A Money Coach in Canada

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News Corp (as in, phone-hacking, police-bribing, bully parliamentarians News Corp) stock rises. Yes, rises. Clue: Live by the sword, die by the sword.

Euro-Zone lightens up the repayment terms for Greece’s debt, in part because the private sector (aka BANKS) also had to help out (Germany insisted). If you don’t get the whole Greece-In-Big-Trouble thing, my story will help.

Microsoft’s net income increased by 30% compared to last year’s Q2. It ain’t dead yet (although the article was rather gloomy) — have you *tried* Kinect??

We’re all still biting our nails about the US debt ceiling and potential default.

And in Canada? Well, < yawns > the Bank of Canada held their lending rate at 1%.

And in other news NORDSTROM’S ANNUAL ANNIVERSARY SALE IS ON NOW!

Rupert Murdoch (Fox news, News of the World, now x-nayed for the phone hacking scandal, and other tabloids) continues his fall from, well, not grace really, and Conrad Black excoriates him too, as only Conrad can do.  (personal comment:  I have no sympathy.  none.)

Australia is going to start taxing the worst 500 polluters ($25 per metric ton of carbon dioxide emitted)

Kinder-eggs maker Ferrero (yes, as in those chocolates) may be on shaky ground. (And what the heck?  America forbids the importing of Kinder-eggs?  ai-yi-yi!)

Canadians are slowing their use of credit (money coach breaths a sigh of relief.  And reminds readers that if you’d like to slow your own use of credit, I have a program that will help!)

And Canajun Finance did a nice piece connecting the dots between your personal “credit ceiling” and the situation in the USA.

1.  Rupert Murdoch trashy tabloid crosses line; advertisers flee

North American readers will recall the furor over Donald Trump’s embarrassing allegations that Obama had not been born in the USA. After a twitterstorm, advertisers pulled out from his show Celebrity Apprentice. I imagine they’ve flocked back by now but the same thing is now occurring across the pond.

A Rupert Murdoch tabloid, News of the World, allegedly accessed, and possibly paid for, illegally hacked voicemails from the police. The voicemails included of folks whose relatives have been killed in Iraq and Afghanistan, and also of murdered school girl Milly Dowler, and others.

As this has come to light, big advertisers such as Ford, Mitsubishi, Sainsbury (the UK equivalent of Safeway), Lloyds of London are distancing themselves by withdrawing their advertising.

Rupert Murdoch’s terse response is:

Recent allegations of phone hacking and making payments to police with respect to the News of the World are deplorable and unacceptable.

I have made clear that our company must fully and proactively cooperate with the police in all investigations and that is exactly what News International has been doing and will continue to do under Rebekah Brooks’ leadership.

We are committed to addressing these issues fully and have taken a number of important steps to prevent them from happening again.

I have also appointed Joel Klein to provide important oversight and guidance and Joel and Viet Dinh, an Independent Director, are keeping News Corporation’s Board fully advised as well.

Rupert Murdoch

2. Portugal’s credit rating is downgraded to Junk status. Portugal had borrowed money from the EU and the IMF (International Monetary Fund) but it is looking unlikely that they will be able to meet the targets spelled out in the loan agreement.

3.Facebook launches VideoSkype. If that doesn’t redefine communications, I don’t know what does. Does anyone besides me remember rotary dialing?

Greece – that lovely country most of us simply associate with the bluest of seas, the softest of sands and brilliant white domes – may be well and truly cluster-fracked at this point. And if they’re fracked, they may pull down a whole lot of other European countries with them. And if they do take down the Eurozone, the US, itself shaky, will find its head submerging below water.

What happened? Here’s a story which may help:

Max and Eve lived beyond their means for quite some time. Truth be told, they spent nearly 50% more each year than they earned! Their credit cards and lines of credit racked up.

The reasons they were in debt were ones with which anyone could sympathize, such as fighting off the neighbourhod mafia. By the time they got rid of the thugs they were so in-the-hole they had to go to a debt counsellor who helped them consolidate their loans. Things went well for several years then those mafia came back *again* and once again they had to borrow to get them off their back. They mortgaged their home to the hilt.

Max and Eve were living a typical middle-class lifestyle. Their (mortgaged-to-the-max) home was lovely and they welcomed many relatives and friends for weekends. They both worked hard at their jobs. They ensured their children were well dressed and got a good education.

Then Max and Eve discovered that all their aunts and uncles were forming their own investment firm, called All In This Together (AITT for short). Several of their cousins joined as well. Max and Eve wanted in. It was time for them to start getting seriously ahead, and besides, they were part of the family.

Max and Eve did have to convince AITT that they would deal with their debts, which was a bit embarrassing, but whatever. And there was lots they didn’t tell AITT. They didn’t tell AITT that they had borrowed from their neighbours in exchange for agreeing the neighbours could use their garage for the next 10 years. They didn’t tell AITT they had borrowed from their friends who owned a nursery and promised they could use the garden to grow flowers for 15 years, which meant Max and Eve could no longer grow their own vegetables. They also had something going on with PayDay loans which no one knew about. Although some of their cousins suspected Max and Eve weren’t being entirely honest, they were family after all (and besides, they had a few dirty little secrets of their own) and eventually AITT let them in.

