Vancouver Secrets

The Tax Man Cometh - Thanks eBay

eBay Canada says it will disclose information on its “power sellers” to Canada Revenue Agency this week. The release of data is in response to a ruling by the Federal Court of Appeal last April.

The court ordered eBay to turn over to the tax agency the names and gross sales figures of Canadians who earn at least $1,000 a month from online sales for three straight months.

In a recent letter to affected customers, eBay said it strenuously objects to the federal requests, but it must comply.

At least they warned them.

In 2006, Revenue Canada started looking into whether power sellers had reported all their eBay earnings on their 2004 and 2005 income taxes.

It’s estimated about 32,000 Canadians make all or part of their income selling on eBay.

Meantime, many more Canadians are shopping online, with 2007 sales rising to $12.8 billion, Statistics Canada says.

h/t CBC

The Unions Killed The Carmakers

GM, Ford and Chrysler are nearing the end, and it’s not only because they make a product that no one wants.

This GM “bailout” video below captures what is at stake (divide by 10 to understand the Canadian ramifications):

Direct impact:

239,000 employees

775,000 pensioners

2,000,000 relying on them for health benefits.

Suppliers:

$156 Billion in sales

610,000 workers

14,000 Dealers with

740,000 employees

Chapter 11 is the probably the only hope. A bailout, regardless of the size, won’t change the root cause of the problem.

They have to drop the social programs, the unions, and re-invent themselves to be competitive once again.

Or they can throw $50 billion or so at them to stall their death for a little while, and enlarge the impact.

Imagine if your business has to support three people for every employee.

These aren’t carmakers anymore - they’ve become social institutions.

Welcome to the future.

Setting All Sorts Of Records

The TSX is on as spiral downwards. We’re now into 2004 territory, and it doesn’t seem like it’ll hold that for long.

This follows the TSX biggest monthly drop in a decade in October.

While we’re all focused on the Promised One’s next dog, the bottom has fallen out.

This global recession is way beyond Obama and the Democrat’s pay grade. Canada is powerless to stop this decline.

Gold has dropped below $800 despite all those ads telling us to buy now. (Note to self: never buy any financial product when they advertise it.)

RBC has cut Nortel’s stock target to $0… yep, ZERO.

Oil is closing in on $55, which puts it on track to get into the $40 range next week.

The Canadian dollar is almost less than 80 cents.

So unless your homeless, the immediate future doesn’t look too promising.

What to do?

If your employed - work smarter and harder. Now isn’t the time to be asking for that raise.

If your an entrepreneur, get out and start something… a downturn brings all sorts of opportunities as bloated companies contract and fail.

People still eat, drink and consume. Find a market niche that is being abandoned, and fill it.

If you can make a go of something now, you’ll be in a position to make a killing when things start to turn around.

Canada has a severe shortage of decent online shopping sites, and it’s possible to create on without having to look after inventory or shipping.

Need an idea on how this works? Check out blinds.com. They are a $50 million business that ships direct from the manufacturer.

Lord knows that as companies start to fall there will be lots of opportunities.

Watch for companies that make the news with mass layoffs. This is a signal that there is opportunity in the markets they serve. It’s counterintuitive, but the remaining staff usually takes cover, making them an easy target.

Every negative brings a positive…

So what are your recession plans?

Casualties of Peak Oil

Just a few months ago, we were told the world was running out of oil.

We had to change our lifestyle and get rid if our gas-guzzling SUV’s now. Anyone not doing so was evil. Smart Cars for all.

Now it seems there’s too much oil, and our good friends at OPEC are scrambling to cut production for the first time in years.

The market has greeted the news of this reduced oil supply by pushing prices down further. Crude has fallen to almost $60.

Now we learn the truth behind “peak oil”.

It wasn’t that the peak oil story wasn’t true. It was the moon shot to $147 that took on a life of its own.

The environmental groups and media told us (with a straight face) that the doubling in oil prices from 2007 to 2008 was a result of our demand - and the shortage of oil - not market speculators.

We’ve been told that Saudi Arabia, the world’s largest producer, is at peak sustainable volume. And they will run out of oil in the not so distant future. ACT NOW!

It’s now safe to say that oil has peaked and the bubble has burst.

With oil prices are falling despite OPEC’s production cuts suggests that demand is falling even faster than OPEC can reduce the supply.

I filled up my SUV yesterday and it cost only $65 at the new inflated gas price (we should only be paying around 75 cents/litre, not 99 cents - saving me another $20).

Now the causality is domestic automobile manufacturers…

The Big Three auto manufacturers are faced with a certain death caused by the run-up in the price of oil and having their products deemed evil. They could have reacted long ago by building cars that matched the market - and they should have stopped building the vehicles no one wants. But that would have meant massive layoffs.

They now need billions just to fill their cash burn needs - combined it is around $15 billion each month.

Throwing money at them won’t solve their problems - they have become socialized institutions.

The only way to fix their problem is to let them go - or have all three merge into one. We don’t need three companies all building crap on our dime. One would do just fine.

It would force them adjust to the market realities, and make the painful transition now so they compete with the rest of the industry.

It may even force to make a product almost as good as Hyundai.

