Canada Ranks Above US in Economic Freedom

The Heritage Foundation just put out its annual report, and Canada scores 7th best in the world. In Heritage Foundations’ latest index of economic freedom, the top 10 countries with the most economic freedom are:

1. Hong Kong
2. Singapore
3. Australia
4. New Zealand
5. Ireland
6. Switzerland
7. Canada
8. United States
9. Denmark
10. Chile

Do you see anything remarkable on this list? Chile, still a 3rd world country, has managed to climb on the top ten list through dynamic economic growth because of free global trade agreements, strong public sector growth, and diversified financial sector.

One thing I did not like on Wikipedia’s Canada page is this line:“Canada is a mixed market, ranking lower than the U.S. on the Heritage Foundation’s index of economic freedom but higher than most western European nations.” Now that Canada beats USA in economic freedom, This line would not make me unhappy anymore and hopefully Wikipedia will update this shortly.

More Canada Articles:

Canada/Toronto Archive

Canada 2010 Federal Budget Highlights

New Mortgage Rules Come To Canada

Canada Exceeds Economic Expectations

Lessons From The Global Financial Crisis

The world has once again found itself in a terrible financial meltdown that has gone to affect the whole world and the consequences are only now trying to reach the ends of the planet, with each nation getting to a feel its share of the pain. This has been a long way in coming since the last such crisis which was somewhere just at the end of the Second World War. Even though there a signs of a recovery from a distance, we are yet to get out of the woods and one would say that the developing countries in particular are going to be hardest hit for reasons that they get affected by things that happen in the first world, even when they are mere spectators most of the time.

A good many people have this feeling that the current crisis was directly caused by the poor macroeconomic policies of the United States which must have led to the decline of local saving rates because of an extremely lenient money policy. This it is noted resulted in a housing boom in the US and most of the developed world and because of poor lending standards, the downfall was not too much for anyone to predict and so obviously in a little while the credit crunch was upon the Americans. It did not take long before the ramifications got to be felt in the rest of the world for the simple reason that the world is now so interconnected financially and otherwise.

It may appear that we have reached a point in time when supervision and proper regulation needs to be considered extremely carefully if we are to get out of the current crisis, leave alone avoiding a similar one any time in the future. In many countries we saw the rise of a shadow financial system for long time, which included mutual funds in the money market, private equity and hedge funds. The challenge was the use of this short term measures to fun long term investments which may not have been the wisest thing to do in a generation that is so informed like ours.

Banks will also need to get back to their standard and regulated practices, because the trend they got into of trying to compete with the smaller financial institutions which have no regulations whatsoever was a great contributor to the plague of unplanned lending worldwide. This automatically led to the over leveraging of the world’s financial system in the US in particular but also the rest of the world in varying degrees. In a little while confidence went under and it brought an abrupt stop to funding which led to the systematic collapse of structures as we know them.

We are going to need to work out fresh new forms of financial management which are going to encompass not only local financial challenges but those that will have to look at the big picture of the global financial market. The new forms of financial engineering will need to be those that are going to look at credit risk in a completely new way which is a basic requirement in any healthy financial market.

Some hand-picked related and non-related posts:

Why Buy International Real Estate Abroad

Do You Really Need That Extra Credit Card?

The Sky Is the limit for India China Trade Relations

Entrepreneurs Just Need An Idea To Become Successful

India and China Oppose Global Warming Initiatives from the West

IMF Says Recovery Looking Good

The latest news on the global economy from a widely trusted source is good news, but comes with at least one caveat. On Thursday October 1^st, the International Monetary Fund unveiled a report which states that the economy is recovering faster than expected. That’s the good news. And the bad? Well, although the rate of recovery is impressive, it is not so impressive that governments should kid themselves that they can now start dismantling the schemes that got it to that point. The economy has been boosted, but largely as a result of the timely intervention of governments, and to withdraw that help now could be damaging.

Maybe it is the once-bitten twice-shy feeling that pervades much in the world today, but the possibility of calling the recession over and returning to the old rules seems too much like a gamble right now. Yes, indicators are popping off all over the world showing that countries have left their recessions behind – but each of the countries to have such positive results has in common the fact that they voted through stimulus spending at a crucial point.