At first things went well; they invested together, they covered each other’s backs, and for Max and Eve the best things was those mafia and their henchmen were gone for good; no one would mess with AITT. They family lent one another money, and Max and Eve got repeated loans when their roof needed replacing and their son got into a really good, but expensive, school.

But as things go in all relationships, some of the dirty little secrets began to emerge. Cousin Herschel got wind about the whole garden thing and challenged Max and Eve on it. Thankfully didn’t have to respond as Cousin Sven’s finances got shaky and all attention turned on him. Then Aunt Maureen disclosed she wasn’t as financially secure as she seemed. These were cause for concern but not insurmountable.

And then the unanticipated happened. Their distant cousin overseas, George, had been doing a number of investment deals with AITT and KABOOM, it was all over the news: George was pretty much going down. AITT held several emergency meetings. Things were getting tense. Above all, they needed to present a united front so they did their best to help out Cousin Sven and Aunt Maureen. Oh, and Uncle Steve and Cousin Susan. The firm’s resources, partially gutted by George, further gutted by Cousin Sven, were slimmer by the day. Then, at this worst possible time, it emerged that the PayDay loans people were about to come calling on Max and Eve with clubs. And the bank discovered the deal with the nursery which in fact was against the mortgage conditions and were about to repossess the home.

The family had a Very.Serious.Discussion with Max and Eve. With raised eyebrows and angry looks, they helped Max and Eve out (for the umpteenth time!) and gave them just enough to hold the PayDay loans people and the Bank at bay until Max and Eve could get their act together. There were very, very stern words spoken to Max and Eve and it was unequivocal – pull your kids out of private school, start renting out your garage (they didn’t know about the deal with the neighbour), and sell your house and move into a smaller place, because you’ve got one year and one year only to pay up.

Stressed out, Max tried to negotiate something more bearable, and asked for more money to actually pay off the PayDay loan and ideally get his garden back too, but all AITT felt they could afford was to make the interest payments for a year.

Max and Eve did what they could. It was hard. Harder than expected. The kids went ballistic about leaving their school. The housing market tumbled and they couldn’t get serious buyers interested. They were going without vegetables which would have long term effects on their health.

And when the year was up, Max lost it. Eve was willing to go hardcore and forgo everything that made life nice for them, but Max was seriously pissed. It wasn’t their fault that Sven and George and Maureen had screwed up. So why was AITT being so hardline with Max and Eve? And why had they had to bear all the brunt of paying off the mafia?

Max and Eve’s relationship started to fracture. Seriously fracture.

Eve was resolute that they had to honour their commitment to the family and AITT. She foresaw that if they failed AITT, then AITT would collapse and the whole family would be ruined.

Max thought the life they would be condemned to – cramped apartment dwelling, dashed hopes for their children, working long hours towards nothing but paying off AITT – was not a life worth living. He alternated between rage and utter despair. He couldn’t believe Eve was putting the welfare of AITT ahead of their own.

The kids were scared and confused, and cried every day and had nightmares.

It was awful.

Max told Eve that if she proceeded, he would divorce her.

Eve proceeded.

What happens next? Keep an eye on the news.

** If it’s not obvious: Max and Eve are Greece. AITT is the European Union. Other than that, the events are very loosely correlated.

** A few interesting facts:
Greece twice had to fight to leave the Ottoman Empire which is what put them in debt. They pledged their whole country as collateral on the debts. They didn’t pay off their debts, but they weren’t invaded by whoever lent them the money, either.

Recently, Greece borrowed money in exchange for all their Airport Fees for years to come.

Greece is currently having to offer 20% on its bonds to attract anyone. Contrast that to 0.65% for Canada Savings bonds.

WORKERS TAKE TO GREEK STREETS AGAINST CUTBACKS

Photo Credit (top image) The Justified Sinner

1. Goldman-Sachs invested $450M in Facebook. Don’t want anyone of my readers to be the last to know!

2. ” a third of all income growth in Canada in the past two decades went to the richest 1 per cent of Canadians.”
Holy smokes, eh? Full article at the Globe and Mail and an extended reflection on this can be found on Mike Todd’s blog.

3. Big Thought of the Day: When we talk about the economy, and jobs, it’s easy to become detached. We never quite believe it “can happen here”. About a year ago I became weirdly interested in Detroit after becoming (equally weirdly) addicted to Sam Roberts’ Song Detroit ’67 below.

Check out these recently published photos, Ruins of Detroit. Then watch the video below for ghosts of what Detroit once was. Our politics, our policies and our spending can make or break a city.

Detroit ’67 Music Video from Dave Pawsey on Vimeo.

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