Recessionary crosscurrents
I’m confused about the status of the recession. The U.S. government says the slowdown is slowing down. Things aren’t as slow. Or the recession is decelerating, perhaps. But what does that mean, exactly?
Here are some random factoids to noodle:
1. Porsche took a pass on the Toronto International Auto Show, has cut back their Canadian allocation by 500 cars this year, but the Panamera is coming just the same. Even.
2. A Toronto Ex-Toggery store won’t take Brioni suits if they have a pleated pant: “not in style” she says (insane). Positive.
3. LCBO is selling 2005 Latour for $1,895 a bottle, well up from the price they wanted for the Futures. Positive.
4. Best Buy has sales some days and doesn’t even put the signs up in the store. You find out at the cash that the item you were going to buy is cheaper than you had thought. Negative.
5. The new Encore casino at the Wynn in Las Vegas is empty. Negative.
6. The 5 year internal rate of return for Onex (OCX:TSX) shares is 3.4%. Often a signal that the market is about to turn. Positive.
7. Banks have drastically cut their sponsorship budgets, leaving many charities hanging. Negative.
8. Investors have realized that Bank of Montreal (BMO:TSX) is not going to be forced to cut its dividend, or go T.U., and have bid up the shares 55% over the past two months. Positive.
9. The Federal government is still trying to figure out how the Business Development Bank of Canada will deploy the new capital is received in the January 2009 budget. Capital that was to help save the economy. But the economy appears to be finding a bottom all on its own, before BDC get down to the new business. Positive.
10. Starbucks is closing 100 of its 800 Canadian stores. Hopefully stores that none of us liked anyway. Even.
Feel free to comment with your own signals.
MRM
(disclosure – I own BMO)
1. Ratio of government/quasi-gov’t advertising to commercial advertising on the subway: 3-to-1 (in the good times I noticed the ratio was roughly 2-to-1 in favour of commercial) – negative
2. My newsstand is selling only 2 of the 5 Financial Times he receives each day, where a year ago he would likely sell out – negative
3. Tim Horton’s line is still roughly the same size as it was last year when I go for coffee in the morning – even/positive
4. I can get a contractor (electrician, plumber, etc) into my house within two-days, where last year it would easily take a week to 10-days – negative
5. Those same contractors still trying and charge way too much for certain jobs – even
6. Pusateri’s not having a police office to direct Sunday traffic (which I believe they usually do) – negative
7. People still buying Pusateri’s ridiculous overpriced produce – positive
8. Number of friend’s/acquaintances who I thought would never lose their jobs – 4 (number usually 0-1 during good times) – negative
9. Visa (V-NYSE) not participating in the recent rally in financials on increased consumer credit default worries – negative
10. Commercial REITs that haven’t cut their distributions yielding 12-16%, while those recently did are yielding 8-10%, which is still extremely high – negative
Also, Silicon Valley unemployment just hit 11% – very negative.
http://www.mercurynews.com/ci_12165116?nclick_check=1
11. Eaton Centre still packed with people buying useless crap – positive.
12. Berkshire Hathaway’s credit ratings cut from Aaa to Aa2 by Moody’s – negative.
13. M&A activity increasing (Oracle/Sun, PepsiCo/Bottlers, Glaxo/Stiefel etc.) – positive.
14. Of the billionaires included on Forbes most recent rankings, only a handful increased their wealth; most notably Joaquin Guzman…a drug dealer – negative.
15. Krispy Kreme (KKD:NYSE) reports a loss of $303,000, or less than a penny per share, during its fourth-quarter compared with a loss of $31.8 million, or 50 cents per share, a year earlier – positive.
16. Only future "accountants-to-be" from my business program were able to secure internships for this summer – negative.
Thanks readers. Love the added insight. Must be a terrible time for a summer internship / co-op placement.
MRM
Yeah, it’s pretty bad. Partly because university students, particularly in finance, now have to compete not only amongst themselves for jobs but also with individuals who have 10, 15, or even 20 years experience and have recently been let go. But more so because a number of the companies that used to dish out a lot of placements are no longer around!