The downturn has eased, the fears that we would go back to a pre-World War II style of economic austerity has receded. But then again, you would be well advised not to go shouting that in the average town center hostelry just at the moment, with unemployment still on the rise in many areas. You might also find that economic recovery does not immediately translate to easy credit availability. That is one hot potato that banks are reluctant to touch even with the longest tongs in the world.

The IMF’s report may point to a likely eventual contraction of global GDP that tops out at 1.1% for 2009, against July’s prediction of 1.4% as well as a forecast for 3.1% growth in 2010 against an earlier prediction of 2.5% – but this need not be considered to be a green light for financial fun in the New Year. The IMF has produced a report which is the equivalent of your parents telling you that you’ve done really well on your mid-term exams, but it is a little too early for you to ask to borrow the car. The recovery is, as of now, somewhat tentative and supported heavily by stimulus spending and emerging economies in Asia.

If all of that sounds like bad news dressed up as good, it is not meant to. The bullet which has just been dodged was very real and poised to do an incredible amount of damage. Without government intervention in several areas there would have been even greater strictures than those which have been suffered. What needs to be accepted and absorbed is that although the bullet has been dodged, there may yet be shrapnel to deal with. Hasty cuts at this point would be unwise, and would leave countries in recovery at risk of another recession, so 2010 will be about taking the first steps towards financial comfort.

Some hand-picked related and non-related posts:

Canadian Consumer Confidence Up Again

Should You Take Out A Second Mortgage?

Do RRSPs offer Creditor Protection In Case Of Bankruptcy?

Personal Finance Software Review by Financial Author A. Dawn

Happy Birthday, Global Financial Crisis

There has been so much said over the past couple of years about the dangers of recession, and much still to be said, but one event seen by many as the moment that the global financial crisis became a fact was the collapse of the American investment bank Lehman Brothers. It was one year ago this week that the bank went bust, and the realities of the crisis became clear to everyone at that point. If the Global Financial Crisis has a birthday, that date is the 16^th of Septem ber. One year on, where are we in terms of the global financial situation?

The collapse of Lehman Brothers marked the point where governments around the world decided that intervention was the way to go. From that point on, many banks have been effectively nationalised – an act which in itself was massively controversial, seeing diverse reactions in different countries. In America, for example, Barack Obama’s determination to bolster the banking sector and revive the world’s largest economy led to accusations of totalitarianism, communism and Nazism. It may sound amusing, but this reaction was, seemingly, entirely serious. In other nations, a sense of skepticism over bank bailouts also persisted, but the bailouts are ratified now and the recovery is in place.

Would the world’s economy have bounced back in such a way and so soon without the government interventions that took place in most of the larger economies? It seems unlikely. Certainly, the banks which have received bailout cash have posted mixed results, with Goldman Sachs posting record numbers very shortly after receiving their lifeline, while others have suffered record losses. But many independent sources feel that the recession is in its last blasts and that this is due in no small part to government intervention. No government has given any indication that further bailout cash will be released, however, so it is now very much a matter of waiting for the situation to stabilise.

While we wait for that, it is believed that the recession has yet to do the last of its work in the sphere of employment. A recent report from the OECD claims that as many as 15million people worldwide have lost their jobs as a result of the financial crisis, and that there could yet be another 10million people made unemployed. Although economic results are improving, the effects of the recession will still be felt for a while to come.

While it would be fair to say that the financial sector has always had its critics, the overwhelming thread running through public reaction to the situation has been one of severe distrust of banks and bankers, and of injustice at the bailouts given to banks while many other industries have been left to fend for themselves. There is still a reluctance on the part of the banks to lend to customers – much to the chagrin of the governments which released the cash to save them – and it might be a while before the stability being claimed for the global economy is seen in the bank accounts and employment prospects of the “man on the street”. This story has some time to run as it blows out the solitary candle on its birthday cake.

Some hand-picked related and non-related posts:

Is The Kyoto Protocol Dead?

Bank of China Tower, Hong Kong

Will Canadians Get A Raise In 2010?

Entrepreneurs And Opportunism vs Cynicism

Arctic Vacation – Do Something Different

In Copenhagen And Closer To Home, Carbon Is The Priority

Canada’s Global Competitiveness Ranking Improves

The World Economic Forum released their Global Competitiveness Report 2009-2010 today. Canada moved up to ninth place from last year’s  10th and 2007’s 13th for overall competitiveness.

