass.  Markets will rise and confidence in the future will be restored and the further confidence falls the better for it is in the tightening of fiscal restraints of each and every one of us that the seeds of economic rebirth to the more sane and stalwart growth trends are built.  One other thing that makes me happy.  This happened in eighty-seven, and eighty-two and ninty-nine, it is amazing how fast these cycles happen, next big bubble should be coming around the corner about 2013.   Be ready to sell into it like a madman running against the tides of joe sixpack buying it all up.  But to prepare, start your buying now, while ever joe six pack is running for the exit.