Bailing them out now just means we are extending the inevitable, and making their collapse even larger than it is now.

photo credit: Here in Van Nuys

Redistribution Of Wealth Explained

photo matt1125

This would be funny if it wasn’t frightening. The caller into the Schnitt Show is a snapshot of what quite a few Americans think Obama will bring:

Obama Voter Calls In… (mp3)

As The Globe And Mail Cheers

photo credit: Petrick2008 

The Globe and Mail’s David Parkinson is taking bets - how low can it go today.

Seems that the US market could fall by 1,000 today - who knows about the TSX. The opening numbers scared me off.

The dollar is now below 80 cents - cancel that trip south for now.

Someone Needs To Bring Him Up To Speed

photo credit: vieux bandit

French President Nicolas Sarkozy this weekend:

“Frankly, if someone would like to tell me that the world today needs an additional division, we do not have the same reading of the world,” Sarkozy said Friday in Quebec City.

We normally don’t care what foreign leaders say about our internal affairs, but this is different, because it comes from France. France’s view of Quebec has a mythical significance to separatists.

Except for one thing.

Quebec has used separation to ride through each recession the past 40 years - and have always succeeded doing so.

The reason the Bloc gained isn’t because they didn’t want Harper or the Liberals, or because of cuts to the arts… it’s because they can see what is coming up fast - a recession.

Quebec has rising unemployment, a slowing manufacturing base, and is one of the first provinces to feel a recession.

As a province that has always taken more than it’s fair share of transfer payments, the separation threat has always resulted in increased payments, contracts and public works projects - all funded by Canadians.

Sarkozy wasn’t informed of this strategy. Maybe now they’ll bring him up to speed.

What Aren’t They Telling Us?

photo credit: Cayusa

The loonie is on it’s way to 75 cents, oil to $50, home prices are falling… and the TSX has lost 40%.

The good news is that thankfully Canada has the world’s soundest banking system.

So why am I suddenly feeling the worst is yet to come?

With the election being days away, I am becoming certain that Canadians will vote in another minority government even though it will hurt the country.

As the crisis deepens and the economy slows, Harper’s hands will once again be tied by two bumbling idiots.

So do you buy, sell, hold, or panic?

Weather Underground Vs FLQ

A lot of buzz about the weather Underground and Ayers lately.

Just to add a little clarity on Obama’s friends and the similarities to our own FLQ.

In 1970, we had a similar situation… which drove the English out of Quebec.

Imagine if Dion was associated with the FLQ.

Food for thought…

Recession Tips

Or, How Are You Planning On Surviving This Recession.

photo credit: megananne

With a recession all but certain, you have two choices:

1) Hunker down, cut back and ride it out…

2) Ignore it and continue down a blissful path of running up your credit.

#2 sounds a lot more fun, less work, and if you’re listening to the Canadian media, all will be hunky-dory.

The reality is that with the market poised to go well below 10,000, the Canadian dollar is retreating, our commodities are falling fast, the price of oil is headed towards $50… it’s starting to sound like an exact repeat of the 80’s.

High interest rates are certain to be here next year, the price of a home will be significantly less than it is today, and stocks will be a bargain. Hell, if you want to get into business you’ll be sure to find a company you can buy for a song.

Cash is now king.

Those with cash can play along with Warren Buffett and buy up assets at incredibly low prices. Those that do will be incredible rewarded and - in good ‘ol Canadian fashion - be vilified (or at least frowned upon).

Canadian’s don’t like those that get rich by being smart. Just look at the what’s being blamed for the current mess. Wall Street, greed, sub-prime mortgage brokers…

The reality is that a socialist policy of making it the right of every American - whether they could afford it or not - to have a home lead to this collapse.

The market and the financial industry just did what was expected - they made money off of a “system” the Democrats handed them.

When house prices stoppped rising at a rate of 10%+ per year, the system failed.

This is because people who never had the income to pay for the home that was given to them through the Equal Housing Opportunity laws suddenly couldn’t get a home equity line of credit to cover the spread.

Then it became the game of musical chairs. Pass the mortgage around and the last one left holding the bag wins.

Unfortunately, the Canadian financial system played in this game too. We’re only starting to hear the news - wait till after the election for the rest of the story.

So, it’s official - we’ve maxed out our credit… now our bills are due.

If you want to get through the next few years without serious pain, now’s the time to:

1) Put away your credit cards.

2) Avoid loans or relying on your home equity.

3) Save.

The bright side of the above is that you will lessen your carbon footprint - and get those pesky environmentalists off your back - and you’ll seep better at night.

How are you planning on surviving the recession?

Barney Frank Gets His _ _ _ Handed To Him

Finally, someone accurately accuses and challenges a member of Congress over his involvement in this current financial crisis.

Barney Frank, the failed Chairman of the House Services Committee for his role in the Fannie Mae-Freddie Mac, gets taken to task, finally.

One other point that isn’t made very often:

When the Democrats took over the House of Representatives and the Senate in January of 2007, the Dow Jones was at an all-time high of 12,400 and gas prices around $2.15 per gallon. The Republican-led Congress of the previous 4-years had left a strong-economy in the hands of Democrats.
In two years two years, under Democrat-controlled Congress the Dow Jones hit a 5-year low of 10,485 and gas prices loomed near $4 dollars a gallon.

This Congress is the worst in history and not enough attention has been paid to this fact.

Love him or hate him, O’Reilly serves a purpose.