The banking sector is one of the many factors Geneva-based organization World Economic Forum looks at to rate countries in terms of overall global competitiveness. The U.S. has ranked second, behind Switzerland, in a poll of over 13,000 business leaders. Singapore is third and Sweden comes fourth.

Here are the top ten countries on the Global Competitiveness Report:

1.   Switzerland
2.   US
3.   Singapore
4.   Sweden
5.   Denmark
6.   Finland
7.   Germany
8.   Japan
9.   Canada
10. Netherlands

Source: World Economic Forum. Visit World Economic Forum website for more information.

More Canada:

Canada Ranks High

Canada Gets A+ Again

Canada – The First Nation To Step Out Of The Recession

Canada Is Back In The Top 10 Of The Least Corrupt Countries

Much of the ire raised among the financial crisis has been the result of banks which have taken large amounts of government bailout money moving to pay out much of it in bonuses. This puts some banks in a tricky position. In many cases these bonuses are a contracted issue and withholding them would put the banks in breach of their contracts to employees. However the bank is performing on the balance sheet (and those requiring bailouts have clearly not been touching the sky), if the individual executives have been delivering the numbers stipulated in their contracts then the bonuses are owed to them by right. As much as the rest of us may be moved to shake our fists at the injustice of it all, ignoring contract terms would put companies on shaky legal ground.

The moves proposed by Europe’s Big Three, then, will deal more with what can be offered in the future – and it seems that they have little thirst for a return to the practices which many blame for the crisis itself. In the words of the letter the lifting of financial tensions has resulted in many of the world’s financial institutions assuming that a return to old practices could be acceptable. It is many people’s view that “bonus culture” encouraged high-risk practices which are blamed for much of the difficulty in which the global economy still finds itself.

Although the three leaders collaborated on the letter, it is known that they are not in total agreement between themselves. While Nicolas Sarkozy views it as essential that bonuses should be capped at a certain level, his opinion is not quite backed by the Brown administration which feels that the plan is unworkable and favours the option of clawing back some of the bonuses after a period of time if long-term results are seen to have suffered. Consensus may be hard to reach in time for Pittsburgh, but publicly leaders are saying that it must be reached then in order for a firm line to be drawn on the subject. With the recovery of stimulus payments also set to be discussed in Pittsburgh, it could well be that there are disagreements aplenty around the table when the finance ministers sit down to talk.

Some hand-picked related and non-related posts:

US Recession Finally Easing?

How To Pick The Right Moment

Make Free PC To Phone International Calls

Why You Should Not Bury Yourself In Work

Entrepreneurs Don’t Need To Do It Alone

Although most of the major economies in the world have been through no small amount of turmoil in 2009, most eyes have been turned towards the performance of the US economy due to the nation’s status as a world leader. This is one time when America would have been prepared to cede the limelight, however, as the financial predictions chart has constantly shown the States and the United Kingdom as the countries in deepest recession and with the latest predicted recoveries of all. Now, however, there are coherent signs that the US economy may finally be moving towards recovery, with second-quarter showings in 2009 looking better than had been expected. The economy still contracted, but only by one percent.

To make a comparison, the January through March period this year showed a retraction of more than 6%, an opening to the year which was enough to make many wonder aloud whether the US would see any kind of recovery before 2010. The fall was the worst for almost thirty years and American’s third straight contraction. This latest marks the fourth in a row – clearly not what would be desired – but the movement is certainly more positive than anyone had been led to hope. It would be optimistic to suggest that Q3 will show growth in the numbers, but Federal Reserve Chair Ben Bernanke has been moved to suggest that the recession will be over for America later in 2009.

Reasons for the better performance are believed to be something of a mix, with businesses smoothing off spending cuts and government spending increasing. A better trade performance with other nations also helped, while consumer spending did decrease, as the results of businesses going to the wall made themselves known, people having to dip into their savings and being less able to rely on the equity in their homes for a shield against the ravages of unemployment. However, given the forecasts for how 2009 was expected to head, the news is broadly a lot more positive than could have been expected.

Some of the credit from economists has gone to the stimulus package fronted by President Barack Obama, which cut taxes and increased the level of government spending. This plan allowed the economy to stabilise somewhat by lessening the burden on services and businesses, keeping some companies alive and allowing support to be provided where needed. As yet, though, economists believe that the best of the package’s results has yet to come, with the second half of the year expected to see the outcome bloom and the early stages of 2010 considered to be the point where the full extent of the stimulus will be evident.

Economists know to couch their optimism in cautious language, and there are no guarantees as things stand, but money does not always behave like we want it to, so there is plenty of reason for cautious speaking. The advice seems to be that America should stick to what it is doing now and monitor the results. If these are as positive as expected, then 2010 will see a world in recovery, given the improvement in economies elsewhere.

Some hand-picked related and non-related posts:

Taipei 101 – A Landmark Skyscraper

China Real Estate Part 2

How To Pick The Right Moment

Make Free PC To Phone International Calls

Why You Should Not Bury Yourself In Work

Global Financial Crisis Is A Demonstrable Wake-Up Call To The World

It may not be a universally popular opinion, but there are certainly more than a few people who will tell you with a straight face that the global financial crisis had to come when it did, and moreover that it was the best thing that could have happened at the time. Most of these people will generally whisper the suggestion quietly rather than say it loud enough for a recently-unemployed eavesdropper to hear, but is there any chance that they actually have a point? Could we come out of the crisis stronger as a world, as nations and as people?

What cannot be denied is that we who live in countries where the mass media have a tendency towards hyperbole probably took longer to accept that the crisis was a very real fact. As has also recently been evidenced by the swine flu pandemic, there is a tendency after a while for people to become fundamentally skeptical about anything that they have not seen for themselves. Even now in more than one nation, there are people saying that the pandemic was exaggerated because comparatively few people have died as compared to the Black Death or Spanish flu epidemics. That it was largely due to speedy reaction from governments that we didn’t see much worse seems to slip people’s minds.

As with the pandemic, so with the crisis. Except, in this case, the symptoms worldwide came before the panic, but were largely ignored by many. Global economies fell like a house of cards, but it was not until the trickle of bad news turned into a torrent that many people realised just how bad things had got. This wasn’t just a minor bump in trade, but a crisis that would render many unemployed or bankrupt – or worse. The effects have been awful but could it be said that, given the inevitability of something like this happening, it is best that it has happened now rather than getting even further out of control?

One thing that has come out of the global financial crisis is that people have begun to see money in a more enlightened way. Before the crisis, many people saw their credit card as an extension of their financial solvency, rather than something which could very easily ruin it. There was also incredible snobbery towards people who bought things second-hand or cheaply, as conspicuous consumption reached its zenith. Now, it is almost cool to be a thrifty shopper and an assiduous saver.

There have been knock-on benefits in other ways, too. We now seem to have a tendency to recycle more. Consumption and waste are becoming watchwords for us all, which may well be a lesson that bears fruit in years to come. And yet, the fact remains that this crisis has left millions without jobs, without homes and many without hope. It cannot be said with any real measure of truth that this crisis has been a good thing. What it has been – hopefully – is a demonstrable wake-up call to the world that when someone yells “crisis!” it might be worth paying attention.

Some hand-picked related and non-related posts:

The Pyramids of Egypt

Blogging And Its Positive Effects

Brand Names Not Worth The Money?

Plastics Break Down Quickly In The Ocean

Different Perspectives to Entrepreneurship

Avoid Making Your Mortgage A Wasteful Borrowing

The sign of a recovery? Maybe not so much.

It is a sign of the times we are living in that more people than ever are actually sitting forward when the TV news switches to finance, as opposed to flipping the channel to find something less boring instead. With the global impact of what was, after all, a global credit crisis, people now want to know about finance. It affects jobs, housing, and after a while it has an impact on everything, from the personal to the political. This week has seen a slew of financial results emerging in the United Kingdom, one of the first countries to be hit by the “credit crunch”, and one of the bell-weather free market economies of the world. To call them a “mixed bag” would be about right…

As the week started two of the biggest banks operating in the UK announced major profits in the billions. Barclays and HSBC each raked in profits for the first six months of the year in the region of CA$5.5 million. Given that it was in the banking sector that the fire started in the UK, two of their major banks reporting such positive results early on is encouraging indeed. The sign of a recovery? Maybe not so much. The other half-year results which emerged this week seem to be somewhat more circumspect, if not downright pessimistic. Among them are some tales of woe, some tales of qualified hope, and a whole lot that can only be described as “hmmm” results.

Bad for the UK government is the news that Northern Rock, the ailing bank it took over (in the aftermath of the UK’s first run on a bank in many, many years) has posted further losses – in the region of CA$1.35 billion. How much of this loss-making is down to how the bank is being run, how much is down to the existing recession conditions and how much is down to the now tattered reputation of the Newcastle-based bank is currently hard to tell. Given that every UK taxpayer now has a stake in the bank, the financial results of Northern Rock are of interest to everyone in the country – and it would be fair to say they aren’t turning cartwheels with joy right now.

Then there is the story of Lloyds HBOS. Twenty or more years ago, there were four banks called Lloyds, TSB, Halifax and the Bank of Scotland. Then Lloyds merged with TSB to create Lloyds TSB, and Halifax and the Bank of Scotland created HBOS in the same way. After a government-backed takeover of HBOS by Lloyds TSB at the end of last year, the buoyant Lloyds TSB found that HBOS’ debt level was far greater than first thought, and this week they announced financial results which showed their first-half numbers to be in the negative margin. Time will tell how they ride out this storm, especially with the Bank of England announcing an additional £50 billion of “quantitative easing”, essentially adding new money to the economy.

Some hand-picked related and non-related posts:

Do Canadians Pay More?

Driving Green – How Realistic Is It?

The CN Tower – An Architectural Triumph

Real Estate Property In Kuala Lumpur

How To Motivate Yourself In Difficult Times

What To Do If Your Entrepreneurship Fails The First Time

Who’s Getting Out First?

The global financial crisis has been such a major story in the last eighteen months that there can now be few people who do not have op inions on it, and fewer still who do not know what it is. The crisis, it would be fair to say, has cut into just about every nation’s news broadcasts, including even those not heavily touched by the crisis itself. What this has led to in many cases is a widespread “who’s more doomed?” contest, where the damage done to different economies is compared in what has, at times, been a pretty unedifying show of blood-letting. It hardly needs saying that speculating on the level of doom does little to encourage recovery.

Among the top ten economies in the World, there are none which have not been touched by the crisis. It is, after all, a global crisis and affects international trade. Yet some have been more seriously affected than others, with recession becoming depression in more than a few – including top ten ever-presents the United States and United Kingdom. Bank bailouts have had some effect – witness the perkiness of Goldman Sachs after their bailout – but in the countries which were at the forefront of the bailout plan there is less sign of immediate recovery. Does this mean the bailout has failed?

It seems certain that without the money at that time, numerous banks would have gone bust and that the overall effect on trade and employment could have been extremely damaging in the long term. It is also arguable that the extent of the crisis was at its heaviest in countries such as the States and the UK, and that was why such a large bailout was needed at the time. Whether this will see the countries concerned hitting the recovery path with renewed vigour in 2010 depends very much on the continued composed distribution of bailout money, and the lessons of this crisis being learned by banks and governments.

There is also something of a race afoot to see who has dealt best with the crisis and which of the countries which entered a recession has done the best job of pulling out of it. Canada was put forward as a strong contender – and certainly seems to be storming ahead of its closest neighbour the US in terms of getting to the light at the end of the tunnel. Its recovery may not, yet, be as strong as that of Brazil, which has recently announced some very impressive figures. If backed up, these would make the BRIC alumnus a strong contender for the title of “Best Recovery (2009)”.

Finance Minister Guido Mantega announced on July 29 that the giant South American nation is already leaving the crisis behind, with the economy growing at a rate of 4% and set to maintain that level of growth for the year going forward. It is true to say that Brazil’s government took speedy but not reckless action to turn its economy around, and we now must wait for further details to emerge on how successful this has been.

Some hand-picked related and non-related posts:

Do Canadians Pay More?

Zero Money Down Mortgages

China-THE Superpower of the Future?

More ATM Tips To Protect Yourself From ATM Scams

Financial Website "Google Finance" Has A New Look

How John Chow Used Google Ban To Flourish His Brand Name And Dot Com Lifestyle